While this BBC dialogue seems to think so, this http://www.economist.com/displaystory.cfm?story_id=795995 seems to think not. In fact, the latter says that globalization is a give and take venture, with different cultures offering the best of what every culture has. Globalization and cosmopolitanism go hand in hand. And while the "philosophical" french believe that American foreign policy is led by the logic of economic warfare, they are stating the absolute obvious. Wars are fought for two reasons: To fight a current or future threat or to expand into new markets, or both. This has been done since the dawn of man and it'll continue until man ceases to exist.
Whether liked or disliked, globalization is here again. Unlike the 19th century when it was at its height and eventually met a protectionist backlash, there are new freedoms to be had for the world. Human rights, democracy, and the pursuit of happiness, all institutions of the American system. Unlike the greedy Europeans who exploited the hapless nations of Asia, Africa, and the Americas, globalization with americanization has been a tremendous success for the whole world. It is an instrument of change for the good of mankind.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
BBC- Globalization Americanization? article
Dear Michael,
Good to see you in New York the other day. I am in favour of globalisation, of opening up, of more trade and of all the pressure for the acceptance of human rights and rule of law that globalisation brings in its wake.
Without globalisation, Asia could not have bootstrapped itself out of poverty, life expectancy would not have risen around the world and living conditions for many women outside Islamic countries would not have improved.
My objection is to none of the above. Rather it is to the way globalisation has increasingly become a cloak for the export of the American business model as the benchmark besides which all other countries must judge the success of their approach to capitalism and society.
It is perfectly possible to believe in the wealth-generating powers of entrepreneurship and markets, and also to believe that societies need strong social contracts and a powerful expression of the public interest.
The international common sense - created by the rise of the new American conservatism in the US which has become the so-called Washington consensus policed by the financial markets - believes in the first set of propositions, but not in the latter.
Thus the pressure not to introduce universal health care systems and to have minimal social safety nets; thus the pressure to live with high levels of inequality; thus the pressure to put the interests of business before those of society which reflects itself in myriads of ways in both the developed and less developed world.
My concern is two-fold. First, that this approach will de-legitimise and may ultimately derail the globalisation process. And secondly, it is wrong in its refusal to countenance a diversity of approaches to capitalism and organising society.
Globalisation needs to be de-Americanised - and genuinely globalised!
Yours
Will
-------------------------
Dear Will
It was good to see you too and I hope the new book's going well.
There's a lot in your first message that I agree with, of course, your points on the role that globalisation has played in raising living standards around the world are right on the money.
But I think we have differences in three respects:
First, it's surely a little out of date to imagine that there is some iron-clad "Washington consensus" of neo-liberal policies imposed upon developing countries (and non-American developed ones) by financial markets and international financial institutions.
For one thing, there's always been less consensus in the consensus than its opponents like to believe.
There are plenty of people who buy into the broad outlines of a market-led programme, for example, without signing on to either financial market liberalisation or the free flow of capital.
John Williamson, who invented the phrase "Washington consensus", never intended it to include capital flows, and Jagdish Bhagwati - a fundamentalist when it comes to free trade in goods and services - has long argued that capital flows raise different issues.
Moreover, not just the World Bank and the IMF but private financial institutions now appreciate - as perhaps they did not 10 years ago - that non-economic matters like healthcare, access to education (especially for women), democracy, transparency and old-fashioned infrastructure projects, are all vital to development.
I don't hear the simon-pure, market-and-nothing-but-market voices raised as loudly as I did in Washington in the late 1980s.
Second, accepting your point that safety nets and universal health care systems are human goods, isn't there a genuine question of sequencing?
The Bismarckian (or Lloyd-Georgian) social welfare reforms that Europeans are (very rightly) proud of came after the development of domestic markets, and there is surely a reason for that.
Social welfare projects are expensive; an economy needs to have developed to a certain degree before they can be afforded.
My third point is of a different nature. Let's say that you are right, and that by some strange process (that I don't really understand) the American version of globalisation has swept all before it.
And let's say that you're also right in your implication that there is a "better," more humane version of globalisation out there.
My question is: Why have the Europeans (say) been so pathetic at convincing the world that their model is the right one to follow? Why have the Americans swept all before them? Or am I wrong in thinking that you think they have?
All best as ever,
Michael
---------------------------
Dear Michael,
Good reply - as I expected. I took short cuts in 200 words but my answers are these:
Firstly, the Washington consensus has become more sophisticated, I grant you, but the same themes remain at its core.
