Population, migration, and globalization.

• Author: Daly, Herman E.

Globalization is not internationalization, but the effective erasure of national boundaries--opening the way not only to free mobility of capital and goods but also, in effect, to free movement (or uncontrolled migration) of vast labor pools from regions of rapid population growth. The impacts on national economies could be tragic.

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The trend toward globalization (free trade, free capital mobility) is not usually associated with migration or demography. If globalization were to be accomplished by free mobility of people, then demographers would certainly be paying attention. However, since globalization is being driven primarily by "free migration" of goods and capital, with labor a distant third in terms of mobility, few have noticed that the economic consequences of this free flow of goods and capital are equivalent to those that would obtain under a free flow of labor. They are also driven by the same demographic and economic forces that would determine labor migration, if labor were free to migrate.

The economic tendency resulting from competition is to equalize wages and social standards across countries. But instead of cheap labor moving to where the capital is, and bidding wages down, capital moves to where the cheap labor is, and bids wages up--or would do so if only there were not a nearly unlimited supply of cheap labor, a Malthusian situation that still prevails in much of the world. Yet wages in the capital-sending country are bid down as much as if the newly employed laborers in the low-wage country had actually immigrated to the high-wage country. The determinant of wages in the low-wage country is not labor "productivity," nor anything else on the demand side of the labor market. It is entirely on the supply side--an excess and rapidly growing supply of labor at near-subsistence wages. This demographic condition--a very numerous and still rapidly growing underclass in the third world--is one for which demographers have many explanations, beginning with Malthus.

Globalization, considered by many to be the inevitable wave of the future, is frequently confused with internationalization, but is in fact something totally different. Internationalization refers to the increasing importance of international trade, international relations, treaties, alliances, etc. Inter-national, of course, means between or among nations. The basic unit remains the nation, even as relations among nations become increasingly necessary and important. Globalization refers to the global economic integration of many formerly national economies into one global economy, mainly by free trade and free capital mobility, but also by somewhat easier or uncontrolled migration. It is the effective erasure of national boundaries for economic purposes. What was international becomes interregional.

The word "integration" derives from "integer," meaning one, complete, or whole. Integration is the act of combining into one whole. Since there can be only one whole, it follows that global economic integration logically implies national economic disintegration. As the saying goes, to make an omelette you have to break some eggs. The dis-integration of the national egg is necessary to integrate the global omelette. It is dishonest to celebrate the benefits of global integration without counting the consequent costs of national disintegration.

Forgotten Root

Those costs are significant. It is not for nothing that the population explosion in the third world has only recently affected wages in the industrial world. The British did not allow colonial India, for instance, to compete in global markets with its cheap labor, nor did the Chinese seek to do so under the isolation policies of Chairman Mao. Only in the last 30 years has the World Bank become converted to the now "incontestible" orthodoxy of export-led development based on foreign...