Globalization, Tech & Future Work

Welcome back to class. Today, I introduce issues that continue to be vigorously debated: the effects of globalization and technological change on widening inequality.

Some background: Many policymakers regard both globalization and technological change as “inevitable” forces that improve economic efficiency — and that should not be altered by political decisions.

I remember discussions in the Clinton White House leading to NAFTA and China’s ascension to the World Trade Organization in which administration officials described both as “necessary” to the evolving global economy. New technologies such as supersonic jets, AI, and facial-recognition software have also been assumed to be beyond political debate or control.

But neither globalization nor the path of technological change is inevitable. Government decides on timing (how quickly should we globalize or should a new technology be introduced?). On what particular goods and services should be subject to globalization and technological change (more or less labor-intensive industries? technologies critical to national security?). On how these changes come about (trade or direct investment? public subsidies? regulations?). And on measures to help those who bear the costs and burdens of these changes (refundable tax credits? education and training?).

It’s called “industrial policy.” Arguably, the Biden administration has the most active industrial policy in more than half a century.