V&V PAPER — Globalization: An Assessment

Editor’s Note: Reflecting the breadth and depth of top-notch scholarship being pursued by the faculty of Grove City College, The Center for Vision & Values is pleased to release the second in a series of exclusive monthly papers being offered through our faculty V&V Paper Initiative. In “Globalization: An assessment” (5,718 words), faculty member, economist, and contributing scholar with The Center for Vision and Values at Grove City College—Dr. Mark W. Hendrickson—traces the evolution of globalization to date. Once relegated to the jargon of “a small number of academics 20 years ago,” the concept has grown in stature and globalization has now “become one of the principal buzzwords of the 21st century.”

“Globalization,” writes the author, “represents a new chapter in economic history.” To depict this new paradigm, Dr. Hendrickson explores the historical context of globalization, the barriers to progress, the “swings” of the globalization pendulum, the American anti-globalizer protectionists and myth builders, NAFTA, and the WTO. His remarks conclude with a look at what lies ahead for the United States. “Embracing globalization,” the author perceives, “is not only the prudent and profitable choice, it is the right one.”

Media Inquiries: If you would like to reach Dr. Hendrickson for comment, please contact him at [email protected].

(Download the Microsoft Word paper here.)

Globalization: An assessment
By Dr. Mark W. Hendrickson

Globalization — a word known to a small number of academics 20 years ago — has become one of the principal buzzwords of the 21st century. According to a popular college textbook, globalization “refers to the shift toward a more integrated and interdependent world” and is the “trend away from distinct national economic units and towards one huge global market”[1] in which commercial trade will multiply as national borders become increasingly irrelevant to peaceful economic exchange.

A new paradigm

Globalization represents a new chapter in economic history. The term aptly characterizes the new paradigm of a single global marketplace that has supplanted the post-World War II paradigm of a planet politically divided into three separate worlds: the first, comprised of the economically developed democracies; the second, the Communist bloc; and the third, the remainder, consisting primarily of wretchedly poor, undeveloped countries.

That Cold War paradigm became outmoded upon the collapse of the Communist bloc, the death throes of which lasted from the tearing down of the Berlin Wall in November 1989 until the official dissolution of the Soviet Union in December 1991. According to the best-selling book, “The Earth Is Flat: A Brief History of the Twenty-First Century,” by journalist Thomas L. Friedman, this major tectonic realignment in the world’s geopolitical order helped to give birth to globalization. No longer were hundreds of millions of people blocked by an Iron Curtain from contact with the rest of the world. This was the political precursor to globalization. The other primary precursor was technological. Advances in communication and transportation have been shrinking our world over the centuries, but the advent of the digital era, enabling information to be shared instantly almost anywhere in the world, represented a quantum leap forward.

This emerging global economy is still in its infancy. It is an ongoing process, not a fait accompli. Today, many are wondering if the trend toward globalization is irreversible. To answer this question, we need to understand the fundamentally different character and pattern of technological progress and political progress. Barring a cataclysm that wipes out human civilization, it appears virtually certain that technological progress will continue and even accelerate exponentially. In fact, it looks like this development will occur not so much on a linear path but on a parabolic one.[2]

Political progress, on the other hand, is cyclical and reversible. The history of trade has swung erratically between progressive periods of greater openness — greater freedom for individuals and businesses to interact economically across national borders — and reactionary periods during which such freedoms are curtailed by the political powers that be. It would be reckless to affirm that the pendulum will never swing the other way again. Whether globalization will thrive or fizzle will hinge primarily on political developments.

The historical context of globalization

If one surveys the entire span of human history, there is one overriding economic megatrend that stands out above all others: the development of the division of labor. The first human families and clans learned that they could have more wealth (i.e., food, shelter, clothing, defense) if each member of the society specialized in supplying what they were relatively skilled at providing. They then shared or traded their surplus with each other rather than trying to provide for all their needs by themselves. As humans gradually learned that expanding their social division of labor raised their standard of living, clans formed tribes, tribes formed villages, villages developed into cities, and cities became parts of states. Along the way, enterprising individuals spearheaded the expansion of the division of labor by venturing to trade with strangers across the valley, across town, and eventually across oceans.

