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Unformatted text preview: Lecture 20: Education and retraining 1. Question time What was responsible for the European recovery after World War II? How big a role did the US play? This is an interesting question because it brings up something called the Marshall Plan, named after the American Secretary of State in the years just after World War II. The situation in Europe was that much of the physical infrastructure had been destroyed, but the human capital, the skills and organization of the workers, remained. What it took to restart the economies of western Europe, then, was capital to rebuild the physical plant, and this was provided by the Marshall Plan. This is interesting in a way because ever since, whenever a problem arises theres a call for a Marshall Plan to solve it, which generally seems to mean marshalling lots of money and marching it over to the problem. This worked in the case of postwar Europe, because the human base was already there and all you really needed was money for rebuilding. But unless the other prerequisites to solving the problem already exist, a recipe of add money and stir is not going to work. This point-that the human resource base is as critical as, or maybe more critical than, the physical infrastructuresegues neatly into the main topic for today, namely what role human resource development plays in the era of globalization, and what should be done for those who are bearing the burdens of globalization. 2. Trade: Defining the political problem and two possible solutions I want to discuss two main topics today. First, I want to conclude the section on trade by summing up the conclusions of last Fridays lecture on the causes of political discontent with trade and then briefly discuss two possible solutions to it. Second, I want to begin a new topic: is the technical advantage edge now enjoyed by the technically advanced countries eroding or expanding as time goes by? I hope I convinced you last time of three propositions. First, there is a severe political problem with trade. Second, the political ire directed at trade is based on real hardship but is misdirected on to the wrong object. According to the law of comparative advantage, trade is not merely not a problem for the economy, but increases national wealth. The actual problem arises from the fact that the bottom two-fifths or so of incomes have been losing ground, both absolutely and relatively, during the era of globalization . This is party due to the operation of the Samuelson-Stolper theorem, according to which wages equalize internationally for the same jobs...
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This note was uploaded on 07/08/2008 for the course GEOG 20 taught by Professor Acker during the Spring '08 term at University of California, Berkeley.
- Spring '08