While many have benefited from humanity’s overall progress via and trade including, significantly, global reduction of poverty, its ill-effects in the past half-century have increasingly been causing widespread social unrest, economic dislocation, wealth inequality and, for some political leaders, disrupted careers.
Prescriptions being recommended include more inclusive community policies like job retraining, UBI or universal basic income, wealth redistribution through sensible tax and tariffs on corporations across state, national or geographical borders, and effective impacting investments at local and city levels.
History Urges the Long View
History has shown that these types of policy prescriptions cannot be delayed much longer. The Industrial Revolution in the 19th century shifted the lives of millions of people, urbanizing, and dismantling feudal societies, to such a degree that dislocation and poverty occurred among the working classes.
Increasing modernization was accompanied by increasing populist revolts and the rise of new socialist ideas, like Marxism, which without question contributed in turn to the rise of nationalist movements in Germany and in Russia.
One might see the parallels occurring today with the rise of globalization and automation, contributed to by digital, mobile and innovations in information technologies. Millions of people have been as dislocated as generations of families that were sustained by manufacturing and industrialization eras no longer had gainful employment.
To note that this trend is now accompanied by, again populism, anti-immigration, nationalistic movements culminating in the rise of Alt-Right, Brexit and Trump’s election in the US is not an exaggeration. Yet these changes are not reverting; in fact, they are accelerating with the rise of artificial intelligence, and robotics. Thousands more people are projected to lose their livelihoods. (WEF)
“The loss of US service jobs to international competition and technology is accelerating, even though at one time the vast majority of these jobs were thought to be relatively safe from globalization.” (HBS)
Human progress must move forward. But governments who continue to ignore warning signs, or corporations like Apple who continue to park millions overseas to avoid taxes, are doomed to suffer the consequences of “wholesale retrenchment.” (Danny Leipziger GWU, Voxeu)
We need more forward-thinking ideas like those that Tesla’s Elon Musk has been promoting and talking about as more technology enablers like Artificial Intelligence advance innovations. And we need bolder leaders, both in the public and private hemispheres, to advance these best ideas forward.
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With globalisation, we have seen the traditional barriers to trade and finance progressively lowered, and in this process, many have gained. Indeed, globalisation has been responsible for large increases in world trade, fluid flows of capital seeking higher returns, imports of final products at lower cost to consumers, jobs and escapes out of poverty for hundreds of millions, and profits for the business community in both advanced and emerging market economies. In this clamour for greater connectivity, issues of the distribution of the gains from globalisation were largely ignored, except in the work of some, like Joseph Stiglitz, largely because gains were large and benefitted many on both sides of the transaction.
Yet, the benefits incurred costs as well. Although it is difficult to do a thorough net cost-benefit analysis of globalisation, it clearly enabled many in the developing world to increase their incomes, and many in the advanced economies to consume more at lower prices. Accompanying the process of globalisation was a process of technological advancement. New technology has enabled many to increase access to seemingly free information and to connect to the new and expanding global digital economy, while for others it has meant job losses and retrenchment. While the net gains still prevail from both phenomena, the process for compensating losers has been inadequate, and in some contexts largely foregone. (Voxeu)
Sources: Danny Leipziger@Voxeu, Matt Turner, James Heskett@HBS
