Thursday, August 5, 2010

Our Globalized Economy

With the terrible recession we are currently suffering through, the focus has been on our national economy. We must remember, however, that we are part of a global economy that has dramatically effected our own.

We speak to this issue whenever we discuss trade, jobs going "overseas," the value of the dollar, and in the case of the recent oil spill; multi-national corporations such as BP. In nearly every case, these elements of globalization are portrayed as gigantic negatives. They are believed to be the reason for the loss of manufacturing jobs, for our "shrinking" middle class, and the threat of "structural" unemployment (permanently high unemployment because many jobs are gone forever).

Our friends on the Left and those in the labor movement believe we should push back the hands of time and undo these forces of globalization. We need to "re-negotiate" our major trade agreements, which in their interpretation means they are effectively recinded, and replaced by tariffs and trade restrictions. They would also like to see laws passed that would prevent American corporations from moving jobs overseas. How they might do that in a free country they never really explain.

So, let's talk about the forces of globalization. First, this has been going on for a very long time. When I was working for a snowmobile company in the 70's we were purchasing significant parts of our snowmobiles and clothing line from Japan and Korea. We were also looking for more ways to automate our welding, painting, and plating of parts. We even started looking at robot welding, which now dominates automotive assembly. We were forced to do this in order to remain competitive within the industry. The loss of manufacturing jobs is not just due to off shoring, it is also the result of greater levels of automation.

Everyone should read Thomas Friedman's description of the forces of globalization, The World is Flat. He is certainly correct to say that no significant corporation can survive today without being plugged into the global economy. And that includes all of the amazing technological innovations of our time that enable us to network and communicate from anywhere in the world. Demanding a provincial or national economy is like trying to keep the horse and buggy as a major source of transportation in the face of automobile industry.

The cat is long gone from the proverbial bag when it comes to a global economy. We must do everything we can to increase our capacity for innovation, creativity, and entrepreneurship. Continuing education and life-long learning will be a must, as we adapt to the technological changes in our industries and workplaces. As an example, at age 62, I have been learning how to prepare courses and teach online. It is a necessary change that fits our mandate to train and support missionaries. It has actually been a bit of an adventure, as I've learned new methods and developed new materials, as well as tackling subjects I've never taught before. The reward has been that I get to help missions professionals, many located on the field while taking the classes, gain insights and ideas that will increase the effectiveness of their ministries.

There is another aspect to this globalization thing; it has the potential to improve the lives of the poorest people of the world. As followers of Jesus, this possibility should make us big fans of viewing the world economy as an integrated whole. People like Ingrid Munro in Kenya, are helping former beggars and thieves escape crippling poverty. She is very clear, she is not giving people "charity." She is teaching them the skills and self-discipline necessary to earn an income and care for their families. Ingrid Munro is part of the global microfinance revolution that is improving countless lives.

C.K. Prahalad of the University of Michigan has done significant research into the aleviation of global poverty. His research is documented in the book, The Fortune at the Bottom of the Pyramid. His premise is that the 4 billion people (2/3rds of the world's population) that live in poverty (less than $1500 per year) are people with all the capacities of any other human being. They are, in fact, 4 billion potential customers and entrepreneurs. Dr. Prahalad's goal is to create a gigantic global middle class and change the economic pattern of the global economy from a pyramid to a diamond, with a small minority of the wealthy at the top and small minority of poor at the bottom. As we help the poor improve their lives, we dramatically improve the state of the global economy. But like Ingrid Munro, Dr. Prahalad makes the point that improving their lives involves improving their character by eliminating the wasteful habits in their lives (drinking, gambling, etc.) and helping them acquire the self-disciplines of a work ethic, regular saving, and care for the needs of their family. (It is a perfect fit for the Gospel, discipleship, and church planting.) In other words, this globalization thing is a pretty cool deal.

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