Argument: Economists worry about the losses of free trade and globalization
Free-Trade Alert: A Warning on Globalization Backlash "The Organization for Economic Cooperation and Development, a Paris-based institute backed by the governments of 30 leading industrialized countries, is a staunch believer in free trade, which most economists believe makes all countries richer overall, including those with high wages.
But in its annual labor study, the OECD acknowledges growing popular unease about globalization -- the growing integration of the world economy through trade and cross-border investment -- and frets about a popular backlash if governments fail to ensure that lesser-skilled workers share the benefits.
"Millions are benefiting from globalization, but at the same time there's a feeling something's wrong with the process," says OECD Secretary General José Angel Gurría. That is creating political resistance to further moves to free up international trade and investment, he says, particularly in the U.S. and France.
A growing number of economists are expressing concern about the number of losers from globalization. Despite strong economic growth, these economists note, many workers in developed countries are struggling to find well-paid work amid a combination of cheap imports, the relocation of factories and offices to low-wage countries, and changing technology.
"The conventional wisdom was that all boats would be lifted by the rising tide. That was overly optimistic," says David Audretsch, director of the Max Planck Institute for Economics in Germany."