Globalization, writes George Reisman, is the process of bringing the entire world into the system of division of labor and thus into the system of social cooperation, of which division of labor is the essence. Its completion will mark the highest level of division of labor and social cooperation that it is possible for human beings to achieve, given the size of the world’s population.
In conjunction with its essential prerequisite of respect for private property rights, and thus the existence of substantial economic freedom in the various individual countries, its potential is nothing less than the elevation of the productivity of labor and of living standards all across the globe to the level of the most advanced countries, and at the same time the radical improvement in productivity and living standards in what are today the most advanced countries.
My analysis is inspired by the writings of my great teacher, Ludwig von Mises, who recognized the growth or decline of the division of labor as synonymous with the growth or decline of the foundations of economic progress and of society itself. FULL ARTICLE
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This all assumes that Darwins Theory of Evolution is a myth and the biosphere miraculously appeared at the staff of God.
Wherebye God decreed
1) There shall be no population genetics.
2) There shall be no status hierarchies.
3) There shall be more that 7 Billion people who can live the life style of the well to do, without causing mass extinctions in the biosphere.
4) There shall be forever more magical thinking.
Wow! This article is an example of why I think Reisman is one of the best economists alive today. Good job, Prof. Reisman! I have a few critques that I would like to make, but I haven’t got the time right now.
Mark, you posted a bunch of words that- by chance it seems- form complete setences, but really signify nothing. (Hey, if you are going to be snide and insulting, I can too!)
The essay ignores the breaking down of old social customs. I predict that the next generation will chose their mates on the basis of intelligence, ambition, and education and not race, religion, and country of origin. This will create a voluntary world wide segregation into castes. An economy of workers and ruling class.
Billwald writes,
” I predict that the next generation will chose their mates on the basis of intelligence, ambition, and education and not race, religion, and country of origin.”
Um, you don’t think there might be a connection
between the two sets of categories?
Good point.
Doesn’t everyone work for someone in some shape or form? Only government employees don’t seem to work for anyone since their pay comes from taxes.
If globalisation is about free trade, I would love it. Perhaps my definitions are wrong, but when I think of globalisation I think of global regulations, global taxes, global government, the UN, global drug wars, global intrusions into peoples financial privacy, global intellectual “property”, and global enviromental controls. I also tend to think of companies like Yahoo who turned in prosters to the Chinese government inspite of being a US company. If it’s fiar for China to demand that Yahoo complies to it’s laws, even if they violate peoples basic rights. Then is it fair for US to punish yahoo according to our laws as if they violated an individuals free speech at home. Why not?
However, the biggest problem of global free trade is that it only goes half way. That is, people in the US are free to buy and import anything we want from China as long as what we want to import is not human labor.
Without that restriction (assuming honest money), companies would likely prefer to build factories and infrastructure in free countries with a strong tradition of protecting property rights and import cheap labor rather than export factories. So now all our factory infrastructure is in countries that have no respect for liberty.
Thus, the more globalisation in trade happens the more it will benefit all of us. But, without labor globalisation it will also lead to increasing global instabilities.
A quote from John Derbyshire from his book review of Mark Styn’s “America Alone.”
Please don’t get me wrong. I am sure Mark Steyn is sincere here. I am sure he believes this stuff about “culture.†Most educated people do. Most will continue to do so for a few more years, while the neuroscientists, geneticists, genomicists, anthropologists, paleontologists, and statistical sociologists sap away beneath them—until the ground gives way. (A professional academic biologist friend of mine is in the habit of snapping out, any time anyone takes refuge in this “culture†stuff: “Culture? Culture? What does that mean? Where does it come from? What are the upstream variables?â€
Snap out of it George!
re: Culture:
http://www.tamu.edu/classes/cosc/choudhury/culture.html
http://www.thefreedictionary.com/culture
http://clusty.com/search?input-form=clusty-simple&v%3Asources=webplus&query=culture+definition
This guy-”professional academic biologist”- is hopelessly wrong.
A sequence of calculations based upon Prof. Reisman’s Table 1 in his article:
(1): Growth in 1st world share of world GDP, with 3% growth rate over 100 years: 32 * (1.03)^ 100 = 615.00
(2): Growth in 3rd world share of WGDP, at 7% growth rate over the same 100 years: 8 * (1.07)^100 = 6941.7
(3): = (1) + (2) = 7556.7 – Total world (real) GDP in 2106, using 2006 as the index. WGDP in 2006 (nominal/real difference n/a, as 2006 is the base year): 40
(4): Price level drop, in order to account for stable money supply: (40) / (7556.7) = 0.005293. Or, each monetary unit is worth 1 in 2006, and 188.9 in 2106
(5): Nominal share of GDP in 1st world: 615.00 * 0.005293 = 3.255
(6) Nominal share of GDP in rest of world: 6941.7 * 0.005293 = 36.74
(7) Total nominal WGDP in 2106, = (5) + (6) =, about 40 – it is 40.00 (39.995). Round-off error explains the differentium.
