|
April 12, 2006
Niall Ferguson has an op ed in the Los Angeles Times about free trade and protectionism in the US. But his comments could equally apply to Australia.
He asks 'Are we witnessing the beginning of the end of globalization? And should we be cheering or chafing at the prospect of its demise?' And he answers thus:
So global flows of labor, capital and goods are all under attack — and this in a country that has been enjoying robust growth for the better part of five years. I shudder to think what would be coming out of Congress if the country was in recession. Presumably a bill for total autarky, mandating the construction of a vast, impermeable dome from sea to shining sea
The stark duality is reminiscent of the Australian debates about Hansonism in the 1990s isn't it. Ferguson adds:
Proponents of a new generation of anti-global measures claim to want to protect vulnerable native groups from the ravages of competition. They point to studies that show the biggest losers from immigration to be high school dropouts. Other evidence shows that it's unskilled blue-collar workers who are most likely to lose out from free trade with China.
Well, the unskilled blue collar workers are surely going to carry the costs of the forthcoming free trade agreement betwen China and Australia.
Ferguson's call on this?
It makes no sense to jeopardize the benefits of globalization to protect the employment prospects of high school dropouts. So here's a modest counter-proposal for the House of Representatives. Instead of building an expensive, hideous and probably ineffective new Iron Curtain, why not use the money to get this simple message across to the kids in American high schools: If you flunk, you're sunk. Yes, boys and girls, academic achievement is the only route to decent employment in an economy at the top of the technological food chain. Drop out of education without qualifications, and you'll be lucky to get a job alongside the Mexicans picking fruit or stacking shelves.
'Tis neo-liberal harshness is it not? There is nothing about programs to lift the skills of high schools kids so they can get jobs in a high tech economy. As things stand Australia is pining its hopes on quarrying minerals for China and India and importing the sskilled workforce.
|
The theory says the opener the better and experience says there will be winners and losers. Provided adequate programs are put in place for the losers, OK. The curly one is of course liberalisation of human capital - so far, OK for the global elite, not for the others (except for highly regulated programs like Philippina maids in the Middle East, and so on). Without the economic skills to work it through, my chief fears are based on the law of diminishing returns: in other words, we've had x amount of liberalisation, so it follows that if we have x+1, we'll be that much better off. Relying on nothing more than common sense plus a dangerously little bit of knowledge, I think it actually may not.
And I always get apprehensive about the dodgy modelling that is called on to justify any particular liberalisation.