The biggest problem with "Globalisation"

A global market for labour.

In a recent article ("Be My Guest"; Oct. 6th 2005), The Economist writes:

Labour is globalisation's missing link. The flow of workers across borders is heavily impeded, leaving the global market for labour far more distorted than those for capital and commodities. The world price of capital may be set in America, and that of oil set in Saudi Arabia. But there is no such thing as a world price of labour. Wages can differ by a factor of ten or more depending only on the passport of the wage-earner, according to Dani Rodrik, an economist at Harvard.


Can we really imagine what a global market for labour would look like? I think I can, and it is stupid. I'm not ready to do away with nation states and their semi-closed borders. I do think that immigration policies should be loosened, but I'm not about to argue that anyone should be able to work and live anywhere, and get up and move somewhere else as they please. (Not yet at least.) I should say, this is not what The Economist is suggesting. The article goes on to discuss the issues surrounding temporary migration, but the central inequity of globalization remains: companies may be able pick labourers as they see fit, and investors deploy their capital as they choose, but labourers are mostly stuck with whatever options are available at home. Now, I'm being entirely too simplistic. Labour is necessarily localized, and though workers may move, their scope for doing so is understandably more limited than that of capital. Companies, on the other hand, lie somewhere in between. The tendency of late has been for them to become more international, with accordingly fewer ties to any locality or nationality. Though I think this has often been good, it is worth thinking about.