It is an ineluctable economic truth that the more people who are included in the social division of labor, the greater the resulting productivity and the higher the standard of living that is achieved. This clearly implies that human wealth and standards of living will be maximized when every human being is integrated seamlessly into a global division of labor. This would be a state of perfect globalization. Obviously, we are far from that today, but this is the ultimate potential of globalization, and it is the direction toward which human history is unmistakably moving.

The great barrier to progress

If the benefits of the division of labor are so demonstrable, what has retarded its development over the centuries? In a word, coercion — that is, the willingness of human beings to use force and violence against each other. The division of labor performs its wealth-creating wonders only when peace and freedom prevail. Under those conditions, exchanges are voluntary and occur only when both parties to the transaction perceive that they will benefit from the exchange. Both sides profit; hence total wealth has increased, however minutely. By contrast, when exchanges are the result of coercion, one side gains at the expense of the other; then, total wealth does not increase, and in fact, often decreases.

The use of force is the great crippler of the division of labor. War destroys wealth, both in the obvious ways and indirectly by disrupting divisions of labor that create wealth. Similarly, wealth is diminished when a division of labor is the result of coercion rather than free choice. This can happen either by positive coercion — compelling one to perform labor that he otherwise would not choose to do (e.g., socialist central planning, forcible colonization or explicit enslavement) — or by negative coercion — depriving one of the freedom to trade with whom one would choose (e.g., a dictatorship erecting an Iron Curtain or a democratic government imposing a trade barrier).

All these interferences with the division of labor are institutionalized on a large scale in the nation-state, which has become the great stumbling-block in the historical evolution of the division of labor toward its all-inclusive, global destiny. What makes the nation-state so formidable a barrier to the attainment of a global market is that it concentrates immense power in the hands of a relative few.

Assuming that our goals are the elimination of human poverty and achievement of the maximum potential of the human race, from the point of view of the overall welfare of the human race, the only rational conduct would be conditions of peace and liberty that allow the division of labor to develop without interference. However, what is rational for the whole is not necessarily rational for the individual. Peace is the rational policy for citizens seeking to improve their standard of living. By contrast, when calculating in terms of potential benefits to certain individuals, e.g., the ruler and his lieutenants who would reap the lion’s share of the fruits of a victorious conflict, war appears to be the rational alternative. Similarly, an import tariff is economically irrational to the people in the country imposing it because it keeps products more expensive than they could be; however, the policy is eminently rational from the point of view of the powerful elite who profit from the tariff — the producers who receive this privileged protection, and the political leaders who provide it. In order to prosper, then, people need to find a way to limit the power of government.

Swings of the pendulum

The last half-millennium has seen several swings of the pendulum between people having the freedom to trade across national boundaries in a peaceful “we-with-them” approach and governments denying that freedom, adopting a hostile “we-against-them” attitude. The Age of Mercantilism (roughly 1500 to the late 1700s) was an example of the latter. Protective tariffs enriched the privileged few at the expense of the many.

The 18th century brought revolutionary change. The biblical principle of equality before the law began to take root in people’s minds. Privilege and elitism were de-legitimized. Locke, Blackstone, Montesquieu and America’s Founding Fathers combined powerful reasoning with revealed biblical truths, giving impetus to the belief that the sole purpose of the state was to provide equal protection to the God-given rights of individuals. After its publication in 1776, Adam Smith’s “Wealth of Nations” convinced many that the true measure of a nation’s wealth was the standard of living of its people, not the wealth of the political leaders, and that free markets and free trade were both necessary and justified.

These intellectual and moral revolutions spawned the constitutional republic of the United States, which (though marred by its racial blind spot) was designed to prevent government power from abridging the rights of individuals or from conferring privileges on special interests. These liberating ideas impacted Europe, too. Individuals in both North America and Europe were freer than ever before to trade with whomever they chose. The results were spectacular. Those countries that had the freest markets and freest trade — the United States and England — prospered the most. In the 19th century, international trade was freer than ever before and, consequently, occurred in greater volumes than ever before, generating greater prosperity than ever before. In fact, some still refer to the late 19th century as the first era of globalization since goods were being shipped between all the populated continents.[3] While the technologies of transportation and communication were less advanced than they are today, politically there was greater freedom to trade then than there is today.

