Teaching Globalization in the Time of Trump

Article Icon Article
Thursday, February 21, 2019
By Jane Elizabeth Hughes
Illustration by The Heads of State
Encouraging students to debate, disagree, and ultimately develop broader views on a politically charged and deeply controversial issue: free trade.

The "time of Trump" has not been an era for subtlety, friendly disagreementor meaningful classroom discussions about deeply nuanced subjects such as globalization and international economic relations. In the nearly three decades I've taught these subjects, I have primarily preached mainstream economics: Trade is good. Free and fair trade is better. And while globalization produces winners and losers, we shouldn't disengage from—or even slow down—the process.

However, over the past few years, the world has morphed dramatically. President Donald Trump has charged other countries with using trade and currency policies to "rape" the United States. The United Kingdom has voted to leave its comfortable perch within the European Union, and Italy is toying with following the Brits out. The polls show large numbers of people in highly globalized, well-off countries decrying globalization. Increasingly, a fierce divide is forming between groups of people, whether based on their political parties, religious affiliations, or socioeconomic status.

I now realize that my comfortable, centrist approach to teaching has to morph dramatically as well. How do we teach our students to think openly and fearlessly about weighty issues, at a time when people are so divided? How do we encourage students to differentiate fact from opinion, prejudice from plain speaking, "truthiness" from truth? How do we give voice to those who feel disenfranchised by the cold winds of globalization, while keeping faith in the economic doctrines that underpin it?

Or, to be more concise: How do we lead classroom discussions on highly charged and politicized issues to create teachable moments rather than sparring matches?

To further complicate matters, I teach in Boston, Massachusetts, at Simmons University School of Business, which I think it's safe to say welcomes a highly progressive, socially liberal, and diverse community. But while we take pride in considering ourselves tolerant and inclusive, tolerance here is almost nonexistent for one ideology: right-wing conservatism.

The vast majority of my students are deeply progressive, many well to the left of Bernie Sanders, but I also have students who are active or retired military, who tend to skew more toward the right and often are fiercely loyal to their commander-in-chief. Our MBA, offered online, draws students from all over the country, not just the liberal Northeast. My students from Massachusetts may never have met someone who voted for Trump, but those from Indiana and Alaska certainly have-and might have voted for him themselves.

But one thing is certain: Today is a time for reflection and for tolerance of different points of view. To ensure that views from all sides are heard in my classroom, I engage my students in tough conversations about the difficulties that globalization presents.

Why Hate Globalization?

The issues surrounding globalization frequently surface in my MBA course Business, Government, and the Global Economy. I often open our first meeting with a story: Two bankers are fishing in a stream, when one looks up and sees a bear running toward them. Both start to run, but one stops to change his wading boots for sneakers. The second banker shouts, "Are you crazy? You can't hope to run faster than that bear!" The first replies, "No, but I can run faster than you!"

The moral of the story: The global economy is a race in which the slowest runner will get eaten alive.

I then offer students this quote by Thomas Friedman, author and columnist for The New York Times, who wrote: "If globalization were a sport, it would be the 100-meter dash, over and over and over." Events move so quickly that even the winner can't stop and enjoy it, since the race is constantly being re-run.

I finish my introduction by citing some research polls. For example, most people in the world support globalization in theory, but their distaste for globalization in practice is abundant, especially in advanced economies like the United States. Barely 17 percent of Americans believe that trade leads to higher wages, and only 20 percent believe it creates new jobs.

I then ask my students: What is this thing called globalization? One student volunteers this example: On a recent visit to Warsaw, Poland, she says, she used the Uber app (U.S.) to hire an immigrant driver (Greek) who was using Waze technology (Israel) and driving a Toyota-brand car (Japan). That's globalization, she suggests.

How do we encourage students to differentiate "truthness" from truth?

That sounds good to me, I answer. But why do people hate it so much?

Hands go up. The first student to speak offers a litany of reasons: Globalization increases inequality, making the rich richer and the poor poorer. It exploits cheap labor and destroys the environment in underdeveloped countries. It sends U.S. jobs to Mexico and Asia, so that U.S.-based factories close and workers suffer. It allows multinational companies to evade taxes, and it is based on unfair international trade rules.

"You sound just like Donald Trump!" another student accuses. "You're saying that it would be better if America was isolationist!" For most, this is a deadly insult. Silence falls over the classroom.

But the accuser has a point. In fact, the U.S. presidential election of 2016 revealed a deep well of anger and anxiety about globalization in general, and international trade in particular. Two candidates at opposite ends of the political spectrum-Bernie Sanders and Donald Trump-ran on fiercely protectionist platforms. We see a similar protectionist view in the U.K., where the majority voted for Brexit, and in other European countries that possibly are not far behind.