There is a manic distrust of the public sector, a celebration of the private and a belief that countries industrialise through market-led policies alone.
Taxation to pay for education and health is abhorred.
Aid budgets have fallen, reversed only partially by 11 September, access to western markets remains difficult and we invite developing countries to grow as if they were developed countries.
The IMF remains unreconstructed - essentially an arm of the US Treasury. Telecoms liberalisation for example (the precondition for the bubble), was forced on the rest of the world by US trade diplomacy.
Globalisation has been primarily shaped by American conservatism.
Secondly, I infer from this that you are for sweated labour, no child protection and a Hobbesian world of all against all.
Welfare states and minimum standards will vary according to wealth - but the principle must stand, surely?
Thirdly, Europeans have a crisis of confidence, wrongly in my view.
The American model has seemed charismatic, job-generating and all-conquering.
It certainly has advantages, but the US is not so strong as widely believed. Control of most of the main avenues of communication and near idealisation by the financial markets are helluva advantages!
I rest my case - in 200 words!
All the best
Will
----------------------
Dear Will,
You make me sound like a Gradgrind stamping on the face of the poor of Coketown! You know I'm not, but in any event, here are my thoughts on your latest.
First, we're not going to agree on the extent to which the US is gripped by a rabidly conservative, devil-take-the-hindmost mindset.
I don't think that's the country I live in, though I admit that I sometimes have doubts.
Whenever I think that the US has gone completely selfish and inward-looking, all I have to do is to speak at a church or school or college where people are more engaged in the rest of the world, more sensitive to global issues, and more generous with their time and money in trying to ameliorate them, than I have ever known before.
And I've been living in the US on and off for nearly 30 years.
Second, no, of course I'm not for sweated labour and the rest. But I do think that it behoves us all to have a sensible set of expectations about what degree of social expenditure and social protection can reasonably be afforded at any particular stage of development.
Third, you're the expert on Europe's lack of self-confidence.
It beats me. Whenever I'm in Paris or Hamburg, I don't look around and think "Hmmm; what a failed model."
The world would be a better place if Europeans (and Canadians, actually) were "noisier" about the successes of their economic and social institutions, but, somehow, they leave it all to the US.
We're all - and I include those of us who live in the US - worse off as a result.
All best, as ever
Mike
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The Economist--Globalization and its critics--first of many articles
Globalisation is a great force for good. But neither governments nor businesses, Clive Crook argues, can be trusted to make the case
PUBLICATION of this survey had originally been intended to coincide with the annual meetings of the World Bank and the International Monetary Fund, scheduled for September 29th-30th in Washington, DC. Those meetings, and the big anti-globalisation protests that had been planned to accompany them, were among the least significant casualties of the terrorist atrocities of September 11th.
You might have thought that the anti-capitalist protesters, after contemplating those horrors and their aftermath, would be regretting more than just the loss of a venue for their marches. Many are, no doubt. But judging by the response of some of their leaders and many of the activists (if Internet chat rooms are any guide), grief is not always the prevailing mood. Some anti-globalists have found a kind of consolation, even a cause of satisfaction, in these terrible events?that of having been, as they see it, proved right.
To its fiercest critics, globalisation, the march of international capitalism, is a force for oppression, exploitation and injustice. The rage that drove the terrorists to commit their obscene crime was in part, it is argued, a response to that. At the very least, it is suggested, terrorism thrives on poverty?and international capitalism, the protesters say, thrives on poverty too.
These may be extreme positions, but the minority that holds them is not tiny, by any means. Far more important, the anti-globalists have lately drawn tacit support?if nothing else, a reluctance to condemn?from a broad range of public opinion. As a result, they have been, and are likely to remain, politically influential. At a time such as this, sorting through issues of political economy may seem very far removed from what matters. In one sense, it is. But when many in the West are contemplating their future with new foreboding, it is important to understand why the sceptics are wrong; why economic integration is a force for good; and why globalisation, far from being the greatest cause of poverty, is its only feasible cure.