The “first globalization” was a major casualty of World War I. After the Great War, mercantilistic protectionist policies returned with a vengeance. Those beggar-thy-neighbor policies escalated into an all-out trade war that helped to precipitate the Great Depression. The resulting economic pain exacerbated the poisonous atmosphere of international distrust and hostility that eventually erupted into World War II.

After World War II, American and European leaders, having lived through the tragically destructive consequences of waging economic war against each other, saw the need for a viable international system of peaceful commerce, and they set about to reduce trade barriers. The General Agreement on Tariffs and Trade, passed in 1947, succeeded in lowering some tariff barriers and its successor organization, the World Trade Organization (WTO), which began to function on Jan. 1, 1995, made further progress at reducing or eliminating various trade barriers.

The WTO appeared at a time of great optimism for those who favored a global marketplace. After the collapse of the Soviet Union, and in light of Communist China’s vigorous adoption of many aspects of a market economy, euphoric commentators went so far as to proclaim “the end of history”[4] and a new golden age in which democratic capitalism would span the globe. Governments were racing to sign trade agreements. In addition to more than 150 member states joining the WTO between 1992 and 2002, various national governments rewrote more than 1,500 laws to facilitate foreign direct investment (FDI).[5]

Globalization was on the march. Global trade and FDI surged. Businesses achieved greater efficiencies by taking advantage of the expanded global division of labor, many economic goods improved in quality while becoming more affordable to consumers, global production grew at impressive rates, and hundreds of millions of individuals climbed out of poverty. The world appeared to have entered a new era of peaceful cooperation promising unprecedented prosperity.

Alas, something happened on the way to the millennium. The current Doha Round of WTO negotiations, which was supposed to reduce trade barriers, has failed miserably. Ernesto Zedillo, the former president of Mexico currently serving as director of the Yale Center for the Study of Globalization, commented, “It seems that countries came to these talks with the aim of creating loopholes to avoid obligations rather than undertaking serious trade liberalization.”[6] The voters of developing countries — including those of some long-time friends, such as Ecuador — have elected leaders strongly opposed to trade agreements with the United States. Congress almost rejected a free trade agreement with five Central American countries, adopting CAFTA (the Central American Free Trade Agreement) by only a single vote. When the leaders of the greatest economic power in the world — in many years, the number-one exporting country and long a leading proponent of fostering peaceful international relations through trade — fear the exports of such economic titans as Honduras and Guatemala, it is apparent that the United States’ commitment to international trade and globalization must be waning. Why is this happening and who are the “anti-globalizers”?

The American anti-globalizers
Part 1: The protectionists

As one would expect, vested economic interests have sought government protection from foreign competition. Thus, American labor unions fought the adoption of the North American Free Trade Agreement (NAFTA) in 1994 because they didn’t want to compete with low-wage Mexican laborers; domestic sugar producers opposed CAFTA because they didn’t want to compete with low-cost Central American producers; textile companies zealously campaigned to retain quotas limiting the importation of cheaper textile products from abroad; farmers lobbied Congress to defend their subsidies against the paring knives of the WTO negotiators; etc.

Often in recent years, these special interests have succeeded in getting or keeping such protection. If one looks at the available evidence, it would seem that the economic case for protectionist policies is much weaker than the case for free trade. Research has estimated that the average family income in the United States is about $10,000 higher due to the reduction of trade barriers over the past 50 years and that reducing remaining trade barriers by just one-third would add another $2,500.[7] Conducting a cost-benefit analysis for trade, the economic benefits of trade are at least twice as large as its costs, saving American consumers billions of dollars annually.[8] Anyone even slightly familiar with economics can understand that protectionism forces consumers to pay higher prices than they otherwise would. Few would dare say that higher prices are good for the people, for rare is the shopper who goes about seeking to pay the highest prices he can find.

