New York Times Columnist and Princeton University Professor, Paul Krugman, recently won the Nobel Prize in Economics. Anne-Marie Slaughter, dean of the Woodrow Wilson School in Princeton, lauded him, claiming "Paul Krugman has been at the cutting edge of research on the most important phenomenon of our time: policymaking in the face of rapid and seemingly inexorable globalization". But what exactly is "globalization"?
Since the 1800s, prevailing trade theory held that nations should specialize in producing and trading those goods whose primary resources are abundant in that particular country. The problem, as perceived by modern economists, is that this theory doesn't explain why multiple countries with similar resources trade similar products eg. Sweden trades and imports cars.
But Krugman suggests that it's because consumers prefer a diversity of products. "It becomes advantageous for a country to specialize [italics mine] in manufacturing a specific car, and to produce it for the world market, while another country specializes in a different brand of car," the Swedish Academy wrote in a commentary that explained Krugman's work.
So who decides which country produces what?
Nations are merely groups of individuals, each with their own interests, that may or may not contradict one another. In a free market individuals decide for themselves what field of endeavor they would like to pursue. This includes the freedom to choose whether or not one finds it in their best interest to invest in themselves to further their skills. This can be the only metaphysically possible meaning for "specialization". Employers, in turn, are free to decide which applicant is best suited or has those skills that are most specialized to meet their business needs.
But this is not what is meant by "globalization". In essence, "nations" are regarded as a supernatural entity, where its "economic interests" come before those of the individuals inhabiting it. When nations "specialize", as was attempted through slave labor in Soviet Russia, and communist China, they are essentially consolidating their markets and means of production to only those commodities deemed appropriate to the nation's resources. Here, individuals do not decide what is in their best interest, but those who claim to speak on their behalf decide what's in the "national interest". This is the glorious future, sought by collectivists like Krugman, "policymakers" and other aspiring central planners everywhere. It is a socialist paradise where the value and worth of a man is only worth as much as his ability to contribute to his nation's international competitiveness.
