4 - Globalization and Welfare
Published online by Cambridge University Press: 05 June 2012
Summary
WHY GLOBALIZATION?
Globalization is a very broad phenomenon, that cannot be discussed comprehensively in a short chapter. However, it raises important issues about modern economics. It concerns a doctrine – free trade – for which there is very wide support indeed among economists. Yet, quite apart from the anti-globalization movement associated with, for example Naomi Klein's No Logo (2000), there are economists who question whether the gains resulting from globalization may outweigh the harm that they see it doing. Even if they support the idea of globalization, they find much to criticize about the way it is happening. Globalization is thus an issue that forces attention on ideology – on certain beliefs that are deeply held by many economists and that appear to critics to be prejudices – and on why conflicting opinions are so difficult to resolve that it can seem to outsiders that economists cannot agree on anything.
To reach conclusions about whether globalization is good or bad, it is necessary to answer two question ‘What are the consequences of globalisation?’ and ‘Do these consequences raise or lower social welfare?’ Answering the first question means considering issues such as whether trade liberalization raises a country's income or whether the free movement of labour and capital raises incomes for the poor. These involve ‘positive’ economics and relate to things that economists should, in principle, be able to resolve using scientific methods.
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- The Puzzle of Modern EconomicsScience or Ideology?, pp. 51 - 73Publisher: Cambridge University PressPrint publication year: 2010