percentage of the national economy began a gradual increase to
beyond 20 percent.
An important consequence of economic globalization is the cre-
ation of a worldwide competitive standard. In the 1960s the bench-
mark for General Motors was staying as competitive as Chrysler or
Ford Motor Co. Today that is not good enough. Globalization has
raised the standards across the board. American industries that
measure up to the new higher standard, such as entertainment and
computer software, prosper greatly. The rest struggle to hang on to
their market share by merging with each other. On average, this
consolidation has resulted in the gradual decline in purchasing
power for the wage earner discussed in Chapter 2.
The move from the National Finals to the World Business
Olympics is much more than simply an enlargement in scope. Capi-
tal and most products (and some services) are portable. Labor is
less portable. Although the desire of Third World residents to work
in the West is substantial, there seems to be no reciprocal desire on
the part of North Americans or Western Europeans to relocate to
the Third World. Thus, we see textile plants closing in the South,
computer help desks closing in Silicon Valley, while downtown De-
troit is an urban wasteland.28 What the Global Economy Means to You
YearPercentage Trade RateTariff Rate0.05.010.015.020.025.01959196119631965196719691971197319751977197919811983198519871989199119931995199719992001FIGURE 3.1 Globalization of the U.S. Economy since 1959
Source: Statistical Abstract of the United StatesandHistorical Statistics of the
United States(Washington, DC: U.S. Government Printing Office).