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OECD vs Globalisation

Not quite, but the OECD has finally recognised that globalisation isn’t currently working to deliver improved living standards for everyone, a fact implicit in the title of its latest report Making Globalisation Work: Better Lives for All, I have a piece in Inside Story, headlined: The OECD joins the backlash against unfettered globalisation looking at a recent report they’ve issued. The subheading is

But can an organisation that has promoted a globalised world economy take on the massively powerful finance sector?

(Hint: Probably not).

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  1. Matt Cowgill
    June 16th, 2017 at 15:18 | #1

    It’s also worth having a look at their latest Employment Outlook, particularly the sections on fiscal policy and collective bargaining.

  2. rog
    June 16th, 2017 at 17:21 | #2

    Globalisation has been good for capital markets and bad for labour, esp in developed countries. They should be in balance but aren’t; consumers need cash to consume and credit is not a sustainable substitute.

    Markets have a way of rebalancing; Brexit and Trump may be the precursors to a voter shift to nationalist groups promising a reenergised labour dominant industrial sector.

    This might not make sense on a macro level but under employment has a corrosive effect on the human spirit, which needs to be able to see a future to be forward thinking.

  3. rog
    June 16th, 2017 at 17:26 | #3

    @Matt Cowgill Commentators seem fixated by monetary policy, Trump promises a refocussed fiscal policy that will build infrastructure using local business.

    In this regard he seems more Keynesian than his opponents.

  4. June 16th, 2017 at 18:36 | #4

    @rog
    Does King’s have a Lord of Misrule day?

  5. rog
    June 16th, 2017 at 18:49 | #5

    @James Wimberley Well you tell me; was Brexit a reasonable decision when considering the facts?

  6. hc
    June 16th, 2017 at 22:00 | #6

    The idea of globalizing economic activity is the most important and correct economic insight offered by economics. It dates to Adam Smith and modern trade theory has rigorously established the basis for such views. Offering people more economic choices improves average welfare. The simple point is that in improving averages some groups are left out – manufacturing workers in developed countries by cheaper imported products and the immigration of competitive workers. Without compensations capital and property-owners gain at the expense of labour. It is wrong-headed to simply attack globalization. The key issue is to insist on the compensations required to ensure that nobody loses. Capital gains taxes and transitional assistance to displaced workers are basic compensatory mechanisms. But it is difficult to achieve such compensations because the owners of capital largely drive the democratic process. So the target should be to target this process and certainly not to dismantle free trade and free capital flows. On free immigration the issue is more complex. The best type of immigrantsfor destination countries are those with skills since they create least distributional injustice there but, of course, without remittances, they impose the biggest costs on source countries. My own view is that we should target much lower rates of immigration and use substitute ways of achieving the objectives of free immigration – namely encouraging free capital flows and fostering free trade in goods.

  7. rog
    June 17th, 2017 at 07:33 | #7

    @hc One problem with globalisation is that politics is localised and beneficiaries of free trade, through geography or otherwise, may not be able to engage in the democratic process. Hence the rise of nationalism and populism, both presenting potential barriers to free trade.

  8. Rob
    June 17th, 2017 at 10:24 | #8

    @rog
    Trump promises that, but actually will deliver a bigger siphon for tax dollars to be transferred to the wealthy from the poor and middle class.

  9. John Quiggin
    June 17th, 2017 at 10:33 | #9

    @rog

    Rog, you’re commenting on the wrong post I think. Look at the post on asset recycling.

  10. June 17th, 2017 at 10:52 | #10

    Making it work is not an easy task..but hope it doesn’t come to what has been of the Eurpoean Union

  11. Salient Green
    June 19th, 2017 at 19:14 | #11

    For the OECD to finally recognise that globalisation isn’t currently working to deliver improved living standards for everyone is for them to kind of say that “it is not a disaster but it is an embarrassing fact for all of the advocates and benefactors of globalisation and it is leading to much unrest which is what the OECD is concerned about.”
    The real disaster, the absolutely shameful, insane, deadly but suppressed disaster is the impact of globalisation on the environment. Overpopulation, overproduction, overconsumption, pollution, species extinctions, etc. etc. are all made worse, if not caused by, a largely unregulated economic globalisation.