EOnation: Globalization and National EO policy

["Jacquelyn Yates" <Yates@salem.kent.edu>]

  At Michael Harrington’s suggestion, I’ve just read two great little books. 
Dani Rodrik is working on economic globalism and makes a strong case for 
careful  study and thoughtful action.  He’s an economist through and through, 
favoring the efficiency of a world wide market, but demonstrating that some of 
the criticisms of globalism are well-founded.  For example, he shows that 
countries which have opened to the worldwide market have experienced more 
extreme variations in real income and real consumption.  For every $1 gain in 
wealth due to world wide trade, there is $5 in churning.  This may be worth it, 
he argues, but people must be protected from shocks in the process.  
  He finds that the countries which opened to trade early and extensively have 
adopted more social insurance programming, but he worries that this may be 
coming to an end as a useful strategy, because it is no longer possible to tax 
capital (without risking capital flight?), so the taxes fall increasingly on 
labor.  
  He also points out that sometimes a little protection may be warranted and 
can be tolerated, since the world economy is already quite open, and 
liberalizing international trade is not a supreme value to be placed above all 
others.   He favors revising the WTO “escape clause” to make it easier to use, 
so that firms will not be forced to turn to the anti-dumping clause for 
protection, which from his view, only impedes efficiency in the market.   He 
wants targeted social programs to help those affected with income support and 
retraining.
  I liked this work a lot.  It spans economics and politics, which seems 
essential for talking about international trade.  It adds considerable 
precision to understanding the impact of global trade and it points toward some 
humane and practical solutions.   Clearly in the long run expensive unskilled 
labor in the developed nations will inexorably be replaced by cheaper unskilled 
labor in the developing world, so the goal must be to help this happen in a way 
which gives hope and dignity to all those affected.
  His work meshes nicely with our interest in national policy, in that employee 
ownership is one way to anchor capital in communities and decentralize the 
process of economic adaptation to thousands of employee-owned companies with 
the human resources to make creative changes in what they sell and how they 
produce it.  As owners, employees have a powerful incentive to stay in their 
communities and help their companies succeed.  They aren’t very likely to pick 
up their capital and leave, and they aren’t as likely to lay off.  They have 
the most motivation of any company to stay where they are and try to make 
things work.  There are already employee-owned companies which are outsourcing 
to the developing world and using the cost savings to become more competitive 
in an international marketplace.   Rodrik’s idea of sensible and time-limited 
protectionism might be a help to some of them. Under the threat of global 
competition, more employee-owned companies should use the techniques of 
progressive management: training, information and employee involvement, in 
order to benefit from the resourcefulness and creativity of their employees.   
And national governments can help with tax expenditures for  EO and 
cooperatives and by funding support organizations to “get the word out” and 
help companies learn how to get their employees effectively involved in 
developing constructive solutions to globalization.


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Jacquelyn Yates, Ph.D.                
Political Science                                   
Kent State University - Salem         
2491 S.R. 45 South     
Salem, OH 44460

yates@mail.salem.kent.edu
FAX  330-332-9256 
Tel. 330-337-4282



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