“The United States will probably determine whether the momentum of the global economy integration will go forward, or whether it will not,” said former Secretary of Treasury Lawrence Summers yesterday in his “New Global Economy” speech at the Gerald R. Ford School of Public Policy.
Summers” speech, which inaugurated the school”s Citigroup Lecture series, addressed a number of important issues the recently appointed Harvard University president feels are crucial to the changing economy.
“Engaged internationalism has never been more important,” said Summers of U.S. national policy, noting the driving effects of decentralized markets and advances in technology in economic globalization.
Summers, who served as chief economist of the World Bank before serving as Treasury Secretary during the Clinton administration, voiced explicit concern for movements opposing international trade expansion on moral grounds.
“There is a serious tendency for domestically motivated protectionists to lend a morally attractive veneer to their protectionism. In many cases, it has the consequence of making the people they”re trying to help poorer than they otherwise would be,” said Summers.
“Let us make no mistake,” he warned, “when the U.S. or other international economies seek to maintain or expand barriers to production in the poor countries in the world, they are impoverishing people.”
Summers further noted that while the conditions of workers in poorer countries has been an expressed public concern, “they are the conditions that are the best opportunity available to them.”
The event had a touch of irony in the fact that Summers was introduced by University President Lee Bollinger, who was passed over by Harvard”s presidential search committee last month in favor of Summers. Summers” visit to Ann Arbor was planned long before he and Bollinger surfaced as candidates for the position.
Bollinger was conscious of the relevancy of Summer”s comments to the University”s policy on corporate sponsorship.
“I think it”s clearly right that providing economic opportunities for people is part of freedom,” said Bollinger following the speech. “I also think (Summers) is right that it”s a moral burden one takes on in trying to reduce those opportunities.”
“There is a very great moral burden on us,” Bollinger continued, “to do our best to ensure that we are not compliant in violations in human rights.” Bollinger and Summers were both contenders for the Harvard presidency.
Summers, who earned his doctorate in economics at Harvard, also discussed some of the issues important to economists studying the new economy.
Specifically, Summers noted the increasing role of information and research in the production of goods and the resulting change in patterns of consumption.
“The new economy is an economy where production is characterized by high fixed costs and low marginal costs of increased allocation,” said Summers, citing computer software and vaccines as examples.
Summers noted that the change gives greater importance to policymakers” support of public education, as evidenced by the widening gap between high school and college graduates” career success.
The speech, which stressed the interrelation of economic and political issues, maintained an overarching tone of optimism for the possibilities of economic globalization.
“If globalization proceeds in the right way, the lives of people can be transformed in a single generation,” said Summers. “Not just in changing material standards of living, but in changing society.”