In spite of these facts, polls show that more Americans believe that foreign trade hurts the U.S. economy more than protectionism does.[9] It turns out that the protectionists have a very effective trump card: They appeal to Americans’ patriotic sentiments by making their slogan “Save American jobs!” Even some citizens who understand that protectionism comes with costs are willing to pay those costs to help save jobs. There is only one problem with this reasoning: It is fallacious.

Overall, domestic protectionism eliminates more jobs than it saves. By preventing American businesses from buying the inputs they require as inexpensively as their foreign competitors can buy them, protectionist policies place American businesses at a competitive disadvantage against their foreign competitors, resulting in lower sales, profits and employment in those businesses. For example, tariffs on imported steel have caused the loss of several times as many American jobs in steel-using businesses as they protected in the steel industry itself. This was true in the 1980s and with the Bush tariffs in 2002 to 2003.[10] Similarly, two long-time American candy companies — Brach’s and Life-Saver — found that the only way they could stay competitive, when protectionist policies kept the American price for sugar two or three times higher than the world price, was to move their production offshore — Life-Saver from Michigan to Canada and Brach’s from Illinois to Mexico.[11]

Seen in this light, protectionist policies cannot be honestly presented as a simple matter of saving American jobs. The truth is that they save certain American jobs at the expense of other American jobs. The question, then, becomes one of raw political power — who has the clout to secure a privileged benefit at the expense of fellow Americans — rather than of national loyalty or fairness.

Another aspect of protectionism that flies under the radar screen of most Americans is its ripple effect on the American taxpayer. One of the fundamental insights shared by economist Ludwig von Mises is that government interference with free markets causes maladjustments and unpleasant side effects that create demands for further intervention. For example, when taxpayers are taxed to subsidize farmers, they take a second financial hit by paying above-market prices for goods that include the subsidized commodities. Higher prices impose hardships on poorer Americans, so our “compassionate” government hits the taxpayer a third time by issuing food stamps to poorer Americans. When guaranteed prices stimulate overproduction, the taxpayer is hit a fourth time to build and maintain storage facilities for the surplus. Often, Uncle Sam “compassionately” donates surplus supplies to poorer countries. The huge influx of supply depresses market prices for those commodities in the recipient country, squeezing profits from local producers, keeping them poor and jeopardizing their economic viability.[12] Our “compassionate” government hits the American taxpayer a fifth time to give foreign aid to those poor countries. Ironically, some of the leaders of countries that have received foreign aid assert that instead of aid, all they need is for the United States and other developed countries to open their markets to exports from developing countries so that the people there could earn what they need.[13] Apparently, our government is not yet that “compassionate,” choosing to retain import quotas to benefit privileged domestic producers.

The American anti-globalizers
Part II: The myth-enthralled

Protectionists are willing to exploit the political system to transfer wealth from their compatriots — the American consumer — to their bank accounts. We can understand their rationale: financial self-interest. By contrast, many other opponents of trade and globalization do so out of devotion to some cause or ideal. In the case of these anti-globalizers, their actions are pitiable rather than admirable, because they are in the thrall of various myths that cause them to take positions that work against their own professed objectives.

Environmentalist opposition to globalization rests on the myth that U.S. multinational enterprises (MNEs) will take advantage of greater openness to FDI to wreak environmental havoc. It is fashionable to believe the worst about MNEs, but the ones with which I am familiar are all proud of how they are helping to improve the environmental standards in developing countries. That admittedly anecdotal statement is corroborated by a systematic study conducted jointly by the University of Toronto and Oxford University, which found that “NAFTA’s trade and investment liberalization is producing an environmental regulatory push to the top, rather than a race to the bottom.”[14]

Another common environmentalist myth is that economic development leads to environmental degradation. The fact is that wealthier societies are cleaner societies.According to exhaustive studies by such eminent institutions as the World Health Organization and Princeton University, once societies attain a certain level of economic development (somewhere between $4,000 and $8,000 per capita, depending on the specific pollutant) pollution progressively declines.[15] There is a simple, logical explanation for this phenomenon: Human priorities shift according to how wealthy people are. The priorities of the poor in developing countries are the basics of life: food, shelter, clothing, health care and education. Once those priorities have been addressed, people become more ready to tackle pollution. The wealthier a country’s population, the more anti-pollution measures it can afford. Thus, environmentalists who hope to curtail and clean up pollutants should favor globalization rather than oppose it, because globalization will hasten the economic development that generates the wealth to pay for environmental improvements.

