The Book Club

Is Globalization as Bad for Americans as It Is for Our Pets?

Dear Dan,

So, I’ve been reading, and enjoying, your new book Connected: 24 Hours in the Global Economy.In the book, you look at a single day—June 15, 2005—and use the experience and thoughts of dozens of different people—American CEOs, European central bankers, Intel managers in Vietnam, a Chinese Web-site worker—to tease out the many ways in which globalization binds us all together. Rather than trace the path of a T-shirt from, say, a factory in China to a Gap store in Wichita, you position us on the ground with—and inside the heads of—people who are pursuing careers, investing, speculating, managing factories, and formulating policy.

Each chapter poses a question—is immigration a luxury or a necessity? Can a poor country get rich too quickly?—and, in classic economist fashion (you can’t shed that Ph.D.), provides an even-handed response. If I were I pitching it as a movie, I’d say it’s like 24 meets The Lexus and the Olive Tree. My big takeaway is that the unprecedented level of connectedness that you describe in the book should upend some of our (by our, I mean American) assumptions about how the global economy works, and about our nation’s (supposedly dominant) role in it.

To start off this discussion, there are two things I’d like to ask you. Actually, three things.

1. Do you find globalization to be ironic these days? I certainly do. In recent months, the news from the globalization front has been somewhat distressing. Rather than raising standards abroad, it frequently seems as if the United States isn’t just exporting 20th-century businesses and business practices (like product assembly and computer programming) to China and other low-cost locations. No, we’re exporting 19th-century businesses and business practices as well.

Reading about the contaminated pet food from China calls to mind Upton Sinclair’s The Jungle—a hellish vision of unregulated industry in which poisonous materials easily infect the food supply (of our animals—at least for now). We may have succeeded in removing some of the unpleasant byproducts of industry here in the United States. But at the same time, we’ve exported the make-it-quick-and-cheap, consequences-be-damned mentality to China—along with the old-school industrial processes to put that mentality into practice. Then we go and import Chinese products—and wind up with versions of the old problems we thought we’d gotten rid of: contaminated pet food, or the huge clouds of mercury created by the power plants that fuel all those Chinese factories and then waft over here. In your travels through the world, what compelling globalization ironies did you find? And in what ways do they affect the daily lives of Americans?

2. Globalization is inevitably a political issue, although it no longer breaks down so neatly along the lines of right and left. (The recent Republican presidential debate featured plenty of tough talk on trade.) There are, however, two poles: On the right, there are the unabashedly happy globalists, who see only benefits to all involved from globalization (rising standards of living in the developing world, cheap goods in the developed world) and are indifferent to the plight of those harmed. On the left, there are those who see only gloom, would like to halt the globalization process, and are not all that concerned about the impact doing so would have on those who have yet to benefit.

Residents of these two poles generally talk past one another. I think the most interesting debate is going on in the broad center, occupied by people like, well, you and me. While I was doing some reporting for an article about the internal Democratic Party debate on economic issues, a former Clintonite noted that what’s changed about the domestic U.S. debate on globalization is that the centrists and moderates are now becoming radicalized. Exhibit A is Alan Blinder, the former Federal Reserve vice chairman and Princeton economist who systematically investigated how offshoring and outsourcing would affect a range of industries, and concluded that not just a few million, but tens of millions of American jobs are at risk.

Blinder now believes that policies on trade, training, and employment must change quickly. For my part, the way in which global competition is tilting the scales in favor of capital and against labor, and creating pressure to slash the retirement and health benefits provided by both the private and public sector, certainly makes me think twice about the sustainability of the trends we’re seeing. I’m not sure American consumers will continue to believe that the benefits they receive from cheap imports and low inflation outweigh the pressures on their wages and benefits. And I can imagine free trade being a far more contentious issue in this year’s primaries—in both parties—and in the general election than it has been in years past. Has globalization radicalized you? And should sensible moderates start getting freaked out?

3. Where were you on June 15, 2005?