Some Thoughts on Globalization
In his article In Defense of Globalization, BBC journalist Henri Astier asserts that globalization, though an abstract and undoubtedly flawed concept, is highly beneficial for the world at large. Whereas opponents of globalization will often argue that global trade practices—especially those involving large corporations—are exploitative of impoverished nations and promote pollution, child labor and a plethora of other societal problems, Astier contends that the existence of free trade, and the limiting of so-called "protectionism" are necessary to solve, rather than exacerbate these problems.
Astier offers a particularly fascinating perspective on the subject being that he is a French journalist who vehemently supports global trade practices, and as he puts it, "...the French Right and Left are equally hostile to markets..." By making such a statement, Astier presents himself, in a way, as a man without a country. Despite the pressures and proclivities of his homeland and most likely his upbringing, Astier remains steadfast in defending a controversial position on a controversial subject. This truly is a testament to his convictions, and for the record, I agree with him.
His assessment about French attitudes regarding trade is supported by the attitudes of the current French president, Nicolas Sarkozy. A New York Times Editorial entitled Two Sides of Mr. Sarkozy, dated November 18, 2007, describes President Sarkozy's recent address to the European Union Parliament, in which he proposed a program for "protectionist walls" around Europe. According to the Editorialist, "[Sarkozy's] approach would discriminate against foreign companies and third world farmers." The Editorialist goes on to write, "...he will do all he can to keep Turkey out of the European Union. If Mr. Sarkozy's ideals prevail...they would inflict long-term damage on France and Europe."
The idea of protectionism is important to consider in analyzing the finer points of globalization. Astier deals with the matter at length in his article, among other facets of this complicated issue. There are a few particular statements in the article that succinctly illustrate some very thought-provoking ideas. For instance, he writes, "Free traders have always defended liberty, and condemned empire as an extension of protectionism." He also notes (facetiously referring to anti-globalist activists), "All the problems found in capitalist societies, from pollution to inane television programmes, disqualify capitalism itself, which is compared to a perfect system that does not exist." I find this statement particularly notable in that it acknowledges the fact that many anti-globalists fail to offer realistic or practical alternatives, and many are arguably cautious about free trade due largely to their negative predispositions toward unbridled capitalism.
At the heart of the article, though, is one particularly profound quote which I would like to address. Astier boldly states, "Globalization is in fact part of the cure, as it helps remove the real cause, poverty." This statement was made to address child labor in particular, but is relevant to the theme of the entire article, and is alluded to throughout. I touched upon this idea earlier, but certainly such an audacious contention requires further explanation, lest it should appear like a mindless bumper sticker slogan. Astier goes into much detail about how specific impoverished nations and even entire continents have benefited from mutually-beneficial global trade. He refers to Asia rising from the ashes of hunger and poverty, and expresses a belief that Africa has the potential to do the same, "given the right policies." "Eighteenth-century Europe," he declares, "was poorer than most of Africa is today."
In making his arguments, Astier alludes to the works other economists. One such economist, who is heavily acknowledged throughout, is Jagdish Bhagwati, an author and professor at Columbia University. Many of Astier's assertions about the benefits of globalization are made with reference to Bhagwati's scholarly works. Curious to find further elaborations—as Astier admittedly only touches upon the works to which he alludes—I visited Bhagwati's website and began reading through some of his articles. Two that particularly struck me were America's Bi-Partisan Battle Against Free Trade and Technology, Not Globalization, Is Driving Wages Down.
These articles, both of which are fairly recent (the former from April 9, 2007, and the latter from January 3, 2007), elaborate on the themes and arguments in Astier's article. For example, in America's Bi-Partisan Battle, he expands heavily on Astier's criticisms of protectionism, stating "they [supporters of protectionism] use fairness in trade to befuddle an ill-informed citizenry into protectionism." He goes on to describe preferential trade agreements, which seek to promote a form of trade that is riddled with checks and balances, taking factors into concern such as the economies of nations with which the US seeks to engage in trade. This, he argues, is not free trade at all, but the illusion of free trade, which often wins popular support as it is presented with supposedly-altruistic intentions.
This position on protectionism further complicates the issue of globalization. As Astier mentions in his article, globalization is a complex word with many connotations, and when you consider also that there is a divide between 'fair trade' and 'restricted trade,' even more questions are raised. Even if international trade is heavily restricted, any such trade is still 'global,' and Astier mentions also that critics of globalization do not oppose all globalization, however the issue of globalization as argued by individuals like Astier and Bhagwati is emphasized specifically in the context of free trade, and therefore protectionism is seen as a hindrance.
For this reason, I wish to note that globalization itself, for the sake of this essay, should be interpreted as a statement in regard to free trade, because although literal definitions might allow for any number of interpretations, the globalization debate in today's society is largely a matter of free trade vs. protectionism (to whatever extent), of which I personally support the former. Bhagwati warns that the seduction of protectionism is the comfort of safety, of economic security, and of international altruism, however this comfort is illusory.
