ISTANBUL

A RECENT VISIT back to the United States revealed some of the more absurd, perhaps unintended consequences of globalization. Long regarded as an unmitigated good fostering international trade, liberalization and economic growth throughout the world, globalization is now coming under increasing scrutiny as we recognize some of the accompanying dislocations and imbalances.

The first shock was a visit to the iconic retailer L.L. Bean. I have been a long-time customer and have always made a pilgrimage to the store in Freeport, Maine, on my visits home. Catalog pictures of the healthy, rugged outdoor life would entice shoppers around the globe. This time I started looking at the labels for countries of origin, and was startled to see that not one garment I looked at was made in the United States. Most were from China, but there were several from Latin America or other Asian countries. Clearly this trend created jobs in those countries and contributed in some way to their economic growth. One also assumes that the American consumer benefits from lower prices — although this has to be questioned.

I paid another visit to an earnestly organic food market in Connecticut. Terribly well-intentioned employees assured customers that all the products were free of destructive fertilizers and other chemical additives. Wonderful. Then I started looking at the origins. Apples from Washington state. Raspberries and blueberries from California. New England has no apples, blueberries or raspberries? It gets better. Pears from Chile. Very tasty to be sure. But at what price? My favorite was bottled water. All sorts of water bottled from France, Italy or distant parts of the United States was on offer. Has anyone thought about the real cost of transport, the carbon footprint involved in shipping tons of apples and water thousands of miles?

True, it is very impressive to see food products from around the world offered in small New England towns. But is it really necessary? The environmental risk caused by shipping heavy bottled water from Europe to one small store in Litchfield, Conn., may indeed be fairly limited. But that risk must surely multiply when we consider the entire system.

I live in Turkey, a country blessed with wonderful, local seasonal fruits and vegetables. We have become accustomed to eating strawberries in May and June, peaches in July and August, asparagus in the spring, etc. Each season brings its own celebration of new tastes. Out-of-season products like tomatoes grown in greenhouses in January are shunned as tasteless. Supermarkets like the French Carrefour are now introducing increasing amounts of foreign-sourced products, but they are much more expensive. Even frozen foods have a very limited appeal, to be used only in dire emergencies.

The agriculture subsidies of the European Union are a subject of much debate and some ridicule, but one benefit is that they support local production. France is often cited as the largest beneficiary of these subsidies, but the country vigorously defends its position on the grounds of protecting a way of life and its local agriculture. It has a point, especially in these days of increased concern about greenhouse gases and global warming. The Loire Valley town of Amiens has a huge weekly farmers market with everything from meat and fish to bread, fruits and vegetables. Nothing in the entire market comes from more than 50 miles away. Very rarely will even the local supermarkets have anything from as far away as the Netherlands or Italy, let alone Britain.

Much of the outsourcing trend in the United States has been based on low cost. Retailers get to protect their profit margins and customers get cheap goods. But perhaps the time has come to reconsider the real cost involved in replacing locally produced products with imports from half-way around the world. In addition to the simple cash costs of production we should consider the social cost of closing factories, retraining employees, paying their unemployment costs, and even the welfare costs. These are very real costs that are not factored into the cost of a product made in China that used to be made in South Carolina. Who bears these costs?

Transportation was always a negligible item when gasoline and diesel were about 50 cents a gallon. We could ship beer across the country and sell it for the same price in California and New York. Now with oil at more than $120/barrel the situation has changed. Suddenly the cost of the transport has become an issue that sooner or later will be reflected in the cost of an item in Walmart.

And then there are the environmental costs of transportation. Shipping tons of T-shirts from China to the U.S. East Coast must leave a carbon footprint the size of an elephant. Who bears these costs?

One of the fundamental lessons of Accounting 101 is to reflect the true cost of product in its price. Otherwise you go broke very fast. The actual cash cost of an item is only one part of the equation. You also have to consider non-cash items like depreciation or amortization. My problem with the allegedly low prices of foreign-made goods is that the price does not reflect the full costs — costs that are borne by society as a whole. These costs are difficult but not impossible to calculate, and they should be reflected in the retail cost of a garment from China or a pear from Chile. If you really want that Chinese T-shirt or that strawberry in January, fine. Just pay the real price.

David Edgerly, an occasional contributor and former Journal writer, is the general manager of Shuaa Securities, in Istanbul.