Undeniably, popular support for that view is lacking. In the developed economies, support for further trade liberalisation is uncertain; in some countries, voters are downright hostile to it. Starting a new round of global trade talks this year will be a struggle, and seeing it through to a useful conclusion will be harder. The institutions that in most people's eyes represent the global economy?the IMF, the World Bank and the World Trade Organisation?are reviled far more widely than they are admired; the best they can expect from opinion at large is grudging acceptance. Governments, meanwhile, are accused of bowing down to business: globalisation leaves them no choice. Private capital moves across the planet unchecked. Wherever it goes, it bleeds democracy of content and puts ?profits before people?.
Who will speak up for international capitalism? Governments and businesses. What a pity that is. These supposed defenders of globalisation may do more to undermine support for it than the critics.
Rich-country governments generally present economic integration to voters as an unfortunate but inescapable fact of life: as a constraint, that is, on their freedom of action. For the past ten years, this has been the favourite excuse of any government about to break an election promise.
Multinational businesses, for their part, with their enlightened mission statements, progressive stakeholder strategies, flower-motif logos and 57-point pledges of ?corporate social responsibility?, implicitly say that they have a case to answer: capitalism without responsibility is bad. That sounds all right; the trouble is, when they start talking about how they will no longer put profits first, people (rightly) think they are lying. If, as these defenders of economies without borders lead you to conclude, global capitalism is a cause of democratic paralysis and a cloak for old-fashioned corporate venality, even instinctive liberals ought to side with the sceptics.
With advocates like these on either side of the globalisation debate?dissembling governments and businesses in favour, angry and uncompromising protesters against?it is natural that the general public stands firmly in support of neither. It has no deep commitment to international capitalism, but it can see no plausible alternative. Certainly, the protesters do not appear to be offering one. So people are mostly puzzled, anxious and suspicious. This climate of opinion is bad for democracy and bad for economic development.
This survey offers a few suggestions for a more purposeful kind of discussion. It would be foolish to suppose that consensus will ever be possible. Some of the sceptics are opposed not just to globalisation or even to the market economy but to the very idea of economic growth. That view has the virtue of coherence, at least, but it is unlikely in the foreseeable future to command a large following.
Nonetheless, in among all their weak arguments, dangerous good intentions and downright loony notions, the sceptics are hiding some important points. Clarifying what makes sense in the sceptics' case, and exposing the mistaken or dishonest arguments that politicians and businessmen are putting up against them, may serve some purpose. And a clearer understanding of the arguments for globalisation, of the problems it solves as well as the problems it creates, may help as well.
Good old invisible hand
The strongest case for globalisation is the liberal one. It is almost never heard, least of all from governments or businessmen. International economic integration, on the liberal view, is what happens when technology allows people to pursue their own goals and they are given the liberty to do so. If technology advances to the point where it supports trade across borders, and if people then choose to trade across borders, you have integration, and because people have freely chosen it this is a good thing. Also, again because people have freely chosen this course, you would expect there to be economic benefits as well.
By and large, theory and practice confirm that this is so. Adam Smith's invisible hand does its work. People choose what serves their own self-interest, each of them making that judgment for himself. The result is that society as a whole prospers and advances?spontaneously, not by design of any person or government.
All kinds of qualifications and elaborations are needed, obviously, to fill out the argument properly. This survey will offer some of them in due course. But it is essential to understand one point from the outset. The liberal case for globalisation is emphatically not the case for domestic or international laisser faire. Liberalism lays down no certainties about the requirements of social justice in terms of income redistribution or the extent of the welfare state. It recognises that markets have their limits, for instance in tending to the supply of public goods (such as a clean environment). A liberal outlook is consistent with support for a wide range of government interventions; indeed a liberal outlook demands many such interventions.
But the starting point for all liberals is a presumption that, under ordinary circumstances, the individual knows best what serves his interests and that the blending of these individual choices will produce socially good results. Two other things follow. The first is an initial scepticism, at least, about collective decision-making that overrides the individual kind. The other is a high regard for markets?not as a place where profits are made, it must be stressed, but as a place where society advances in the common good.
Why then are governments and business leaders rarely heard to put this case? Because for the most part they are not liberals. Perhaps it goes with the job that politicians of left and right, traditional and modern, have an exaggerated view of their ability to improve on the spontaneous order of a lightly governed society.
It would be even more naive, and contrary to all experience, to expect business itself to favour a liberal outlook. Businesses are ultimately interested in one thing: profits. The business-bashing NGOs are right about that. If businesses think that treating their customers and staff well, or adopting a policy of ?corporate social responsibility?, or using ecologically friendly stationery will add to their profits, they will do it. Otherwise, they will not.
