Is Globalization Passé?

Is Globalization Passé?

If criticism spelt deconstruction, one might think that globalization was becoming passé -- however, a look at two books about globalization can dispel this misconception.
Economic patriotism: French workers demonstrate for their rights, but one in seven is employed by a foreign company.
Globalization and its Discontents, Joseph E. Stiglitz
W. W. Norton & Company, 2002

In Defense of Globalization, Jagdish N. Bhagwati
Oxford University Press, USA, 2005, pp.320,

Excerpted from Oxford Journals Socio-Economic Review
The ubiquity of ‘globalization' and its familiarity within the toolkit of everyday language convey an instance of linguistic populism: globalization is as common place as it is easy to talk about. But neither this ubiquity nor this familiarity seem to be capable of providing unanimous agreement about what globalization actually means. In many ways this should be anticipated. ‘Globalization', like other buzzwords from everyday speech seldom lends itself to easy definition despite its familiarity. Yet from among the institutions that have tended to guide our appreciation of global economics—the International Monetary Fund (IMF) and the World Bank, other international economic institutions symbolized by the World Trade Organization (WTO)1 and regional trading blocs, the capital markets and mainstream economists—a single definition of globalization seems to emerge: perceived international economic integration. This directs attention to a process of increasing economic activity among the people and enterprises of different countries, to freer international trade, direct foreign investment, capital market flows and migration. Understood in this way, globalization would seem to be a most robust phenomenon. Yet sufficient criticism of globalization has arisen in recent years to motivate Joseph E. Stiglitz (2002) and Jagdish N. Bhagwati (2004a) to entitle their latest books Globalization and its Discontents and In Defense of Globalization, respectively. If criticism spelt deconstruction, one might think that globalization was becoming passé. However, a close consideration of globalization and of these works about it can dispel this misconception.

Since the 1980s, the world has again witnessed a revival of globalization—more correctly, the second age of globalization.

Globalization started at an earlier time. In the emphatic words of Ferguson (2005) the first age of globalization was in the period from around 1870 to the beginning of World War I. World War I, the Great Depression of the 1930s and World War II constituted the interregnum that condemned globalization to implosion. Globalization would be rescued from itself only by the intervention of time. Since the 1980s, the world has again witnessed a revival of globalization—more correctly, the second age of globalization. This repetition creates an uncertainty, a vexing lack of correspondence between timeliness and relevance. While this recurrence may logically confirm globalization's timeliness and relevance, arguably it does so only tangentially, for it does not address globalization's specific features in the new age. The two books under review are, in the main, a response to this apparent deficiency, inasmuch as they unknowingly serve as a response to each other. They are formulaic and deliberate, partly conveying a justification for globalization, as well as an ideal. Curiously, it is the theme of explanation and assessment that ties this coincidental tag-team of Columbia University economics professors together, while their interpretations and conclusions divide them.

Jagdish N. Bhagwati, 2 begins his newest book, In Defense of Globalization, dramatically—and for those used to meandering academic texts-startlingly—by arguing that, first, globalization has improved the lot of humanity; that second, in part because of that improvement, the world must sustain, even deepen globalization; that third, globalization is still relevant. The deep controversies surrounding globalization have not been lost on Bhagwati. He addresses them by a process of elucidation, evaluation and reassurance. He accomplishes this by identifying and then rebutting the accusations—often levelled against globalization—that globalization promotes poverty and inequality; that it encourages child labour; that it harms women and the environment; that it promotes a race to the bottom and that it aids predatory corporations. Then he questions the credibility and legitimacy of Western-based Non-Governmental Organizations (NGOs) as self-appointed advocates for the world's poor people without consultation or authority from them as their principals. Bhagwati's book is aimed at disenchanted and well-intentioned but misinformed critics of globalization. For this group of critics he has both a descriptive and analytical purpose when he writes that the castigation of globalization in the terms just sketched above is due to and is a demonstration of the same misplaced reliance on unverifiable anecdote and misapplied or misunderstood economic theory that pro-globalists like him have been insisting is pervasive among anti-globalists.

In Globalization and its Discontents, Joseph E. Stiglitz,3 for his part has set as his ambition, a critique and condemnation of the policy formulation, conduct and advice of the three main protagonists of globalization, being the IMF, World Bank and WTO.

