[Opinion] A Tale of Two Cities

In his book “The World Is Flat,” New York Times columnist Thomas L. Friedman divided the history of globalization into three periods. The first was between 1492, when Christopher Columbus found the New World crossing the Atlantic, and 1800. The second was between 1800 and 2000, or the period between the Industrial Revolution and the emergence of the Internet. Until 2000, when the global economy was born, the world was round. As China joined the World Trade Organization in 2001, the global workforce increased to three billion and information technology grew by leaps and bounds. The world then entered the third phase of globalization through integrated networking of global intellectual assets. In Friedman’s words, the world became ‘flat’.

In globalization, the lives of individuals suddenly toggle back and forth between heaven and hell. As the New York Times reported, the residents of Holland and Greenville, Michigan, are good examples. Holland saw the number of jobs quadruple as the German multinational Siemens arrived there four years ago. In contrast, 2,700 of 8,000 Greenville residents lost their jobs when Electrolux of Sweden abruptly left.

A while ago, the situation was the opposite for the two cities. Thousands of Holland residents turned unemployed when the IT bubble burst in the 1990s. Greenville residents, meanwhile, stayed complacent in the belief that they had lifelong job security since Electrolux had built a factory there 30 years ago. Things changed, however, when the factory closed two years ago. Greenville proposed a cut in labor costs and a drastic tax reduction to keep the company from leaving, but residents lost the labor competition to Mexicans.

Like the Greenville story shows, globalization has a dark side. But it is hard to deny that globalization has greatly contributed to per capita GDP growth of 3.2 percent a year since 2000. The Economist said economic growth in the first decade of the 21st century was the fastest in human history. According to the Globalization Index of Foreign Policy magazine and the consulting firm A.T. Kearney in 2000, globally integrated countries grew 30 to 50 percent more than other countries. Last year, Korea ranked 35th, down six spots from 2006. The tale of the two cities should teach us a lesson.

Editorial Writer Huh Moon-myeong (angelhuh@donga.com)