Globalization, central banking, and the erosion of economic opportunity

Unemployment and Lack of Economic Opportunity
Introduction
Unemployment and the lack of economic opportunity is a global societal problem: from the East to the West to the Global South, people of all ages find it difficult to obtain work or careers, start their own businesses or take financial control of their lives (Adelaja & George, 2020; Chand et al., 2017; Chidiebere et al., 2014; Dilanchiev, 2014; Farley, 1987; Prasetyo, 2021). Friedman (1977) argued that fighting unemployment was a matter of money and real wages: the labor market is determined by the law of supply and demand. Yet, for decades the central banks of the world have sought to manage the economy by linking inflation with the employment rate. Meanwhile, companies in the West have offshored labor to the Global South, while globalization has caused small business owners in the Global South to lose market share to multinational corporations (MNEs) that can scale in ways entrepreneurs and self-employed individuals cannot (Mukwarami et al., 2020). The effect is that MNEs have grown over the decades due to their ability to draw easy credit from financial institutions, thanks to central banks suppressing interest rates; while ordinary, average people around the world are unable to access these pools of credit and are pushed out of the labor market by companies exporting jobs overseas to states where the average worker is employed as a wage slave (Vietor et al., 2008). Corporations like Nike and Apple depend upon these wage slaves to turn huge profits, but in no sense of the word can these jobs be viewed as fair economic opportunities for workers. The solution to this problem is to prohibit offshoring of labor and to prohibit central banks from managing economies by creating money illusions that are really only wealth transfers. There is also a cultural issue that needs to be addressed in some parts of the world to prevent racism and classism from denying certain groups from having economic opportunities.
Background
The global societal problem of unemployment and lack of economic opportunity came about as a result of globalization (Vietor, 2008; Mukwarami et al., 2020). Globalization allowed jobs to flow from regions where workers were paid well to regions where workers were paid poorly. Jobs lost in the domestic region of the company were not replaced with other high-paying because offshoring only increased. Problems of economic opportunity were further exacerbated by events like the global financial crisis of 2008. The central banks of the world intervened, however, with trillions of dollars in liquidity, which as a result drove up inflation—because whenever a massive amounts of liquidity are injected into markets, inflation occurs (Friedman, 1977). Unemployment and lack of economic opportunities has persisted because central banks manage the economies of the world in order to support MNEs and investors. They are engaged in an enormous wealth transfer, by way of inflation and easy credit for MNEs. Ordinary people cannot obtain the kind of credit that larger corporations can, and so it is not an even playing field. This is why the 1% in the world see their incomes grow every time there is a financial disaster that affects the rest of the world. Their endeavors, investments, and businesses are all supported by central bank intervention, and their revenue streams are not impacted too greatly because their labor costs are so low since they have offshored labor to wage slaves in the East and Global South.
This problem is a societal problem because it affects all people: migration occurs because people want better opportunities for themselves—but they arrive in a different land only to realize that the opportunities are not as forthcoming as they imagined. Cultures are being lost, and wars are being waged for the corporations that control the globalized world (Baars, 2019). In Africa, it is difficult for small business owners to compete against the MNEs that have come into the country through complex political-economic arrangements involving governments in the EU, the US, and the African continent, the International Monetary Fund (IMF), and other organizations. As Chidiebere et al. (2014) show, for instance, young people have few to zero economic opportunities in Nigeria. It is the same in India and Indonesia, as well (Chand et al., 2017; Prasetyo, 2021). Race plays a factor in employment and economic opportunities in countries like the US, and that is a problem that has been around for decades and shows that cultural biases contribute to the issue in some states—i.e., it is not just a matter of economic forces and MNEs dominating the markets and pushing smaller players out (Farley, 1987). But offshoring and central banking manipulations are also to blame for this problem all over the world (Friedman, 2007; Vietor et al., 2008).
