Amid increasing calls for protection of American industries and banning outsourcing of IT services to countries like India, China and Brazil, Chairman of the US Federal Reserve Alan Greenspan has asserted that globalisation eventually benefits all and any impediments to it would exact a heavy price.
"I do not doubt that the vast majority of us would prefer to work in an environment that was less stressful and less competitive than the one with which we currently engage," Greenspan said delivering an address via satellite before the British Treasury's Enterprise Conference in London on Monday.
"The cries of distress amply demonstrate that flexibility and its consequence, rigorous competition, are not universally embraced," he said.
But as consumers, most people "seem to insist" on low product prices and high quality.
"If a producer can offer quality at a lower price than the competition, retailers are pressed to respond because the consumer will otherwise choose a shopkeeper who does," Greenspan said.
He warned that the consequences of moving towards protectionism in today's globalised financial world could be unexpectedly destabilising."I am optimistic that we and our global trading partners will shun that path. The evidence is simply too compelling that our mutual interests are best served by promoting the free flow of goods and services among our increasingly flexible and dynamic market economies," he said.