Another criticism of globalization is the tired refrain that the rich are getting richer, and the poor, poorer. The poor are getting richer, too — at least, the poor who are participating in globalization. According to Mary Anastasia O’Grady, one of the editors of the “2007 Index of Economic Freedom,” “the incomes of poor individuals across the globe are rising” and “the gap between the per-capita income of have-not populations and that of the developed world is narrowing.”[16] This confirms earlier studies, which found that those countries that have embraced globalization and allowed their citizens to participate in the global marketplace have created new wealth at a far faster rate than those which have not.[17]

Another myth is that MNEs are exploiting the poor in developing countries. What the anti-globalizers decry as “exploitation” is actually the creation of jobs that provide a lifeline out of extreme poverty. Yes, working conditions are harsh, hours are long, and wages are meager by our standards, but all these poor people are asking for is a job similar to what our own ancestors in Europe toiled at in the early stages of our own economic development. Hundreds of poor people in developing countries stand in long lines hoping to be “exploited” by getting a better job than any they have ever had before. Globalization has lifted hundreds of millions of people out of poverty faster than ever before.[18]

Another common myth is that gigantic MNEs hold the balance of power over developing countries. This is utter nonsense. There are tens of thousands of multinational enterprises in the world, with thousands more coming into existence every year.[19] Clearly, the few hundred truly gigantic MNEs aren’t monopolizing international business. In fact, nearly 90 percent of U.S. firms that export employ fewer than 100 people.[20]

By contrast, there are fewer than 250 countries in the world. Countries have many times more options for potential partners than MNEs do. Periodically, there are news reports about a government expropriating — nationalizing — private business operations (e.g., Bolivia and Venezuela in 2006 and 2007), but do you ever read accounts of a private business taking over a country? Governments have power to incarcerate CEOs of private businesses, but private businesses can’t jail a country’s ruler.

If anti-globalizers really want to cut business down to size, they should favor globalization, because that would increase competition, and there is nothing more feared by businesses than competition. It is competition, not monopolies, that causes thousands of businesses to disappear every year.

Still another popular myth is that the United States has an outsourcing crisis. In January 2004, NAFTA’s 10-year anniversary, it was clear that NAFTA had not devastated employment in the United States. Instead, during that decade, the number of jobs in the United States increased by more than 18 million and 80 percent of those jobs paid wages above the U.S. median.[21]

The outsourcing alarmists conveniently overlook the increase in domestic employment that results from the efficiencies that firms realize by outsourcing parts of their operations. For example, such outsourcing in the information technology field “created over 90,000 net new jobs in 2003 and is expected to create 317,000 net new jobs in 2008.”[22]

Paralleling outsourcing is the phenomenon of insourcing. As of 2004, there were “6.4 million jobs in the United States in which the employer is a foreign company. The rate at which these insourced jobs are growing is faster than the rate at which jobs in general are being lost.”[23] Employment in the United States is growing more rapidly in foreign-owned companies than in domestically-owned companies.[24] Last year, The Wall Street Journal reported that “Roughly one in 20 Americans now works for a foreign-owned firm, and those jobs on average pay 30 percent above the U.S. median.”[25] Foreigners have outsourced more jobs to the United States than vice versa,[26] yet American anti-globalizers want to “rescue” us from international trade?

NAFTA and the WTO

The U.S. government, under Democrat and Republican presidents alike, strove mightily for the creation and adoption of NAFTA and the WTO, the two principal trade agreements adopted by the United States in the last 15 years. The American goal had been to establish a durable framework for peaceful trade relations. However, once those agreements went into effect, it seemed that politicians of both parties vied with each other to see who could do the most to defy those agreements, thereby aligning themselves with the anti-globalizers.

