The prophet Hosea said it best:
With their silver and gold they have made idols for themselves… how long will they be incapable of innocence? …For they sow the wind, and they reap the whirlwind…
In the relentless pursuit of worldwide domination and wealth, America sowed the wind and is reaping a whirlwind. Blinded by the allure of “silver and gold,” America’s leaders fell into a trap – a trap called globalization.
It was supposed to open the markets of the world to American goods and make America’s fields and factories yield even more wealth for their owners. And it did – for a while.
But it did so at the expense of the American worker.
Globalization dealt American workers a devastating blow in their age-old struggle with investors.
You see, when both labor and capital are confined to the same arena, the contest is relatively even. But when capital is free to pack up and find a new arena, the playing field is severely tilted against labor.
This oppressive state of affairs was highlighted today by an Associated Press report from China.
According to Business Writer Elaine Kurtenbach, demands for better wages and conditions are threatening to end the “era of cheap costs that helped make southern coastal China the world’s factory floor.” (Photo above shows Chinese workers.)
It had to happen, of course. It always does.
Eventually, workers – wherever they may be – wake up and ask for a fairer share of the wealth produced by their labor. A series of strikes and other ugliness then ensues.
Once upon a time the conflict would be resolved by some kind of compromise, usually including better wages and working conditions. That was how a significant part of America’s middle class evolved – which incidentally led to the development of the world’s largest consumer market.
This huge consumer market became the engine that drove American prosperity – and the world economy.
But when American politicians became convinced that abolishing tariffs was the way to global prosperity,the seeds of the whirlwind were sown.
Investors – or rather the management class in charge of investment – found they could make more money by closing factories in America and moving their operations to some other country, such as China.
Now, the strikes and ugliness are beginning in China. And capital is fleeing.
“Many companies are striving to stay profitable by shifting factories to cheaper areas farther inland or to other developing countries,” Kurtenbach reports. “And a few are even resuming production in the West.”
But don’t get too excited about the news that “a few” manufacturers are moving back to “the West.”
It’s a big world out there, and many “developing” countries would welcome the sweat shops being spurned by China.
As long as globalization remains the order of the day, the decline of American industry will continue. And this will inevitably result in a dwindling middle class, a shrinking consumer market, and an impoverished economy.
Globalization undoubtedly has led to cheaper goods at places like Wall-Mart. But lower prices have come at a devastating cost.
Not only to America but also to the world.