POOR, POOR, PITIFUL WE:

That Seldom Heard Encouraging Word (Christopher Farrell, 3/26/04, Business Week)

I think it's time for a reality check. What's everyone really complaining about? That India and China are joining the global trading system? That Russia and Taiwan just had democratic elections, however imperfect, for their Presidents? That the American productivity growth rate jumped to a 3% average annual rate from 1995 to 2003, about double the anemic pace of 1973 to 1995?

"We -- the globally collective we -- are getting rich so much faster than before that we ought to be in need of sedatives to subdue the wild laughter," says James Griffin, economist consultant at ING Investment Management.

Let's not lose sight of the bigger picture here. Even with the threat of terrorism, freer trade is invigorating global growth by providing entrepreneurs from all the world's major economies access to bigger markets.
The Austrian economist Friedrich Hayek emphasized the role the markets play in creating and disseminating knowledge. In the Information Age, the cost of gathering and sharing information and knowledge has plummeted even as the size of the market has expanded exponentially.

"Capitalism, as Hayek conceived it, was fundamentally dynamic, and that dynamism was due to the discovery of new needs and new ways of fulfilling them by entrepreneurs possessed with 'resourcefulness,'" writes historian Jerry Muller in The Mind and the Market. These are the tantalizing glimmers of a payoff from globalization.

One is reminded most of the brief and rather painless period of slowed growth under the first President Bush, when the readjustment from a Cold War to a peacetime economy distracted attention from the protracted boom that was inevitably to follow. We are even more comfortable economically than we were then and the current difficulties--like outsourcing--are even more trivial, while the benefits to be reaped from increasing globalization are likely to be substantial.

If it weren't so disheartening, it would be hilarious to listen to Americans bitch and moan about how hard life is at a time when no one has ever had it so good--at least in material terms.

Posted by Orrin Judd at March 28, 2004 9:22 AM