Col,

While I don't doubt Bhagwati's reasoning, I'm a bit confused as he seems to equate globalization with trade (maybe you can clarify this for me). One can't understand globalization without understanding the underlying technological aspects that are driving it (I'm having a hard time de-coupling the two in my thinking about the issue).

One could certainly make the claim that globalization has affected certain industries (I'm thinking IT sector here - call centers specifically - where given the current technological climate, the labor pool is effectively global in nature). In this case, is it technology or globalization that is placing downward pressures on wages?

Any clarification on this would help...

Trade is the manifestation of globalisation.

Without the trade issues, no one would give a fuck.

The technology drivers for globalisation are, in my opinion, relatively minor. The major part of trade impact in domestic economy from globalisation comes not from call centers, or the like, but logistics. IT has a clear role in there, in terms of making logistics supply trains far more efficient, and allowing better management of distant suppliers, of routes, etc. Combined with lower barriers to trade than was the case for much of the 20th century, technology in terms of trade has an impact.

However, those same technologies are also impacting the domestic market - including the non-tradable services - and I would suggest what JB is saying is the technology impacts internal (to the given domestic economy) economic relations even more. The technology efficiencies in terms of IT for treatment of firm back office operations, of logistics - local more than global even, of any domestic firm activity that can be automated or semi-automated clearly have a differential impact on various labour profiles. Middling skilled persons that are not client-facing (sales, retial services, etc) will likely be under much pressure.

For trade globalisation, lower tariff barriers, improved administration etc. to smooth trade, that's not truly technology rather than improved processes and policies.

Does that cover your question or did I misunderstand?

Col,

Your clarification is much appreciated. I want you to touch on a few things just so I'm clear in my thinking.

"The technology drivers for globalisation are, in my opinion, relatively minor."

I guess I would have to disagree, but only in the sense that it's not technology (in and of itself) that's driving globalization, but rather technological advances/innovations in certain industries (IT and transportation/logistics, specifically) that have allowed the degree of globalization to occur at its current magnitude.

I say this looking at it more from a historical/geographical perspective as it pertains to technoligcal advances in transportation and communications. Obviously, the process of globalization has been occurring for a long time (many historians would likely place the start of our current phase of globalization as beginning sometime in the late 1800s; the two world wars stalled the process somewhat, but has accelated since the end of WWII). Technological advances in both transport and IT have allowed the process of globalization reach it current levels. While the scale isn't any different than in the late 1800s, the magnitude is much, much greater.

Policies are crucial (improved trade relations, reduction in barriers, tariffs, etc.) in that they allow new technologies to be adopted and implemented. But I would also argue that technological advances/innovations help spur the process whereby trade policies have a better chance of being adopted and successfully implemented. Without the technolgical advances/innovations already available, it makes it more difficult for some to buy into the issues associated with trade policy. Not to say it's not possible, but it a bit of the chicken-and-egg problem - trade policy versus technological advances/innovations.

"The major part of trade impact in domestic economy from globalisation comes not from call centers, or the like, but logistics. IT has a clear role in there, in terms of making logistics supply trains far more efficient, and allowing better management of distant suppliers, of routes, etc. Combined with lower barriers to trade than was the case for much of the 20th century, technology in terms of trade has an impact."

Agreed...

"However, those same technologies are also impacting the domestic market - including the non-tradable services - and I would suggest what JB is saying is the technology impacts internal (to the given domestic economy) economic relations even more."

OK, I see what you (and JB) are saying here. I think he would you (and he) agree that one would find the impact to be as great (or maybe greater) absent any globalization. In other words, scale doesn't matter (whether its local, regional, national, or global - technology will be the main culprit putting pressures on wages).

"The technology efficiencies in terms of IT for treatment of firm back office operations, of logistics - local more than global even, of any domestic firm activity that can be automated or semi-automated clearly have a differential impact on various labour profiles. Middling skilled persons that are not client-facing (sales, retial services, etc) will likely be under much pressure.

For trade globalisation, lower tariff barriers, improved administration etc. to smooth trade, that's not truly technology rather than improved processes and policies."

Agree, although see above regarding technology vs. policy. While I don't doubt that this is the case, I don't think one can entirely discount the affects that technological advances/innovations have on influencing policy.

"Does that cover your question or did I misunderstand?"

No, you've helped greatly - thank, Col.

I'd bookmarked the same article, actually. Definitely agree with your analysis above re efficiency gains from streamlining internal ops, logistics, back office, etc, via IT. Labor impacts aren't immediately obvious, but can be quite significant.

I see this sort of thing at a microcosm level all the time.