The trigger for my topic here is one of Alan Tonelson’s posts today, titled “Why U.S. Globalization Policies Need More ‘Narrow’ Nationalism.” Actually, it prompts me to make a number of points I’ve wanted to bring up for quite a while.
In the above post, Alan takes umbrage at a recent column by prominent economist Tyler Cowan on the effects of globalization. Cowan points to research showing that globalization (a category in which Cowan includes immigration, citing George Borjas’ work) has slammed the middle and lower classes in wealthy nations like the U.S. Cowan notes wryly that these findings are “contrary to what many economists had promised.”
Many who read Cowan’s article must have laughed at the economists’ lack of common sense. And THAT is my real problem with them, even with Cowan, of whom I am a longtime fan. Most of them have never experienced serious economic hardship, say a period of extended unemployment or a home foreclosure. Hence, they just don’t get it.
And that’s why Cowan’s second point is rather hollow: The good news, he points out, is that globalization has generally (though not in all cases) improved standards of living for the world’s poor. Alan retorts, in essence, “Fine, but don’t ignore people in the U.S.” Again, to someone who has always had a comfortable life financially like Cowan, Alan’s words sound selfish. But I believe most other people know exactly what Alan means.
I do agree that the improvement of living standards in the Third World is good news, as Cowan says. I’ve been passionate about this issue ever since college, and in fact this was one of the main motivations I had for specializing in statistics. (I’m a former stat professor, and am still quite active in the field even though I’ve taught computer science most of my career.)
And though I’ve written extensively on the problems of the H-1B work visa, I’m far from doctrinnaire about trade issues. I’ve mentioned here before, for instance, that I’ve always driven Japanese cars, as I believe they are better made (especially important for someone who lives 60 miles from work, as I do). I feel the same way about services as about goods, and have actively supported bringing in “the best and the brightest” from around the world.
But the key point that Cowan does NOT address is, to what degree is it possible to have a it both ways–continued progress in living standards in the Third World while still maintaining reasonable levels here? Clearly, if Cowan doesn’t have an answer to that question, then neither do I. (Though I don’t lack for ideas on ameliorating the negative effects on Americans.) But what we at least CAN ask for is an honest dialog–and we’re not getting one. The globalists’ rallying cry, “American consumers benefit in lower prices,” is rarely critically examined, even though the information is out there–the research and even “thought experiments” show that the price “savings” accruing from trade are typically quite small. Indeed, occasionally even those with self-interest, such as the National Association of Manufactures, publicly admit it.
Given my work on the H-1B issue, I see this problem up close. The industry lobbyists excel at manipulating a generally gullible and even innumerate press. One of my favorite retorts in that game is one I use when the lobbyists say, “The tech industry is forced to hire mainly new or recent graduates, including foreign students at U.S. campuses, because only the young new grads know the latest technologies. The older engineers don’t have these new skills.” I reply, “Well, who taught those young people the new skills? It’s old guys like me!” Actually, a bright child could see that gaping hole in the lobbyists’ argument–so why can’t the journalists see it?
Sadly, academia, supposedly a bastion of truth and impartial inquiry, is the source of a lot of the industry PR–paid for by them, in the form of research funding. Call me old-fashioned, but I simply cannot understand why presumably self-respecting economics professors (I don’t mean Cowan) would take industry funding for research that–surprise!–turns out to support the funders’ views.
So we have government and policy making by lobbyists and others with vested interests. Yes, part of this is due to the generous campaign donations the tech industry makes to Congress, the president and the political parties. But I’ve had enough interaction with people on the Hill to know that most of them really believe this stuff. To them, America’s economic strength depends on importing engineers, and evidence to the contrary is simply cognitive dissonance, automatically dismissed.
So is all the evidence showing chicanery by Microsoft in particular on the H-1B issue, including a recent New York Times op-ed by Bill Gates (plus Warren Buffett and Sheldon Adelson, but I’ll focus on the tech guy here, Gates and the firm he founded). The article told how the H-1B workers are “badly needed” by the tech industry. Yet days later, Microsoft announced a huge layoff, and then announced that it was going to reduce the work it assigns to its independent contractors. Microsoft actually has a long history of saying one thing but doing another in connection to the H-1B and alleged tech labor shortage issues.
Folks, Cowan has a point about the up side of trade for the Third World, but I don’t like being lied to by those PR hacks. Do you?