It used to be that supply and demand applied to workers and wages within Canada. But globalization has changed that, argues economist Jeff Rubin. When the whole world is your market, there is never a dearth of workers willing to do the same job for less money. On the Agenda, he lays out his arguments for how free trade ruined the middle class, the topic of his new book, “The Expendables: How the Middle Class Got Screwed by Globalization.”
Why the Trends of Income Inequality & Redistribution of Wealth Could Reverse (w/ Trevor Noren)
Trevor Noren, managing director at 13D Global Research and Strategy, discusses how the concentration of wealth and corporate power is shaping his macro perspective. He sees the past three decades of industry consolidation as root causes of the problems that the American economy currently faces: stagnant growth, increasing wealth inequality, and a QEdependent stock market. Noren predicts that this trend of consolidation will reverse, and he sees significant investment potential in gold, small cap stocks, and companies leading the decentralization movement. Filmed September 26, 2019 in New York.
Outsource Thomas Friedman’s column to India
At one point, Thomas Friedman pauses briefly but significantly in The World is Flat, his gushing endorsement for how technology is moving all kinds of American jobs to places like India. He chuckles, a little nervously. “Thank goodness I’m a journalist and not an accountant or a radiologist,” he writes. “There will be no outsourcing for me. . .”
But why not?
* Friedman has failed abysmally as a foreign affairs commentator.
* Accomplished columnists in India who are writing eloquently in English right now could replace him by tomorrow morning.
The New York Times is presumably paying Friedman for his knowledge and experience, but he has been wrong too often and for too long. He is supposedly an expert on the Middle East, but his analysis of the American invasion of Iraq and the calamitous, violent decade since then has been chronically misleading and worthless. Before the 2003 U.S. attack, while the genuine experts counseled diplomacy and caution, he told Americans: “My motto is very simple: give war a chance.” A few months after the invasion, he said that it “was unquestionably worth doing.” Some of his most offensive comments have been immortalized on Youtube, during an outburst in which he used a crude sexual metaphor that insulted people in the Middle East as part of an embarrassing rant that ended: “We hit Iraq because we could. And that’s the real truth.”
Let us set aside the immorality of cheerleading for a war in which nearly 4500 Americans and at least 160,000 (and possibly more) Iraqis have already died. Friedman failed to do his job – which was to accurately explain a far-off, foreign reality to his readers so that they could make informed choices. Among those he let down were: the U.S. voting public; business executives who may have been considering whether to invest in the Mideast; and, quite possibly even young people deciding if they should join the American army.
Friedman is fond of emphasizing that globalization is producing a competitive new world, which has no tolerance for inefficiency. If he worked for one of the big corporations that he likes to glorify, his blunders would have gotten him fired before the Iraq war had dragged into even its second year.
Fortunately, The New York Times would not suffer by losing him. There are newspaper columnists in India who could step right in immediately.
Palagummi Sainath, based in Mumbai, is the rural affairs correspondent for the English-language The Hindu. Sainath, who is one of India’s best known and respected reporters, is an elegant man in his late 50s, with a shock of gray hair. He has spent decades traveling through rural India, giving voice to the poor majority who have been left behind by the economic boom (which Friedman celebrates at every opportunity). Sainath spent part of 2012 in the United States, where he also wrote original columns about America. (His work is readily available on The Hindu’s website.) In today’s flat world, all he needs is his computer terminal, and his columns could be in the hands of his New York Times editors in nanoseconds.
Praful Bidwai, of New Delhi. Bidwai is a bearded bear of a man in his 60s, a tenacious, independent thinker. He spent years at the Times of India, but at present he freelances; thanks to the miracle of globalization, some of his work is instantly accessible at prafulbidwai.org. He writes about a broad range of subjects, including his regular indictments of India for developing nuclear weapons. By criticizing New Delhi’s atomic arsenal, he has shown the courage that a great newspaper columnist must have by speaking out about a subject on which the majority of India probably disagrees with him.
Arundhati Roy, of New Delhi. Americans who only know Roy through her remarkable novel The God of Small Things will be delighted to learn that she uses her mastery of the English language in outspoken essays on world politics, human rights, and war and peace. Some of her most effective articles denounced the 2002 anti-Muslim pogroms in the state of Gujarat, during which the state’s chief elected official stood by in complicit silence as mobs of Hindu extremists murdered 2000 people. (That official, Narendra Modi, is a strong candidate for India’s prime minister in this spring’s’s elections. Friedman’s 635-page-long The World is Flat is full of rejoicing about India’s high-tech industry, but he does not mention Modi and the mass killings once.)
This list of potential replacements for Friedman is only a beginning. Harsh Mander concentrates on hunger in India, which persists despite the much trumpeted economic miracle. Shubhranshu Choudhary spent seven years courageously reporting on the Maoist insurgency in east-central India, an uprising triggered partly by mining companies stealing land from the rural poor.
