Globalization Blog1

Wolf’s discussion of globalization- The reduced labor mobility as a cause of wage inequality noted by Wolf is interesting, however I wonder to what extent reducing migration barriers would reduce this inequality.
Wolf’s assertion of the changing attitudes toward free trade, free market, and globalization sometimes becomes overly generalized. With respect to labor mobility, during the pre-war era of undprecedented labor mobility, there were moves to restrict immigration into the United States from Asian countries, as well as strong anti-immigration attitudes and violent riots as a result. Meanwhile, the past half century has seen some relaxing of labor mobility immigration restrictions in the USA. The Bracero system of the 1940s-60s surely represented a high degree of labor mobility at least between the US and Mexico (though this system ended in 1960s to be replaced by a steep rise in illegal immigration) and then the immigration reform of the 1960s that relaxed limits on immigration into the USA. Generally, Wolf is right in that labor mobility was higher a hundred years ago, however.
I also think he exaggerates on the abandonment of free trade and global economic integration during the interwar period, though in general correct. Wolf does mention the reduction in US tariffs starting in 1934 and the following trade liberalization (WWII probably resulted in a large degree of import substitution temporarily reversing the trend until after the war) so though the ideas of free trade were not completely abandoned, the world as whole can be seen as moving toward more closed economies.
Stiglitz’s discussion of globalization- Stiglitz argues that globalization is not inevitably a good thing, that if orchestrated properly can be extremely helpful to developing countries, but could actually be hurtful if orchestrated improperly. In the preface he asserts that trade-offs do exist and that there are multiple workable policies. He argues that income redistribution is not as costly to economic growth as some fear. Stiglitz states that free markets are dependent on government involvement and enforcement to function properly. Certainly some level of government intervention is necessary, but it will be interesting to find out what he believes the proper balance should be.
Both Wolf and Stiglitz agree that the global financial system needs reform, that the government has a vital role in ensuring the proper function of the free market, that investments should be made carefully, and cite the interwar period’s decline in globalization and the contribution of Keynes to saving the free market system during the great depression. However, while Wolf finds increasing globalization the solution to the perceived problems, Stiglitz believes globalization needs to proceed in a different way.

Test

Here is the first blog post

http://www.washingtonpost.com/wp-dyn/content/article/2007/04/12/AR2007041202301.html