Comments on: Globalization: Intended and actual http://blogs.reuters.com/emanuelderman/2011/08/24/globalization-intended-and-actual/ Models.Behaving.Badly Fri, 14 Sep 2012 09:10:53 +0000 hourly 1 http://wordpress.org/?v=4.2.5 By: SethTS http://blogs.reuters.com/emanuelderman/2011/08/24/globalization-intended-and-actual/#comment-145 Mon, 29 Aug 2011 20:47:19 +0000 http://blogs.reuters.com/emanuelderman/?p=249#comment-145 This is only surprising if you think of the entire US economy as an abstract point, equating everyone’s experience to the national average. Apparently, you are innovating by representing the US with as many as TWO distinct points, much less as a (nearly)-continuous wealth distribution.

The extra supply of labor brought into the global economy lowered the cost of labor leading to greater returns to capital at the expense of labor. American capital benefits from this gain, while American labor is lowered toward the new global mean. Other forces have been at work, but certainly it seems intuitive that globalization would not be a force for greater *equality* within the US.

American workers used to benefit somewhat unfairly from being ‘close to’ American capital. That advantage has been eroding steadily for decades now. But our political culture equates all Americans to the children of Lake Wobegon: we are ALL going to be above the global average. Too bad that is mathematically impossible.

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