Does that make market capitalism wrong? On the contrary, the point of a liberal market economy is that it civilises the quest for profit, turning it, willy-nilly, into an engine of social progress. If firms have to compete with rivals for customers and workers, then they will indeed worry about their reputation for quality and fair dealing?even if they do not value those things in themselves. Competition will make them behave as if they did.
Here, then, is where the anti-business NGOs get their argument completely upside down?with genuinely dangerous consequences for the causes, sometimes just, which they hope to advance. On the whole, stricter regulation of international business is not going to reduce profits: the costs will be passed along to consumers. And it is not going to diminish any company's interest in making profits. What it may well do, though, by disabling markets in their civilising role, is to give companies new opportunities to make even bigger profits at the expense of society at large.
For example, suppose that in the remorseless search for profit, multinationals pay sweatshop wages to their workers in developing countries. Regulation forcing them to pay higher wages is demanded. The biggest western firms concede there might be merit in the idea. But justice and efficiency require a level playing-field. The NGOs, the reformed multinationals and enlightened rich-country governments propose tough rules on third-world factory wages, backed up by trade barriers to keep out imports from countries that do not comply. Shoppers in the West pay more?but willingly, because they know it is in a good cause. The NGOs declare another victory. The companies, having shafted their third-world competition and protected their domestic markets, count their bigger profits (higher wage costs notwithstanding). And the third-world workers displaced from locally owned factories explain to their children why the West's new deal for the victims of capitalism requires them to starve.
If firms ruled the world
A fashionable strand of scepticism argues that governments have surrendered their power to capitalism?that the world's biggest companies are nowadays more powerful than many of the world's governments. Democracy is a sham. Profits rule, not people. These claims are patent nonsense. On the other hand, there is no question that companies would run the world for profit if they could. What stops them is not governments, powerful as they may be, but markets.
Governments have the power, all right, but they do not always exercise it wisely. They are unreliable servants of the public interest. Sometimes, out of conviction, politicians decide to help companies reshape the world for private profit. Sometimes, anti-market thinking may lead them to help big business by accident. And now and then, when companies just set out to buy the policies they want, they find in government a willing seller. On all this, presumably, the sceptics would agree.
But they miss the next crucial step: limited government is not worth buying. Markets keep the spoils of corruption small. Government that intervenes left and right, prohibiting this and licensing that, creating surpluses and shortages?now that kind of government is worth a bit. That is why, especially in developing countries with weak legal systems, taming capitalism by regulation or trade protection often proves such a hazardous endeavour.
If NGOs succeeded in disabling markets, as many of them say they would like to, the political consequences would be as dire as the economic ones. It is because the sceptics are right about some things that they are so wrong about the main thing.
------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
BBC Article- France Takes Swipe at Rumsfeld
French Defence Minister Michele Alliot-Marie has sharply criticised her US counterpart Donald Rumsfeld's view of the world.
In a newspaper interview coinciding with the opening of the 45th annual Paris air show, Mrs Alliot-Marie said Mr Rumsfeld espoused a US-centred vision.
"The American defence secretary believes the United States is the only military, economic and financial power in the world. We do not share this vision," Mrs Alliot-Marie told Le Monde.
Her comments came after news that the American defence department - along with many US aerospace firms - had reduced its participation in this year's show in apparent retaliation for French opposition to the war in Iraq.
The Paris show is being attended by nearly 40 countries, displaying about 200 aircraft.
In the interview, Mrs Alliot-Marie suggests Mr Rumsfeld appears to be at loggerheads with his own uniformed services, arguing that these services "themselves find it to their advantage to share tasks between allies".
"They recognise the job that has been done by the French military in certain theatres of operation, for instance by our airmen in Afghanistan," she said.
The French minister said US companies followed "the logic of economic warfare" and expressed "true preoccupation" of attempts by US companies to take over European defence concerns.
Mrs Alliot-Marie's comments were dismissed by the Pentagon.
"The French minister is entitled to her own opinion," said a spokesman.
"However, her opinion does not accurately characterise the policy or position of the secretary of defence or the position of the US Government."
Concorde homage
At the air show on Saturday, French President Jacques Chirac paid tribute to the retiring supersonic passenger plane Concorde.
The president, along with hundreds of spectators, applauded as one of Air France's Concordes performed a flight of honour over Le Bourget airport, before landing and taking its place at the nearby Air and Space Museum.
