[Paleopsych] Guardian: Myths and corrections
checker at panix.com
Wed Apr 27 19:26:23 UTC 2005
Myths and corrections
[Something else worth recycling, so as to get refutations.]
Will Hutton analyses two very different approaches to the
globalisation debate in Martin Wolf's Why Globalisation Works and
David Held's Global Covenant
Saturday July 10, 2004
Why Globalisation Works
Global Covenant: The Social Democratic Alternative to the Washington
It was not long ago that every international economic gathering was
punctuated by fierce protests at the sins of globalisation; famously
the World Trade talks at Seattle got nowhere in part because of the
teargas and mayhem outside the conference. Who was prepared to
the cause of globalisation when so many people found it offensive?
the Genoa G8 summit in 2001, protester Carlo Giuliani was killed by
the Italian police - a martyr to the cause. A small cottage industry
emerged of authors decrying the sins of the turbo-charged capitalism
that globalisation was creating. It seemed that having won the
of ideas against communism, the west was having a crisis of ideas
about its own economic organisation. Those who believed in the
of markets and capitalism were on the retreat.
Not Martin Wolf, chief economic commentator of the Financial Times.
There is something of Wayne Rooney about Wolf. You would not want to
defend any but a rock-solid economic position against his absolute
self-confidence, his honesty and almost joyous marshalling of
data; if there is a chink in your armour he will find it. His book
a swaggering assertion that the antiglobalisers are wrong. This is
a man to suffer those he considers fools, and plenty of reputations
are the worse after this.
He attacks the antiglobalisation brigade in all its manifestations -
and early on lists the charges. Globalisation is allegedly
impoverishing peasants and workers worldwide, empowering faceless
corporations and destructive finance, brutalising our environment,
promoting inequality and destroying democracy and the state
through which it works. The emergence of a single global market with
ever lower tariffs, ever greater capacity to produce and distribute
goods (and increasingly services) wherever there is economic
advantage, and ever easier movement of capital in and out of
country, has unleashed the capitalist tiger, say the critics. It
be resisted or we all face perdition.
Wolf will have none of this. He shows how trade and foreign direct
investment are engines not of poverty but of wealth-creation; the
problem for too many of the world's peasants and workers is not too
much globalisation but too little. There is a rich man's club of
western nations that largely invest in and trade with each other,
ratcheting up their incomes by specialising in what they are good at
and exploiting their exponentially expanding stock of physical,
and intellectual capital. What the rest of the world wants and needs
is not to resist this process but to share in more of the action
itself - and those countries that join in on the right terms can do
Wolf cites China as an example - in a way perhaps the most
extraordinary convert to the principles in which he believes.
economic growth is already the stuff of legend, and for those
who accuse the country's export processing zones and burgeoning
industrial belts of being new bywords for exploitation, Wolf has a
ready reply: it was even worse living on the land on less than a
dollar a day. Infant mortality has fallen dramatically; numeracy and
literacy are rising sharply; food consumption is climbing. The 10
million peasants who leave the countryside every year looking for
in the cities are proof positive that they regard what is happening
an improvement - and one born of opening up to the very trade,
investment and financial flows that the antiglobalisers decry.
Western corporations are the crucial handmaidens of this
transformation; the idea that western consumers and third-world
workers have become slaves to the tyranny of brands, logos and their
callous production methods as they move production offshore is
complete baloney to Wolf. He shows how they pay better wages than
local producers, how their investment is essential for development
how the trade they foster benefits all parties.
And so it goes on. The financial markets as a source of instability?
Yes, crisis runs on currencies have been costly and sometimes poorly
managed by the IMF - but better this than no global financial market
at all. Governments undermined by the newly powerful footloose
companies? Government spending and taxation in the west have been
rising over the past 20 years, and even taxation on companies is up.
Inequality on the march? Among individuals maybe, but the big story
hundreds of millions being lifted off the breadline. Environmental
degradation? Standards are rising, not falling, and where there are
problems they are due not to trade but to authoritarian political
regimes impervious to complaints about pollution and toxicity -
produced by domestic manufacturers protected from global
Wolf is convinced and convincing, but to a degree he is tilting at
easy targets; the argument is moving on from where it was even two
three years ago.
David Held is a gold-carat social democrat and man of the liberal
left, and intriguingly he begins his book with almost the same list
myths about globalisation as Wolf and consigns them to the dustbin
with no less enthusiasm. But while Wolf believes that globalisation
works, Held has profound reservations. It certainly has the
to produce the opportunity and sustained wealth-generation in which
Wolf believes - but only if the politics and governance are right.
argument migrates to new ground, where Wolf's certainties and
of economic data are less secure.
Held's position is that globalisation is undermining national social
settlements. Tensions between capital and labour, whose past
resolution on a national basis led to social democratic bargains -
legitimising capitalism, promoting the rule of law and underwriting
the circumstances and opportunities of ordinary people - are, he
argues, re-emerging in the global framework. While Wolf can only
explain the ability of totalitarian fascism and communism to check
last great beneficent, liberal global opening in the late 19th
as the triumph of bad ideas and power-grabbing authoritarians, Held
not puzzled at all. Rather he is worried that economic instability,
inequality and palpable unfairness were recruiting-sergeants for
massive political dissent, and that the only way to head them off
is to ensure that a global system of governance is developed on
democratic principles to govern globalisation. He calls this a New
Held may be dismissed as an idealist; to achieve either a
representative UN or even to establish a global financial authority
part of his covenant seem very distant dreams - but perhaps the
side of globalisation will provoke this response as a necessity. In
his recent Financial Times columns, Wolf has pointed to the
unsustainability of the growth of the US's international debts and
likelihood of a painful adjustment - an analysis that is little
ventilated in his book. This unsustainability is due to the
willingness of Asian central banks to acquire an endless supply of
dollars - a willingness that is driven by political as much as
economic judgment. Globalisation is not just created by the
hand of the market and its viability ensured by the law of
advantage; its success so far has depended on a series of fragile
political bargains, notably between Asia and the US.
Wolf seems most ill at ease in his ho-hum judgment on the IMF's
managing currency crises and on the way corporate lobbying is
undermining democracy. Scratch a bit and in these areas he is not so
far away from those he criticises.
Wolf may have set the bar high for those who want to attack the
economics of globalisation - but he has not engaged with what
governance structures will be needed to organise any adverse
from the processes at work, for example a potentially colossal run
the dollar. For that we have to turn to Held. If you want to
understand globalisation you need to read both.
Will Hutton is chief executive of The Work Foundation. To order Why
Globalisation Works for £17.99 or Global Covenant for £10.99, both
plus p&p, call Guardian book service on 0870 836 0875.
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