EFFICIENCY - February 19, 2009

As I listen to the British Prime Minister describing the economic fetishes he is pledged to support, and which I believe he genuinely worships, there are two that seem to be revered by all or most of the economic gurus of the capitalist world. They are a dedication to the belief that tariffs are destructive of economies and that the principal benefit of globalization is the efficiency of the world’s productive effort. In these beliefs, they are followed by whole armies of people with economics degrees repeating the sacred mantras of what they call the Free Market. And since they call themselves scientists, and even fortify their claim with the purchase of an annual award that they pretend is a Nobel Prize, they get a lot of support from people with power to expend in the doing of Good Things. But a look at the major results of globalization show that the claim of increased efficiency is no more and no less than the success of manufacturers and others in getting the jobs of prosperous workers done more cheaply by much poorer people, often at earnings that border on slave wages. The claim that this transfer is motivated by philanthropy is transparently self-serving. The visible truth is that the same amount of product or slightly more is being created with a smaller portion of the price garnered by the working people of the world. Thus, as the nominal value of the goods grows from year to year, the workers who create it are taking home less and less. This serial impoverishment of the global working class is called efficiency, even as some of the product is notably inferior to what we had before, as is manifestly the case in the phone-answering services. So when we are offered the argument that this impoverishment of the world’s workers is the result of a law of nature, many are not up to refuting it, including the US President and the British Prime Minister.