Deconstructing anti-globalization

Yet this is blatantly counter-intuitive. The benefits of free trade are acknowledged by most economists. Even conceptually, the notion that forbidding foreigners from trading with the people of a given country can help that country seems contradictory : if it wasn’t in their interest to trade with the foreigners and thus enable economic progress, it just wouldn’t happen. People do not buy foreign products because they are anti-patriotic, they buy them because of their price or quality.

Any study would only confirm the obvious : more job possibilities and more imports means better living conditions. Empirically, these results are confirmed. Here in North America, NAFTA has made Canada and Mexico most important trade partners with the United States, turned Mexico away from socialism and depressions, and American unemployment dropped from 6.9% in 1993, to 4% in 2000 (“NAFTA at 10 : An Economic and Foreign Policy Success”, Center for Trade Policy Studies, December 2002).

The same thing is true on a global scale. Economic freedom is on the rise, including trade freedom, and this helps everyone. While poverty is still a world problem, the 1$-a-day poverty rate in 1985-value dollars has dropped from 20% in 1976, to 5% in 1998 (“The Disturbing “Rise” of Global Income Inequality”, by professor Xavier Sala-i-Martin).

Likewise, the 1$-a-day poverty rate in 2002 dollars has fallen steadily since 1950, going from 63% to 12% (“Imagine There’s No Country: Poverty, Inequality and Growth in the Era of Globalization”, Institute for International Economics).

There are two simple reasons why globalization raises the level of life. First, opening the job market to foreign companies raises the demand for workers, which raises wages. And foreign factories would especially be interested in attracting workers, given their higher manpower needs and the hostility of the Western world against them.

Nike factories, for example, routinely pay twice the wages of local factories and three times the wages of local farms. When Wal-Mart stopped hiring teenagers in Bangladesh, according to UNICEF, many of them had to turn to prostitution (“Give Me a Break” with John Stossel, October 2003). Where work is attacked, workers lose.

Secondly, the law of comparative advantage ensures that the use of resources in a country where free trade exists will be optimal. This is an advantage of the new competition I just pointed out.

It is based on the fact that countries have comparative advantages in certain things and not in others : they differ in natural resources, in education, in geography, and so on. A country that is competing with other countries will specialize in the production of goods in which is has a comparative advantage, and trade for those it does not.

This is the reason why globalization does not cause loss of jobs, but rather raises the productivity of the jobs already existing.

The only alternative – self-sufficiency – ensures waste, as any given country only produces some items efficiently. Likewise, individuals cannot do everything efficiently: that is why we have specialization of labour. The only alternative is to grow and manufacture everything ourselves, which is highly inefficient. To propose self-sufficiency as an alternative is as absurd as proposing to go back to farming.

The advances in industrial technology to the third-world also cannot be discounted, especially in agriculture. It would be part of the solution to environmental damage as well.

“Subsidiary farming is the single most [environmentally] destructive process in the world,” he said. “Hungry people pose the largest threat to the environment.”

Without the technological advances spread by globalization, said Bailey, an additional 1.5 billion acres of land around the world would be damaged by primitive farming methods.

US Libertarian Party News, February 2004

Activists know this already, so what conclusions can we draw ? Wealthy white males from North America can safely fight globalization : they don’t have nearly as much to gain from it than people in third-world countries.

Right-wing statists like protectionism because local corporations have everything to gain from blocking free trade, in order to be spared from the increased competition. Furthermore, they tend to be against third-world stability and economic relations. Left-wing statists like protectionism because they tend to favour cultural and racial supremacy, and tend to be against global progress because of its inherent inequality.

Anti-globalists portray themselves as champions of the poor and tolerent people, but that is contradictory to what anti-globalism is. By its very nature, anti-globalism seeks to set apart countries and races, to prevent trade between countries and races, to keep poor countries poor and rich countries rich. Anti-globalism, and protectionism, cannot be dissociated from fanatic racism.

Both hold on to anti-globalization hate rhetoric because they have a lot of power to lose. But either way, consumer rights and third-world countries will be the big losers if globalization is hampered.

Free trade is also conductive to peace. I have discussed this at length in my article “Why libertarianism is the only solution to war”. Free trade, by virtue of comparative advantage, strengthens the bonds between countries and their markets.

Note that supporting free trade does not imply that one supports specific trade organizations, which tend to be more corporatist than capitalist. The IMF, for example, has been demonstrated to hinder more than help the countries it intervenes in (“IMF admits its policies seldom work”, Electronic Telegraph, 03/2003).

Here are two resources to help you deconstruct anti-globalization rhetoric :

A Primer on Trade, by Mark Brandly.
Debunking the Myths : A Review of the Canada-US Free Trade Agreement and the North America Free Trade Agreement, by Marc Law and Fazil Mihlar.