AROUND THE WORLD

Is globalization inevitable?

Germany has unemployment levels not seen there since 1933.
Companies like Siemens and Bosch are closing dow n their German
factories and moving overseas. You’ve commented on Daimler-
Benz’s operations in Alabama and BMW ’s in South Carolina.

German industry has been treating the U S as a T hird World
country for several years. Wages are low here, benefits are poor
and the states compete against each other to bribe foreign
companies to relocate. German unions have been trying to join w ith
American ones to w ork on this problem, w hich hurts them both.
I suspect that the collapse of the Soviet empire has a lot to do
w ith this. As w as predictable, its main significance has been to
return most of Eastern Europe to w hat it had been for five hundred
years before—the original T hird World. Areas that w ere part of the
West—like the Czech R epublic and w estern Poland—w ill end up
resembling Western Europe, but most of Eastern Europe w as
submerged in deep T hird World poverty, and they’re going back to a
kind of service role.
A w hile back, the Financial Times ran an article under the
headline “Green Shoots in Communism’s R uins.” T he green shoots
w ere Western European industrialists’ ability to pay Eastern
European laborers much less than they pay “pampered w estern
w orkers” w ith their “luxurious lifestyles” (as Business Week put it
in another article).
Now they can get w orkers w ho are w ell-educated, because
Communism did do a good job w ith that—even w hite and blue-eyed,
though no one says that openly. T hey’re also pretty healthy—maybe
not for long, because the healthcare systems are declining—but for
a w hile, at least. And there’s reasonable infrastructure.
Western companies typically insist on plenty of state protection,
so w hen General Motors or VW invests in an auto plant in Poland or
the Czech R epublic, they insist on substantial market share,