Making globalization work

Economic Policy Institute President and author Jeff Faux has penned an absolutely fantastic briefing paper this month on the impact of globalization and, as the report is titled, how this powerful phenomenon can be made to work for average Americans. It's a touch on the long side for a casual reader, but I highly recommend trying to read the whole thing if you want to understand the dynamics in play - as opposed to reading the garbage Tom Friedman regularly puts out.

In the opening paragraphs, Faux lays his cards on the table. His argument is that in the US, as well as in both the Global North (industrialized nations) and the Global South (the developing world), the benefits of globalization as it is currently structured have been concentrated among the super-wealthy captains of industry and finance, while the costs have been disproportionately shouldered by working families at the middle and the bottom. since the signing of "free" trade legislation like Nafta in 1994, for example, real wages and benefits for the majority of workers are flat, millions of jobs have been destroyed (especially in manufacturing) and income inequality has intensified.

But that's not the only deleterious impact globalization has had on workers. Faux notes: "[N]ew global economic constitution primarily protects and promotes the interests of only one category of citizen—the global corporate investor. The rules of the global economy now give corporate property rights priority over human rights, undercutting the hard-won domestic social contract that has supported broadly shared prosperity in advanced societies and in some developing countries as well.

The rules have encouraged and often imposed policies of privatization, deregulation, domestic austerity, and export-dependent growth on sovereign nations. They have denied governments the right to effectively regulate imported products produced by exploiting labor and the environment, while requiring governments to protect corporate patents and other intellectual property. And they give corporate investors extraordinary privileges to sue governments in secret tribunals."

But Faux doesn't stop at merely diagnosing the problems with globalization, or even measuring the impact it has had on ordinary Americans, but rather puts forward a bold, realistic plan for harnessing the power of economic integration so as to benefit society at large. His individual suggestions are not revolutionary on their own, but taken together they represent one of the most comprehensive agendas for refocusing US trade, tax, labor and education policy to address these challenges. His recommendations section is long, but go check it out and you'll realize that far from being a helpless bystander to the changing structure of the global economy, our government can play an active role in shaping the future of the economic landscape.

After you finish reading this brief, check out this op-ed by Faux in The Nation entitled "The Party of Davos". It's a classic and a lot shorter.