Pity the Misunderstanding - Cafe Hayek
. . . and that the “the pitiless evolutionary march of globalization” is a positive bringing abundance, wealth, and increasing the standard of living of all who trade.
More after the break, with Milton Friedman videos.
"In what way is globalization “pitiless”? Is it because it creates an ever-growing abundance of new goods and services that consumers choose to buy? Is it in the fact that it lowers the prices of food, clothing, furniture, electronics, communications, and (for example, by expanding the sizes of pharmaceutical-companies’ markets) medicines?
Is globalization “pitiless” because it allows many desperately poor workers in the developing world to earn incomes that enable them and their families to live above subsistence? Or perhaps globalization is “pitiless” because it obliges entrepreneurs and workers in the developed world – nearly all of whom are multiple times richer (thanks to globalization!) than are the foreigners about whom they complain they must compete – to adjust their actions to the choices of the consumers whom they serve?
Globalization is no more or less pitiless than is economic competition generally and what Deirdre McCloskey calls “market-tested innovation” – the same competition and innovation that over the past few centuries crafted our current high standard of living. So unless Ms. Parker believes that it is gentle and just for rich first-world workers to prevent poor third-world workers from improving their lives – unless Ms. Parker thinks it humane for consumers to be forced to accept whatever products are offered, and at whatever prices are demanded, by existing producers rather than motivate producers to work hard and creatively to please consumers – she should not describe globalization as “pitiless.'"
As with all economic concepts there is always the "on the other hand" argument. Here, the problems is that for most of the 20th century we found that the progressive socio-economic model worked in some sense to create a stable, understandable social order. Workers went to work, learned a set of skills, and for the most part had a long term job which, with only minor skills changes, would last their entire lives. By the end of the 20th century that model had broken down. Many people who believed the eternality of the progressive model have been shocked at the speed of the change, and how disruptive these changes can be for the workers.
We do a poor job of helping our young people understand that they will need to constantly upgrade their skills, and that they will be in near perpetual competition with others for their jobs for the rest of their lives. The older set, the Boomers and the older GenX generations failed to understand this issue. They incorrectly believed everything would remain as they perceived it always had been. (This belief is simply crazy.)
The ultimate problem is that politicians have spent the past 50 years selling the falsehood that the progressive movement is eternal. Politicians like progressivism for its ample graft, and corruption, but it was running out of steam by at least the early 1970s, and completely destitute by the 1990s.
After the 2008 recession, myriad people had their beliefs in the model shaken to the core. They frequently lost their jobs, and could not find anything similar, and either had to retire early or take much lower paying jobs. It is these people and people faced with similar outcomes who are frightened and animated about immigrants coming for their jobs, and trade forcing the loss of jobs to overseas factories. Yes, they misunderstand that their high salaries were due to globalization, and that this process of creative destruction is necessary, and beneficial. Instead they only see that they must make changes, and that they frequently are unwilling to make the necessary changes, and so financially injured.
And so these people trapped, unwilling to change, and fearful lash out at others, and seek to maintain the system they understand. Both Hillary, and Trump represent aspects of this mindset.
Trump represents the fearful workers seeking to maintain the socio-economic model they understand.
Hillary represents retaining the socio-political elements which had power during the 20th century, elements like the "bigs" big business, big government, big banking, big labor, big law, and big social movements. The idea what that these bigs would produce space where the little guy could exist in some protection. This was a failure in nearly every respect.
Ultimately neither of these models will move us forward. But the people reliant on these models are unwilling to let them go, and so we end up waiting for the necessary change.
For a humorous interlude read the comments.