Solutions
The proposed solution to this problem is to prohibit offshoring of labor and to prohibit central banks from managing economies by creating money illusions that are really only wealth transfers. This solution should help to address many of the problems that states face with unemployment (Friedman, 2007; Vietor et al., 2008). However, there are cultural issues in states like China, South Africa, India, and the US, where racism and classism prevent people of certain groups from being granted job opportunities or having access to labor pools or schools where they can acquire working skills needed for better employment (Adelaja & George, 2020; Baars, 2019; Chand et al., 2017; Mukwarami et al., 2020). Cultural is often tied to politics, and politics is often impacted by corporate lobbying (Baars, 2019). So the problem is complicated by that factor—and the power of prohibiting offshoring of labor or of prohibiting central banks from distorting markets with their interventions is really not feasible or viable for a population of 99% that has virtually no control over what the 1% does (Baars, 2019). This is the solution that is needed, but barring a large-scale revolution that resets the global order and prevents MNEs, financiers, and political lackeys from taking the reins there is no viable solution to the problem. The aim of every MNE is profit, and it will pursue this aim regardless of the detrimental effects on individuals around the world (Baars, 2019).
However, the solution is necessary, and to the extent that it is necessary it ought to be viewed as viable in the sense that it is supported by reason, logic, necessity, and the statistical data (Baars, 2019; Chand et al., 2017; Friedman, 2007; Vietor et al., 2008; Prasetyo, 2021). Consumers do have power in terms of how they spend what little money they do have: they can boycott MNEs and companies like Apple and Nike, which exploit the labor of wage slaves in the Global South and East; they can buy locally from small business owners and contribute to the economic interests of their own domestic markets instead of purchasing on brands that belong to MNEs from foreign countries. They do not have to feed the economic titan that is the globalized world order; but this is an approach that requires organization and bottom-up action, for the law is on the side of the MNEs (Baars, 2019). Legislation is written by corporate authors, and legislators are lobbied to support it by the same corporations (Baars, 2019). The central bank members and governors come from the same world of corporate elitism and thus represent the MNEs rather than the ordinary people of the 99% (Baars, 2019). It is a system that can only be altered through organized, grassroots, global coordination—but such coordination is possible thanks to the Internet, social media, and collective thinking that is on the rise today. People from around the world see that their futures are connected and impacted by the same 1%, which controls the sectors of finance, business, government, and media (Baars, 2019). The only viable solution, therefore, is to challenge that group through collective effort.
Statistical Data
The statistical data shows that the Global South affords Western companies the cheapest hourly wage rate, with Indonesia costing these companies a mere 20 cents per hour compared to 22 dollars per hour for a worker in the US (Vietor et al., 2008). The data compiled by Vietor et al. (2008) is valid, as it can be checked based upon the sources identified in the research. It is reliable because the method is explained and verifiable, and there do not appear to be any biases in the research. The strength of this source is that it highlights the big reason companies in the West are exploiting cheap labor in the Global South and East and the effect this has on labor all over the world. It shows that this process of offshoring and exploitation limits economic opportunity for everyday workers, making them either jobless or turning them into wage slaves. The weakness of the article is that it does not show how the central bank plays a role in massaging the situation and covering up the economic catastrophe lurking under the surface of things for global society. That is where Friedman’s (1977) article helps.
Friedman (1977) shows that the Phillips Curve, which was used by the central banks to show the association between inflation and the employment rate, was an incorrect way to approach the economy. Friedman (1977) pointed out that “rates of inflation that had earlier been associated with low levels of unemployment were experienced along with high levels of unemployment. The phenomenon of simultaneous high inflation and high unemployment increasingly forced itself on public and professional notice, receiving the unlovely label of ‘stagflation’” (p. 270). Friedman (1977) indicate that market pressures—supply and demand—and the natural rate hypothesis could explain employment rising and falling: it all came down to where the money was flowing and how it was being manipulated: “What mattered for employment, we argued, was not wages in dollars or pounds or kronor but real wages - what the wages would buy in goods and services. Low unemployment would, indeed, mean pressure for a higher real wage - but real wages could be higher even if nominal wages were lower, provided that prices were still lower. Similarly, high unemployment would, indeed, mean pressure for a lower real wage - but real wages could be lower, even if nominal wages were higher, provided prices were still higher” (p. 270). Friedman (1977) went on to give significant statistical evidence showing that inflation and unemployment could rise at the same time, and the evidence is valid, reliable, and without bias. It is shown where the data comes from, how it was calculated, and why it was selected. Friedman (1977) is not attempting to show anything other than how market forces operate. The article is strong because it explains how the law of supply and demand impacts the labor market. Its main weakness, however, is that it does not integrate the problem of offshoring into the debate. But this is not really Friedman’s (1977) fault, as offshoring had not begun in force in the 1970s.
