October 15, 2011

Globalization could benefit the entire world

"In principle, the new globalization can ultimately be beneficial for the entire world. [...] The high income countries, including the United States, Europe, and Japan, can also be winners. The newly emerging economies produce a wide variety of low-cost goods and services that we desire, and in turn we can export a wide variety of goods and services to the emerging economies. Sectors that have strong economies of scale will benefit for the expanded reach of the global market. [...]
Yet the gains are likely to be distributed unevenly within the high-income economies. High-skilled (and therefore high-income) workers are likely to benefit straightaway, while low-skilled (and therefore low-income) workers are likely to feel the pressure of tougher competition from abroad. For all broad segments of society to benefit from globalization, therefore, the winners have to help compensate the losers. High-income earners who enjoy a surge in income and wealth resulting from globalization should pay more in taxes to finance increased income transfers and public investments (for example, for job retraining) for those who are the losers."

~ Jeffrey Sachs, in The Price of Civilization: Reawakening American Virtue and Prosperity

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