A Strategy to Promote Healthy Globalization

US workers and voters are impatient with globalization – and the highly skilled, productive workers in the West do not want any competition to dent their top wages. “[Workers’] effort is complemented by capital, broadly defined to include equipment, managerial expertise, corporate culture, infrastructure and the capacity for innovation,” writes Lawrence Summers, Harvard professor and former treasury secretary for the Clinton administration. In open economies, however, companies have little incentive to invest in education or the infrastructure of their homeland, because as Summers notes, companies can always threaten to relocate to cheaper locales. Withdrawing from the global economy is not an option for any country. “A decoupling of the interests of businesses and nations may be inevitable; a decoupling of international economic policies and the interests of American workers is not,” Summer concludes. Governments have good reason to care about standards for all global workers – and cooperation on international taxes and regulation could eliminate inequities and resentment. – YaleGlobal