In Defense of Globalization Book Review

Jeff Wilson

Jagdish Bhagwati lays out a comprehensive reasoning for why every nation would be better off by entering into the global economy. Bhagwati defines globalization as the

“integration of national economies into the international economy through trade, direct-foreign investment, short term capital flows, international flows of workers… and flows of technology.”

His book covers the various aspects of the subject such as globalization’s effects on labor

(domestic and foreign), women’s rights, the environment and how fast domestic economies should enter into the global market. In the end, Bhagwati predictably concludes that nations gain when they engage in free trade. Economic growth increases, national incomes increase, parents are able to afford better products and education for their children and democracy is more likely to spring up where once more oppressive governments were in place.

The first section of the book deals with many of the commonplace arguments put forth by the opponents of globalization. These include claims that freer trade harms the environment, harms domestic workers, increases poverty and even can steal your girlfriend! He notes that much of the anti-globalization movement can be tied to anti-capitalist, anti-American sentiments that are present in the world today. As America furthers her interests across the globe, other nations become resentful of the growing American presence in all corners of the world. A dissenting opinion of American actions becomes rife in areas such as the Middle East which, rightfully or not, morphs into a general stance against any kind of foreign involvement in their domestic affairs. Bhagwati is also quick to note the rise of Non-Governmental Organizations 2

(NGO’s) in the societies of today. There are NGO’s for every possible cause out there and they serve to further only that cause. NGO’s in favor of domestic labor, domestic culture and or the environment all lobby their respective governments to oppose increased trade levels. Many of the claims and worries that these groups have are misguided but their political power is on the rise nonetheless.

Bhagwati moves into a discussion of the merits of globalization including its effects on poverty, child labor and democracy to name a few. As opposed to many of the claims put forth by the anti-globalization NGO’s, poverty is likely to be increased by globalization. With freer trade comes cheaper goods and increased consumption. This consumption drives the market demand and in turn increases economic growth; increasing everyone’s stock. Those seeking work are now presented with more job opportunities due to the global market now available to them. To the West, working in a shoe factory in Vietnam may seem atrocious but compared to what those workers would otherwise be doing (often times nothing at all), their new jobs have increased their incomes. Bhagwati is quick to note that in places were poverty has increased

(very rare) with globalization it is likely due to the domestic policy of that nation’s government not because of the heightened trade levels.

Along the same lines as poverty, Bhagwati addresses the issue of child labor and says that globalization is helping the problem, not hurting it. Children will work in very poor nations whether there is free trade or not. In fact, the jobs that they work under globalization are often times better than the ones they would otherwise be completing in the absence of free trade. They are paid a higher wage and are under supervision which is not always the case when working in fields for their family. Bhagwati notes that Western attempts to end the use of child labor in factories often have severe consequences such as increased levels of child prostitution in 3

Thailand for one. The US Child Labor Deterrence Act of 1993 sought to boycott products made with child labor coming from overseas. This resulted in many factory closings and in the search to make money off their kids, parents would sell their now unemployed children into slavery or prostitution services. The bill actually increased the very atrocities it was trying to fix.

Bhagwati then tackles the issue of Democracy: diminished or enhanced by free trade?

He argues that democracy and free trade go hand in hand. As trade levels increase and national incomes improve the overall population of that country is better off. Following a quasi-hierarchy of needs, as people worry less and less about simply providing food for their families, they begin to focus on other issues and push for an increased voice in the policies of their country. A middle class often arises from nations that increase their trade levels and this middle class is what wants heightened levels of democratic clout in their country. The culture of these nations may be changed as a result of globalization but that is not to say that they are diminished.

Bhagwati notes that people cling onto their culture with steadfast resolve when in fact they need to embrace change for such occurrences are inevitable. Globalization may alter a nation’s culture (i.e. the French movie industry) but change is going to happen regardless of trade levels and Bhagwati argues that persons need to accept this fact and move with the times.

He then takes on environmentalists who claim that globalization leads to a race to the bottom regarding environmental standards. This is simply not the case according to Bhagwati.

He argues that, each nation is responsible for the valuation of their land and resources and it is silly for foreign, environmental NGO’s to pressure a nation regarding such autonomous behavior. He also notes that businesses today are subject to higher media scrutiny along with a heightened public concern of the state of our earth. A business cannot simply dump oil in the

Rio Grande (example he gives) even if there are no environmental standards and expect to face 4 no consequences. It is likely that CNN has the action on tape and that the public will boycott that company for such actions. Even without this unofficial regulation in place by the media and the public, businesses are aware that as nations improve economically they will turn more attention to their environmental standards. Therefore, though initially settling in a deregulated area, the business will take these future environmental regulations into consideration and self regulate themselves now so they won’t have to overhaul their production process in the future.

As Bhagwati shows, globalization is at worst a, dare I say, benign factor on environmental issues. At best, globalization in fact improves our earth’s natural features.

In the end Bhagwati refutes many of the common claims put forth by opponents of globalization. Increased foreign trade leads to higher domestic income levels, decreased poverty, increased democratic opportunities and even increased environmental levels. He calls for people to stop focusing on small, single case examples of harms brought about by globalization and instead focus on the greater, widespread gains to be had from free trade.