December 29, 2003

The revolution will hopefully be televised

Posted by Curt at 05:58 PM in Economics | TrackBack

If you haven’t already, check out this interview with Johan Norberg, who recently published “In Defense of Global Capitalism.” There are no new arguments in refutation of anti-globalization activists here, but Norberg seems to be exceptionally talented at articulating them in a way that many economists seem unable to do. Because of his young age (30), and roots in left-wing anarchism, which surely ought to give him credibility with his intellectual opponents, he could be an extremely effective spokesman for an eminently defensible intellectual position, and I hope that his book gets wide attention in America. My favorite quotes from the interview:

“The broader an economy is, the more wealth and income are spread around. The best thing that could happen to the Arab world would be for them to run out of oil. Then they’d have to open up to trade…”

“The most vocal opponents of globalization in poor countries are often funded by critics from wealthier countries…There are the old groups that have always been scared of foreign competition. Corporations that wouldn’t be able to beat competition from other countries are one of them. In the U.S., that includes the textile industry, which has funded a lot of the anti-sweatshop propoganda. You see the same thing when it comes to unions that are trying to educate people against free trade…”

“People are dying because we in the West are unwilling to change and to actually live by the free-market rhetoric we often spout…it’s not merely developing countries that lose out by these policies. We do, too…Agricultural subsidies cost something on the order of $1 billion a day in Western countries.”

I think especially acute in Norberg’s contention that the real economic legacy of colonialism is not a depletion of the resources in former colonies but rather a concentration of political power in areas of high resource wealth, which has the effect of uniting political power and wealth in a marriage as unholy as that between church and state (although the strength of the agricultural and industrial lobbies in the U.S. shows that it is not an entirely foreign affliction). In his view, areas poor in natural resources have generally become much wealthier through diversification.

In general, then, I find Norberg to be a very hopeful voice of reason. That said, I can anticipate several weak points in his argument, which ought to be resolved. I appreciate his understanding that economic modernization cannot proceed without passing through the industrialization-smokestack-sweatshop period, which globalization critics do not seem to recognize in their false dichotomy between the developed world and some mythological bucolic pre-industrial society with fauns scampering through the forest, and I can appreciate the point that many environmentalists seem motivated not just by a desire to preserve nature but by a hatred of modern life, but he does not seem terribly conscious that, while it is true that pre-industrial life included much more starvation, disease and death than our world, there have nevertheless been losses and sacrifices in the “progress” of civilization. It seems to me pretty clear that there is a certain tendency to abstraction and rootlessness in the modern world, which I find to be the most troubling elements of life now, and unless one really engages oneself with these issues deeply, then little work can be made to the enrichment of human life in those areas without the loss of all the other positive aspects of material well-being which have come to be in the last couple of centuries.

On another point, while he calls the WTO “the free-traders’ deal with the devil,” he nevertheless admires its ability to “lock in” nations to international trade. But if the benefits of free trade are so apparent, why would nations need to be compelled to engage in it? In any case, how does the WTO bind the nations to trade freely any more than the UN binds nations to remain peaceful? If their first protectionist urge is to withdraw from international trade, how does excluding them from it put any effective pressure on them? And aside from all that, why should anyone be more interested in engaging nations in free trade at the governmental level rather than at the buyer-and-seller level?

And lastly, while I am aware that Norberg’s expertise lies in economics rather than religion, his argument that Muslims might have an easier time of liberalizing their societies economically than Christians because Muhammed was more supportive and favorable towards trade and the amassing of wealth than Jesus, while intriguing, I find to be a pretty thin and tenuous line of reasoning. It may be somwhat overly univeralist of me to say so, but if the vicissitudes of fortune of the Orient and the West teach us anything, I think it should be that the fortunes of a civilization generally have little to do with its specific religious dogmas, which according to Norberg himself, as an advocate of the separation of religion from public life, is as it should be. And of course anyone following events of the last six months or of the last century will be amused, if sadly, by his contention that “Europe figured out ways of having different beliefs without slaughtering one another.” Anyway, these are all mostly quibbles, although important ones to address in order to bolster a substantially very valid and convincing point of view.