Why?
Astier deals with this at length, how the inhibition of free trade prevents developing nations from becoming prosperous. Without free trade, they are unable to harness their resources through mutually-beneficial transactions with other nations and elevate themselves to a higher economic status. There are still those who argue that protectionism is necessary to prevent exploitation of nations and individuals, but Astier points out that these protections very seldom address the root problems. As I mentioned earlier, it is poverty, and not globalization, that brings about child labor, and as Astier points out, the absence of globalization does not bring an end to child labor, but merely drives it underground. Child labor is a social issue that must be dealt with through laws and measures set forth by the nations in which such practices exist, but globalization is inconsequential in this matter. The same can be said of environmental issues. Factories may pump pollution into the air, but that itself is not an argument against free trade, nor does it have anything to do with the matter. Environmental regulations are issues that must be dealt with on their own merits.
But what of those people who argue that globalization hurts workers? Astier points out that in fact the standard of living has been raised in many countries due to free trade and the economic incentives thereof. Many large, powerful corporations have expanded their ventures overseas into developing nations such as India, and although some criticize these "outsourcing" practices, struggling nations have found them very beneficial. In a BBC article entitled, Multinationals Lead India's IT Revolution, dated January 24, 2007, reporter Steve Schifferes writes, "[Corporations] have found that it is cheaper to outsource many white collar tasks – such as accounting, IT support, and payrolls – to locations overseas." Referring specifically to India, Schifferes describes how the nation has benefited immensely from global trade practices in recent years, currently exporting 25 billion dollars per year worth of the above-listed services. This number is expected to rise to 60 billion dollars by 2010.
There are those, however, who contend that these outsourcing practices are a threat to domestic wages. In response, I refer to the second Bhagwati article that I listed earlier, entitled Technology, Not Globalization, is Driving Wages Down. In the article, Bhagwati boldly asserts that "all empirical studies including those done by some of today's top trade economists...show that the adverse effect of trade on wages is not substantial." He goes on to explain that stagnating wages are largely the result of technological advances that eliminate entry-level jobs. This creates less demand, consequently affecting wages.
I wish to repeat that both Astier and Bhagwati openly concede that globalization is not without its negative impacts. No enterprise is perfect, but these writings and others demonstrate that the benefits of globalization far outweigh the negatives. As Henri Astier declares ever so eloquently, "That trade brings wealth and that a country hurts itself by blocking imports is among the best-established ideas in the social sciences."
In his article In Defense of Globalization, BBC journalist Henri Astier asserts that globalization, though an abstract and undoubtedly flawed concept, is highly beneficial for the world at large. Whereas opponents of globalization will often argue that global trade practices—especially those involving large corporations—are exploitative of impoverished nations and promote pollution, child labor and a plethora of other societal problems, Astier contends that the existence of free trade, and the limiting of so-called "protectionism" are necessary to solve, rather than exacerbate these problems.
Astier offers a particularly fascinating perspective on the subject being that he is a French journalist who vehemently supports global trade practices, and as he puts it, "...the French Right and Left are equally hostile to markets..." By making such a statement, Astier presents himself, in a way, as a man without a country. Despite the pressures and proclivities of his homeland and most likely his upbringing, Astier remains steadfast in defending a controversial position on a controversial subject. This truly is a testament to his convictions, and for the record, I agree with him.
His assessment about French attitudes regarding trade is supported by the attitudes of the current French president, Nicolas Sarkozy. A New York Times Editorial entitled Two Sides of Mr. Sarkozy, dated November 18, 2007, describes President Sarkozy's recent address to the European Union Parliament, in which he proposed a program for "protectionist walls" around Europe. According to the Editorialist, "[Sarkozy's] approach would discriminate against foreign companies and third world farmers." The Editorialist goes on to write, "...he will do all he can to keep Turkey out of the European Union. If Mr. Sarkozy's ideals prevail...they would inflict long-term damage on France and Europe."
The idea of protectionism is important to consider in analyzing the finer points of globalization. Astier deals with the matter at length in his article, among other facets of this complicated issue. There are a few particular statements in the article that succinctly illustrate some very thought-provoking ideas. For instance, he writes, "Free traders have always defended liberty, and condemned empire as an extension of protectionism." He also notes (facetiously referring to anti-globalist activists), "All the problems found in capitalist societies, from pollution to inane television programmes, disqualify capitalism itself, which is compared to a perfect system that does not exist." I find this statement particularly notable in that it acknowledges the fact that many anti-globalists fail to offer realistic or practical alternatives, and many are arguably cautious about free trade due largely to their negative predispositions toward unbridled capitalism.