(8) So, what we have is the First World producing less than 10% of WGDP in 2106, a marked drop from production of 80% of it in 2006, while being (in real terms) about 19.21 times better off in 2106 than in 2006. We have the paradoxical conclusion that it is possible to both advance through time and decline relative to contemporaneous competitors – all thanks to a positive, though varying between regions, rate of productivity growth for all.
I thought this result was neat.
David C:
“If globalisation is about free trade, I would love it.”
So would I, but among the various forms of government intervention you mention, the one that is conspicuous by its absence is government fiat currencies that have corrupted the concept of money to the point that free trade is impossible.
After all, insofar as “money is the root of all civilization (historian Will Durant), it is the root of all the exchange that characterizes the process upon which civilization is built.
Thus, in today’s money-corrupted world, “globalization” is simply “dollarization” — i.e., a massive paper Ponzi scheme that will wreak havoc when it collapses, no matter that the day of reckoning is postponed via the creation of a euro-like replacement for it in the form of a new “money of the Americas” — http://www.americanfreepress.net/html/cfr_making_moves.html
Bottom line: Globalization will only realize its potential when the world returns, once and for all, to sound money, if for no other reason than few of the other forms of government intervention could survice in such a climate. For while sound money (gold and silver) is the very oxygen of a free society, it is carbon dioxide for the state, which would choke to death accordingly.
“Bring it on.”
David White
“Bring it on.”
I’m with you. Is it just me? It seems at this point, we would be better off just stepping aside and letting them crash spend the whole system into the dirt. It would force pressing “the reset button” on the global economy and force them to stop lying to us about the value of our money. God help us. It’s going to be one hell of a ride.
Prof. Reisman:
You wrote the brilliant essay “Against Fiduciary Media” awhile back, so I’d be interested in how you reconcile globalization with the exclusive use of this monetary fraud to power it.
Presuming free enterprise does capture the imagination of more significant portions of the population, the framework for which the accounting will fit is ably indicated in Dr. Reisman’s report.
It seems useful to consider converting the numerical figures into weights of gold, including an allowance for increase in gold production. for use in discussions of a future sound money regime (perhaps to have developed out of widespread use of electronic gold vault instantaneous transaction payment mechanisms).
Would Professor Reisman find these values increasing even more in the years ahead were he to add in a factor for a probable slight increase in population, at least in the populations catching up, if not even to some smaller extent in the now most highly progressed nations?
Mark:”"Culture? Culture? What does that mean? Where does it come from? What are the upstream variables?â€
According to research into culture and economics, religion/philosophy is the source of culture. Are you saying that “neuroscientists, geneticists, genomicists, anthropologists, paleontologists, and statistical sociologists” don’t believe culture exists, or that they’re not important?
Of course the study of cultural evolution became important before the study of biological evolution develped in importance (work on cultural evolution, such as the language evolution, was highly developed in the 18th century and may have help inspire the work on biologigical evolution in the 19th century).
It is also true that groups of people may both have the same genetic origin and live in a similar natural environment and yet have a very different culture – with not just different languages, but different ideas on ownership and many other matters.
In the end it is the ideas that people support that matter. For example, if people support the private ownership of land the environment (such as forests) will tend to be much better protected than if they either do not think that land can be owned (and, for example, anyone may cut down whatever trees they wish to) or that it is owned by the state – thus leaving the environment to the not so tender mercies of the politicians and administrators.
A person that is given “access” (in return for bribes or whatever) for a certain amount of time to an area is apt to treat it rather differently to a person who owns it.
On population pressure (an odd concern for the West where most fertility rates are below replacement level)a developed economy is the best way of dealing with them – people who are prosperious have no need to have many children to look after them in their old age.
Nor is economic development, if it is real (i.e. private property based) economic development, any threat to the environment – inculding the water and the air (for these also are, or should be, a matter of private property tort defence).
Lastly on the popular “global warming” (whether it is caused by C02 emissions or by the rather active Sun of the last few years), I find the best response to people who say that we must “do something” is to say “I am so glad to find another supporter of atomic power stations”.
This separates people who really are concerned (rightly or wrongly) with C02 emissions (such as James Lovelock) and who one should listen to, from the rich kid “progressives” who it is a waste of time to talk with on any subject.
Another brilliant essay prof. Resiman. Can’t wait to read the next one.
The process of globalisation has been going on since the beginning of the industrial revolution. It is really, nothing new.
Björn Lundahl
“We have the paradoxical conclusion that it is possible to both advance through time and decline relative to contemporaneous competitors – all thanks to a positive, though varying between regions, rate of productivity growth for allâ€.
Yes, like Great Britain.
An excellent article! Professor George Reisman, thank you.
Björn Lundahl
“what I find astonishing here is that the fall in prices exactly matches the fall in first world (nominal) GDP! The fall in first world (nominal) GDP is to 5/24 of its initial level and so too is the fall in prices! Both are exactly the same!”
it is like saying that in 2006 the 1st world produces 8 units, assuming that productivity rises everywhere but the 1st world, then running through a deal of calculation to say that in 2106 1st world’s production in real terms (GDP/P) has remained the same.
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