Globalization is very good for some (maybe even most) people. It's going to be very difficult for others. As barriers to trade and the free movement of capital come down, the accelerated movement of goods, money, and ideas will make some people very rich indeed. It will be a huge challenge for the rest of us.
Throughout the last hundred years or so in America, historical trends, economics, social policy, communications technology, and culture have served to, if anything, reduce the class differences that exist in our country. The CEO may have made 20 times what you made, but everybody watched the same TV shows, the same sporting events. Everybody got to go on vacation. Most people could afford cars. The 'American Dream' was being realized by more and more Americans.
Over the last few years, we've seen a regression in that trend. CEO salaries are through the roof, in some cases totally to thousands of times the salaries of their junior employees. I recently saw an article that pointed out that, over the last 20 years, the average salaries of the best-paid 20 percent of Americas had gone up by approximately 30 percent, while the salaries of the poorest 20 percent had only gone up by 16 percent. The rich are, in fact, getting richer, while the poor are getting poorer.
Globalization will only serve to accelerate this trend, at least in America (in India and China, the poor are getting richer, too). Just as globalization means that, essentially, the world's best talent is competing with the best talent around the world, it also means that the workers of the world are in competition, too. So Ford has to lay off 30,000 workers and close 14 plants because, in global competition, they can't compete if they're paying US union wages.
In his books Rise of the Creative Class and Flight of the Creative Class, Richard Florida makes the case that the existing paradigm for class in the U.S. is obsolete: that people are defined more by what they do than by how much capital they control, and that capital follows creativity to such an extent that our most creative workers are also generally our best paid. I would like to take this one step further... We are rapidly becoming a society of two classes: those who are 'in' and who are participating in the global economy, and those who are 'out' and are not.
A few ago, in the dot.com years, these would have been described as the information 'haves' and 'have nots.' I think, for the first time, we are seeing the economic affects of being a 'have' or a 'have not' with regard to information technology.
Those who are 'in' are participating in the evolution of our society, whether through their brainpower, their leadership, or by investing their capital.
Those who are 'out' are living, functioning, trying to get by. Their biggest goal has to be to try to get 'in' and participate in the global economy, tap into the dizzying acceleration of change that shows no signs of slowing.
Our biggest goal as a society should be to help those who are 'out' to get 'in.' A world in which half of the population earns $500,000 a year or more, and the other half earns $8 an hour, will be a scary place indeed. (I'm reminded of the future earth in H.G. Wells' The Time Machine.)
We have to reverse the widening divide between rich and poor in America. We have to create educational and social structures to help more people get into the global economy. if they can't, we'll all suffer the consequences.
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