Globalization Will Doom Us All

A recent piece in the LA Times warns against globalization, arguing that, with telecommuting, high-end service jobs as well as low-end manufacturing jobs are going to start moving en masse from the First to the Third World. Merely getting a good education will no longer give North Americans job security.

Havng lived in the Third World for some time, I, for one, am not worried.

The first thing to remember is that there is no way the fact of your neighbour growing richer is going to impoverish you. Just the opposite, really; if you are running any kind of a business or supplying any kind of a service, you are boind to get more custom from him, for he is a consumer as well as a producer.

And so are you. If the Third World can provide given goods and services more cheaply than the First World, all of us in the First World benefit too, for we are all consumers.

We simply specialize in what we can do most efficiently. Just as, on an individual level, I have never found it worthwhile to make my own shoes or do my own dentistry, but instead to rely on purchasing these from others.

But I don't see any sudden exodus of high-paying jobs to the Third World in any case.

Third World countries just do not have the education system the First World has. They have fewer colleges and universities per capita, and the colleges and universities they have are much less well-equipped. A university library in the Third World, for example, would pale in comparison to the average small-town library in Canada.

A first-class university and college is a pretty sophisticated piece of infrastructure; more intricate and trickier to build and maintain than a bridge or a dam. And it relies more heavily than almost anything else you could name on honesty in its transactions; because it relies more heavily than almost anything you could name on reputation. It is too easy to sell marks or to logroll for a relative.

Corruption is, as Mancur Olsen and other ecopnomists have demonstrated, the primary reason why the Third World is poor in the frst place. This is just what they lack.

This is also why apparently highly qualified professionals from the Third World often have trouble getting work in their field even when they are already in North America: their credentials can never be assumed to be authentic. This is going to be just as much a problem for them when marketing their skills from India or Madagascar.

My wife assures me, for example, that it is entirely possible to buy a degree from a recognized university in the Philippines, and have it certified by all the relevant authorities right up to the President's Office; and it is still completely bogus. No tests taken, no classes attended.

This doesn't matter so much in some fields. In, for example, the IT field, where the proof is very quickly apparent in the pudding. But it's going to be a big problem elsewhere.

In the Persian Gulf, hospitals and their patients are perfectly eager to hire doctors from Europe, even though they must pay them three times the salary they do for an Indian or an Arab doctor sitting in the next office.

Difference in cost is crucial in low-skill, low-pay occupations. Difference in skill is crucial in high-skill, high-pay occupations.