Republican President George W. Bush defied the WTO by imposing the afore-mentioned special tariffs on foreign-produced steel for 20 months in 2002 and 2003. Bush also targeted Canadian producers of soft lumber, eventually extracting four or five billion dollars of illegal tariffs from them in defiance of multiple NAFTA rulings (tariffs that effectively raised the average price of building a new home in the United States by $1,000).[27]

Not to be outdone, Democratic Sen. Robert Byrd of West Virginia succeeded in pushing The Continued Dumping & Subsidy Offset Act of 2000 through Congress. The so-called “Byrd Amendment” amounted to a virtual declaration of a trade war against foreign producers. It empowered domestic firms to file charges of unfair trade practices against their foreign competitors, and then, without an audit or any other serious investigation of the validity of their claims, Uncle Sam would collect tariffs on the targeted imports and give those funds directly to the U.S. firms that filed the complaints against their foreign competitors. Multiple WTO rulings denounced this financial piracy, but Congress resisted abolishing the Byrd Amendment for several years until American firms were lining up to file claims for more money than the entire U.S. gross domestic product, at which point Congress finally pulled the plug on this corporate welfare scheme.[28]

The flagrant flouting of the very trade agreements that U.S. leaders had worked so hard to persuade other countries to adopt has aroused considerable anti-American sentiment around the globe. If we can’t even cooperate peacefully and honestly with Canada, then our foreign relations are on shaky ground indeed, and we are not well-positioned to provide the leadership toward freer markets that the world needs.

Globalization and the United States: Looking ahead

Many foreigners view the United States with distrust and contempt for our hypocrisy in expecting other countries to open their markets to us while we restrict their access to our markets. To developing countries, this one-sided approach seems like a new form of colonialism.[29]

Our heavy-handed actions are not without negative consequences. Recently, economist David Malpass wrote, “Latin America seems to have decided that the United States is one of the weak links in the global economy. It is reaching out to Europe and China for investment and free-trade agreements, with the view that those are the economic relationships of the future.”[30] Similarly, a number of African countries recently have contracted to export their resources to China.[31]

The good news is that, despite the protectionist actions of the United States (and other developed countries) during the last few years, global trade continues to expand.According to the WTO, global exports increased by two-thirds from 2000 to 2005.[32] Too many people around the world have learned that participating in the global economy is the fast track to development for the current momentum toward globalization to stop. If globalization is unstoppable, the United States has a choice: to embrace and promote the process, and through it build partnerships and friendships, or to resist it and so offend and alienate others. In the post-9/11 world, one would think that U.S. leaders would strive to cultivate good will, support and cooperation from other countries.

Former President Bill Clinton spoke wisely when he said that trade “is not sufficient to build a peaceful, free world, but it is absolutely necessary.”[33] There is an old maxim that if goods don’t cross borders, armies will. More recently, Thomas Friedman has floated a tongue-in-cheek Dell Theory of Conflict Prevention: “No two countries that are both part of a major global supply chain, like Dell’s, will ever fight a war against each other as long as they are both part of the same global supply chain.”[34] The underlying logic is compelling: If individuals are enjoying reciprocal benefits from trade, they have more incentive to maintain those relationships than to rupture them through war; thus, extensive trade relations are an incentive for peace.

Even if all national trade barriers in the world were removed, there would still be much more work to be done, as Clinton implied, to maximize and optimize the global division of labor. The human race still would have to contend with various attitudes and behaviors that retard economic progress, including: rigid social barriers, such as India’s caste system; the indifference of wealthy elites who make no effort to provide opportunities for educational or economic advancement to the poor in their societies; the tendency for criminals and politicians to use coercion to violate the rights of others; self-righteous and apocalyptical religious beliefs; and all forms of bigotry. Viewed in this light, eliminating all government barriers to trade would be only one step toward achieving a complete globalization of the division of labor. Yet this step would be immensely significant. It would lift billions out of poverty, tap into human potential that otherwise would have been lost, and make the world richer due to the consequent emergence of scientists,inventors, entrepreneurs, healers, leaders, artists, visionaries, builders, etc. Surely this is a worthy goal.

