Don't Give Up on Globalization
November 11, 2008
Border crossings are inefficient places. Travelers get delayed. Guards solicit bribes. Countless hours are wasted on interrogations, vehicle searches, passport stamps, and pat downs.
Globalization makes borders—both physical and figurative—irrelevant. By reducing barriers to trade, investment, and immigration, globalization minimizes the impact of borders on the way we do business, the way we live, and the way we communicate with each other. It has succeeded so well, we sometimes take it for granted. If you've ever had Red Bull, sushi, or a yoga class, then you've experienced globalization first hand.
As a nation and as citizens, we derive massive benefits from the open and interconnected systems that globalization supports. Unfortunately, negative effects move through these systems just as efficiently. Capital charges past newly unguarded borders, sometimes overwhelming underdeveloped infrastructure. Virulent diseases trace invisible vectors through shipping containers and departure lounges. Instantaneous communication feeds the flames of religious fervor, political extremism, and financial panic.
Openness arouses our natural insecurities. In times of crisis—in times like these—it becomes easy to believe that openness is to blame. Without all of this globalization, without all of this interconnectedness, we would be insulated. We would be in greater control of our destiny. We would be safe.
While these are comforting thoughts, we should take pains to remember that globalization is not just about finance. It also expedites innovation in science and medicine. It offers consumers lower prices on everyday goods and services. It shrinks the distance between far-flung relatives and eases the burden of sending money home.
Most of all, globalization is a reflection of our fundamental attitudes toward each other. Globalization is an attitude of openness.
A quick look at history tells us that openness has been a fleeting feature of our world. And just as Francis Fukuyuma predicted the end of history in 1992, some are predicting the end of globalization. "From around 1870 until World War I, the world economy thrived in ways that look familiar today," wrote historian Niall Ferguson in 2005, "…[but] the possibility is as real today as it was in 1915 that globalization, like the Lusitania, could be sunk."1
So let's take a moment to weigh the implications of a post-globalization world. Let's consider what we stand to lose.
Free to ChooseOpenness, it is often argued, is fundamentally good in and of itself. Engagement with others is healthy. It enriches us in a thousand different ways. To be open is to be alive.
While this view is satisfactory to some, we can take it a step further. We can think of openness as not simply a final destination—an end—but as a means to achieving something worthwhile. Whether in cultural attitudes or economics, openness improves the lives of citizens by expanding opportunities for choice. Choice, as political, economic, and social philosophers from Isaiah Berlin to Milton Friedman have shown, is a fundamental component of human liberty. When choice is minimized, citizens are less free.
Of course this cannot and should not be taken as an argument in favor of unregulated chaos. Markets are only free when they offer participants opportunity for entry, exit, and competition on equal terms. Failure to consistently guarantee equal access to truly free markets remains globalization's greatest shortcoming. Critics and skeptics have seized on this failure, offering it as evidence of globalization's irredeemability. Yet closing the door on the most prosperous era in human history would be foolish in the extreme. Imagine giving up on democracy because it produces an occasional lousy result. We shouldn't, as Voltaire warned, allow the perfect to become the enemy of the good.
"Let us agree the benefits of globalisation can and should be shared more equitably," United Nations Secretary General Ban Ki-moon told the UN Conference on Trade and Development in April. But the solution, he added, is "More trade, not less."2
Washington: More Contentious than Consensus
In the United States, the political rhetoric surrounding the question of openness is discordant. One side insists upon freer trade, but tighter controls on immigration. The other side advocates deeper cultural dialogue, yet views open markets with suspicion. Presidential elections tend to bring these contradictions into sharp relief.
The American Right's obsession with immigration dances dangerously close to xenophobia. Nothing sends a clearer message about openness than a border fence. Economically, however, there is no evidence that immigration either lowers average domestic wages or negatively impacts economic growth. In fact, recent studies have concluded the opposite: that immigration correlates with economic growth.3
Immigrants, especially those that migrate primarily for economic reasons, are famously entrepreneurial. They are not simply job seekers. In many cases, they are also job creators, opening small businesses, paying taxes, and living out the American dream. Moreover, birth rates in most Western countries have been declining for many years. Immigration—the globalization of people—tempers this trend, contributing to economic productivity by counteracting the natural attrition of the labor force. Economists will tell you: Holding productivity constant and increasing the labor force translates into economic growth.
The American Left fancies itself a champion of the world's poor, yet is often openly skeptical of free trade and open markets. Openness to trade and investment—the globalization of wealth—correlates with increased living standards.4
Workers in the developing world know this. A 2007 Pew Research Center's Global Attitudes Project survey found strong support for Ban Ki-moon's preferred solution to global underdevelopment. Astonishingly, given what we are often lead to believe about public appetites for globalization, eighty percent of Africans said they believed that trade was having a positive impact on their country's economic development.5
In India, 800 million people live in extreme poverty as measured by the World Bank. That is nearly three times the population of the United States. Yet, the Pew survey found 90 percent of Indians expressing support for free trade. Perhaps more significantly, for a nation with a long history of socialism, three quarters of Indians support free markets.
From China to Kenya to Bangladesh to Ukraine the refrain is the same: We want more trade, not less. We want globalization, not protectionism. We want openness.
Don't Give Up, Give In
American politicians often deal with inconvenient policy contradictions by ignoring them. The election cycle forces individual members of Congress to specialize in the art of pandering to narrow domestic constituencies. Campaign promises to block the passage of trade agreements or wall off our southern border may play well on the stump, but are not in the long-term interest of the United States.
At the very least, coherent policy requires partisans on both right and left to declare themselves on the question of openness. Are we in favor of openness? If so, we should open our borders as well as our markets. We should acknowledge that investing in people and investing in business are not mutually exclusive. We should accept that trade is aid, commerce can be compassionate, families can't be illegal, and openness is not just an end, it's a means for achieving a better standard of living.
If we value openness, we should not give up on globalization.
1 Niall Ferguson, "Sinking Globalization," Foreign Affairs, March/April 2005
2 "Food price hikes to hit world growth: UN," World News Australia, April 21, 2008
3 Stuart Anderson, "The Debate over Immigration's Impact on U.S. Workers and the Economy," National Foundation for American Policy, July 2006
4 Shang-Jin Wei, "China as a Window to the World: Trade Openness, Living Standards and Income Inequality," Reserve Bank of Australia 2002 Conference
5 "World Publics Welcome Global Trade—But Not Immigration," Pew Research Center Report, October 2007