But while the accuser has a point, so does the pro-protectionist. It's time to explore the issue deeper.

Free Trade: Who Wins?

From there, I move the discussion to free trade versus protectionism. I present the ideas of Adam Smith and David Ricardo, who both figured out more than 200 years ago that when countries play on their strengths, everyone benefits. Germany exports capital-intensive goods because it's accumulated masses of capital, while Vietnam exports labor-intensive goods because it has a large pool of cheap labor.

The result is a free trade system that reduces both the cost of living for all and the odds of armed conflict. Or, to put it another way, "When goods don't cross borders, armies will," a quote commonly attributed to 19th-century French economist Frederic Bastiat.

The winners are consumers who can buy cheaper clothing, electronics, and other imported goods; the losers are workers and businesses that face greater competition from foreign factories that produce those cheaper goods. On the whole, the winners outnumber the losers.

Even so, many students will argue for trade protection, unaware that they are echoing the words of candidate Trump, who called the North American Free Trade Agreement, or NAFTA, "the worst trade deal maybe ever." They cite millions of jobs lost, especially in industries such as textiles and steel. They talk about inequality and worry about environmental damage in poorer countries, where weak environmental regulations could appeal to foreign investors.

I agree that the primary problem with free trade is that its gains are widely dispersed, while its costs are concentrated, borne by a few highly visible groups. But the few who bear the costs have greater incentive to organize politically than the many who benefit.

I then share with my students some expert perspectives. In his April 3, 2016, Forbes op-ed, "4 Reasons Free Trade Has Become a Contentious Political and Economic Issue," economist Jeffrey Dorfman notes that "free trade was long virtually the only issue about which all economists agreed. Free trade was good and moving toward freer trade was always better than protectionism. These basic lessons have been taught for over a century in millions of economics classes to many millions of economic students with an unchanging lesson: Free trade creates a net benefit for all countries involved."

And, yet, he continues, this net benefit is more frequently being overlooked. He writes, "Support for free trade among the general public and political leaders is fading fast in the face of a myriad of complaints about the real-world outcomes from free trade."

Where Does This Leave Us?

I tell my students that, yes, free trade produces a diffuse set of winners and concentrated sets of losers. Yes, it can increase inequality because gains from trade are often disproportionately captured by people who are better educated and already doing well economically.

But here's where I challenge them: Over the past few decades, the most rapidly globalizing countries have been on the winning side of the column. In fact, according to the United Nations Conference on Trade and Development in its report "Development and Globalization Facts and Figures 2016," the proportion of people living in extreme poverty fell from around one-third of the world's population in 1990 to 12 percent in 2015. More than 1 billion people have been lifted out of extreme poverty. China alone has raised 300 million of its citizens from poverty to the middle class.

Not surprisingly, China and India were the leading contributors to global poverty reduction. And that happened primarily because of globalization, with both countries attracting foreign investment that has created millions of jobs in export industries.

What's a Professor to Do?

By this point in the discussion, my students are thoroughly confused. "So, what's the bottom line?" one of them asks me, a bit plaintively.

It's complicated, I reply. On one hand, politicians like Sanders and Trump dangerously oversimplify these complex issues, either because they don't understand them or because politics reduces everything to bumper sticker slogans.

On the other hand (one of my favorite phrases; that's why God gave economists an infinite number of hands), just because Donald Trump or Bernie Sanders says something doesn't mean it's wrong. Some working-class Americans have suffered from free trade, just so that we can buy cheaper iPhones. But, to go back to the other hand again, poor families also have access to cheaper food and clothing.

Most of my students are horrified to realize that they agree with Donald Trump on something. Their sympathies are now with the working class that has suffered losses from globalization and voted him into the presidency.

Still, I have found it difficult to have serious conversations with my students on these issues, because as debate heats up, the environment can become toxic, endangering the art of discourse.

What is a professor to do? While it can be helpful to insert facts and figures into the discussion, that's not always a solution. We live in a time when even facts have become a matter of opinion. The better approach is to ask students to be open to hearing points of view from all ends of the spectrum. The college classroom is an ideal place for students to spend time listening to those with whom they disagree and learning to distinguish facts from opinions. At the end of the day, they will probably still disagree—but hopefully they will have listened, and thought, and learned. 

Jane Elizabeth Hughes
Professor of Practice, School of Business, Simmons University
Subscribe to LINK, AACSB's weekly newsletter!
AACSB LINK—Leading Insights, News, and Knowledge—is an email newsletter that brings members and subscribers the newest, most relevant information in global business education.