A helpful first step in restoring credibility about the United States’ commitment to free markets would be to cease filing complaints with WTO and NAFTA panels and to acquiesce with all decisions adjudicated by those panels. In doing so, we might make amends to some whom we have aggrieved, but even more importantly, we would reaffirm the rule of law. When presidents and congressmen lead the way in violating laws that they and their predecessors have enacted, as has been the case with NAFTA and the WTO, this not only conveys to foreigners that the United States is not honorable, it corrodes respect for the law at home, contributing to a demoralized “rules are made to be broken” ethos. A country where the people become accustomed to disregarding laws is on very unstable footing.

In addition, the United States should go beyond the provisions of trade agreements in liberalizing trade. As Dr. Hans Sennholz taught generations of Grove City College economics students, if a foreign government is abusing its citizens by blocking cheaper imports or taxing them to subsidize certain producers, what sense does it make for our government to adopt the attitude, “We will abuse our own citizens until you stop abusing yours”?Making U.S. trade liberalization contingent on other governments instituting similar reforms by adopting the WTO framework was a major strategic error. The best policy for the United States would be to unilaterally abolish all our protectionist measures. This would have three major benefits: It would raise the standard of living; it would promote international peace and friendship; and perhaps most importantly, it would eliminate a whole raft of privileges that go against the fundamental American/biblical principle of equality before the law. Embracing globalization is not only the prudent and profitable choice, it is the right one.

[1] Charles W. L. Hill, Global Business Today, 4th ed., New York: McGraw-Hill/Irwin, 2006, p. 3.

[2] Ray Kurzweil, “Long Live AI,” Forbes, 15 August 2005, p. 30.

[3] Cf. www.pbs.org/wgbh/commandingheights/lo/timemap/index.html: See “1914 Europe.”

[4] Cf. Francis Fukuyama, “The End of History,” The National Interest, Summer 1989; Francis Fukuyama, The End of History and the Last Man, Free Press, 1992.

[5] United Nations, World Investment Report, 2003.

[6] Ernesto Zedillo, “A Trade Fiction,” Forbes, 19 September 2005, p. 41.

[7] “A Case for Trade,” unsigned editorial, Investor’s Business Daily, 14 September 2006, p. A14.

[8] Brett D. Schaefer, and Alison Fraser, “Myths and Realities: The False Crisis of Outsourcing,” Backgrounder No. 1757, Washington, D.C.: The Heritage Foundation, 13 May 2004, p. 6.

[9] Cf. Tomas Larsson, The Race to the Top, Washington, D.C.: The Cato Institute, 2001; pp. 40-41.

[10] Cf. “Review & Outlook, “Bush’s Steel Opening,” The Wall Street Journal, 11 November 2003, http://www.opinionjournal.com/forms/printThis.html?id=110004287; Hill, pp. 196-8; Mark W. Hendrickson, “The Trade Balance Blues,” Special Report #42, Public Policy Education Fund, Inc., August 1987, p. 3.

[11] Review & Outlook, “Bittersweet Trade,” The Wall Street Journal, 13 May 2002, p. A12.

[12] Examples of this phenomenon are legion, including dumping sugar, cotton, and dairy products with devastating effect into African countries.Cf. Roger Thurow & Geoff Winestock, “Addiction to Sugar Subsidies Chokes Poor Nations’ Exports,” The Wall Street Journal Online, 16 September 2002, p. 1; Review & Outlook, “Tricks of the Trade,” The Wall Street Journal, 8 October 2002, URL: http://online.wsj.com/article/0,,SB1034036931482524120.djm,00.html; “WTO Plans to Probe US Cotton Farm Subsidies, The Financial Times, 29 September 2006, p. 7.

[13] www.pbs.org/wbgh/commandingheights/lo/people/pe_name.html. See “Benjamin Mkapa.”

