Bhagwatis Globalization
As a quick refresher, globalization is the term used to describe the ongoing process by which regional economies, societies, and cultures have become connected and integrated through a globe-spanning network of communication and execution, generally using trade and technology as the medium to span from national to international economies. This can happen through a number of ways trade, foreign direct investment, capital flows, migration, even the spread of technology. Bhagwati, in his ambitious work, attempts to address all of these factors trying to make the case that globalization is not the problem but the answer to the numerous societal ills that plague the world.
He begins hitting the ground running, as the reader can see with the first chapter being titled Anti-Globalization Why, and, in addition, it is naturally grouped in the first section designed around Coping with Anti-Globalization. However, what Bhagwati is doing here is actually attacking the detractors of globalization without even defining what the globalization platform is. Early on, he states that the then informed refutation of the fears and follies that animate the anti-globalizers, we cannot adequately defend the globalization that many of us seek to sustain, even deepen, and then continues without any clear arguments for the stance of anti-globalization, merely focusing on how it manifests instead.
Moreover, he suggests throughout the work that hes willing to listen and consider the reasoning behind the anti-globalization movement, but again provides no examples of how these conversations with them play out. The reader is left simply to take his word for it when he tells us that he talks with them at every opportunity he finds enthusiasm, even idealism, but never any ability to engage concretely on the issues they take a stand on. Bhagwati simply isnt very convincing on this point surely the anti-globalizers must be able to express some sort of rationale and motivation behind their actions even if it ultimately proves to be entirely irrational. He doesnt, at least initially, allow the reader to judge globalization versus anti-globalization for themselves, seeming to believe that his own approach is more deserving of the benefit of all the doubts about it. However, this approach of trivializing rather than directly countering the beliefs of the anti-globalization movement undermines any potential credibility to his argument.
Fortunately though, after the initial misgivings, Bhagwati recovers when he begins to discuss the policy implications, costs, and overall benefits of globalization. Unfortunately, though, he still falls back to stating information rather than arguing a point or explaining an issue. For example, a typical passage such as
However, I would argue that seizures of people and property are not the way to organize the protests, but that the methods of non-violent resistance advanced by Mahatma Gandhi and practiced so well by Martin Luther King Jr. are the better way.
Here again, Bhagwati relies far too much on fanciful phrases and offers too little supporting evidence as well as completely disregarding possible counter-arguments toward his view. While the aforementioned passage could certainly be considered a supportable position, he leaves it at that. He offers no further explanation as to why he believes what he just stated is the better way.
To clarify a constant criticism to how Bhagwati presents his work, he tends to use the phrase, as seen above, I would argue. Yet, usually after this phrase he goes on not to argue anything. In many cases, it would be better to preface his positions with I think or I believe. Throughout his work, it appears that Bhagwati doesnt have a clear understanding what it means to argue a point, or at least this is certainly not how its done. He says that the methods of Gandhi and MLK Jr. are favorable, yet both of these role models ended up getting themselves killed. It would be fair to say that at least a little justification should be needed as to why their methods are superior when asking people to follow their footsteps, regardless of how noble the cause is, yet none is offered.
What Bhagwati does do right, though, is detailing his lengthy understanding of the intricacies of globalization. He knows that it comes with some costs, and all throughout he believes intensely in real-world policy solutions to make the difficult transition to free-trade regimes less burdensome on those that would be hit hardest by it. What he doesnt do is focus on airy theory and call for the immediate abolition of all trade restrictions, instead keeping grounded and in-touch with the real-world consequences that exist. Also, while he illustrates that he is very much pro-free trade, he is far more hesitant about issues of free capital flows. He incorporates both of these beliefs into his defense of globalization.
Additionally, Bhagwati displays a lot of interest in the role of the NGOs, Non-Governmental Organizations. In particular, he constantly reminds the reader about the varying interests, goals, and general abilities of NGOs between developed countries and developing nations, highlighting the valuable relationship that NGOs create between the two. In fact, many of these issues introduced are issues that are not widely looked into by much of the western world. He combines this information chapter after chapter with other main criticisms toward globalization in developing nations, including world poverty, child labor issues, environmental issues, womens rights, nations transitions to democracy, culture, and wagelabor standards.
Overall, his analyses do generally cover most of the concerns of globalization, of course suggesting that the benefits clearly outweigh the costs. However, in doing so, Bhagwati insists that these problems are not inherently due to globalization but rather the policies which arent implemented in conjunction with it. He states this point clearly in that domestic policies, which the poor countries could change, are the source of the problem. Essentially, what he is stating is that it is the individual, government, or nations fault for not utilizing globalization effectively when a problem arises. Sure, common sense might suggest that other, better polices should be instituted, or popular and NGO pressure could institute necessary safeguards in order to prevent the aftereffects of freeing-up trade from negatively impacting an economy, but the reality is that not all governments and nations are as open or sensitive to said common sense or outside pressure.
Bhagwati assumes that the proper polices and safeguards are obvious and easily enacted when such moves are not always available or widely agreed upon. Even today, professionals and scholars in the field argue about the proper approaches to achieving positive globalization. For example, the Soviet and Indian five-year plans had many supporters at one time, even among Western economists. There are also powerful special interests in the foremost capitalist countries that need to be taken into account, of which are incredibly costly and nigh impossible to get rid of entirely.
