Ordinary people have been hurt by globalism

Willem THORBECKE
Senior Fellow, RIETI

Gideon Rachman is right to celebrate that global trade has lowered the prices of goods such as iPhones and lifted millions in Asia out of poverty ("Why globalism is good for you," October 30). He is not right, however, to denounce as extremists those who say that trade hurts ordinary people.

Economists have long known that trade liberalisation harms lower-skilled workers in countries like America and benefits lower-skilled workers in countries like China. Until China's accession to the World Trade Organization in 2001, however, they did not know how long it would take for lower-skilled workers in America to find jobs comparable to those they lost due to import penetration, and how painful the transition would be.

To workers reeling from the "China shock," it is cold comfort to hear that globalisation benefits them by causing the iPhone X to cost $1,000 instead of $2,000.

November 1, 2018 Financial Times

February 5, 2019