One night a year ago, I was flying into Hanoi, deeply aware of the changes that have taken place globally. My youth had been filled with war stories of U.S. air raids on this city. But 30 years later, the government had invited me to give a talk. I stayed in an ultramodern hotel, used my ATM card, and, to my mother’s relief, could e-mail her that I had safely arrived. These and similar wonders of globalization have enamored its beneficiaries.

Advocates of the new economic rules – free trade, free markets and less government – that have led to greater global integration say it is good for business. And it is. Profits and the income of the richest 10 percent have soared in the last two decades. But it is an error of gigantic proportions to assume that what is good for business is also good for the poor and middle class. Globalization has imposed huge costs. Job insecurity, virtually no movement in wages despite rising education, and higher unemployment rates in the United States and globally have made it harder for many to support their families.

One side effect of this process has been a dramatic increase in inequality. Those with more economic power have used it to leverage political power to get further changes in the global economic system that benefit elites but harm others.

For example, multinational pharmaceutical companies have worked hard to prevent poor countries from producing affordable generic drugs that could stem the crushing weight of HIV/AIDs. Drug companies also have used their influence to get extended patent protection. Their higher profits come at the cost of lives of the poor and ill. This is clear in the United States as more and more Americans are forced to go to Canada to purchase prescription drugs at more affordable prices.

Some companies use their increased power to get around health and safety standards. Several years ago, Black & Decker closed its small appliance plant in the U.S. after being told it had to bring its chrome plating operations into compliance with federal regulations. Workers were suffering lesions to their nasal septums due to inhaling toxic fumes. Instead, Black & Decker moved operations to Brazil where safety standards were lower. Brazilians came forward to take those dangerous jobs because unemployment was so high and they had few options.

Closer to home, I met the manager of Newport’s Stride-Rite shoe factory several years ago. The factory closed its doors on Friday and he was on his way to open a new factory in Haiti on Monday. The piece rate per case of shoes was $1.60 in Maine and 35 cents in Haiti. The move to Haiti may have led to lower prices and higher profits, but that wasn’t good news for the workers laid off in Maine who no longer had an income to buy shoes. Many workers laid off due to footloose firms moving overseas remain unemployed for a long time, and when they do get jobs, the pay is often much lower and without benefits.

It isn’t just blue-collar workers whose jobs are fleeing and whose wages are stagnant. Professionals like architects and radiologists are now seeing their jobs outsourced. Their income, benefits and job security suffer. Workers in other countries who get these jobs do not have job security either, because many firms are so mobile.

Companies use the threat of relocation overseas to get a better deal on taxes, too. The share of income tax paid by corporations has fallen from 28 percent to 14 percent in just 25 years. The rest of us – those with lower or stagnant wages – foot the bill. Worse, social insurance that we rely on to provide a safety net in hard times is more difficult to finance because of falling tax revenues. And it is harder for governments the world over to fund public education, health and infrastructure investments.

These problems are compounded by the deregulation of global finance. Wealth holders are now free to move money around the globe at a dizzying pace to find the highest rate of return. But this has led to the emergence of a global casino, and increasingly severe financial crises. Massive unemployment is the cost of this financial mobility. The ones who gain from the mobility, though, are not the people who bear the costs.

Proponents of globalization support this system at their peril. With wages and job security under threat in the U.S. and internationally, firms face a shrinking market for their goods. The result has been a global economic slowdown with global growth rates of GDP falling from 3.4 percent a year from 1960-78 to 1.1 percent a year since that time.

We need new rules of the game, much as we needed them after the havoc created by the American robber barons, and just as we needed them when the Roaring ’20s led into the Great Depression. We need rules that impose speed bumps on the furious movement of capital around that globe. An increase in the legal minimum wages is important, and though more difficult, a global minimum wage. And we need rules that encourage corporations to compete based on creativity rather than on their ability to squeeze concessions from workers, communities and governments.

These reforms are a tall order, but they are possible.

Stephanie Seguino is the associate dean of the College of Arts and Sciences and an associate professor of economics at the University of Vermont.