One of the great puzzles of contemporary politics is how globalisation came to have such a bad name. The end of the cold war left governments around the world struggling to find a new framework for international relations. It also seems to have left the protest movement in search of a new focus.
But why pick on globalisation when there is no agreement on what it is? For some people, it is primarily economic and trade integration; others put more emphasis on cultural aspects. I would argue that it is all these and more. Globalisation is the increasingly rapid exchange of ideas, people and goods made possible by falling transport costs and technological advances, all leading to the closer integration of the world including — but not limited to — the economy.
Confusion, though, suits those who want to climb on the bandwagon of opposition. Many of those involved in the campaigns against globalisation clearly mean well even if, as some of us think, they are misinformed and misguided. As Jagdish Bhagwati says in his book, the movement is a “motley crew, a melange of anti-globalisation protesters … appearing to be an undifferentiated mass”. In Defense of Globalisation is an important contribution to an often incoherent debate. It sets out a persuasive case in favour of globalisation.
Opposition to change is hardly new. The 19th century English Luddites bequeathed their name to all who stood against industrial and technological progress. But the Luddites’ position had some logic; their livelihoods were being threatened, though the progress they opposed stood to benefit a much larger cross-section of the population. Yet most of today’s protesters, dependent as they are on e-mail and mobile telephones, are beneficiaries of the technological changes they oppose.
For centuries, technological progress has had an impact on living standards. What made the 20th century different was the scale and breadth of the rise in those standards. On a wide range of measures — poverty, life expectancy, health, education — more people have become better off at a faster pace in the past 60 years than ever before. All this occurred within the multilateral economic framework established at the end of the second world war.
Trade liberalisation and expansion have been central to the post-war surge in living standards. The progressive multilateral liberalisation of trade has driven rapid growth and that, in turn, has accelerated the reduction of poverty. Yet more than anything else, trade, or rather opposition to it, is what seems to be inspiring the anti-globalisation movement. Trade hurts the poor in developing countries, they say, or it costs jobs in industrial countries.
Indeed, at the margin there will always be some people who find themselves displaced as the expansion of trade or the advances of technology force economies to adjust. To make the benefits of trade more convincing, it is important that we do all we can to make sure that appropriate safety nets are in place for those individuals. But we must also remember that while some are adversely affected by import competition, others benefit from an increase of industry jobs in the export sector.
It makes no sense to blame globalisation for creating jobs in developing countries — what the current row about outsourcing amounts to — and for creating poverty in those countries at the same time. Wages are lower in developing countries than in the industrial world. But that is what makes those countries competitive. Globalisation is not a zero-sum game. There is overwhelming evidence that it creates extra wealth and everyone can benefit.
The economic achievements of the past few decades have been extraordinary. To be sure, the rich have got richer. But so have the poor, to a considerable extent. What the protesters fail to recognise — or choose to ignore — is that the progress that has been achieved derives from the policies they now so fiercely oppose. Of course, there are downsides, as Mr. Bhagwati readily acknowledges.
We need to do more to reduce the short-term costs associated with globalisation. But the protesters are actively hindering progress on this front. Many of them seem almost viscerally opposed to the very multilateral institutions that offer the best hope of making globalisation work more effectively and with fewer short-term costs. To this end, Mr Bhagwati’s book should give the protesters pause for thought.