Finally, there is the evidence supplied by US Bureau of Labor Statistics (2016) which shows that labor force participation rate growth was fueled in the latter half of the 20th century by the entrance of Baby Boomers into the labor market—but since that time period birth rates have declined. And in addition to that technology has made many old jobs obsolete as autonomous machines have replaced many laborers in factories and other sectors. The US Bureau of Labor Statistics (2016) provides compelling data that is valid, reliable and without bias since it is compiled by the government and therefore can be trusted. The strengths of the data are that it shows how the global economy was impacted after WWII and how workers in some parts of the world had better job opportunities because of credit than in others. The weakness is that it does not show why or how this happened and leaves it to the reader to draw conclusions.
The limitations of the current research on this matter are that it would require a book to piece together all the social, economic, political, and cultural issues that factor into global unemployment and the lack of economic opportunity. Areas for future research should, therefore, be on ways of distilling these factors—perhaps through systematic reviews of articles from various disciplines and then uniting the findings into one article. It is a very rich and complex issue that needs to be properly understood, but it can best be approached by looking at the role that globalization and the central banks have played in changing economies and altering the labor force participation rate, the labor markets around the world, and the economic opportunities for individuals from East to West to the Global South.
Ethical Outcomes
The ethical outcomes that result from the solution proposed herein is that there would be a more equitable world order, one where wealth and power are distributed evenly and accordingly rather than consolidated in the hands of 1% of the global population. Government would be small—not large and bureaucratic like it is today; and government would be for and by the people rather than autocratic, technocratic, and totalitarian like it is today in many parts of the world, from East to West to the Global South. Issues such as racism and classism would be overcome by such an equitable system, but it would require that a culture of equality and fraternity be promoted by the people. The people cannot rely upon government actors to do the promotion for them: they must take back all of their institutions, formally or informally, in order to ignite this movement—but once ignited and moving forward, it is possible for ethical outcomes to emerge that would benefit everyone—instead of only the top 1%.
A more equitable outcome of this nature would help solve the unemployment problem and open up economic opportunities for people around the world: it would mean that corporations are restricted in terms of having so many legal rights. They would not be permitted to offshore labor, and every state would have to focus on using the resources it has to contribute to the competitive marketplace of the future world. Every nation does have resources, human, capital, and natural, that it can turn to in order to contribute to this market; but every state also has to maintain moderation in its approach and not be dominated by a desire for more or by greed and power. The key to equitable outcomes is self-restraint, self-governance, and self-accountability; it is the promotion of a culture of virtue or a system of virtue ethics like that promoted by Aristotle thousands of years ago. Virtue ethics were popular in both the East and the West for centuries prior to the modern era, when materialism and political power emerged as the motivating force for the 1%. This would be the positive ethical outcome that would result from the solution.
One negative ethical outcome would be that it would likely require a significant revolution—which means sacrifice, and very possibly even a large-scale conflict between the forces of the 1% and the 99% of the human population. Would people be willing to fight for a cause such as global equitability so that unemployment can be solved and economic opportunity given to all? Would asking people to be part of such a solution even be ethical? That is a difficult question to answer because not everyone will agree on what the most moral course of action is.
Two ethical issues related to the outcomes is that, first, there will still be a desire among some to control outcomes and consolidate power—as that is the nature of the human condition; vices like greed will not disappear just because a new system is put in place. So long as people lack virtue and grace, the system can only be temporary, and Adam Smith warned of precisely that in Wealth of Nations. The second ethical issue is that cultures are formed over long periods of time and it requires education—but many might object to a new culture or system of values being taught that they did not agree to have. India, for instance, has an ancient culture that is still rooted in classism, and changing that culture would be more difficult and even ethically questionable than in another state.
Conclusion
Offshoring labor, central bank manipulation of economies, and cultural biases are what contribute to global societal problem of unemployment and lack of economic opportunities. To solve this problem, they all need to be eradicated. But that can come only by way of organized, global social action and coordination. It may seem unlikely, but it is the only logically viable solution. At the root of it, moreover, is the need for a system of virtue ethics in the new global order.



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