At the heart of the article, though, is one particularly profound quote which I would like to address. Astier boldly states, "Globalization is in fact part of the cure, as it helps remove the real cause, poverty." This statement was made to address child labor in particular, but is relevant to the theme of the entire article, and is alluded to throughout. I touched upon this idea earlier, but certainly such an audacious contention requires further explanation, lest it should appear like a mindless bumper sticker slogan. Astier goes into much detail about how specific impoverished nations and even entire continents have benefited from mutually-beneficial global trade. He refers to Asia rising from the ashes of hunger and poverty, and expresses a belief that Africa has the potential to do the same, "given the right policies." "Eighteenth-century Europe," he declares, "was poorer than most of Africa is today."
In making his arguments, Astier alludes to the works other economists. One such economist, who is heavily acknowledged throughout, is Jagdish Bhagwati, an author and professor at Columbia University. Many of Astier's assertions about the benefits of globalization are made with reference to Bhagwati's scholarly works. Curious to find further elaborations—as Astier admittedly only touches upon the works to which he alludes—I visited Bhagwati's website and began reading through some of his articles. Two that particularly struck me were America's Bi-Partisan Battle Against Free Trade and Technology, Not Globalization, Is Driving Wages Down.
These articles, both of which are fairly recent (the former from April 9, 2007, and the latter from January 3, 2007), elaborate on the themes and arguments in Astier's article. For example, in America's Bi-Partisan Battle, he expands heavily on Astier's criticisms of protectionism, stating "they [supporters of protectionism] use fairness in trade to befuddle an ill-informed citizenry into protectionism." He goes on to describe preferential trade agreements, which seek to promote a form of trade that is riddled with checks and balances, taking factors into concern such as the economies of nations with which the US seeks to engage in trade. This, he argues, is not free trade at all, but the illusion of free trade, which often wins popular support as it is presented with supposedly-altruistic intentions.
This position on protectionism further complicates the issue of globalization. As Astier mentions in his article, globalization is a complex word with many connotations, and when you consider also that there is a divide between 'fair trade' and 'restricted trade,' even more questions are raised. Even if international trade is heavily restricted, any such trade is still 'global,' and Astier mentions also that critics of globalization do not oppose all globalization, however the issue of globalization as argued by individuals like Astier and Bhagwati is emphasized specifically in the context of free trade, and therefore protectionism is seen as a hindrance.
For this reason, I wish to note that globalization itself, for the sake of this essay, should be interpreted as a statement in regard to free trade, because although literal definitions might allow for any number of interpretations, the globalization debate in today's society is largely a matter of free trade vs. protectionism (to whatever extent), of which I personally support the former. Bhagwati warns that the seduction of protectionism is the comfort of safety, of economic security, and of international altruism, however this comfort is illusory.
Why?
Astier deals with this at length, how the inhibition of free trade prevents developing nations from becoming prosperous. Without free trade, they are unable to harness their resources through mutually-beneficial transactions with other nations and elevate themselves to a higher economic status. There are still those who argue that protectionism is necessary to prevent exploitation of nations and individuals, but Astier points out that these protections very seldom address the root problems. As I mentioned earlier, it is poverty, and not globalization, that brings about child labor, and as Astier points out, the absence of globalization does not bring an end to child labor, but merely drives it underground. Child labor is a social issue that must be dealt with through laws and measures set forth by the nations in which such practices exist, but globalization is inconsequential in this matter. The same can be said of environmental issues. Factories may pump pollution into the air, but that itself is not an argument against free trade, nor does it have anything to do with the matter. Environmental regulations are issues that must be dealt with on their own merits.
But what of those people who argue that globalization hurts workers? Astier points out that in fact the standard of living has been raised in many countries due to free trade and the economic incentives thereof. Many large, powerful corporations have expanded their ventures overseas into developing nations such as India, and although some criticize these "outsourcing" practices, struggling nations have found them very beneficial. In a BBC article entitled, Multinationals Lead India's IT Revolution, dated January 24, 2007, reporter Steve Schifferes writes, "[Corporations] have found that it is cheaper to outsource many white collar tasks – such as accounting, IT support, and payrolls – to locations overseas." Referring specifically to India, Schifferes describes how the nation has benefited immensely from global trade practices in recent years, currently exporting 25 billion dollars per year worth of the above-listed services. This number is expected to rise to 60 billion dollars by 2010.
There are those, however, who contend that these outsourcing practices are a threat to domestic wages. In response, I refer to the second Bhagwati article that I listed earlier, entitled Technology, Not Globalization, is Driving Wages Down. In the article, Bhagwati boldly asserts that "all empirical studies including those done by some of today's top trade economists...show that the adverse effect of trade on wages is not substantial." He goes on to explain that stagnating wages are largely the result of technological advances that eliminate entry-level jobs. This creates less demand, consequently affecting wages.
I wish to repeat that both Astier and Bhagwati openly concede that globalization is not without its negative impacts. No enterprise is perfect, but these writings and others demonstrate that the benefits of globalization far outweigh the negatives. As Henri Astier declares ever so eloquently, "That trade brings wealth and that a country hurts itself by blocking imports is among the best-established ideas in the social sciences."
posted by Kris Avalon at
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