To Bhagwatis credit, most of the issues behind globalization are incredibly complex. Yet, complexity is not an excuse to neglect a major issue in globalization, the environment, and that is exactly what Bhagwati does. He barely hits at the fundamental problem that environmentalists have with free trade, i.e. its historical success. To explain, its a generally accepted fact in todays world that increases in economic activity, like the production and consumption of more goods, almost inevitably has an inverse relationship with the environment. This is easy to understand, the more factories, more cars, more waste products, etc., entails a massive hit to the environment. The developed world is experiencing this crisis right now. Bhagwati totally ignores this argument. He does point out that a protectionist or self-sufficient regime as practiced by the Soviet Union and India for a time might mitigate the environmental impact, but, again, environmental harm almost always comes with increased economic activity, and globalization would lead to increased economic activity.
In contrast, Bhagwati does explain why the labor consequences in developing nations, such as questions of child labor, women in the workplace, wages, unions, etc., must be seen through a multicultural lens, not just through Western eyes. He does quite a good job discussing the different incentives behind developed and developing workers as well as unions and companies have in labor protection. He considers current globalization treaties which use self-interest rather than actual fairness as the dominant factor, and, unfortunately, notes that powerful Western forces tend to have the edge in this area.
Bhagwati does take direct aim at the argument that the United States must impose labor and environmental standards on poor countries in regards to future trade agreements. He goes to point out evidence that establishes the fact that U.S. multinationals do not actually seek out less developed countries with low standards, but instead find most of their affiliates in other high-wage, high-standard countries. Bhagwati notes that when they do invest in poorer countries, the result is not the race to the bottom as imagined. What actually happens is that high-wage, high-standard countries do invariably bring standards that generally far exceed the current economy of the poor country, creating a race to the top situation. Bhagwati also warns that withholding U.S. trade and investment from poor countries will inevitably mean slower economic growth, fewer girls studying in school, and more people working low-wage, low-expertise jobs like those found in farms, factories, and brothels. With that in mind, Bhagwati is also willing to acknowledge that there are certain sectors where policies that arent exactly in the best interests for poorer nations have been forced on them under the guise of the ideal of free trade. For example, intellectual property protection could be viewed as negatively impacting poorer nations. Large-scale pharmaceutical multi-nationals continue to threaten and impose untenable conditions on poorer nations with little or no recourse. He notes that some concessions were made at the Doha Round negotiations, yet, the issue continues to manifest problems for free trade.
Essentially for Bhagwati, free trade shouldnt be considered an end-in-and-of-itself, but instead should be seen as an often powerful weapon in the policies we can deploy to fight poverty. He does cede that the aforementioned intellectual property protection issue is a shortcoming of the current free trade system as practiced now. He also cautions against the ever tempting too fast integration into the global financial system without proper protection against capital outflows, but this is not exactly a new problem or one unique to globalization policy-making. Ultimately though, he emphasizes that free trade is the way to go, contrasting the negatives with how it will improve the average wealth of citizens. Not only that, it opens the door for incredible gains, something that protectionist or self-sufficient economies just cant rival.
However, Bhagwatis analysis on capital controls and go-slow reforms for countries in transition appears flawed here. He does support the free movement of goods, yet he does not hold that same support for capital, citing that short-term capital flows tend to destabilize emerging economies. This, though, is simply incorrect. Short-term capital typically moves out of emerging economies because of the loss of confidence that is felt in regards to the stability of the internal domestic markets. Bhagwati simply appears to have erred in terms of cause and effect here. Also, the too fast integration that he warns about also is another statement he makes without proper support. He utilizes the example of Russia and its rapid reforms that devastated it. However, he omits the fact that Russias economy was a mess before those reforms, the true root of Russias lingering economic problems are the half-hearted reforms implemented by its corrupt leaders. If the too fast integration was really to blame for the economic upheaval, why werent former Soviet bloc countries that reformed even more aggressively than Russia, such as Poland and the Czech Republic, doing so much better than Russia Not only that, why are countries like the Ukraine and Belarus, who lagged behind even Russia, consequently doing so much worse than it Bhagwati leaves that answer up in the air.
Nevertheless, Bhagwati must understand that sensible policies must be implemented in order to take advantage of the opportunities globalization has to offer. Not only that, protecting those who might suffer in the short-term and long-term from a change in the rules is a huge issue that cannot be addressed simply or generally. Some changes are sensible, such as his view on the World Bank
In my view, the Bank should automatically trigger support when the WTOs Dispute Settlement Mechanism brings a significant loss of income and attending adjustment problem for producers in poor countries who have lost market access.
Even here, though, he admits that the World Bank is ultimately crippled now by overreach, and probably wont doing that in the foreseeable future. Also, the more vital domestic regulations that are needed isnt something that one can put much stock in considering the state of the world today.
In the end, In Defense of Globalization does offer a decent overview of many of the current globalization-issues. Bhagwati also, when he chooses to focus on concrete examples and arguments, does make a decent case for why an open world is better than a closed one. However, the lack of examples, clear arguments, and supporting cases ultimately mar his work. Extensive references do point the interested reader, however, to additional sources regarding many of the points he makes should they choose to look into them. Nevertheless, a bit more clarity and depth to some of the arguments should have been implemented for a clear case in defense of globalization.
Categories:
0 comments:
Post a Comment