Joe Lost His Job! Good.

Oh, good. Someone actually gets it.

I’ve been keen on delivering what amounts to a utilitarian defense of globalization in these pages and to my mind, it’s virtually unassailable.

Equally unassailable is the contention that globalization isn’t reversible. Neither is progressivism or the push towards multiculturalism.

Everyone understands utilitarian arguments on the micro level. Let me give you an example. Let’s say someone robs a bank (like old John Mogan). Unfortunately, one teller and one customer waiting in line are shot and killed in the process. Assuming the robber gets away and is never caught, and stripping out any emotional distress or guilt the robber might be saddled with, the robbery was almost unquestionably a good thing for the perpetrator. But no one would make the argument that the robbery was on balance a positive development. Why? Well because two people were killed, the rest of the bank employees are nervous at work, and if this was a small-ish community bank, the whole town’s probably terrified.

Flipping the argument around, imagine you and a group of five friends decide to take a trip to Mexico and unfortunately, you’re all kidnapped by a Mexican drug cartel. Turns out the kidnappers aren’t nice people and before long, the captors decide to play a game. You’re handed a pistol and told that if you don’t shoot one of your friends right now, then they’ll kill everyone. Including you. A brutally stringent form of utilitarianism says this is a no brainer (no macabre pun intended). If you think these murderous people are serious, then you shoot one of your friends immediately to save yourself and the rest of the group. It’s just that simple.

In both stories the good of the collective comes before the good of any one individual and while the second story might seem more contentious, it’s really not. That is, if we assume that everyone who hears your story upon your escape believes 100% that the cartel members were serious when they said they’d kill everyone if you didn’t kill one person, then no one in their right mind is going to blame you. In fact, had you not chosen to be directly responsible for killing one person, you would have been indirectly responsible for killing six (although you’d have been spared the guilt because you’d be dead too).

Ok, so given that, you can take me quite literally when I say that if Joe the factory worker who used to have a pension and make $25/hour ends up losing his job and having to work at WalMart, that is unquestionably a net positive for humanity if it ends up creating 10 jobs for 10 Chinese who, while Joe was making $25/hour, were quite literally starving.

See in that scenario, Joe and his family don’t starve (contrary to what Donald Trump will tell you). Are their lives “ruined” because Joe lost his job and now works at WalMart? Maybe, but that depends on your definition of “ruined.” Nightmare scenario: Joe loses his job at the factory. The health insurance goes with it. WalMart isn’t hiring. Well, there’s a social safety net in America that will in all likelihood catch Joe and family. The chances you’ll see Joe with a paper cup at Grand Central begging are slim to none.

Meanwhile, there’s a non-negligible chance that the 10 Chinese who now have jobs in China making the widgets Joe used to make would have actually died without the opportunity. They were likely living in abject poverty that’s almost unheard of in modern day America.

Joe is worse off. But humanity as a whole is better off. Joe moves to a trailer and gets food stamps. 10 Chinese people are able to eat and escape a kind of poverty Joe couldn’t even begin to conceptualize even at his worst moments.

So having subjected you to a utilitarian rant about why globalization is good, I’ll come full circle to the first line in this piece. That is, to the bit about someone “actually getting it.” Below, find the very same arguments presented above expounded by someone who actually grew up in the Rust Belt and who is likely far more sane than Heisenberg.

Via FT

In 1989, American film-maker Michael Moore shot to fame with his debut feature, Roger and Me, a documentary which tracked the economic impact of then General Motors’ chief executive Roger Smith’s decision to downsize 30,000 jobs from Mr Moore’s hometown in Flint, Michigan. It was a story that I lived growing up in Frankfort, Indiana, in the heart of the rural Rust Belt where anger over exactly that sort of laissez-faire globalisation helped get Donald Trump elected.

My father, a Turkish immigrant who studied engineering in the US and eventually started a small manufacturing business, worked for years in the auto components industry, at one point for United Technologies Corporation, whose subsidiary Carrier recently cut a deal with the president to keep 1,000 jobs in Indiana rather than moving them to Mexico, only to come under fire from unions for outsourcing hundreds of others and replacing workers with robots.

Indiana, like much of the industrial midwest, was crucial to President Trump’s victory: in my home county he captured 71.5 per cent of the vote. It is not hard to see why. A little under half of the population of Indiana is educated to high-school diploma level or less. The median household income is $5,000 less than the national figure of $55,775. Those who might in the past have worked $25 an hour factory jobs now do $11-$13 an hour shifts at Walmart.

Yet the American dream is still alive in my hometown – within the burgeoning immigrant community. Hispanics who once might have toiled as migrant farm workers have become upwardly mobile, starting restaurants and specialty grocery stores that dot a town centre that used to be dominated by a now defunct Woolworths. This is ultimately a good thing: small and medium-sized businesses create about 60 per cent of jobs in America. But at the same time it also leads to the sort of cultural tension that fueled the Trump victory.

The nature of globalisation had already begun to shift before Mr Trump took office. Small and midsized businesses in the US have grabbed market share relative to larger competitors, as technology allows them to service local markets more efficiently and cross borders more easily. US manufacturing jobs as a whole are actually up 7 per cent since 2010, as multinationals localise more production for a variety of reasons: rising Chinese wages, supply chain complexity that brings economic and political risks and local production which allows goods to reach fickle consumers more quickly. Globalisation is not going away, as Mr Moore and others might have liked.

Mr Trump’s anti-globalisation posturing may be, as Mr Moore has put it, “sweet music” to the ears of the white working class. But it won’t bring back Flint, or Frankfort.