Been thinking about misunderstandings concerning Capitalism, particularly among conservatives. You can say that liberals have many misunderstandings as well, but they are not the ones touting Free Markets as the savior of all.
Today's topic is globalization and labor. Globalization has been sold as a natural next step in the eventual victory of Capitalism. On the surface, it does appear that the one unified, American-style world market we are building fits the theory comfortably.
My question is: Can an open market operate without an open labor market? In the US, generally held up as a model, those who lose their jobs when an appliance factory closes in Ohio can apply for jobs at an auto parts factory expanding in Pennsylvania. This free-flow of workers between states improves efficiency in the economy and helps make free markets possible. The Founding Fathers foresaw this when they deep-sixed the Articles of Confederation (Article IV Section 2, Article II Section 8).
Now compare the situation in a country with freedom of movement with the global marketplace. If my employer moves all its operations to India (as it has some operations already) I can not just pack up my family and follow my job. There will be no Okies driving from Muskogee to Bangalore. National barriers (as well as financial ones) prevent that. The migrant worker issue in the United States illustrates just how an imbalance in labor markets creates a vacuum whose tendency to correct itself is unstoppable.
Globalisation looks good on paper but factors that cause a truly free market to operate smoothly are missing or hobbled. Restrictions to the free movement of labor raises in significance when one understands that the laborers - i.e., those to whom the benefits of globalization have been promised, are precisely those who will see their participation constrained.