Air France retired its fleet in May, and in June donated the oldest of its five Concorde aircraft to the Smithsonian Institution's National Air and Space Museum in Washington.
British Airways is to taking its Concordes out of service by October.
Whether liked or disliked, globalization is here again. Unlike the 19th century when it was at its height and eventually met a protectionist backlash, there are new freedoms to be had for the world. Human rights, democracy, and the pursuit of happiness, all institutions of the American system. Unlike the greedy Europeans who exploited the hapless nations of Asia, Africa, and the Americas, globalization with americanization has been a tremendous success for the whole world. It is an instrument of change for the good of mankind.
--------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
BBC- Globalization Americanization? article
Dear Michael,
Good to see you in New York the other day. I am in favour of globalisation, of opening up, of more trade and of all the pressure for the acceptance of human rights and rule of law that globalisation brings in its wake.
Without globalisation, Asia could not have bootstrapped itself out of poverty, life expectancy would not have risen around the world and living conditions for many women outside Islamic countries would not have improved.
My objection is to none of the above. Rather it is to the way globalisation has increasingly become a cloak for the export of the American business model as the benchmark besides which all other countries must judge the success of their approach to capitalism and society.
It is perfectly possible to believe in the wealth-generating powers of entrepreneurship and markets, and also to believe that societies need strong social contracts and a powerful expression of the public interest.
The international common sense - created by the rise of the new American conservatism in the US which has become the so-called Washington consensus policed by the financial markets - believes in the first set of propositions, but not in the latter.
Thus the pressure not to introduce universal health care systems and to have minimal social safety nets; thus the pressure to live with high levels of inequality; thus the pressure to put the interests of business before those of society which reflects itself in myriads of ways in both the developed and less developed world.
My concern is two-fold. First, that this approach will de-legitimise and may ultimately derail the globalisation process. And secondly, it is wrong in its refusal to countenance a diversity of approaches to capitalism and organising society.
Globalisation needs to be de-Americanised - and genuinely globalised!
Yours
Will
-------------------------
Dear Will
It was good to see you too and I hope the new book's going well.
There's a lot in your first message that I agree with, of course, your points on the role that globalisation has played in raising living standards around the world are right on the money.
But I think we have differences in three respects:
First, it's surely a little out of date to imagine that there is some iron-clad "Washington consensus" of neo-liberal policies imposed upon developing countries (and non-American developed ones) by financial markets and international financial institutions.
For one thing, there's always been less consensus in the consensus than its opponents like to believe.
There are plenty of people who buy into the broad outlines of a market-led programme, for example, without signing on to either financial market liberalisation or the free flow of capital.
John Williamson, who invented the phrase "Washington consensus", never intended it to include capital flows, and Jagdish Bhagwati - a fundamentalist when it comes to free trade in goods and services - has long argued that capital flows raise different issues.
Moreover, not just the World Bank and the IMF but private financial institutions now appreciate - as perhaps they did not 10 years ago - that non-economic matters like healthcare, access to education (especially for women), democracy, transparency and old-fashioned infrastructure projects, are all vital to development.
I don't hear the simon-pure, market-and-nothing-but-market voices raised as loudly as I did in Washington in the late 1980s.
Second, accepting your point that safety nets and universal health care systems are human goods, isn't there a genuine question of sequencing?
The Bismarckian (or Lloyd-Georgian) social welfare reforms that Europeans are (very rightly) proud of came after the development of domestic markets, and there is surely a reason for that.
Social welfare projects are expensive; an economy needs to have developed to a certain degree before they can be afforded.
My third point is of a different nature. Let's say that you are right, and that by some strange process (that I don't really understand) the American version of globalisation has swept all before it.
And let's say that you're also right in your implication that there is a "better," more humane version of globalisation out there.
My question is: Why have the Europeans (say) been so pathetic at convincing the world that their model is the right one to follow? Why have the Americans swept all before them? Or am I wrong in thinking that you think they have?
All best as ever,
Michael
---------------------------
Dear Michael,
Good reply - as I expected. I took short cuts in 200 words but my answers are these:
Firstly, the Washington consensus has become more sophisticated, I grant you, but the same themes remain at its core.
There is a manic distrust of the public sector, a celebration of the private and a belief that countries industrialise through market-led policies alone.
Taxation to pay for education and health is abhorred.
