JL: John Micklethwait and Adrian Wooldridge (A Future Perfect: The Challenge and Hidden Promise of Globalization) define globalization as “a process rather than event,” but what kind of a process is it? What is it driving toward, if anything? And what are its effects in the developed and developing worlds?
I propose a working definition: globalization is the uneven, sometimes-chaotic expansion of a set of options—freedoms of trade, movement, expression, investment, and representation—to those in the West but also to those in the developing world as well.
Globalization can often seem to exacerbate certain problems, but I am convinced and will contend throughout this exchange that globalization has been one of the most fortunate developments ever to occur on God’s green earth.
MC: The intensification of international economic ties in recent decades, particularly higher levels of trade and foreign investment, is unprecedented. Has this globalization been beneficial, particularly for the poorest people and countries? On balance, yes. Living standards have risen fastest in those countries that have adopted the free trade and open market policies advocated by globalization supporters. Images of women and children sewing sneakers for a dollar an hour are searing, but this may be better if the alternative is growing subsistence crops for a dollar a day.
Free trade and free markets are necessary, but not sufficient. Conditions for social and economic development, education, good government, and civil society are equally important. “Shock therapy” approaches to market reforms can disrupt and harm some of these very institutions necessary for growth.
Globalization has been a positive development overall, but market forces must be balanced by strong social institutions if globalization is to provide long-term benefits for all social classes in all countries.
RW: Globalization is the latest incarnation of the colonialism project of the nineteenth century. It has gone forward by force of arms and is maintained today by coercion. Indeed, in its present form, it cannot exist without the military support of the so-called Western democracies.
Proponents of globalization typically downplay the collateral damages of their crusade, and it is not hard to find their assertions that the price is worth it. These statements, of course, are made by the winners; nobody bothers to ask the victims what they feel about the situation. But the poor are human beings; each of them has intrinsic worth as a human person. The utilitarian but-it’s-worth-it arguments of the globalizers are the apologies of murderers attempting to cover up for their crimes. Globalization, as we presently know it, is a demonic manifestation of the culture of death.
MC: Robert, you say that globalization requires Western military might to survive, yet even countries with massive internal markets, which were not part of the U.S. bloc, like China and India, failed in building domestic socialist economies but have succeeded since the 1980s in dramatically increasing growth and living standards by courting foreign investment and promoting exports. Surely they weren’t forced to do so by U.S. force of arms. Domestic policies, not American hegemony, seems to have more to do with it.
RW: India and China are not as “open market,” particularly in regard to finances and capital, as is typically recommended by the IMFand World Bank. Much of the rise of living standards in rural China was because people were allowed more freedom in terms of what they grow, where and to whom they sell their products. But they are not offering their food products on the world market but rather to the domestic Chinese market, so I don’t know that the globalizers can claim this as one of their successes.
The Western globalization model is that corporations from outside of the nation should come in, bringing expertise and capital, employ local people at low wages, and export stuff back to the homeland, a process very similar to the mercantilism of previous generations.
But this is not the only economic alternative developing countries have before them. The Mondragon cooperatives of the Basque region of Spain, for example, have tens of thousands of worker owners, each of whom has an equal vote in electing the management of their enterprise. They succeeded without importing outside capital or expertise or employing people at low wages.
Workers in northern Mexico may make a dollar per hour, but most of the globalized workers in China, Central America, Southeast Asia, and elsewhere make 13 to 50 cents per hour. One of their alternatives may be subsistence farming, but another alternative could be a Mondragon-style cooperative system. Alas, the governments we support in those nations are not interested in such programs, and, in fact, sometimes at our request they have murdered economic organizers who sought to start such enterprises.
JL: With all due respect, I think you vastly overstate the case against globalization and conflate it with the geopolitics of a war that is now behind us. Yes, some horrible things happened in Latin America during the Cold War. The century behind us has demonstrated that Hobbes wasn’t far off with nasty, brutish, and short.
