The ever-incisive FT columnist Martin Wolf reminds us that while globalization's prize is plus-sum (everyone gains), as opposed to zero-sum (Country A gains only if Country B loses), it is not perfect sum (there are costs) nor egalitarian sum (everyone gains equally).

The biggest advantage of globalization, in Wolf's view? The spread of prosperity, including a wider distribution of innovation and bigger opportunities for profitable exchange/trade. Also valuable, although not guaranteed, Wolf says, is increased political stability in previously impoverished countries.

Globalization marches on

Further, in the globalization era's first decade, the United States can't do anything to halt the flow of ideas, and the diffusion of knowledge, skills, technology systems, and so forth, Wolf argues. Or at least the United States can't do anything decent to stop globalization.

What's more, Wolf says that at the very moment free markets are creating wealth, expanding middle classes, and lifting millions out of poverty around the world, they are creating a bit of a paradox: namely, the globalization model is weakening (or is weak) in its creator/defender country, the United States.

Further, agreeing with former Clinton Administration Secretary of Treasury Lawrence Summers, who said it is hard for democracy to proceed with policies that a large numerical minority believes are against its interests, the United States must, (and there is no small irony here), make itself economically fit -- able to compete in the globalization era. But Wolf argues this won't be achieved by protectionism or by propping-up corporations (i.e. tax policies that encourage employers to offer health care to more employees, etc.). Rather, it will be achieved by broader a social welfare state (certainly regarding health care), and higher taxes on upper income citizens.

However, Wolf is unsure whether the United States has the domestic political will to implement the above -- a solution he believes will redistribute the spoils of globalization, not sacrifice them.

Economic Analysis: Wolf makes no mention of the policy implications of the rise of Democratic presidential candidate and probable party nominee U.S. Sen. Barack Obama, D-Illinois. Does Sen. Obama represent the personification of this political will that will lead to increased taxes on upper income citizens and a broader social welfare state? Sen. Obama has called for both increased taxes on the wealthy citizens and additional social programs, so it appears the nation is receptive to each. Still, the 2008 presidential campaign is in its infancy. Whether this support translates into political will during the general election remains to be seen.