Why Globalization Works

Article excerpt

WHY GLOBALIZATION WORKS Martin Wolf New Haven: Yale University Press, 2004. xviii, 398pp, $43.50 cloth (ISBN 0-300-10252-6)

Give the antiglobalization gaggle their due. After the 1999 "battle in Seattle," mainstream commentators summarily dismissed most of the claims of most of the antiglobalization protestors-often within the space of a single op-ed column. That was then. Over the past five years the antiglobalization crowd has managed to convince a fair fraction of the globe of the correctness of their arguments: global economic integration empowers multinational corporations at the expense of citizens, enriches the wealthy while impoverishing the poor, and strips away the autonomy of governments, leaving them at the mercy of global capital markets.

As these claims have garnered greater credence, the reaction has been a fuller articulation of the mainstream response. Economists and policymakers who support the reduction of national barriers to exchange have generated a raft of books devoted to debunking the myriad claims of the antiglobalization and alternative globalization crowds. Some of themDouglas Irwiris Free Trade Under Fire, Brink Lindsey's Against the Dead Hand, Raghuram Rajan's Saving Capitalism From the Capitalists, Johan Norberg's In Defense of Global Capitalism, and Jagdish Bhagwati's In Defense of Globalization-have made some excellent points. However, Martin Wolf's Why Globalization Works is the best single book to date that comprehensively addresses all of the claims and counterclaims with regard to economic globalization. Wolf, a World Bank economist turned Financial Times editor and columnist, has written the kind of book that makes me envious-because I wish I had written it.

Wolf's argument is simple but compelling: compared to all other forms of economic organization, a system based on free market principles brings the greatest good to the greatest number. A market system supported by the legal and popular sovereignty of a liberal democratic polity functions even better. Globalization increases the size of the market, which increases the opportunities for growth, which increases the number of nonzero-sum interactions as compared to zero-sum conflicts. When contrasted against the alternatives, both theory and practice strongly recommend the unfettered integration of national markets. Critics of global market integration-variously dubbed "new millennium collectivists" or "antiglobalization.com" by Wolf-are simply unable to propose a better international economic arrangement.

The first three sections of Why Globalization Works are devoted primarily to the theory side of the argument-how to define globalization, why the free movement of goods, services, and people across borders is a good thing, and the proper division of labor between markets and governments. Few of the points made in this section are new, but they serve a useful purpose, which is to point out an alternative frame through which to judge the merits of globalization. Protestors tend to focus on cross-sectional analysis-i.e., comparing how different parts of the present-day world are experiencing the (mal)distribution of benefits from the globalization phenomenon. Wolf argues that the thoughtful observer should also make temporal comparisons. How much do individuals benefit during eras of globalization as opposed to periods of segmentation? The answer here is not surprising-periods of globalization generate much greater gains than other periods in history. …