As Michael allows, I didn’t hide the ball in my original post, nor did I claim that reversing “globalization” qua liberalized trade would by itself undo 70 percent of GDP. I could have saved us both a lot of grief by summing up the litany of booming growth indicators I provided — a near-tripling in the size of the economy, lower unemployment, robust wage growth, household wealth accumulation — with something like: “This is the economic record of the 40 years Vance thinks were so disastrous for America.”
Some of that record is directly attributable to lower trade barriers, but as I wrote a few paragraphs later, trade regimes alone don’t “capture the full warp and weft of globalization.” Global connectivity includes enhanced comparative advantage and intellectual and technological diffusion, as well as things like “the beneficial effects of foreign direct investment, labor and capital mobility, factor price convergence, multinational production chains, financial integration, and so forth, which are also well-recognized drivers of growth.”
Multinational production in particular interacts with trade liberalization in a synergistic way, with one model suggesting globalized production chains more than double the benefits of trade for a given country. And take some of the others in the list: Foreign-owned multinationals operating in the United States generated $1.52 trillion in American value added in 2024, employed 8.6 million Americans, and conducted nearly $100 billion in U.S. research and development. American multinationals, meanwhile, earned $660 billion on their direct investments abroad in 2025, leaving us with about a $350 billion surplus in direct investment income. FDI also makes U.S. firms more productive. One estimate suggests that in the first decade of the period Vance is talking about made U.S. manufacturing more productive: “FDI spillovers [are] economically important, accounting for about 14% of productivity growth in U.S. firms between 1987 and 1996.”
Critically, we also sit at the center of the global financial and monetary system, a structure of our device and control. The dollar is the world’s currency of exchange, Treasury securities supply much of the world’s collateral, and demand for dollar assets dramatically expands the capital available to, and reduces borrowing and transaction costs for, the U.S. government, businesses, and households alike. This is what economists call “exorbitant privilege” and JD Vance calls “a resource curse.”
Michael says U.S. population would have grown, and America would have developed new technologies, either way. That’s obviously true. Of course Americans would have made things and had children if NAFTA had never existed. Lots of things and lots of children, accounting for lots of our growth in the autarkic counterfactual. But labor mobility and immigrant inflows were certainly a major piece of population growth in this world. The question is whether this was a net positive. And again, on technological and intellectual diffusion and labor mobility, it seems clear that it was. One model suggests that as much as a third of American innovation between 1990 and 2016 came from immigrants (and, critically, from immigrants in collaboration with native-born).
Globalization is a capacious concept, and equivocation across different pieces of it is responsible for this exchange of Corner posts but also, substantively, for much of globalization’s discontents’ discontent. Vance’s original point, for instance, was about H1-B visas. That might be a poorly structured program. I think maybe it is. But there’s no question that the U.S.-designed and -led global economic, financial, and monetary architecture of which it is a part has been a boon during my lifetime.