Defending globalization

Some used the good old-fashioned bullhorn, while others pontificated on alternative radio. And a few wrote passionate essays in avant-garde magazines denouncing globalization and praising American President Bill Clinton for supporting some of the demands made by the 50,000 protesters who scuttled the World Trade Organization talks in Seattle late last year.

Without exception, these global critics took exception to remarks made by trade experts that Clinton was “taking a dive for labour, for enviros and the loony left,” or that the protest itself was “a Noah’s ark of flat-earth advocates, protectionist trade unions and yuppies looking for their 1960s fix.”

In a recent essay in Harper’s Magazine, Mark Weisbrot, a co-director of the Centre for Economic and Policy Research in Washington D.C., seethed with righteous (make that leftist) indignation as he ridiculed “the defenders of the status quo” for “the underlying intellectual weakness” of their mostly contemptuous dismissals. The bulk of economic research and theory is not on their side, he says.

Before we get into Weisbrot’s trade-is-bad findings, we must add our belated voice (humble though it is) to those who wondered what Bill Clinton wasn’t inhaling that day. We know he felt the protestors’ pain, but wasn’t this the guy who bagged two elections with the slogan, “It’s the economy, stupid?”

To get back to Weisbrot, people who build intellectually weak superstructures of thought based on faulty premises should not throw pebbles. Socrates would not be amused. Weisbrot points out that while trade in the United States is now almost twice as large (as a percentage of gross domestic product) as it was in 1973, foreign investment has risen sharply and the median real wage has been stagnant over the past twenty-six years. In contrast, during the years 1946-1973 (when foreign trade and investment were smaller), wages increased by about 80%.

These statistics aren’t out of whack, but the notion that increased trade is somehow responsible for the decline is utter nonsense. The post-war boom was America’s day in the sun because a generation that had known first depression, and then war, embraced the American Dream with a fervor that hasn’t been seen since. Entrepreneurs were heroes then, cheered as new factories opened and admired for their contribution to society. The domestic economy boomed because people needed everything, and everything was Made in America. There was no competition. Germany and Japan were still digging out from under the war rubble, and Great Britain’s economy stagnated under a labour government deeply suspicious of private enterprise.

Americans saw their pay packets shrink in the 1970s and onward — as did Canadians — because their respective governments launched into an orgy of public-sector spending and tax increases that boggle the mind. Who can forget Lyndon Johnson’s Great Society? Or Pierre Elliot Trudeau’s Just Society? And of course, the Vietnam War added huge sums to the rapidly growing public debt. By the same token, though, countries that embraced trade — Germany, Japan and later Korea — became economic powers. Perhaps Americans took home less, but millions of people elsewhere took home more, balancing the playing field in the process.

Prosperity began to spread globally, bypassing nations that embraced ideologies of the far left, and even the far right. Latin America floundered as its revolutionary leaders made pilgrimages to Moscow and Havana, or as unenlightened protectionists brutally defended their entrenched self-interests in a stagnant economy.

Weisbrot concludes his missive by arguing that once the “iron grip” of such institutions as the International Monetary Fund (IMF) and the World Bank is loosened, “much of humanity will be freed to pursue new experiments; some of the many possible paths to social economic and development that have been blocked for so long will open up.”

Those who forget history are condemned to repeat it. The past century was one of great experimentation in socialism and communism, on which the IMF and World Bank had no grip at all — unlike the iron grip of the utopia-seekers who foisted their high-minded experiments on the glum, resigned and sometimes terrified masses.

The only experiment that worked was free enterprise, and only when it was backed with rule of law and equal access to opportunity. It worked in Athens, the world’s first trade-based Empire of Thought. It continues to work today, and odds are it will work tomorrow.