Aid budgets have fallen, reversed only partially by 11 September, access to western markets remains difficult and we invite developing countries to grow as if they were developed countries.
The IMF remains unreconstructed - essentially an arm of the US Treasury. Telecoms liberalisation for example (the precondition for the bubble), was forced on the rest of the world by US trade diplomacy.
Globalisation has been primarily shaped by American conservatism.
Secondly, I infer from this that you are for sweated labour, no child protection and a Hobbesian world of all against all.
Welfare states and minimum standards will vary according to wealth - but the principle must stand, surely?
Thirdly, Europeans have a crisis of confidence, wrongly in my view.
The American model has seemed charismatic, job-generating and all-conquering.
It certainly has advantages, but the US is not so strong as widely believed. Control of most of the main avenues of communication and near idealisation by the financial markets are helluva advantages!
I rest my case - in 200 words!
All the best
Will
----------------------
Dear Will,
You make me sound like a Gradgrind stamping on the face of the poor of Coketown! You know I'm not, but in any event, here are my thoughts on your latest.
First, we're not going to agree on the extent to which the US is gripped by a rabidly conservative, devil-take-the-hindmost mindset.
I don't think that's the country I live in, though I admit that I sometimes have doubts.
Whenever I think that the US has gone completely selfish and inward-looking, all I have to do is to speak at a church or school or college where people are more engaged in the rest of the world, more sensitive to global issues, and more generous with their time and money in trying to ameliorate them, than I have ever known before.
And I've been living in the US on and off for nearly 30 years.
Second, no, of course I'm not for sweated labour and the rest. But I do think that it behoves us all to have a sensible set of expectations about what degree of social expenditure and social protection can reasonably be afforded at any particular stage of development.
Third, you're the expert on Europe's lack of self-confidence.
It beats me. Whenever I'm in Paris or Hamburg, I don't look around and think "Hmmm; what a failed model."
The world would be a better place if Europeans (and Canadians, actually) were "noisier" about the successes of their economic and social institutions, but, somehow, they leave it all to the US.
We're all - and I include those of us who live in the US - worse off as a result.
All best, as ever
Mike
-------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------------
The Economist--Globalization and its critics--first of many articles
Globalisation is a great force for good. But neither governments nor businesses, Clive Crook argues, can be trusted to make the case
PUBLICATION of this survey had originally been intended to coincide with the annual meetings of the World Bank and the International Monetary Fund, scheduled for September 29th-30th in Washington, DC. Those meetings, and the big anti-globalisation protests that had been planned to accompany them, were among the least significant casualties of the terrorist atrocities of September 11th.
You might have thought that the anti-capitalist protesters, after contemplating those horrors and their aftermath, would be regretting more than just the loss of a venue for their marches. Many are, no doubt. But judging by the response of some of their leaders and many of the activists (if Internet chat rooms are any guide), grief is not always the prevailing mood. Some anti-globalists have found a kind of consolation, even a cause of satisfaction, in these terrible events?that of having been, as they see it, proved right.
To its fiercest critics, globalisation, the march of international capitalism, is a force for oppression, exploitation and injustice. The rage that drove the terrorists to commit their obscene crime was in part, it is argued, a response to that. At the very least, it is suggested, terrorism thrives on poverty?and international capitalism, the protesters say, thrives on poverty too.
These may be extreme positions, but the minority that holds them is not tiny, by any means. Far more important, the anti-globalists have lately drawn tacit support?if nothing else, a reluctance to condemn?from a broad range of public opinion. As a result, they have been, and are likely to remain, politically influential. At a time such as this, sorting through issues of political economy may seem very far removed from what matters. In one sense, it is. But when many in the West are contemplating their future with new foreboding, it is important to understand why the sceptics are wrong; why economic integration is a force for good; and why globalisation, far from being the greatest cause of poverty, is its only feasible cure.
Undeniably, popular support for that view is lacking. In the developed economies, support for further trade liberalisation is uncertain; in some countries, voters are downright hostile to it. Starting a new round of global trade talks this year will be a struggle, and seeing it through to a useful conclusion will be harder. The institutions that in most people's eyes represent the global economy?the IMF, the World Bank and the World Trade Organisation?are reviled far more widely than they are admired; the best they can expect from opinion at large is grudging acceptance. Governments, meanwhile, are accused of bowing down to business: globalisation leaves them no choice. Private capital moves across the planet unchecked. Wherever it goes, it bleeds democracy of content and puts ?profits before people?.
