We have a global economy. What exactly does that mean?

Money can move freely around the world. That money can buy goods and services, or it can buy companies, or shares in companies and companies’ promises to pay, that is, stocks and bonds. It can even buy government bonds: other governments' bonds. People all over the world can buy US treasury securities. That partly explains how the US government can increase spending while lowering taxes; it borrows money from all over the world.

Goods can move across most borders with little or no interference. Some goods are subject to tariffs (import taxes) when they move into one country from another country. Many countries have free trade agreements with other countries to reduce or eliminate tariffs. The US economy depends on certain goods, like petroleum, from all over the world.

Services are a mixed bag. Some services, like telemarketing, telephone answering, technical support by email and telephone, and even design and programming, can be provided in one country for use in another through the use of communication networks. Other services, like laundry, housekeeping, construction, refuse collection, and so on, can’t be done through communication networks. They have to be performed by people on the spot where the services are needed. That’s where the global economy starts to fall apart.

People can’t move freely. You can move people temporarily, for visits, for education, for temporary work assignments, without much difficulty. Moving permanently from one country to another is severely restricted. Some people pay large amounts of money and risk their lives to get around these restrictions. Israel is building a wall between them and Palestine. We in the U.S. are building a wall between us and Mexico. There’s no “global economy” in people.

Serfs in Europe in the Middle Ages, and in Russia into the nineteenth century, were attached to the land they lived on; they were not allowed to change their place of residence. People today have a little more freedom; they can move within their own country. But, like serfs, they can move to another country only with difficulty.

It begins to look as though the real purpose of the “global economy” is to move money from rich countries to poor countries, hire cheap labor in the poor countries, and move the resulting goods and movable services back from the poor countries to the rich countries, but keep the poor people where they are so their labor will remain cheap.