Resumo de How The World Looks As A Single Economy

The most striking conclusion of orthodox trade theory was that low wage and high wage countries could profitably trade without one side undermining the other. Of course, the theory was never quite that simple. There was a learned debate about the conditions in which trade and capital movements could be a substitute for the free movement of labor. A useful shortcut is to look at the world as a single closed economy. Thus, the same ideas can be used to explain why an American professor does or does not earn more than an American truck driver, as to explain the relative movement of US and Chinese wages.
In its Fourth Quarter Global Research, HSBC discusses what a unified world economy means in practice. The most obvious conclusion is the loss of market power by western labor as companies transfer more and more activities to China and India. The prices of consumer durables and services have been kept down by these competitive forces; but raw material and oil prices have been forced up by the enlargement of the world economy. Recent headline price increases should be regarded as a mechanism for weakening the western world's terms of trade through a reduction in real wages.
The last resort of the old fashioned free trader was to say that, even if manual workers as a class lost out in the developed world, their countries as a whole gained. Any resulting problem would be one of the internal distribution of income. A new element has, however, been added by Professor David Colander, writing in the January issue of the US Challenge magazine. He argues that the older countries as a whole might cease to benefit from extending free trade once the ownership of capital itself shifted to the newer ones.
The outsourcing branch of the US economy could itself be outsourced, as Chinese and other foreign firms with residual claimants outside the United States replace current firms as the economic engine of the world and the residual claimants of the benefits of trade. The recent US hypersensitivity to attempted Chinese takeovers suggests he has a point. In that case the wherewithal for redistribution towards the domestic losers might not always be available.
What discomfits me about the world as closed economy thesis is that it seems to support the uplift approach of politicians and industrial leaders who say that the West must constantly innovate, re-educate, find new products and generally pull its socks up to hold its own against countries such as China and India. What happens if some of us reject the sermonising and carry on as lotus eaters, enjoying our prosperity but not exerting ourselves overmuch to improve performance?
The best hope then is that all the bracing effort enjoined on us by summit communiqués might not be so necessary if the equalization takes place from the other end: that is, if it is Chinese wages that do the rising rather than western wages doing the falling. Until recently this would have seemed an idle hope because of the vast reserve of unemployed Chinese labor that could be brought into the market economy without having to raise pay.
In fact, however, many of the frictions that market economists normally deplore are working to gradually raise the pay as well as the educational standards of the workers on the coastal fringes, who cannot be immediately replaced by millions from the interior. We are in the end left with a political paradox. Free trade still benefits the world as a whole, even if not all of it all of the time. The most likely losers are in the old industrial west, which means that the emerging world must be gainers by that much more. Yet the armies of anti-globalizing protesters base their case on the supposed harm to poorer countries. There is something wrong somewhere.

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