When the word “globalization” is used in political discourse, it often connotes some relatively recent historical events. Whether it’s the establishment of the World Trade Organization, the advent of just-in-time supply chains, or the rise of Asian manufacturing, opponents of “globalization” make it sound as though the international exchange of goods and services is a product of recent modernity and there was some golden age decades ago when countries didn’t interact with each other economically.
Scott Lincicome at the Cato Institute has launched a new project to defend globalization. One of the important points he and the other contributors make is that globalization has “been going on since the dawn of recorded history.”
That’s not to say that more recent historical events haven’t been disruptive, or that the level of globalization has been constant. As Daniel Griswold wrote for the project, the U.S. economy has opened up considerably in the past few decades, with more international trade, international investment, and immigration than in the past.
But that hasn’t made Americans at large worse off. The reason the middle class is smaller than it was in the 1970s is that more people moved to the upper class. The lower class is smaller, and today, 36 percent of U.S. households make six figures. The long-run decline in the price of consumer goods relative to income means that people today spend a smaller proportion of their pay on basic necessities. And the homeownership rate, which was 55 percent in 1950 — the supposed post–World War II golden age of the middle class — is 66 percent today.
As Lincicome wrote in his essay for the project, globalization isn’t going anywhere. International data show that global trade is either holding steady or continuing to increase, depending on what’s being measured, despite the sanctions and “decoupling” often covered by the media. Americans continue to eat ethnic foods and listen to foreign music at higher rates than in the past, and countless businesses have arisen to cater to those tastes. Former National Review critic at large Kyle Smith is slated to contribute an essay to the project about globalization in entertainment.
Even the trend of “near-shoring,” much written about and less acted upon, wouldn’t be a repudiation of globalization, just globalization in a different form. The basic principle is the same: that gains from trade apply beyond national boundaries and can make all sides better off. “Globalization skeptics missed this nuance because they misunderstood ‘globalization’ as an immutable, straight‐line series of trade flows and transactions instead of what it actually is: a constantly changing web of individual, mostly private actors doing business daily across national borders,” Lincicome writes.
That sort of activity has been going on for centuries. It used to be restricted to only a few industries or only for the benefit of the wealthy. Think of the spice trade or luxury goods for nobility. Now, almost everyone in wealthy countries can benefit from that sort of trade, in almost every industry and for almost every type of good. And countless poor countries around the world strive to increase their participation in global markets, because they know that globalization has raised incomes and reduced extreme poverty.
The Cato project will continue to release new content demonstrating how globalization works. It’s not a political statement. In fact, the point seems to be in demonstrating that globalization isn’t a product of politics, though it certainly has political implications. Rather, it is an outgrowth of the human propensity to trade that Adam Smith wrote about and has been part of our nature since creation.