by James Pethokoukis is has a master's degree in journalism and no credentials in economics. Perhaps this explains at least part of his failure to understand that globalization under neoliberal doctrine — "free markets, free trade, and free capital flows" results in the great leveling as capital flows where resources, including labor, as least expensive in order to be be competitive. This implies that wages and capital investment in developed countries, where resources are most costly, will fall as the emerging world rises. This will continue under such a system until an equilibrium level is reached.Obviously, domestic workers in developed countries are disadvantaged by this policy and will continue to be unless government step in to soften the blow, or neoliberal globalization is ended.The
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James Pethokoukis is has a master's degree in journalism and no credentials in economics. Perhaps this explains at least part of his failure to understand that globalization under neoliberal doctrine — "free markets, free trade, and free capital flows" results in the great leveling as capital flows where resources, including labor, as least expensive in order to be be competitive. This implies that wages and capital investment in developed countries, where resources are most costly, will fall as the emerging world rises. This will continue under such a system until an equilibrium level is reached.
Obviously, domestic workers in developed countries are disadvantaged by this policy and will continue to be unless government step in to soften the blow, or neoliberal globalization is ended.
The policy of the present administration is the latter.
But it is not the only policy available for addressing the issues that neoliberal globalization entails.
MMT economists recommend recognizing that receiving real resources from abroad is a real benefit domestically. Moreover, a currency sovereign has the ability to purchase the use of real resources to prevent their being idled. Such a government also has the capacity for improving the value of real resource use through public investment in education, health care, infrastructure, R & D, etc. while addressing temporary problems with welfare provision and an employer of last resort program funded by the currency issuer.
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