By replacing Friedman with one of these highly-qualified Indian candidates, The New York Times would not only improve its accuracy. The newspaper could also save money, which Friedman would agree is surely part of its responsibility to its shareholders. Back in 2005, he may have unwittingly composed his own pink slip.
“When the world is flat,” he wrote, “your company both can and must take advantage of the best producers at the lowest prices anywhere they can be found.”
The End of Neoliberalism and the Rebirth of History
For 40 years, elites in rich and poor countries alike promised that neoliberal policies would lead to faster economic growth, and that the benefits would trickle down so that everyone, including the poorest, would be better off. Now that the evidence is in, is it any wonder that trust in elites and confidence in democracy have plummeted?
NEW YORK – At the end of the Cold War, political scientist Francis Fukuyama wrote a celebrated essay called “The End of History?” Communism’s collapse, he argued, would clear the last obstacle separating the entire world from its destiny of liberal democracy and market economies. Many people agreed.
Today, as we face a retreat from the rules-based, liberal global order, with autocratic rulers and demagogues leading countries that contain well over half the world’s population, Fukuyama’s idea seems quaint and naive. But it reinforced the neoliberal economic doctrine that has prevailed for the last 40 years.
The credibility of neoliberalism’s faith in unfettered markets as the surest road to shared prosperity is on life-support these days. And well it should be. The simultaneous waning of confidence in neoliberalism and in democracy is no coincidence or mere correlation. Neoliberalism has undermined democracy for 40 years.
The form of globalization prescribed by neoliberalism left individuals and entire societies unable to control an important part of their own destiny, as Dani Rodrik of Harvard University has explained so clearly, and as I argue in my recent books Globalization and Its Discontents Revisited and People, Power, and Profits. The effects of capital-market liberalization were particularly odious: If a leading presidential candidate in an emerging market lost favor with Wall Street, the banks would pull their money out of the country. Voters then faced a stark choice: Give in to Wall Street or face a severe financial crisis. It was as if Wall Street had more political power than the country’s citizens.
Even in rich countries, ordinary citizens were told, “You can’t pursue the policies you want” – whether adequate social protection, decent wages, progressive taxation, or a well-regulated financial system – “because the country will lose competitiveness, jobs will disappear, and you will suffer.”
In rich and poor countries alike, elites promised that neoliberal policies would lead to faster economic growth, and that the benefits would trickle down so that everyone, including the poorest, would be better off. To get there, though, workers would have to accept lower wages, and all citizens would have to accept cutbacks in important government programs.
Subscribe today and get unlimited access to OnPoint, the Big Picture, the PS archive of more than 14,000 commentaries, and our annual magazine, for less than $2 a week.
The elites claimed that their promises were based on scientific economic models and “evidence-based research.” Well, after 40 years, the numbers are in: growth has slowed, and the fruits of that growth went overwhelmingly to a very few at the top. As wages stagnated and the stock market soared, income and wealth flowed up, rather than trickling down.
How can wage restraint – to attain or maintain competitiveness – and reduced government programs possibly add up to higher standards of living? Ordinary citizens felt like they had been sold a bill of goods. They were right to feel conned.
We are now experiencing the political consequences of this grand deception: distrust of the elites, of the economic “science” on which neoliberalism was based, and of the money-corrupted political system that made it all possible.
The reality is that, despite its name, the era of neoliberalism was far from liberal. It imposed an intellectual orthodoxy whose guardians were utterly intolerant of dissent. Economists with heterodox views were treated as heretics to be shunned, or at best shunted off to a few isolated institutions. Neoliberalism bore little resemblance to the “open society” that Karl Popper had advocated. As George Soros has emphasized, Popper recognized that our society is a complex, ever-evolving system in which the more we learn, the more our knowledge changes the behavior of the system.
Nowhere was this intolerance greater than in macroeconomics, where the prevailing models ruled out the possibility of a crisis like the one we experienced in 2008. When the impossible happened, it was treated as if it were a 500-year flood – a freak occurrence that no model could have predicted. Even today, advocates of these theories refuse to accept that their belief in self-regulating markets and their dismissal of externalities as either nonexistent or unimportant led to the deregulation that was pivotal in fueling the crisis. The theory continues to survive, with Ptolemaic attempts to make it fit the facts, which attests to the reality that bad ideas, once established, often have a slow death.
If the 2008 financial crisis failed to make us realize that unfettered markets don’t work, the climate crisis certainly should: neoliberalism will literally bring an end to our civilization. But it is also clear that demagogues who would have us turn our back on science and tolerance will only make matters worse.
The only way forward, the only way to save our planet and our civilization, is a rebirth of history. We must revitalize the Enlightenment and recommit to honoring its values of freedom, respect for knowledge, and democracy.