Still Made in the U.S.A.

There’s a fascinating series in this week’s Wall Street Journal on manufacturing in the U.S. I tagged the first installment today with our class tag, FSEM100j. Apparently, manufacturing isn’t dead in the U.S. yet. What do these companies have to teach us about how to compete with lower cost workers in the rest of the world? Stay tuned and we’ll find out.

My Research Topic

I plan to do my own expert study at the same time that you guys are doing yours. The question I want to explore is the effect of globalization on wages in the U.S. and abroad. Some people see globalization as a “race to the bottom”; after all, if foreigners will do the same job as Americans, business will naturally want to outsource. The only way Americans will keep jobs is if they’re willing to work for the same wages as Indians or Chinese do. Or so the argument goes.

Friedman, by contrast, argues that globalization is a “race to the top” in which outsourcing will allow foreign wages to catch up with those in the developed world.

So which is it? A race to the bottom or a race to the top?  Stay tuned…

When the Washington Post and the Wall Street Journal Agree, What Should One Conclude?

Both the Washington Post and the Wall Street Journal have recently published articles on the upcoming decision to repeal or maintain one of the many tariffs on steel. What does it mean when the “liberal” Post and the “conservative” Journal come to the same conclusion–that the steel tariff has outlived its usefulness? I’ll leave it up to you to decide.

Technology Changes the World in a Big Way for a Small Group

There have been a number of recent really thought-provoking (at least for me) newspaper articles about globalization. I tagged them via del.icio.us but wanted to blog specifically about a couple. The first one was For India’s Traditional Fishermen, Cell Phones Deliver a Sea Change. What struck me about this article was how a small but profound technology that most of us take for granted could have a huge impact on the economic lives of a group of people in the developing world.

Clearly, the fishermen will gain here, but it’s not merely at the expense of the fish wholesalers. Rather, there’s a much more powerful dynamic at work here. This scenario is not a zero sum game. The advent of cellphones turns fishing into a much more competitive industry, where fishermen will end up selling in ports where the demand is highest. This should result in a net creation of economic value, not just a transfer of existing wealth from wholesalers to fishermen.

2006 Nobel Peace Prize

The winner is…Dr. Muhammad Yunus, an economist from Bangladesh. This is the first time in memory that economists have won two different nobels in the same year. More importantly, next time you think that a single person, even you, can’t change the world, think about this.