Source: Global Times New Media

Recently, the US government's arbitrary actions in trade and tariff policies have not only aroused widespread opposition from the entire world but also caused ordinary people in the United States who are facing inflation problems to suffer greatly.

Given that Trump predicted this "America First" and anti-globalization policy direction during last year's US presidential election, some American economists are also reflecting on why many Americans at that time believed this policy direction was "correct," which led to Trump entering the White House.

Among them, Kyle Handley, an economics professor at the University of California, San Diego, wrote in an article that some Americans' enthusiasm for anti-globalization and their belief that globalization has harmed the US economy, even blaming so-called "harm" on China, stems from a deviation in America's own understanding of globalization.

In this article published on the website of the Cato Institute, a US think tank, Handley stated that he was motivated to write this article because some people in the US who oppose globalization have been spreading the false view that economists are overly optimistic about globalization and neglect the unemployment, industrial decline, and economic difficulties caused by globalization and the accompanying open trade and market globalization in the US.

Even some voices argue that mainstream economists who recognize globalization are "unreliable," and that the US government should go against these economists to find the "right" way out for the US.

In Handley's view, these anti-globalization voices are clearly wrong, as they generalize and selectively piece together facts. However, he also believes that the emergence of these erroneous voices is related to the mainstream media not clearly explaining the complexity of globalization, which has profoundly impacted the world economy, and presenting globalization in a simplistic and fragmented manner.

For example, he said that in the 1980s to 1990s, the academic community generally believed that free trade brought about by globalization would bring a "net gain" to the US, even if it caused some people to lose out in the process, this pain was "short-term," and would soon be compensated by other gains. Later, after China joined the WTO in 2000 and Chinese-made products began to flood into the US, some people believed that the previous notion in the academic community that the pain caused by globalization to US manufacturing was "short-term" no longer held true. They named this issue the "China shock" and began to study the negative impacts of the "China shock" and globalization on the US.

Handley believes that viewing issues in a one-sided and fragmented manner is generalizing.

Regarding the decline in manufacturing job opportunities, Handley said this trend appeared in the US far earlier than China joining the WTO. It started in the 1950s and 1960s and has continued to the present day—even according to a chart he provided showing the decline in US manufacturing jobs, the most intense period of this trend did not occur after China joined the WTO in the new millennium but in the 1970s to 1990s.

He pointed out that this was a period of rapid technological progress and productivity growth globally. Therefore, it wasn't someone taking away American workers' jobs; rather, these positions would inevitably be replaced by new technologies and automation such as robots. This phenomenon was not limited to the US; similar situations occurred in Japan, Germany, and many other developed countries, as well as in some developing countries.

"So, even if we waved a magic wand and had the US completely decouple from China in 2001, the long-term decline in manufacturing jobs in the US would continue, and American workers would still not find new opportunities," Handley wrote.

More importantly, Handley said that these lost manufacturing jobs have actually been transformed into increasingly prosperous service sector jobs in the US, such as technology research and development, financial management, transportation logistics, and warehousing. Even within the manufacturing sector, high-tech manufacturing in the US continues to develop and expand. However, this transition between old and new jobs has been more prolonged and complex than economists initially expected, and it has not occurred within the same industries. Economists have closely monitored and studied these developments over the past few decades. Handley said that even after thoroughly studying these situations, economists still widely acknowledge the benefits of globalization and believe that these benefits far outweigh the uncertainties and risks of protectionism, which is outdated and disconnected from the times.

"Industries rise and fall, and new industries will always replace old ones. There is no rule that the top industries of the 1980s and 1990s must continue to be the top industries of the new era, even though technology has advanced significantly... General Electric no longer produces light bulbs, IBM’s expertise has become cloud computing and software, 3M has become an innovator in consumer products rather than a mining company... These are all good developments," Handley wrote. He believes that it is precisely these developments brought about by globalization that have made the US a leader in science and technology innovation and financial services. He also believes that this shows the US has not lost its advantage in globalization, as advantages themselves are dynamic concepts that are constantly changing. Workers and companies that successfully transitioned have already benefited from the new productivity and dividends brought about by the US's growing advantages in new fields. This remains beneficial for the long-term development of the overall economy.

Additionally, when Handley discussed the benefits of globalization and free trade, he mentioned an interesting detail, namely that it is precisely due to free foreign trade that the US can now import eggs to address domestic egg shortages. He believes this demonstrates that globalization can greatly enhance the resilience of the US economy against uncertainty and risk. And a resilient economy is more popular with the market.

In summary, Handley believes that economists should continue to support the US in pursuing a globalized path, as both theory and reality prove that globalization is more beneficial than harmful to the US, and its benefits far outweigh those of protectionism, which is full of uncertainties, lacks resilience, and is out of touch with the times. However, this support should be more comprehensive, addressing both the benefits and the issues—guiding issues to be properly and realistically resolved within the framework of globalization, doing explanatory work, rather than allowing protectionism to mislead people into reversing history.

Finally, regarding globalization and the prospects of US manufacturing, a recent article in the UK's Financial Times mentioned an interesting poll. This poll was conducted by the Cato Institute, which published Handley's article, in August last year. One survey found that although a high percentage of Americans believe that having more Americans engaged in manufacturing is beneficial to the US, only a small percentage are willing to personally work in factories.

Original Source: https://www.toutiao.com/article/7493523322744046121/

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