Is Globalization to Blame?
bostonreview.net
bostonreview.net
The significance placed on trade deficits always struck me as somewhat misguided so the author's uncritical focus on this crude metric is off putting. In aggregate, inward and outward flows have to match by definition. If an American company builds and sells a car to a foreigner this reduces the US deficit but if it builds and sells a house to a foreigner, then this has the effect of increasing it. So in the modern world, running a trade deficit just means you are selling more things like houses than cars.
If running a trade deficit was impoverishing, then you'd imagine that the two lists of countries with the biggest trade deficits and surpluses (https://en.wikipedia.org/wiki/List_of_countries_by_current_a... ) would be dominated by the poorest and richest countries respectively. But they are not - it just depends on the economic specialities of the countries.
Also I am suspicious of anyone who uses a dismissive phrase like "so called experts" as part of their argument. In my experience, this generally is a strong signal that the author has a very superficial understanding of the subject. Not that I claim any expertise in the area.
Trade imbalances quoted in US dollars reveal what merchants are dealing with, in terms of local currency.
When traders start suffering, you can be sure there are some underlying workers that are relatively devastated.
tl;dr Dean Baker wants to respond to the impoverishment of manufacturing workers by impoverishing professional service workers.
"In generating savings from freer trade in the labor of doctors and lawyers and so on, we would also be promoting equality"
People like him are why Trump is now in power.
On a different note, if it we not for globalization, yes, third world countries (which many like to say are exploited by the larger more mature economies) would be even worse off than they are today --mostly relegated to very light manufacturing and natural resources and agricultural products -had globalization not occurred. It's not exactly a zero-sum game, but it does like to approach equilibrium meaning those up will go down and those at the bottom will go up (we have the smallest proportion of global pop in extreme poverty.)
The only highly paid professionals that are immune from this appears to be high level managers; high enough to control budgets / P&L.
Outsourcing medial work is theoretically about as simple, but for a few buts. Much of medical work, from nurses' to surgeons' to dentists', is highly local and real-time. Tele-surgerly is possible, though, and probably talking to a patient can be done entirely remotely. But this supposes that a patient and a doctor speak a common language well, which in many cases is tricky (and factory workers don't need this).
Outsourcing lawyer work requires, besides a common language, a deep understanding of foreign law codes and a good understanding of foreign daily life and practices. This is, of course, attainable for a determined remote lawyer, but I don't see why it may happen to be cheaper than attaining the same level of education and experience for a local. As of cost of living, places like upstate Nebraska are quite inexpensive! Showing up in court is harder for a remote attorney, but probably tele-presence could help somehow.
I suppose that importing doctors and lawyers would not help lower the costs much. Doctors in the US are expensive not (only) because clueful, experienced people are rare, but because the supply is (or was) limited.
What exactly do you think would happen to the price if supply increased?
Doctors are also expensive because of malpractice insurance. Finance gets a big cut.
Yeah, that's the factor Dean Baker wanted eliminated.
Edit: It also seems common to misplace fault in many directions while ignoring the influence of globalization completely.