by From Robert Wade In this context globalization refers to the opening of domestic markets and the integration of global production via multinational corporations (MNCs). More broadly, it refers to movement in the world economy towards “one country”, or “deep (not shallow) integration”, where nation states have no more influence over flows of goods, services, capital, finance, ideas and people across borders than South Dakota or the other US states have across theirs. Ever since the 1980s leaders of western states – including shareholders and top executives of MNCs – have agreed that states, on their own and cooperating (in free trade agreements, and in inter-state organizations like the World Bank, IMF, World Trade Organization, European Union), should push for ever more globalization, more “market access” for their corporations, and less state “intervention” or “regulation” in markets. Here is Martin Wolf of the Financial Times, one of the world’s most influential economic commentators: “It cannot make sense to fragment the world economy more than it already is but rather to make the world economy work as if it were the United States, or at least the European Union… The failure of our world is not that there is too much globalization, but that there is too little.
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from Robert Wade
In this context globalization refers to the opening of domestic markets and the integration of global production via multinational corporations (MNCs). More broadly, it refers to movement in the world economy towards “one country”, or “deep (not shallow) integration”, where nation states have no more influence over flows of goods, services, capital, finance, ideas and people across borders than South Dakota or the other US states have across theirs. Ever since the 1980s leaders of western states – including shareholders and top executives of MNCs – have agreed that states, on their own and cooperating (in free trade agreements, and in inter-state organizations like the World Bank, IMF, World Trade Organization, European Union), should push for ever more globalization, more “market access” for their corporations, and less state “intervention” or “regulation” in markets.
Here is Martin Wolf of the Financial Times, one of the world’s most influential economic commentators:
“It cannot make sense to fragment the world economy more than it already is but rather to make the world economy work as if it were the United States, or at least the European Union… The failure of our world is not that there is too much globalization, but that there is too little. The potential for greater economic integration is barely tapped… Social democrats, classical liberals and democratic conservatives should unite to preserve and improve the liberal global economy against the enemies mustering both outside and inside the gates” (emphasis added).[1]
Here is Renarto Ruggiero, former head of the WTO:
“trade integration is not just a recipe for growth but also security and peace, as history has shown” (emphasis added).
Here is the WTO saying on its website: global integration under WTO and predecessor GATT supervision
“has been one of the greatest contributors to economic growth and the relief of poverty in mankind’s history” (emphasis added).
Here is the World Bank summarizing others’ research findings, with which it agrees:
“openness to international trade, based on largely neutral incentives, was the critical factor in East Asia’s rapid growth” (emphasis added).[2]
The World Bank’s Structural Adjustment Loans over the 1980s carried more trade liberalization conditions than those in any other policy domain. The Bank treated trade liberalization as the queen of policies, not just one among many, saying that free trade policy will limit the amount of damage from other government interventions in the market.[3]
The Financial Times peppers its editorials about trade protection with negatives like “mercantilist” and “populist”, and stresses that any one country benefits from adopting free trade policy even if others do not – because protection amounts to throwing rocks in your own harbor. Apparently the collective interest of any country and of the world at large always favors free trade, because free trade maximizes the size of the pie. Only self-seeking “vested interests” want protection in order to get more of the pie for themselves, at inevitable cost to society.
A big business voice comes from Percy Barnevik, when CEO of the Swedish-Swiss multinational Asea Brown Boveri (ABB):
“I would define globalization as the freedom of my group to invest where and as long as it wishes, to produce what it wishes, by buying and selling wherever it wishes… while putting up with as little labor laws and social convention constraints as possible.” [4]
Finally, Bernard Arnault, in 2000, CEO of French luxury group LVMH and 10th richest person on Earth:
“Businesses, especially international ones, have ever greater resources, and in Europe they have acquired the ability to compete with states… Politicians’ real impact on the economic life of a country is more and more limited. Fortunately.”[5]
These statements illustrate the tendency for globalization champions to attribute “all good things” to trade and investment integration, including (1) global poverty reduction on an unprecedented scale, (2) East Asia’s remarkable economic rise, and (3) global peace and security.
Though they assert causality, the statements are not intended to pass a test of evidence. Their job is to affirm identity: that the speaker or organization is a member of the global elite team which wants capital, goods and services to be able to move freely worldwide between locations and sectors, as the defining feature of desirable globalization, assuming that what is good for the team is good for humanity and the biosphere.
Implicitly or explicitly the claims downplay the value of “policy space” and the value of the solidarity obligations embedded in the idea of “nation”, ignoring the employment point made by Keynes in the epigraph. The claims should be understood in the light of Daniel Kahneman’s observation, “Declarations of high confidence mainly tell you that an individual has constructed a coherent story in his mind, not necessarily that the story is true”. read more
[1] M. Wolf, 2004, Why Globalization Works, Yale University Press, p.4.
[2] World Bank, 1993, The East Asian Miracle: Economic Growth and Public Policy, p. 292.
[3] World Bank, 1989, “Strengthening trade policy reform”, Washington DC, November 13.
[4] Quoted in J. Gelinas, 2003, Juggernaut Politics: Understanding Predatory Capitalism, Zed Books,
p. 21[5] B. Arnault, quoted in Serge Halimi, 2013, “Tyranny of the one per cent”, Le Monde Diplomatique (English), May 1.