Globalization doesn’t just pass the utilitarian test of being better than the alternatives, although it does that in spades. Most of the massive violence of the twentieth century sprang from nation states trying to advance their own parochial interests against what we might call the common good.
What you refer to as a “manifestation of the culture of death” has been about nation states pulling back and not pressing quite so hard on their own citizens. I would have thought that someone concerned for the poor would be in favour.
RW: Well, if globalization was truly laissez-faire, I would be a lot less opposed to it, but there’s nothing laissez-faire about it, first of all because it is dominated by corporations, and corporations—popular propaganda notwithstanding—are not free market enterprises; they are statist to their core and rest on anti-market principles.
Violence was not an aberration of the Cold War; it is structural and endemic to the system. My roof was just fixed by a crew of guys, all of whom came from a certain area in Mexico. They used to be farmers, but then the Mexican government forced them off their land and gave it to a North American company to grow vegetables for the U.S. market. Their options were either to stay in Mexico, and work as labourers on their former lands for wages that wouldn’t allow them to buy the produce of their former properties, or immigrate illegally to the U.S. and, as it turns out, put a new roof on my house.
I am very much in favour of government lessening its coercion against people, but that isn’t what is happening with globalization. Governments are increasing their coercion against their own people. These men and their families and their ancestors had lived on their land for generations. Previously, the government left them alone. Now, the government has discovered that they have something useful that someone else wants and will pay money for: land and water. So their own government threw them out into the street. What’s laissez-faire about that?
Consider the structural violence embodied in our farm policy. Farm subsidies are supposed to protect the family farmer, but, in fact, have proven themselves to be a subsidy that favours bigness. Thus big U.S. farmers, including many agribusiness corporations, encouraged by the market distorting subsidies, overproduce crops, and the U.S., using the globalization mantra, forces other nations to lift their trade barriers so our cheap subsidized products flood into those nations and thus their own small farmers are devastated.
MC: Your Mexican farmers-cum-roofers example seems to be a pretty fair model of globalization—local domestic production displaced by export-oriented production for world markets.
Hernando de Soto (The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else) has argued that one of the major things holding back the poor in the developing world is a lack of secure property rights and title. I would bet that if these farmers had secure legal rights to their land, rather than simply traditional occupancy, they could have sold their land on much more agreeable terms. Maybe globalization critics should be insisting more loudly on reforms like these, rather than rejecting the market and globalization entirely.
But can it be argued that even under the less than ideal circumstances under which this expropriation took place that the net result is still better for poor Mexicans? First of all, the American-owned farming operation will still have to hire local labour. The fact that some of them move elsewhere seeking higher wages will push up the wages for those left behind. The vegetables sold for dollars will generate hard currency and an increased tax base, some of which will benefit poor Mexicans. And the fellows that became roofers in Oklahoma will send some of their dollars home, increasing local consumption. I would be willing to bet that the net result will be not simply a higher Mexican GDP, but an improved standard of living for the lower income people in the region where the vegetable farm is located.
I also agree that much of what has been done in the name of globalization is, in fact, simply support of corporations and developed nations. It is appalling to see the EU and the U.S. promoting farm subsidies that keep Third-World products out of our markets. It is terrible that we are using extremely long patent protections to keep developing nations out of fields like pharmaceuticals, software, and biotech. We cannot keep the costs of advanced products beyond the reach of Third-World citizens, even as we drive down the price of commodities by subsidizing our own industries.
But the answer to these problems is more free trade, not less. Furthermore, despite these inequities, I think experience has shown that countries that follow the path of sound economic policy and free trade do better in the long run—including raising the living standards of the poor—than countries that turn inwards.
