The Globalization Paradox Analysis

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The final chapter of The Globalization Paradox, titled “The Rise and Fall of the First Great Globalization,” focuses on what the United States should do to become a new innovation economy and regain its economic prowess. The author, Moretti, identifies the lack of investment on research and development, and the lack of human capital as the main problems with the American economy. He goes on to explain that the creators of new ideas are often not compensated by the government for the positive spillover effects that these creations lead to. The amount of current funding in research and development fails to recognize the increased value of knowledge. As the returns for investment increase, Moretti suggests that the government stimulate investment …show more content…

Although the top one percent and certain economic policies like deregulation are often blamed, the real reason for this inequality is the slowdown of supply of skilled labor. As the US has failed to substantially increase the number of college graduates, especially STEM graduates, it is failing to meet the demand for such workers. There are ways to increase the supply, primarily by encouraging more students to go to college. However, the high upfront cost of college tuition, the difficulties in presenting collateral while taking loans to pay for said tuition, lower high school graduation rates, and a social multiplier effect that inflames the educational divide make this difficult.
Moretti concludes by saying that America needs skilled labor to become a strong, innovative economy. While revamping the current education system is always a solution, it remains a long-term one. Instead, Moretti suggests modifying US policies so that more H1B visas are granted to skilled immigrants. High skilled immigrants don’t just heavily improve America’s innovative capacity, but they also complement low skilled native workers and generate positive externalities like employment opportunities for local …show more content…

I am convinced that innovation is the way forward for America and as R&D leads to innovation, more investment in R&D seems like a rational reaction. I also agree with what he has the say about the H1-B program. The program was first designed to help US firms deal with shortages in labor in rapidly growing fields, like technology, that have specialized jobs. Since then, the country’s need for technological workers has only increased but the supply of American-born STEM graduates has stagnated. The availability of a dedicated workforce that is willing to fill gaps in technological specialization and consequently improve the economy and the lives of low skilled Americans seems like a good solution to America’s economic problem. In fact, an H1-B visa was Microsoft’s CEO Satya Nadella’s way into the US. More Satya Nadella’s coming to the US hardly seem like a bad thing! However, I don’t agree with the way Moretti discusses the high skilled immigrants. His underlying insinuation is almost as if high skilled immigrants are objects can be used for America’s benefit. He subsequently suggests modifications to the H1-B visa program, like expansion, but makes no mention of policies that ensure that this vulnerable work-force is not exploited by

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