Who will speak up for international capitalism? Governments and businesses. What a pity that is. These supposed defenders of globalisation may do more to undermine support for it than the critics.
Rich-country governments generally present economic integration to voters as an unfortunate but inescapable fact of life: as a constraint, that is, on their freedom of action. For the past ten years, this has been the favourite excuse of any government about to break an election promise.
Multinational businesses, for their part, with their enlightened mission statements, progressive stakeholder strategies, flower-motif logos and 57-point pledges of ?corporate social responsibility?, implicitly say that they have a case to answer: capitalism without responsibility is bad. That sounds all right; the trouble is, when they start talking about how they will no longer put profits first, people (rightly) think they are lying. If, as these defenders of economies without borders lead you to conclude, global capitalism is a cause of democratic paralysis and a cloak for old-fashioned corporate venality, even instinctive liberals ought to side with the sceptics.
With advocates like these on either side of the globalisation debate?dissembling governments and businesses in favour, angry and uncompromising protesters against?it is natural that the general public stands firmly in support of neither. It has no deep commitment to international capitalism, but it can see no plausible alternative. Certainly, the protesters do not appear to be offering one. So people are mostly puzzled, anxious and suspicious. This climate of opinion is bad for democracy and bad for economic development.
This survey offers a few suggestions for a more purposeful kind of discussion. It would be foolish to suppose that consensus will ever be possible. Some of the sceptics are opposed not just to globalisation or even to the market economy but to the very idea of economic growth. That view has the virtue of coherence, at least, but it is unlikely in the foreseeable future to command a large following.
Nonetheless, in among all their weak arguments, dangerous good intentions and downright loony notions, the sceptics are hiding some important points. Clarifying what makes sense in the sceptics' case, and exposing the mistaken or dishonest arguments that politicians and businessmen are putting up against them, may serve some purpose. And a clearer understanding of the arguments for globalisation, of the problems it solves as well as the problems it creates, may help as well.
Good old invisible hand
The strongest case for globalisation is the liberal one. It is almost never heard, least of all from governments or businessmen. International economic integration, on the liberal view, is what happens when technology allows people to pursue their own goals and they are given the liberty to do so. If technology advances to the point where it supports trade across borders, and if people then choose to trade across borders, you have integration, and because people have freely chosen it this is a good thing. Also, again because people have freely chosen this course, you would expect there to be economic benefits as well.
By and large, theory and practice confirm that this is so. Adam Smith's invisible hand does its work. People choose what serves their own self-interest, each of them making that judgment for himself. The result is that society as a whole prospers and advances?spontaneously, not by design of any person or government.
All kinds of qualifications and elaborations are needed, obviously, to fill out the argument properly. This survey will offer some of them in due course. But it is essential to understand one point from the outset. The liberal case for globalisation is emphatically not the case for domestic or international laisser faire. Liberalism lays down no certainties about the requirements of social justice in terms of income redistribution or the extent of the welfare state. It recognises that markets have their limits, for instance in tending to the supply of public goods (such as a clean environment). A liberal outlook is consistent with support for a wide range of government interventions; indeed a liberal outlook demands many such interventions.
But the starting point for all liberals is a presumption that, under ordinary circumstances, the individual knows best what serves his interests and that the blending of these individual choices will produce socially good results. Two other things follow. The first is an initial scepticism, at least, about collective decision-making that overrides the individual kind. The other is a high regard for markets?not as a place where profits are made, it must be stressed, but as a place where society advances in the common good.
Why then are governments and business leaders rarely heard to put this case? Because for the most part they are not liberals. Perhaps it goes with the job that politicians of left and right, traditional and modern, have an exaggerated view of their ability to improve on the spontaneous order of a lightly governed society.
It would be even more naive, and contrary to all experience, to expect business itself to favour a liberal outlook. Businesses are ultimately interested in one thing: profits. The business-bashing NGOs are right about that. If businesses think that treating their customers and staff well, or adopting a policy of ?corporate social responsibility?, or using ecologically friendly stationery will add to their profits, they will do it. Otherwise, they will not.
Does that make market capitalism wrong? On the contrary, the point of a liberal market economy is that it civilises the quest for profit, turning it, willy-nilly, into an engine of social progress. If firms have to compete with rivals for customers and workers, then they will indeed worry about their reputation for quality and fair dealing?even if they do not value those things in themselves. Competition will make them behave as if they did.
