Globalization is being used to justify both exorbitant executive salaries and benefits, as well as job losses and wage cuts for low income workers. No wonder there is a backlash.
Business Week prints an article by Vladimir Masch, who writes about the “law of comparative advantage”,
True, it is a consistent theory, but it is relevant only in some utopian world, rather than under real-life conditions. This fact is carefully concealed from the public.
But even if all utopian conditions are met, and even under full employment, it has been rigorously proved (by three independent teams of preeminent economists, founders of the contemporary international trade theory) that wages in all free-trading countries would be equalized at a sufficiently low level…
That is true, of course.