12/07/2011

Beer, Fries and Globalization

If you would like to be rich, then it is a good idea to forge close links with the rest of the world.

The most visible manifestation of the world's increasing economic interdependence is the availability of foreign products in familiar settings.

Globalization will never homogenize what we have, not while new ideas are always appearing and adding fresh ingredients to the slowly turning blender of economic integration.

Why does Tim Harford write a book about economics when professor Wilson, a much better economists than Tim, could write a better one? The answer is comparative advantage. A person should choose his vocation not with reference to what he does better than another one does, but with reference to what he does best.

Exports pay for imports.

Without minimizing the genuine suffering to those who lost their livelihoods along the way, it's obvious that technological progress and international trade made us far better off.

The solution is to allow progress to continue while help support and retrain those who have been hurt as a result.

Two common complaints about globalization:
(1)Globalization is bad for the planet
(2)Globalization is bad for the world's poor

Foreign investment is widely recognized to be good for economic growth in poor countries: it is an excellent way for them to create jobs, learn cutting-edge(尖端的)knowledge, and do so without having to invest their own scarce money.

The idea that trade is bad for the environment is based on weak thinking and little evidence.

The first worry is that free trade causes environmental problem because goods produced overseas are subject to more lenient environmental standards.
(1) Trade, in most situations, are made between rich countries, which have similar environmental law standards.Besides, environmental regulations are not a major cost, labor is. Companies move abroad seeking for cheap labor rather than pollution haven. Latest manufacturing techniques are often cheaper and less polluting at the same time. Environmental standards are rising in developing countries. Potentially high polluting industries remain in developed countries.

(2)International transportation pollutes more.
In fact, domestic transportation pollution may be more severe. Think about average pollution of a laptop from international trade and one from domestic trade.

(3)Trade makes people richer, and this will damage the environment.
The most deadly and certain environmental problems of today are also those that afflict the very poorest people in the world, such as wood-burning stoves and unsafe drinking water.


Pollutants like airborne particulates emitted from cars, do get worse as people get richer--for a while. At one point people are rich enough to afford improved environmental standards, and they will demand them.


People go to sweatshops voluntarily, which means that whatever their alternatives are, they are worse.

Sweatshops are good news in two ways: they are a step up from the immediate alternatives, and they are also a rung on the ladder to something better.


In most countries, rich and poor, special interest groups with disproportionate influence have reasons to oppose free trade.
The policy of isolation was not designed for the good of the Chinese people but good for its rulers.

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