ABSTRACT
Daly distinguishes between globalization – the integration of a single global economy, and internationalization – the interdependence of separate national economies. He is concerned that globalization leads to lower wages, weaker environmental standards and a fraying social safety net. Countries that strive for improvements are impeded from doing so by competition from others whose aspirations are not as high or at least, are different. Similarly, a country wishing to lead in the direction of a steady-state economy will find it virtually impossible in a globalized world. Daly argues that some form of trade protection is necessary in these circumstances, contrary to the globalizing tendencies of organizations such as the WTO, IMF and even the World Bank where he worked for several years.
Daly bases much of his criticism on globalization on his still unanswered critique of the theory of comparative advantage, which is the very basis of arguments in favour of free trade. He says, with Ricardo, that comparative advantage depends on the immobility of capital among nations which no longer applies. If capital can move between the countries it will go where it can make the most profit and trade will be determined by absolute not comparative advantage.