Here, then, is where the anti-business NGOs get their argument completely upside down?with genuinely dangerous consequences for the causes, sometimes just, which they hope to advance. On the whole, stricter regulation of international business is not going to reduce profits: the costs will be passed along to consumers. And it is not going to diminish any company's interest in making profits. What it may well do, though, by disabling markets in their civilising role, is to give companies new opportunities to make even bigger profits at the expense of society at large.
For example, suppose that in the remorseless search for profit, multinationals pay sweatshop wages to their workers in developing countries. Regulation forcing them to pay higher wages is demanded. The biggest western firms concede there might be merit in the idea. But justice and efficiency require a level playing-field. The NGOs, the reformed multinationals and enlightened rich-country governments propose tough rules on third-world factory wages, backed up by trade barriers to keep out imports from countries that do not comply. Shoppers in the West pay more?but willingly, because they know it is in a good cause. The NGOs declare another victory. The companies, having shafted their third-world competition and protected their domestic markets, count their bigger profits (higher wage costs notwithstanding). And the third-world workers displaced from locally owned factories explain to their children why the West's new deal for the victims of capitalism requires them to starve.
If firms ruled the world
A fashionable strand of scepticism argues that governments have surrendered their power to capitalism?that the world's biggest companies are nowadays more powerful than many of the world's governments. Democracy is a sham. Profits rule, not people. These claims are patent nonsense. On the other hand, there is no question that companies would run the world for profit if they could. What stops them is not governments, powerful as they may be, but markets.
Governments have the power, all right, but they do not always exercise it wisely. They are unreliable servants of the public interest. Sometimes, out of conviction, politicians decide to help companies reshape the world for private profit. Sometimes, anti-market thinking may lead them to help big business by accident. And now and then, when companies just set out to buy the policies they want, they find in government a willing seller. On all this, presumably, the sceptics would agree.
But they miss the next crucial step: limited government is not worth buying. Markets keep the spoils of corruption small. Government that intervenes left and right, prohibiting this and licensing that, creating surpluses and shortages?now that kind of government is worth a bit. That is why, especially in developing countries with weak legal systems, taming capitalism by regulation or trade protection often proves such a hazardous endeavour.
If NGOs succeeded in disabling markets, as many of them say they would like to, the political consequences would be as dire as the economic ones. It is because the sceptics are right about some things that they are so wrong about the main thing.
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BBC Article- France Takes Swipe at Rumsfeld
French Defence Minister Michele Alliot-Marie has sharply criticised her US counterpart Donald Rumsfeld's view of the world.
In a newspaper interview coinciding with the opening of the 45th annual Paris air show, Mrs Alliot-Marie said Mr Rumsfeld espoused a US-centred vision.
"The American defence secretary believes the United States is the only military, economic and financial power in the world. We do not share this vision," Mrs Alliot-Marie told Le Monde.
Her comments came after news that the American defence department - along with many US aerospace firms - had reduced its participation in this year's show in apparent retaliation for French opposition to the war in Iraq.
The Paris show is being attended by nearly 40 countries, displaying about 200 aircraft.
In the interview, Mrs Alliot-Marie suggests Mr Rumsfeld appears to be at loggerheads with his own uniformed services, arguing that these services "themselves find it to their advantage to share tasks between allies".
"They recognise the job that has been done by the French military in certain theatres of operation, for instance by our airmen in Afghanistan," she said.
The French minister said US companies followed "the logic of economic warfare" and expressed "true preoccupation" of attempts by US companies to take over European defence concerns.
Mrs Alliot-Marie's comments were dismissed by the Pentagon.
"The French minister is entitled to her own opinion," said a spokesman.
"However, her opinion does not accurately characterise the policy or position of the secretary of defence or the position of the US Government."
Concorde homage
At the air show on Saturday, French President Jacques Chirac paid tribute to the retiring supersonic passenger plane Concorde.
The president, along with hundreds of spectators, applauded as one of Air France's Concordes performed a flight of honour over Le Bourget airport, before landing and taking its place at the nearby Air and Space Museum.
Air France retired its fleet in May, and in June donated the oldest of its five Concorde aircraft to the Smithsonian Institution's National Air and Space Museum in Washington.
British Airways is to taking its Concordes out of service by October.
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