In Globalization and its Discontents, Joseph E. Stiglitz,3 for his part has set as his ambition, a critique and condemnation of the policy formulation, conduct and advice of the three main protagonists of globalization, being the IMF, World Bank and WTO. The book is thus in one part, an essay on revisionism, insofar as it reminds readers, after the fact, that done properly—that is, with more reliance on good economics and less on dogma or politics—globalization could easily garner favour and not mistrust. It is also in another part, a memorial account of Stiglitz's years as an influential policy practitioner of global economics. Yet the account is much more than a typical recollection of good times: in reminiscing about the past, it also challenges the economic models and operations of the trio of Bretton Woods' institutions, and in fact casts a laser beam on the IMF. Throughout, Stiglitz evokes popular notions of real sovereignty that take the form of a direct appeal to the world to remake the global financial architecture, and reaffirm the powers of developing nations, all in the name of social justice and progressive politics. Stiglitz's book, unlike Bhagwati's, is not targeted at the clarification of the familiar, but rather, at the revelation of the unfamiliar: for it raises a spectre of market fundamentalism. 4 It does this by lifting the veil—as only an insider could do—on the blind faith application of unabashed capitalistic ideology, politics and prescriptions to the problems of poor nations and how such countries are sacrificed on the altar of high finance, to serve global lenders, free trade agencies and large brokerage firms, that maintain a worldwide presence by their location on New York's Wall Street. Two things about the international economic and financial agencies dismay Stiglitz: one is the frequency of their wrong advice to the developing countries and the other is their lack of democratic practices and accountability in decision making. 5

Despite their obviously different orientations, the books do contain some common acknowledgements and overlap at critical points in their joint interest in globalization. Both assert, without equivocation, that freer international trade between nations has improved the lot of many than would have been achieved without globalization; legions of people the world over are better off now than ever before in the history of humankind; technology, knowledge and the benefits of human advancement are more accessible and cheaper to the rank and file in virtually every corner of the globe; and globalization has been hospitable to a rights consciousness and an ever-more pluralistic political, cultural and intellectual life.6 Nonetheless, these intersections do not mask the authors' divergent recommendations. Bhagwati sees globalization as virtuous but is mindful of its few defects. For this reason he recommends its management, if it is to sustain itself as a force for the good. Stiglitz is an agent of change advancing breakthroughs in the way things are performed. Because he wants to rewrite the ground rules for globalization, he unflinchingly argues that the way globalization has been managed, i.e. its terms and processes need to be radically revised.

1 Were it not because of ill-luck, the WTO's assumed progenitor (the International Trade Organization or ITO) was intended to begin as an organization from the time of the Bretton Woods conference, to complement its sister organizations, the IMF and World Bank. The ITO was meant to be an agency to facilitate free trade, whereas the other two were designed for turnaround and development missions, respectively.

2 An eminent international trade scholar, Bhagwati has, among others, advised the United Nations Secretary General on globalization and the General Agreement on Tariffs and Trade secretariat in the Uruguay Round trade negotiations (1986-1994) that gave rise to the creation of the WTO. He is a university professor at Columbia University in the City of New York and a senior fellow in international economics at the Council on Foreign Relations in New York City, USA.

3 An ex-Chairman of the United States Council of Economic Advisors in the Administration of President William J.(Bill) Clinton, an erstwhile senior vice president and chief economist of the World Bank and a 2001 recipient of the Noble Prize in economics, Stiglitz is the driving force behind a branch of economics called information economics for which he has gained worldwide acclaim. He is a university professor at Columbia University in the City of New York and President of his self-created Initiative for Policy Dialogue (IPD) housed at Columbia University in the City of New York. The IPD is a think tank established to assist developing nations in exploring alternative development policies and encouraging civic participation in economic policymaking.

4 That the market is the fairest arbiter in the allocation of resources and leads to fair value, competition and efficiency for which there can be no debate. Correspondingly, this mindset, regards any government as largely inefficient and unfair as an arbiter and often condemns it for either being a part of problem or for failing to be a part of the solution in the distribution of resources

5 This is a fault line that finds resonance all the time, and on it Bhagwati readily concurs with Stiglitz: that illegitimately, globalization easily takes public decision making powers from elected representatives and then grants them to the market where special interests lubricate the exercise of such powers.

6 Despite Bhagwati's misgivings about their role in the general scheme of advocacy, because they pander to the domestic concerns of the West; they are unaccountable to the third world for which they claim to act; and their choice of issues bears little resemblance to the issues of survival and development that daily confront the third world; in the author's prediction, the use of NGOs, wherever they may be situated, as corporate watchdogs will enhance the attempt to supplement and ensure globalization's benign and socially beneficial outcomes. As is more than apparent, his arguments serve an inherently corrective or even conservative role—offering reminders of globalization's relevance and necessity—rather than promises of globalization's infallibility

To read the complete review, as published in the Oxford Journals Socio-Economic Review, see Is Globalization Passe?

Contributed by Bongi Disang Dominic Radipati, a professor at the Department of Law, University of Botswana, Botswana.

To read a Global Envision article about Joseph E. Stiglitz, see Consider this One of the Primers on Globalization.

To read a Global Envision article about Jagdish N. Bhagwati, see Troubled by Trade.

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