Financial Times Editorial Comment: Globalisation needs more than PR to be sold to its losers
Financial Times Editorial Comment: Globalisation needs more than PR to be sold to its losers
Copyright The Financial Times Limited 2007
Published: June 20 2007 23:04 | Last updated: June 20 2007 23:04
Globalisation has many virtues. Chief among them, it has contributed to an unprecedented accumulation of human wealth over the past decades and has helped lift a record number of poor out of poverty. Yet globalisation has also created losers, particularly among the middle and lower classes in rich countries. Governments need to do more to help the groups most hurt.
A recent employment survey by the Organisation for Economic Co-operation and Development confirms some accepted facts: the share of output going to labour has declined over the past decade, leading to a rise in inequality within rich countries. Yet it also concluded that real wages in these countries were still rising and that globalisation can be consistent with high employment rates, given the right policies. Thus Angel Gurría, OECD secretary-general, declared: “The story has to be told better.”
Indeed, better public relations may go part of the way. To some extent, it is not globalisation itself but technological innovation that triggers some fundamental economic changes. But trying to disentangle the two is a pointless activity because open markets help foster and spread new technologies. Furthermore, emphasising absolute gains in income is little consolation to those who share the twin economic fears of rising inequality and job insecurity.
Governments need to be more active in helping the losers in rich countries. Instead of trying to safeguard industries in vulnerable sectors, governments need to be more inclusive and protect citizens.
It is also important to understand where the potential for a backlash comes from. Many people do not mind that Bill Gates or Warren Buffett are worth billions. Both earned their wealth under the set of rules that apply to most others in rich countries. But the worry is that the global market system works to the disadvantage of people in already low-paid, low-skilled jobs in developed economies.
So government policies should focus on enabling the individual to feel as confident as possible within the global system. This could be through funding additional training or other means to help those who have lost their jobs to re-enter the market quickly. It might also imply a more progressive tax system, partial wage insurance, and untying social benefits such as basic healthcare from jobs to avoid undue fears of unemployment.
Globalisation is inevitable. It brings great prosperity to many. But if it proceeds in an atmosphere of resentment, its undoubted overall benefits will be at risk.
Copyright The Financial Times Limited 2007
Published: June 20 2007 23:04 | Last updated: June 20 2007 23:04
Globalisation has many virtues. Chief among them, it has contributed to an unprecedented accumulation of human wealth over the past decades and has helped lift a record number of poor out of poverty. Yet globalisation has also created losers, particularly among the middle and lower classes in rich countries. Governments need to do more to help the groups most hurt.
A recent employment survey by the Organisation for Economic Co-operation and Development confirms some accepted facts: the share of output going to labour has declined over the past decade, leading to a rise in inequality within rich countries. Yet it also concluded that real wages in these countries were still rising and that globalisation can be consistent with high employment rates, given the right policies. Thus Angel Gurría, OECD secretary-general, declared: “The story has to be told better.”
Indeed, better public relations may go part of the way. To some extent, it is not globalisation itself but technological innovation that triggers some fundamental economic changes. But trying to disentangle the two is a pointless activity because open markets help foster and spread new technologies. Furthermore, emphasising absolute gains in income is little consolation to those who share the twin economic fears of rising inequality and job insecurity.
Governments need to be more active in helping the losers in rich countries. Instead of trying to safeguard industries in vulnerable sectors, governments need to be more inclusive and protect citizens.
It is also important to understand where the potential for a backlash comes from. Many people do not mind that Bill Gates or Warren Buffett are worth billions. Both earned their wealth under the set of rules that apply to most others in rich countries. But the worry is that the global market system works to the disadvantage of people in already low-paid, low-skilled jobs in developed economies.
So government policies should focus on enabling the individual to feel as confident as possible within the global system. This could be through funding additional training or other means to help those who have lost their jobs to re-enter the market quickly. It might also imply a more progressive tax system, partial wage insurance, and untying social benefits such as basic healthcare from jobs to avoid undue fears of unemployment.
Globalisation is inevitable. It brings great prosperity to many. But if it proceeds in an atmosphere of resentment, its undoubted overall benefits will be at risk.
posted by Carlos T Mock @ 7:42 AM
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