Globalization, its discontents, and its upside

Email|Print|Single Page| Text size + By David M. Shribman
June 1, 2008

The Post-American World
By Fareed Zakaria
Norton, 292 pp., $25.95

The China Price: The True Cost of Chinese Competitive Advantage
By Alexandra Harney
Penguin, 336 pp., $25.95

With the war in Iraq more than five years old, America's domestic economy in upheaval, a presidential election looming, and uncertainty abounding, this is a good time for a moment of national reflection, and for two thoughtful and provocative new books about the national condition.

In important ways Fareed Zakaria's "The Post-American World" and Alexandra Harney's "The China Price" are bookends. Together they talk about the changed place America holds in the world's power equation and economy. They urge us to rethink out assumptions, including these: America is under challenge everywhere. Terrorism is the scourge of our times. Foreigners loathe us. Cheap imported goods are an economic benefit.

Start with Zakaria's book, which itself starts with a remarkable sentence: "This is not a book about the decline of America but rather about the rise of everyone else." Memo to America from one of its adopted sons, the editor of Newsweek International and ubiquitous presence in print and on the airwaves: Don't panic. But don't be complacent either.

Zakaria - who may have more intellectual range and insights than any other public thinker in the West, in part because as an Indian native he is rooted in the East - reminds us that things are pretty good, if we take the long view. We have in our lifetimes witnessed twin miracles, the collapse of predatory international communism and the taming of debilitating hyper-inflation. That both came at a time of remarkable technological innovation is a coincidence, likely a happy one.

Here's the very good news. Despite wars, terrorism, political instability, and the presence of menaces in Venezuela, North Korea, Iran, and Cuba, the world economy grew in the first seven years of the new century at its fastest pace in almost four decades. Radicals are a fringe of Islam, not the majority. One of the world's greatest challenges is the byproduct of plenty: "to stop the forces of global growth from turning into the forces of global disorder and disintegration."

None of this is bad for America. "The United States remains by far the most powerful country," Zakaria writes, "but in a world with several other important great powers and with greater assertiveness and activity from all actors." Understand that, and the world makes more sense. Then add this. For decades, the United States has been urging other countries to adopt market capitalism and think globally. Well, they did. And now, as Zakaria puts it, "we are becoming suspicious of the very things we have long celebrated - free markets, trade, immigration, and technological change."

One of the biggest engines of the changed world Zakaria describes is, of course, China, and in "The China Price," former Financial Times correspondent Harney tells a sad tale. Toxins in toys. Air pollution. Underage workers. Crippling working conditions producing the lung disease silicosis and other maladies. And the galloping "modularization" of manufacturing, which makes it possible for the materials for a shirt sold in your local mall to be provided by South Korea, the weaving and dyeing to be done in Taiwan, and the cutting and sewing in Thailand.

Sure, we get electronics, textiles, toys, jewelry, coal, and food from China, mostly because we like the "China price." But it comes at a frightful cost, and Harney's book, meticulously researched, is journalism at its highest level, and is remorseless in chronicling human-rights abuses and market caprice. "American toddlers don't respond well to a cartoon created to promote a new toy?" she asks. "Hundreds of workers at the factory in Huizhou, . . . chosen to produce the toy lose their jobs when the order is cancelled."

Chinese factories are manned by the modern equivalents of the Lowell factory girls - mostly migrants from rural villages, a familiar story in the New England of yore - except that the workforce is the largest nation on earth, its economy fueled by falsified time cards that conform to the sensibilities of the reformers who are in most cases an ocean away.

The result is the creation of a consumer-manufacturing colossus that saves Americans as much as $500 apiece each year, but at the China price of lost domestic jobs and dwindling American economic prospects. China's share of manufacturing output (by value added) was 2.4 percent as recently as 1990. Now it is 12.1 percent, behind only the United States and Japan. China's exports were $26 billion in 1984. In 2006, the figure was $969 billion. China is now the world's third-largest exporter, behind only the United States and Germany.

There are ironies here. The first is that this abuse, pollution, and disease occur in a nation ideologically constructed to favor the worker and not the multinational corporation or global capitalism. The second is that the costs of industry, in injured workers and heavy pollution, are undermining the progress that China's drive to industrialization was supposed to bring.

"The effect of air pollution on health will lead to countless lost work dates and contribute to the early retirement of employees," Harney writes. "Caring for people made ill by pollution will add to China's health care costs and tax the already overburdened health care system."

The third irony is that the limits on family size, known as the one-child rule, are going to leave China with a swiftly aging population and a shrinking base of young people to support it. And you thought America's Social Security system was a time bomb.

Who's at fault? The Chinese are, in part, though there is a growing domestic reform movement. Multinationals are, in part, since the good-faith efforts they make to limit sweatshop labor are hampered by phony audits and sham inspections. The rest of us, too. "Our appetite for the $30 DVD player and the $3 T-shirt helps keep jewelry factories filled with dust, illegal mines open and 16-year-olds working past midnight," Harney writes. "We all pay the China price."

David M. Shribman, for a decade the Globe's Washington bureau chief, is executive editor of the Pittsburgh Post-Gazette.

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