There is a lot of talk these days about "a level playing field." There is a sense that it is about fairness in any kind of competition, from college admissions to world trade. Its most current form has arisen in connection with moves by the United States to take actions to stem the influx of Chinese-produced goods. Some would claim the influx is the result of an absence of a level playing field created by the combination of low labor costs in China and a Yuan pegged by the Chinese government at an unrealistically low value in relation to the dollar and other currencies.
The talk will be stimulated by the recent publication of the book, The World is Flat (as in a level playing field), by Thomas L. Friedman. In it, Friedman suggests that such things as rapid and ubiquitous technological advances, enlightened education systems, and the over-building of the world's communication capacity during the "bubble" of the last century will shape the twenty-first century by producing a more level playing field between the world's haves and have nots. Economists point to the rapid increases in economic growth and productivity in China and India in relation to more developed economies as evidence that a more level playing field is resulting in huge advances in the standard of living for more and more of the world's residents.
But is a level playing field a good thing? Take the immediate arguments surrounding U.S. trade with China, for example. Floyd Norris, writing recently in the The New York Times, suggests that steps to encourage China to increase the value of the Yuan (thereby creating a more level playing field?) could have significant consequences. It could lead to more expensive goods for everyone (except the Chinese) as well as reductions in Chinese investments in the United States, particularly the purchase of dollars. That, in turn, could fuel more significant interest rate increases and reduced economic activity in the United States. As Norris puts it, "the largest vendor financing program ever has stimulated both the Chinese and American economies." Is it wise to "level" this playing field?
Just what is a level playing field? Does the game played on it have the same rules for everyone, even if such rules work to the continued disadvantage of the already-disadvantaged? Is it a global economy in which governments refrain from any efforts to gain economic advantage over their neighbors? Should there be exceptions for certain currently disadvantaged countries that are desperately, and in many cases unsuccessfully, trying to just get to the sidelines of the playing field? How do we draw the line on such exceptions? And who administers them?
Who benefits most from a level playing field? A developing economy achieving productivity gains with volume increases achieved through low factor costs of production? Or a developed economy realizing productivity gains in totally different ways, for example, by leveraging already high factor costs through technology and the education and communication required to use the technology more effectively? Are these two types of economies even competing on the same playing field? What do you think? 
To read more:
Thomas L. Friedman, The World Is Flat: A Brief History of the Twenty-First Century (New York: Farrar, Straus, and Giroux, 2005).
Floyd Norris, "Who's in Charge of Determining U.S. Interest Rates? It May Be Beijing," The New York Times, May 13, 2005, p. C1.