The Glass Half Empty
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Posted on December 19, 2002
Previously filed under: Book and Film Reviews
On Globalization, by George Soros.
Public Affairs, a member of Perseus Books Group, 2002
Having profited so greatly by globalization, George Soros rightly attracts great attention when he criticizes the source of his prosperity. Although he is often labeled an antiglobalist, in fact he does not support the coalition of market fundamentalists and antiglobalization activists who would celebrate the death of the WTO. Soros describes the WTO as the goose that lays the golden eggs—ugly on the outside, but with plenty of potential value. Soros’ goals, as laid out in On Globalization, are to improve and strengthen the organizations that impact globalization, not to destroy them.
Despite the labels attached to him, Soros finds much that is positive in globalization and in free markets. “Private enterprise is better at wealth creation than the state,” (p 4) he writes. He believes enterprise helps create individual freedom, and that free global competition liberates entrepreneurial talents and stimulates technological progress. In sum, Soros states: “In spite of its shortcomings, I am an ardent supporter of globalization” (p 7). But as most will admit, the shortcomings of globalization are significant. People in less-developed countries can and have been hurt by globalization and the spread of free markets, since, as Soros points out, markets are not designed to address social needs, and global financial markets are crisis prone.
If Soros is a critic of globalization, he is the kind of critic we could all use. His book offers specific suggestions for making improvements. Many of his ideas are founded in what he has learned through his philanthropic endeavors. Two of the principles ingrained in his proposals for improving foreign aid and making globalization more humane include:
(1.) Good managers know that it is wise to involve all levels of the organization in the formulation of the decisions that will affect them, and
(2.) In aid and policy, as in business and child-rearing, incentives for good results often work better than penalties for breaking rules.
On Globalization provides many ideas about how the operations of the World Bank, International Monetary Fund (IMF) and the World Trade Organization (WTO) might be improved. The WTO, which draws the greatest ire from antiglobalization protestors, is, in Soros’ view, the most advanced of the international institutions. “It has been successful not only in creating international law but also in exercising a judiciary function” (p 32). Soros believes that the WTO bias in favor of rich countries and multinational corporations has more to do with how the body has been used than how it is organized.
A vivid example from the book of the uneven playing field supported by the WTO referees is developed nations’ significant subsidies of agricultural products, which have their major impact on developing countries who can’t compete against this advantage. Europe, Japan, and most recently, the US, have all committed this foul.
In an argument not unlike Bhagwati’s in Free Trade Today, Soros suggests that too often, the WTO is expected to achieve things it was not created for, and is not prepared to do. For issues involving environmental protection, food safety, human rights, and labor rights, he maintains that we would be better off looking to states and other international institutions to mediate, and not the WTO. He suggests, for example, that rather than a WTO decree prohibiting child labor, a more successful strategy would be to fund universal primary education and encourage incentives for school attendance. Then we could demand the elimination of child labor as a condition of receiving such educational support.
Another major focus of Soros’ book is the need to make quantum improvements in the way foreign aid is delivered and administered. Recognizing that most past results have not been successful, he argues that there is much that needs to be changed. His foundation, which is dedicated to fostering “open societies,” provides guidance on ways to improve aid organizations. The theory behind an open society is that democracy, the rule of law, and a strong private sector create a more fertile soil for foreign assistance to improve life than straight disaster relief programs.
Use of Special Drawing Rights (SDRs) is an approach to funding advocated in On Globalization. The book explains that a pilot for this system was authorized by the IMF in 1997, and only requires ratification by the US Congress to be initiated.
On Globalization also encourages us to recall U.S. policy at the end of World War II. The Marshall Plan of aid for Europe and similar programs in Japan helped create remarkable recoveries in the affected countries. At the end of the Cold War, similar attention and aid was not provided to the former Communist countries and other economies in distress, and Soros concludes that our world is suffering as a consequence.
In his final chapter, Soros paints a picture of US dominance in the world, both military and economic. “The United States bears a special responsibility for the world because of its dominant position,” (p 166) he says. The tragedy of September 11, 2001, has made North Americans more able to understand that our welfare is interwoven with the welfare of the whole world. We have a chance—or perhaps an obligation, to rethink our relationships with the rest of our planet. Through On Globalization and his other activities, George Soros is providing leadership and ideas. We should carefully consider his book and the ideas he puts forth, and put the best of them into action.
About the Author (from Persueus Books Group)
George Soros heads Soros Fund Management and is the founder of a global network of foundations dedicated to supporting open societies. He is the author of several bestselling books, including The Alchemy of Finance, The Crisis of Global Capitalism, and Open Society.
Contributed by William Early, Founder, Global Envision.
To read another Global Envision article about how business leaders, including George Soros, are supporting poverty alleviation, see Billionaire Philanthropy.