RW: I agree with you 100 per cent that one of the problems of the poor in developing countries is a lack of secure property rights and title. But I disagree with your judgment that my roofers are better off losing their land by theft and immigrating to the U.S. Their original situation had economic value, and it is to the discredit of the primitive accounting systems of modern capitalism that it does not recognize those economic transactions. Stealing the land of the poor is always an objectively evil act. The end does not justify the means. Breaking a window increases the GNP because it must be replaced, but the money that went for the replacement is money that isn’t available for other stuff.
I’d also like to note that my original statement referred to “globalization as it is presently constituted” as being a demonic manifestation of the culture of death. Under the right moral and economic circumstances, I would support globalization, but that’s not what we have with the present situation.
JL: Let me propose an analogy: bad things have happened in the name of all, or nearly all, organized religions: Protestantism, Judaism, Mormonism, Catholicism, Buddhism, etc. So, obviously, the best answer is to toss all said faiths. Let’s not start with any utilitarian tests of benefits versus costs here; all have sinned; all should be damned.
That, Robert, is how I read you. Bad things have happened in the name of globalization and no protestations to the contrary—that not everything that occurs in the name of globalization should actually be blamed on it; that there really have been measurable benefits to the poor; that more people would suffer if the tide of globalization is reversed—are acceptable. Ofcourse governments—and to a much lesser extent, corporations—abuse people. They always have and will always attempt to do so. But globalization is expanding the set of options to the middle class and to the poor so that the people will have tools, not so much to fight back but to get around the barriers that are put in their way.
RW: You argue that since we don’t discredit all religion because some religions have done some bad things we shouldn’t discredit globalization because bad things have been done under its banner. But religions aren’t organized for evil purposes; it isn’t a matter of their structure. I am arguing that globalization, as it is presently constituted, is a structural evil. It can’t help but do evil things because that is how it is organized; it can’t operate without wholesale violations of human rights, such as theft of land from the poor, murders of union organizers and cooperative entrepreneurs, corrupting local elites, destroying local cultures, etc.
JL: Robert, what can I say? Before entering this dialogue, I read Swedish writer Johan Norberg’s In Defence of Global Capitalism. He leads with some telling truths that anti-globalizers like to duck. Contrary to the picture painted by, well, by people like yourself, the world picture in the 1990s—the most globalized decade in the history of the world—saw tremendous gains made all over but by the poor in particular. At the beginning of the decade, 1.3 billion people lived in abject poverty; by the end—and despite massive population growth—that number had dropped by 100 million people. Wars became less frequent, democracy spread, education rose, malnourishment dropped, infant mortality declined, life expectancy rose, literacy spiked. Honestly, what’s not to like?
RW: Generally, I find that works like this rely very heavily on United Nation’s statistics. I question the accuracy of all government macroeconomic statistics, especially those of the United Nations, when it comes to issues like we are talking about here. Infant mortality? When I talk to people from very poor areas in the Third World, what they tell me is that a lot of babies are born and die and are never registered on any government’s book of birth certificates.
I recently was at a dinner with a family from India. I asked the people there about the population of India, currently pegged at about 1 billion by the United Nations. They all burst into laughter, and the gist of their reply was, “Nobody knows the population of India. Do you think anyone in the Indian government ever bothers to survey all of those villages? They are required to file reports so they invent numbers and file their reports.” I always think it odd when libertarians base their arguments on government statistics. What’s to trust about them?
MC: Robert has a valid point about the irony of conservatives and libertarians relying on government statistics, particularly those from the UN. But I think that the picture painted by Jeremy and Lomborg is nonetheless mostly accurate—I can’t imagine that many Chileans or Koreans would want to undo the economic progress they have realized. But for citizens of other countries, the benefits of the trade off between growth and the destruction of traditional ways of life may not be so clear.
I think that we in the West have to help balance that equation and make globalization a more beneficial proposition for the developing world, for example, by eliminating tariffs on agricultural products and reducing patent protection for life-saving drugs. Perhaps rather than disputing whether real existing globalization is good or bad, we should be working to ensure—through market-based solutions we all seem to agree on—that future rounds of globalization benefit all.
