"So, in the US in this example, workers are initially relatively scarce and lose from trade, while employers gain; in China workers are initially relatively abundant and gain from trade, while employers lose. The key to understanding this is to focus on the change in relative scarcity once labour and capital embodied in traded goods and services can flow across borders.
This, however, ignores the overall increase in the size of the economy resulting from trade. This could benefit everyone in the economy and could therefore offset the losses experienced by the disadvantaged group (in this case, the US workers)." (Core Econ, Chapter 18). In today's class we will inquire into the question of who benefits and who is hurt by economic globalization.
You should have read the following sections in Chapter 18 ("The Nation and the World Economy") of Core Econ: 18.6 Winners and Losers from Trade and Specialization and 18.7 Winners and Losers in the Very Long Run and Along the Way.
Write a blog post about the sections you read for homework, relating the ideas in the reading to the country you have chosen to study.
Share a question that you would like to discuss as part of our Socratic Discussion today.
Participate in a Socratic Discussion. This rubric will be used to evaluate your blog post and discussion.
Read the following sections in Chapter 18 ("The Nation and the World Economy") of Core Econ: 18.8 Migration: Globalization of Labour
Podcast: In this podcast, David Autor of MIT talks with EconTalk host Russ Roberts about the fundamentals of trade and his research on the impact on workers and communities from trade with China. Autor's research finds large and persistent effects on manufacturing jobs and communities where those jobs once were. Autor and Roberts discuss whether these results capture the full impact of increased trade with China and what the policy response might be that could help workers hurt by trade. And in this article on "Globalization's Backlash" Autor is quoted arguing that the nature of globalization (which sectors are impacted) has changed.
Podcast: In this podcast, Ed Learmer discusses whether outsourcing good for America and how foreign competition affects wages in the United States? Leamer, professor of economics at UCLA, talks about the effects of outsourcing on wages, jobs, and the U.S. standard of living. Drawing on a review of Thomas Friedman's The World is Flat, Leamer talks with host Russ Roberts about technology, trade, productivity and inequality.
Book: On the Principles of Political Economy and Taxation by David Ricardo
Book: Robert Heilbroner (The Worldly Philosophers) on David Ricardo
Podcast: In this podcast, Nobel Laureate in Economics Angus Deaton of Princeton University talks with EconTalk host Russ Roberts about the economics of trade and aid. Deaton wonders if economists should re-think the widely-held view that redistribution from rich nations to poor nations makes the world a better place. The conversation focuses on the challenges facing poor Americans including the rising mortality rate for white Americans ages 45-54.