Situation A: residents of hypothetical country have total net income of $1,000,000 and 10 wage earners each earning $100,000. Average income is $100,000 and life is good. Situation B: by instituting “free trade” and globalization, net income increases to $2,000,000. One guy is now making $1.5 million and the other nine $55,555. The average income is now $200,000. To an economist, “B” is much better. For the people, one is doing great and the other nine have had their incomes cut nearly in half and B sucks.
That’s the fallacy of free trade/globalization. GNP and net incomes go up but more and more people have trouble making a living. I know it makes me sound like some kind of socialist, which I am definitely not. However, it is not good for a peaceful and pleasant social order when there are huge numbers of “have-nots” and a few “haves”. Political instability is a consequence, among other nasty things.
What to do? Beats me. About all I can do personally is to buy American when I can and try to urge others to do the same. That said, I own a fair amount of stock in the emerging economies.