[14] Ruth Walker, NAFTA’s impact,” The Christian Science Monitor, 3 April 2001, p. 8.

[15] G.M. Grossman & A.B. Krueger, “Economic Growth and the Environment,” Quarterly Journal of Economics 110 (1995), pp. 353-78; Rhona Mahoney, “Dirty Deal?” Reason, May 1992, p. 50; Dr. Thomas H Jukes, “PBS Canonizes Carson,” AIM Report, April-A 1993, p. 2.

[16] Mary Anastasia O’Grady, “The Poor Get Richer,” The Wall Street Journal, 16 January 2007, p. A21.

[17] Cf. “A Case For Trade,” Investors Business Daily, 14 September 2006, p. A14.

[18] Cf. Friedman, p. p. 315; Peter Ford, “Consumer Tidal Waveon the Way: China’s Middle Class,” The Christian Science Monitor, 2 January 2007, pp. 1, 12.

[19] United Nations, World Investment Report, 2003.

[20] U.S. Department of Commerce, “A Profile of U.S. Exporting Companies, 2000-2001,” February 2003. (See www.census.gov/foreign-trade/aip/index.html#profile)

[21] Donald J. Boudreaux, “NAFTA at 10,” Pittsburgh Tribune-Review, 18 January 2004, p. F1.

[22] Global Insight (USA), Inc., “The Comprehensive Impact of Offshore IT Software and Services Outsourcing on the U.S. Economy and the IT Industry,” 30 March 2004 at www.itaa.org/itserv/docs/execsumm.pdf.

[23] Organization for International Investment, “The Facts About Insourcing,” at www.ofii.org/insourcing (April 27, 2004).

[24] Cf. Thomas Kane,Ph.D,; Review & Outlook, The Wall Street Journal, 27 May 2004, p. A20; Joel Millman, “In Castoffs of U.S. Industry, Mexico Finds Some Bargains,” The Wall Street Journal, 10 May 2004, p. A1; Scaefer & Fraser, op. cit., p. 5; “Foreign Friends,” The Economist, 8 January 2000, pp. 71-72.

[25] Review & Outlook, “The Don’t Invest in America Act,” 19 July 2006, p. A12.

[26] Cf. Michael M. Phillips, “More Work Is Outsourced to U.S. Than Away From It, Data Show,” The Wall Street Journal Online, 15 March 2004, URL http://online.wsj.com/article/0,,SB107919804320754591.00/html; Walter B. Wriston, “Ever Heard of Insourcing?”, The Wall Street Journal Online, 24 March 2004; URL http://online.wsj.com/article/0,,SB108009765048743855,00.html.

[27] Cf. Josie Newman, “Timber accord rankles Canadian firms,” The Christian Science Monitor, 18 October 2006, p. 7; Review & Outlook, “America’s Bad Trade Example,” The Wall Street Journal, 7 October 2005, p. A16.

[28] Review & Outlook, “Tariffs for the Rich,” The Wall Street Journal, 4 October 2005, p. A26.

[29] Cf. Remarks by Dr. Mahathir bin Mohamad, former Prime Minister of Malaysia, and Jairam Ramesh, Senior Economic Advisor to India’s Congress Party at www.pbs.org/wgbh/commandingheights/lo/people/pe_name.html.

[30] David Malpass, “The Triple Deficit Paralyzes Policy Vision,” Forbes, 29 January 2007, p. 27.

[31] “China, Africa ink contracts worth US $1.9b,” China Daily Online, 6 November 2006 at http://english.peopledaily.com.cn/200611/06/eng20061106_318690.html; Isabel Goncalves, “Africa Exports to China Grow,” International Business Times, 3 August 2006 at http://www.ibtimes.com/articles/20060803/africa-china-trade.htm

[32] Daniel Altman, “Globalization still has a long way to go,” International Herald Tribune, 9 January 2007 at http://www.iht.com/bin/print.php?id=4146568.

[33] See fn 12, then “President Bill Clinton.”

[34] Friedman, pp. 420-421.