If Globalization Was Up for a Vote Today, Would the American People OK It?

They aren't going to vote on it now -- but if globalization were up for a vote today, would the American people vote for it?

Globalization -- basically, free markets and the transfer of jobs to lower-cost labor/production centers -- has lifted more than 1 billion people out of poverty, and in the process united nations, peoples and cultures.

Further, globalization has benefited the United States in many ways, including: cheaper products, lower production costs, a wider array of goods, goods from foreign lands and more markets for U.S. exports, among other benefits.

But globalization, as many Americans will confirm, also has liabilities, a downside -- but rarely will one see these voiced in commerce circles. Namely: the massive dislocation -- translation: job losses -- that occur when corporations move jobs to nations outside the United States, often to tap lower-cost labor.

The American people were also told that the job losses -- and the international competition that's helped constrain wages in many job segments that remained in the U.S. -- would be a small burden to bear compared to globalization's multiple benefits. Decision-makers also promised the cost of major products -- cars, for example -- would drop dramatically, enabling a wider array of Americans to access more products, and offsetting the effect of stagnating wages in the aforementioned job segments. But it hasn't happened.

New Car Price Case Study

Case in point: Cars. Globalization's lower production cost for cars hasn't substantially reduced the price of a new car in the United States, in real terms. (Prices based on research compiled by cars.com.)

Take, for example, the 1991 Ford Taurus versus its replacement, the 2012 Ford Fusion.

1993 Ford Taurus price: $15,700 or $24,580 in 2011 dollars.

2012 Ford Fusion price: $25,350.

Now, in fairness, the Ford Fusion has more standard features than the Taurus -- things like a 6-speed automatic transmission that delivers better fuel economy, anti-lock breaks, and all sorts of electronic features that the Taurus did not have, hence one could make the case that the Fusion is a better vehicle, from a features-per-sticker price standpoint. But the point is that from a customer end-cost standpoint -- a driving the new car out of the showroom cost, if you will - globalization has not lowered the cost of the typical new U.S. sedan.

The above is but one example; there are many others. Does that mean one should form a negative conclusion regarding globalization? Hardly. We're too young in the globalization age to do that. But as the new car case study demonstrates, globalization is not the perfect commerce paradigm that many of its advocates suggest.