“This is where the money is,” the Bloomberg rep told me. And sure enough, Tuesday’s career fair was a place for people who aren’t satisfied with the prospect of banking, say $5 million a year, and really, really (really!) need to make at least 10. Not that there’s anything wrong with that. The Career Fair, I believe the headline says, is Decadent and Depraved. Not that there’s anything wrong with that, either.
Free enterprise and those who practice it — from Ghanaians selling Foakleys in Battery Park to lobstermen sailing out of Gloucester harbor to the most cutthroat of hedge and private equity fund managers — are part, if not all, of what makes America, well, America.
The free market — capitalism — is the best system we’ve yet stumbled upon for the allocation of limited resources. And free trade — the expansion of free market values across the global stage — is probably a good thing, and will lead and has led, to overall economic growth. (The proposed moratorium on building in Collegetown, incidentally, sucks.)
Despite the benefits, lately there’s been a lot of public anger directed against capitalism and free markets. Illegal immigration and globalization have borne the brunt of a rhetorical beating by a middle class that is increasingly disillusioned by what it perceives as a system without its best interests at heart.
Anti-immigration and anti-globalization sentiments are just two examples of what Grant Aldonas, Robert Lawrence and Matthew Slaughter call “protectionist drift,” a backlash against economic integration that’s in large part due to rising inequality.
In a report for the Financial Services Forum, the three (two of whom are former Bush Administration officials —Aldonas as an undersecretary of commerce and Slaughter as one of W.’s appointees to the Council of Economic Advisers) argue that protectionist drift must be counteracted if globalization — which will proceed whether Americans like it or not — is to remain politically tenable and economically beneficial for the United States.
In other words, the free market is a great thing. But economic liberalism is by nature embedded in the political system. JFK said, “If a free society cannot help the many who are poor, it cannot save the few who are rich.” Similarly, if we cannot make globalization and free markets work for the middle class, it will become increasingly politically difficult for big business to proceed, and that would be bad for everyone.
Since 1999, the percentages of Americans who believe that free trade agreements have either helped or hurt the U.S. have essentially reversed themselves, according to a Wall Street Journal/NBC polling collected by the Aldonas team. The amount of respondents who thought trade agreements hurt the U.S. jumped by 16 points to 46 percent, while the amount who thought agreements help dropped by 11 points, to only 28 percent.
Statistical data back up the perception that for the average worker, globalization isn’t working. The rewards of globalization are not evenly distributed. Aggregate growth figures are nice, but they don’t wash away for mounting economic inequality.
While the productivity of the U.S. economy rose 71 percent between 1980 and 2005, notes a Jeff Faux paper for the Economic Policy Institute, real compensation (i.e. including benefits) for the bulk of American workers rose only by 4 percent.
From 2000 to 2005, according to the Aldonas paper, only 3.4 percent of the U.S. workforce saw an increase in mean real money earnings. Even college graduates and workers with non-professional master’s degrees — representing 29 percent of the workforce — saw declines.
In 2005, the average American CEO earned a whopping 262 times the pay of the average worker, according to another EPI paper from Lawrence Mishel. In the same year, the average CEO earned more in one day than the average worker earned all year.
Most stunningly in this ghouls’ parade of figures, the top 1 percent accounted for 21.8 percent of the national income in 2005, the highest level since 1928.
There is more inequality in America — in a relative, but obviously not absolute sense — than at any time since Herbert Hoover, leading the New York Times, recently, to proclaim a “New Gilded Age.”
But regardless of your opinion of the Times, Aldonas and Slaughter aren’t a couple of liberal pansies; they’re Li’l Bush’s political appointees. And they’ve realized that if business leaders want to continue to benefit from globalization, they ought to find out a way to take care of ordinary Americans — before the political costs of globalization become greater than the economic benefits.
The point is, if business folks are serious about globalization and increased economic integration — in other words, if business folks are serious, and let’s hope they are, about making more money — then they’ve got to get serious about politics. And they’ve got to get serious about making sure globalization’s benefits are felt across the American workforce.
David Wittenberg ’09 is a Senior Editor at The Sun. He can be contacted at dwittenberg@cornellsun.com. The Scoop appears alternate Thursdays.