I’m not the only free trader who is having second thoughts about globalization. Stephen Roach, formerly chief economist at Morgan Stanley, wrote:

“Recent trends in global trade are also flashing warning signs. According to the International Monetary Fund, annual growth in the volume of world trade has averaged just 3 percent over the 2009–2016 period — half the 6 percent rate from 1980 to 2008. This trend reflects not only the Great Recession, but also an unusually anemic recovery. With world trade shifting to a decidedly lower trajectory, political resistance to globalization has only intensified.”

If we had to describe the last 50 years of economic history in one word, globalization would be high on the list. Thousands of small, independent economies around the world fused into one nearly seamless whole.

The things we use every day — food, clothing, vehicles, furniture, electronic devices, even the materials that compose our homes — now come from far and wide. We don’t even notice. International trade over vast distances is now so normal that we forget it wasn’t always the case.

Keep Reading

We’ve all been there. Senior management or maybe the board has decided to take action on an organizational issue. It clearly describes the challenge and clearly articulates the solution. The organization develops an internal initiative and assigns responsibilities, and the work moves forward — or not.

What happened?

When Jonah Berger was a Ph.D. student at Stanford Graduate School of Business, he biked through Palo Alto, slipping surveys under the windshield wipers of BMWs. He wanted to compare why owners bought their Beamers to why they thought others bought theirs. Berger discovered that BMW owners assumed other owners were strongly influenced by the social cachet associated with the luxury brand, while they themselves believed they were influenced by more rational and practical reasons.

Keep Reading

More people are working in big, bureaucratic organizations than ever before. Yet there’s compelling evidence that bureaucracy creates a significant drag on productivity and organizational resilience and innovation. By our reckoning, the cost of excess bureaucracy in the U.S. economy amounts to more than $3 trillion in lost economic output, or about 17 percent of GDP.

Here’s the arithmetic. According to our analysis of occupational data provided by the U.S. Bureau of Labor Statistics, there were 23.8 million managers, first-line supervisors and administrators in the American workforce in 2014. (This figure includes both the public and private sectors but does not include individuals in IT-related functions.) That works out to one manager and administrator for every 4.7 employees. Overall, managers and administrators made up 17.6 percent of the U.S. workforce and received nearly 30 percent of total compensation.

Keep Reading