September 06, 2006

When does the “loss” really occur, when the worker has become globally uncompetitive or when his job finally disappears?

Sir, Martin Wolf, back with vigor, tells us that “We must act to share the gains with globalization’s losers” (September 6), which sounds right but when he then says that “being opposed to trade is no more reasonable than being opposed to other sources of higher productivity” he also reminds us that there really is no reason why we should make a case of specifically differentiating losers from globalization from losers affected by other factors.

Fact is that whenever there is a more efficient alternative to deliver goods or services elsewhere but countries are not using them because of other considerations, like wanting to assure employments at home, these jobs are effectively placed on artificial life support and so the “loss”, when the jobs finally disappears, has much more to do with a reduction of the subsidies or the cost of keeping them, than with globalization. For instance in the case of the orange growers of rich Florida and that are now kept in business by specific duties on orange concentrate that in some cases have been equivalent to more than 70% ad-valorem duties, the already existing losers are those consumers of poor Arkansas that have to pay a higher price for their morning juice.

By the way the whole concept of “losers” is wrong if implies having to win all races, since the real losers from globalization and from all other sources of higher productivity as well, are those that hang on too long on days gone by without moving on.