In Defense of the Dollar and Market Globalization

Article excerpt


The era of laissez-faire capitalism is over, it is said, as if the era of laissez-faire capitalism ever really began. Still, globalization has helped open markets around the world.

At a time of economic crisis, Benn Steil and Manuel Hinds mount a well-documented defense of globalization, the extension of consensual economic exchange across borders. They warn: [C]harges that financial markets and institutions, such as the International Monetary Fund (IMF), are violating fundamental rights of states remain largely unchallenged and have a natural and growing appeal to organized interests who are only too willing to harness the powers of state organs in the name of reclaiming lost sovereignty.

Money, Markets and Sovereignty is a surprisingly easy read, given the complicated issues covered. In it, Mr. Steil and Mr. Hinds consistently challenge today's statist nostrums.

Critics often treat globalization as a new phenomenon. Yet, the authors observe, broadly speaking, the view that increasing economic and cultural interconnections across the globe are a positive development, to be advanced rather than resisted - has a much older and historically esteemed pedigree than is widely recognized.

The authors explore the relationship between globalist thought and the notion that individuals have certain natural universal rights that transcend the will of rulers.

This history highlights the fact that today's trade mythology - that autarky is the natural state of affairs and that people should not buy from foreigners except with dispensation from the state - is hardly one with a compelling pedigree.

Particularly beneficial has been the development of private commercial law. But, note Mr. Steil and Mr. Hinds: Many globalization critics hope to preempt the organic development of common international commercial practice and expectations, and instead to dictate ex nihilo the form and scope of permissible facets of globalization.

The authors bust several anti-globalization myths. Mr. Steil and Mr. Hinds explain: Anti-globalization writers, in contrast to their pro-globalization counterparts, do not tether their arguments to the history of ideas. They do not defend a philosophy; they endorse no particular principles of just conduct or lawmaking. Rather, their arguments are largely based on defending visions of a sublime past, now being supplanted by what are alleged to be new and illegitimate forces.

Does globalization violate sovereignty, the authors ask? Yes - just as sovereignty has been routinely limited throughout history. Critics complain about the adverse impact of individual choice, an argument that, Mr. Steil and Mr. Hinds argue, often turns out to be an open invitation to authoritarianism. It is, not surprisingly, heartily endorsed by Chinese state censors.

Complaints about income inequality actually acknowledge globalization's positive impact on international poverty. The authors explain: Following conspicuously pro-globalization strategies over the past decade, [China's and India's] exceptional progress in bringing hundreds of millions out of poverty has forced critics of outward-oriented economic policies to shift their focus away from poverty and toward the wealth gap.

The claim that globalization somehow destroys nations could not be more welcome to despotic rulers of poor nations and less conducive to the interests of their people. …