Conclusion: Beyond Economics
Despite all the noise on television and the campaign trail, the actual impact of globalization on our lives has not been as momentous, for good or ill, as commentators suggest. We do not discount the pain for workers who lost manufacturing jobs as production shifted overseas or the gain to consumers from lower-priced goods imported from China and other developing countries. We seek to put all those changes into perspective.
First, looking ahead, the trends point strongly to an economy in which services play a larger role. Most services are domestically produced and consumed. Over time, the world may learn to trade many more services, just as it learned to trade differentiated manufactures from the 1920s on, after global commerce had cut its teeth on raw materials and bulk commodities. But this will be a protracted process, and in the meantime, the increasing significance of services means the declining importance of globalization.
Also, economic development is due to local choices, not global conditions. As we have pointed out in some detail, economic policy at the national level changed the standard of living of hundreds of millions of Chinese, Indians, and other Asians. Globalization was part of the story, no doubt, but it hardly played the leading role. And in developed countries, the informational advantages that benefit local investment institutions continue to mean that global capital often buys high and sells low, not the best way to make a lot ...