section_path: Support and criticism/Economics
section_name: Economics
paragraph_text: Economics
  
  The literature analyzing the economics of free trade is extremely rich with extensive work having been done on the theoretical and empirical effects. Though it creates winners and losers, the broad consensus among economists is that free trade is a large and unambiguous net gain for society. In a 2006 survey of 83 American economists, "87.5% agree that the U.S. should eliminate remaining tariffs and other barriers to trade" and "90.1% disagree with the suggestion that the U.S. should restrict employers from outsourcing work to foreign countries."
  
  Quoting Harvard economics professor N. Gregory Mankiw, "Few propositions command as much consensus among professional economists as that open world trade increases economic growth and raises living standards." In a survey of leading economists, none disagreed with the notion that "freer trade improves productive efficiency and offers consumers better choices, and in the long run these gains are much larger than any effects on employment." Most economists would agree that although increasing returns to scale might mean that certain industry could settle in a geographical area without any strong economic reason derived from comparative advantage, this is not a reason to argue against free trade because the absolute level of output enjoyed by both "winner" and "loser" will increase with the "winner" gaining more than the "loser" but both gaining more than before in an absolute level.
  
  In the book The End of Poverty, Jeffrey Sachs discusses how many factors can affect a country's ability to enter the world market, including government corruption; legal and social disparities based on gender, ethnicity, or caste; diseases such as AIDS and malaria; lack of infrastructure (including transportation, communications, health, and trade); unstable political landscapes; protectionism; and geographic barriers. Jagdish Bhagwati, a former adviser to the U.N. on globalization, holds that, although there are obvious problems with overly rapid development, globalization is a very positive force that lifts countries out of poverty by causing a virtuous economic cycle associated with faster economic growth. However, economic growth does not necessarily mean a reduction in poverty; in fact, the two can coexist. Economic growth is conventionally measured using indicators such as GDP and GNI that do not accurately reflect the growing disparities in wealth. Additionally, Oxfam International argues that poor people are often excluded from globalization-induced opportunities "by a lack of productive assets, weak infrastructure, poor education and ill-health;" effectively leaving these marginalized groups in a poverty trap. Economist Paul Krugman is another staunch supporter of globalization and free trade with a record of disagreeing with many critics of globalization. He argues that many of them lack a basic understanding of comparative advantage and its importance in today's world.
  
  The flow of migrants to advanced economies has been claimed to provide a means through which global wages converge. An IMF study noted a potential for skills to be transferred back to developing countries as wages in those a countries rise. Lastly, the dissemination of knowledge has been an integral aspect of globalization. Technological innovations (or technological transfer) are conjectured to benefit most developing and least developing countries (LDCs), as for example in the adoption of mobile phones.
  
  There has been a rapid economic growth in Asia after embracing market orientation -based economic policies that encourage private property rights, free enterprise and competition. In particular, in East Asian developing countries, GDP per head rose at 5.9% a year from 1975 to 2001 (according to 2003 Human Development Report of UNDP). Like this, the British economic journalist Martin Wolf says that incomes of poor developing countries, with more than half the world's population, grew substantially faster than those of the world's richest countries that remained relatively stable in its growth, leading to reduced international inequality and the incidence of poverty.
  
  Certain demographic changes in the developing world after active economic liberalization and international integration resulted in rising general welfare and, hence, reduced inequality. According to Wolf, in the developing world as a whole, life expectancy rose by four months each year after 1970 and infant mortality rate declined from 107 per thousand in 1970 to 58 in 2000 due to improvements in standards of living and health conditions. Also, adult literacy in developing countries rose from 53% in 1970 to 74% in 1998 and much lower illiteracy rate among the young guarantees that rates will continue to fall as time passes. Furthermore, the reduction in fertility rate in the developing world as a whole from 4.1 births per woman in 1980 to 2.8 in 2000 indicates improved education level of women on fertility, and control of fewer children with more parental attention and investment. Consequently, more prosperous and educated parents with fewer children have chosen to withdraw their children from the labor force to give them opportunities to be educated at school improving the issue of child labor. Thus, despite seemingly unequal distribution of income within these developing countries, their economic growth and development have brought about improved standards of living and welfare for the population as a whole.
  
  Per capita gross domestic product (GDP) growth among post-1980 globalizing countries accelerated from 1.4 percent a year in the 1960s and 2.9 percent a year in the 1970s to 3.5 percent in the 1980s and 5.0 percent in the 1990s. This acceleration in growth seems even more remarkable given that the rich countries saw steady declines in growth from a high of 4.7 percent in the 1960s to 2.2 percent in the 1990s. Also, the non-globalizing developing countries seem to fare worse than the globalizers, with the former's annual growth rates falling from highs of 3.3 percent during the 1970s to only 1.4 percent during the 1990s. This rapid growth among the globalizers is not simply due to the strong performances of China and India in the 1980s and 1990s—18 out of the 24 globalizers experienced increases in growth, many of them quite substantial.
  
  The globalization of the late 20th and early 21st centuries has led to the resurfacing of the idea that the growth of economic interdependence promotes peace. This idea had been very powerful during the globalization of the late 19th and early 20th centuries, and was a central doctrine of classical liberals of that era, such as the young John Maynard Keynes (1883–1946).
  
  Some opponents of globalization see the phenomenon as a promotion of corporate interests. They also claim that the increasing autonomy and strength of corporate entities shapes the political policy of countries. They advocate global institutions and policies that they believe better address the moral claims of poor and working classes as well as environmental concerns. Economic arguments by fair trade theorists claim that unrestricted free trade benefits those with more financial leverage (i.e. the rich) at the expense of the poor.
  
  Globalization allows corporations to outsource manufacturing and service jobs from high-cost locations, creating economic opportunities with the most competitive wages and worker benefits. Critics of globalization say that it disadvantages poorer countries. While it is true that free trade encourages globalization among countries, some countries try to protect their domestic suppliers. The main export of poorer countries is usually agricultural productions. Larger countries often subsidize their farmers (e.g., the EU's Common Agricultural Policy), which lowers the market price for foreign crops.