Globalizátion: The irrational fear that someone in China will take your job

Chapter 4. Can We Make Any Money?: What Globalization Does to Profits

At his confirmation hearings in 1953 to be Secretary of Defense, Charles Wilson, CEO of General Motors, said, ". . . for years I thought what was good for the country was good for General Motors and vice versa." The issue was whether he should sell his stock in the company in order to avoid a conflict of interest. Wilson did sell the stock, and depending on how he reinvested the proceeds, the Senate Armed Services Committee may have done him and especially his heirs a great service.

Putting aside the returns on their investment, it does seem clear in the twenty-first century that what is bad for GM may not be so bad for the country, and that the once-tightly intertwined interests of the automobile giant and the rest of America have been weakened, if not entirely eliminated. The larger issue is the extent to which globalization has changed the terms under which companies compete with one another, and whether profitability is as dated as the tail fins on a 1958 Cadillac. To give the answer away, globalization has not repealed the underlying rules of market economies. Firms that operate in intensely competitive industries will not get very rich. Those fortunate companies that have markets to themselves—with perhaps a few friendly competitors—will continue to thrive.

Companies Under Globalization 3.0

The current round of globalization has not curtailed economic growth in the developed world. Although employees in certain ...