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Public Affairs, a member of Perseus Books Group, 2002
Having profited so greatly by globalization, George Soros rightly attracts great attention when he criticizes the source of his prosperity. Although he is often labeled an antiglobalist, in fact he does not support the coalition of market fundamentalists and antiglobalization activists who would celebrate the death of the WTO. Soros describes the WTO as the goose that lays the golden eggs—ugly on the outside, but with plenty of potential value. Soros’ goals, as laid out in On Globalization, are to improve and strengthen the organizations that impact globalization, not to destroy them.
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Despite the labels attached to him, Soros finds much that is positive in globalization and in free markets. “Private enterprise is better at wealth creation than the state,” (p 4) he writes. He believes enterprise helps create individual freedom, and that free global competition liberates entrepreneurial talents and stimulates technological progress. In sum, Soros states: “In spite of its shortcomings, I am an ardent supporter of globalization” (p 7). But as most will admit, the shortcomings of globalization are significant. People in less-developed countries can and have been hurt by globalization and the spread of free markets, since, as Soros points out, markets are not designed to address social needs, and global financial markets are crisis prone.
If Soros is a critic of globalization, he is the kind of critic we could all use. His book offers specific suggestions for making improvements. Many of his ideas are founded in what he has learned through his philanthropic endeavors. Two of the principles ingrained in his proposals for improving foreign aid and making globalization more humane include:
(1.) Good managers know that it is wise to involve all levels of the organization in the formulation of the decisions that will affect them, and
(2.) In aid and policy, as in business and child-rearing, incentives for good results often work better than penalties for breaking rules.
On Globalization provides many ideas about how the operations of the World Bank, International Monetary Fund (IMF) and the World Trade Organization (WTO) might be improved. The WTO, which draws the greatest ire from antiglobalization protestors, is, in Soros’ view, the most advanced of the international institutions. “It has been successful not only in creating international law but also in exercising a judiciary function” (p 32). Soros believes that the WTO bias in favor of rich countries and multinational corporations has more to do with how the body has been used than how it is organized.
A vivid example from the book of the uneven playing field supported by the WTO referees is developed nations’ significant subsidies of agricultural products, which have their major impact on developing countries who can’t compete against this advantage. Europe, Japan, and most recently, the US, have all committed this foul.
In an argument not unlike Bhagwati’s in Free Trade Today, Soros suggests that too often, the WTO is expected to achieve things it was not created for, and is not prepared to do. For issues involving environmental protection, food safety, human rights, and labor rights, he maintains that we would be better off looking to states and other international institutions to mediate, and not the WTO. He suggests, for example, that rather than a WTO decree prohibiting child labor, a more successful strategy would be to fund universal primary education and encourage incentives for school attendance. Then we could demand the elimination of child labor as a condition of receiving such educational support.
Another major focus of Soros’ book is the need to make quantum improvements in the way foreign aid is delivered and administered. Recognizing that most past results have not been successful, he argues that there is much that needs to be changed. His foundation, which is dedicated to fostering “open societies,” provides guidance on ways to improve aid organizations. The theory behind an open society is that democracy, the rule of law, and a strong private sector create a more fertile soil for foreign assistance to improve life than straight disaster relief programs.
Use of Special Drawing Rights (SDRs) is an approach to funding advocated in On Globalization. The book explains that a pilot for this system was authorized by the IMF in 1997, and only requires ratification by the US Congress to be initiated.
On Globalization also encourages us to recall U.S. policy at the end of World War II. The Marshall Plan of aid for Europe and similar programs in Japan helped create remarkable recoveries in the affected countries. At the end of the Cold War, similar attention and aid was not provided to the former Communist countries and other economies in distress, and Soros concludes that our world is suffering as a consequence.
In his final chapter, Soros paints a picture of US dominance in the world, both military and economic. “The United States bears a special responsibility for the world because of its dominant position,” (p 166) he says. The tragedy of September 11, 2001, has made North Americans more able to understand that our welfare is interwoven with the welfare of the whole world. We have a chance—or perhaps an obligation, to rethink our relationships with the rest of our planet. Through On Globalization and his other activities, George Soros is providing leadership and ideas. We should carefully consider his book and the ideas he puts forth, and put the best of them into action.
About the Author (from Persueus Books Group)
George Soros heads Soros Fund Management and is the founder of a global network of foundations dedicated to supporting open societies. He is the author of several bestselling books, including The Alchemy of Finance, The Crisis of Global Capitalism, and Open Society.
Contributed by William Early, Founder, Global Envision.
To read another Global Envision article about how business leaders, including George Soros, are supporting poverty alleviation, see Billionaire Philanthropy.
Click the icon to buy this book from Amazon.com. A portion of your proceeds will go to support Global Envision. |
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