Fed Chief Gives Seminar on History of Globalization

Fed Chief Gives Seminar on History of Globalization – New York Times

Mr. Bernanke said.

“The emergence of China, India and the former Communist-bloc countries implies that the greater part of the earth’s population is now engaged, at least potentially, in the global economy,” “There are no historical antecedents for this development.”

Those expansions shared many common themes with trends of today, he said, including the role of new technologies in opening up trade opportunities as well as similar social and political backlashes from groups whose lives were disrupted by new competition. (Think of the Islamic return-to-roots backlash to Globalization).

“The scale and pace of the current episode is unprecedented,” he said. Though Columbus’s voyage to North America ultimately transformed the world, he noted, that change took centuries to occur. By contrast, he said, the emergence of China as an industrial dynamo and export powerhouse has altered the world economy and geopolitics in less than 30 years.

The patterns of global trade and finance have changed as well, he said. The old distinction between core rich countries that exported manufactured goods and poorer periphery countries that exported natural resources has broken down.

Production is becoming more geographically fragmented, he noted, citing chip makers like Advanced Micro Devices that do production in Texas and Germany and final processing in Thailand, Singapore, Malaysia and China.

If Mr. Bernanke had a message to political leaders, it was that they needed to acknowledge the downsides of globalization in terms of lost jobs, disrupted livelihoods and wrenching change.

“The challenge for policy makers,’’ he said, “is to ensure that the benefits of global economic integration are sufficiently widely shared — for example, by helping displaced workers get the necessary training to take advantage of new opportunities — that a consensus for welfare-enhancing change can be obtained.”

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