It is said as the world globalizes it gets smaller and smaller. This, of course, doesn't mean the planet is physically shrinking, but some astrophysicists may argue that it actually is. That notwithstanding if globalization is responsible for under-employment, can we make the argument that as the world becomes more isolationist, we will see a correlation to lower unemployment? Is that not the case in the US currently? Or is there something else afoot here.
No, becoming isolationist or separating oneself from others will nit lead to lower unemployment because then the country would not be indulging in international trade and thus there would be no comparative advantage in production of goods and thus the country would only be producing and consuming for itself.
This certainly means the resources will not be put to their best use as there would be no need of calculating comparative advantage. Resources will continue to be used as per their face value without calculating their optimal use or calculating how to put them to their best use. This will make resources unemployed as their will be no external demand for those resources as well.
The same would happen in US. Isolating itself will only increase unemployment and not decrease it, as the resources would not be put to their best use.
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