Globalization has been an ongoing process for at least the past century, but it seems to be rapidly accelerating today due to the influence of the Internet and especially of social media networks such as Twitter, Facebook, and YouTube. This has ramifications not only for the global economy but also for global politics and international relations, and within the economic impact it threatens to undermine the profit-friendly global regime that has been the meaning of “globalization” in common understanding for some time.
The key feature of the global economy that has resulted in protests and calls for protectionism is imbalance. It is a global economy in which capital freely crosses national boundaries but labor does not, making it possible for a company to move operations to wherever the labor is cheapest, fostering a race to the bottom that has hurt working people to the gain of the corporate bottom line. But the cure for this unpleasant aspect of globalization may not be to restrain it, but to complete the process.
How are wages in poor countries kept low? The answer depends in part on common standards of living and expectations, and in part on the activities of governments. As investment in the poor country increases, living standards tend to rise, and ultimately so do the political demands of the people, leading to political change. But these have traditionally been slow processes. The explosion in recent years of social media networks may speed the transition dramatically, and in the end restore balance to the economy much faster than has been anticipated.
First, by facilitating communication, social media networks increase awareness in poor countries of the kind of lifestyle available in more advanced parts of the world, including the kind of salaries and wages that are paid in the United States, Europe, and other wealthy nations, as well as the lifestyles those higher wages and salaries can purchase. This has the effect of raising the expectations of labor in poor countries. Secondly, by facilitating political organization, the social media are empowering demands for economic fairness, or the correction of perceived unfairness. This makes it increasingly difficult for the governments of poor countries to hold wages down in an effort to attract capital, and at the same time increases activism in the wealthy countries themselves.
We may already be seeing this at work in China, where wages are rising dramatically, according to a recent article in the New York Times. In part, this is due to the rise of independent labor unions in China, which are officially outlawed by the government. But can the government, which succeeded in suppressing a democracy movement mostly confined to college students, similarly repress a movement embraced by the working class? At the same time, wages are rising rapidly in other countries besides China. The development appears to be global.
In the end, globalization may bring the cure to its own ills.
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