Laws of History: Economic Determinism

Robert Crow writes: "High on the list of candidates for "laws of history" should be "Economic problems are blamed on the foreigner/outsider." Anti-Semitism, racism and nativism, and protectionism are obvious examples. This law also accounts for the pummeling meted out to globalization in the face of overwhelming evidence of its net beneficial effects to rich countries and poor countries alike. Reactions to globalization demonstrate the power and universality of this law inasmuch as globalization is condemned by significant portions of the population in rich countries and poor countries alike. In rich countries, "unfair" competition from low-cost foreign workers is said to take the jobs of honest, hard-working men and women. In poor countries, "unfair" competition from sophisticated, well-capitalized firms in rich countries is said to hold back domestic development, thereby taking the jobs of honest, hard-working men and women. The glass that in fact is three-quarters full is seen, as a result of the blame-it-on-the-outsider law, as three-quarters empty. The benefits of free trade are among the oldest and most firmly established propositions of economic theory. Moreover, these benefits are supported by massive economic evidence, not the least of which is the emergence of globalized East Asia over the past 60 years from relative poverty to significant prosperity. This contrasts sharply with the record of protectionist Latin America, which has gone from relative prosperity to relative poverty over the same period. John Kofas writes: "Ironically, the doctrine of "Economic Determinism" explains the fall of Communism. That should give hope to those who believe in Socialism as a viable system, and it should be a source of concern for those advocating globalization. The same forces that brought down Communism are at work in any political economy that fails to serve society and fails to keep pace with change". With respect to globalization, Kofas is half right: those advocating autarky and protectionism are the ones failing society. However, according to the blame-it-on-the-outsider historical law, failure to serve society by picking on foreigners will probably continue to be one of the easiest ways of getting and keeping political power". [Tom Grey]