A different manifesto
Sep 27th 2001
From The Economist
print edition
If sceptics could learn to love capitalism,
they would still have plenty to complain about
SOME sceptics have recently started to argue that the movement against globalisation dwells too much on what it is against; it must grow up, and start to say what it is for. This is a worthy thought, but tactically ill-advised.
The
main things holding the anti-globalist coalition together are a suspicion of
markets, a strongly collectivist instinct and a belief in protest as a form of
moral uplift. Once upon a time this combination would have pointed to socialism
as a coherent alternative to “the system”. But socialism, after the unfortunate
experiences of the 20th century, is not quite ready yet for release back into
the community. The attitudes that support it are still out there, as evidenced
by the protesters, and by the sympathy they arouse among the public. But for
the moment, as a programme for government, socialism lacks sufficiently broad
appeal.
What
else is there? The protest coalition can hang together only if it continues to
avoid thinking about what it might be in favour of—a challenge it is all geared
up to meet. All the same, it seems a pity.
Meanwhile,
the champions of globalisation—governments and big business—are also giving a
deeply unimpressive account of themselves. Intellectually, their defence of
globalisation (“it's good for our exporters and creates jobs”) is a disgrace. And
governments deserve fierce criticism for many of their policies, not least in
areas of particular concern to anti-globalists.
Rich
countries' trade rules, especially in farming and textiles, still discriminate
powerfully against poor countries. Rich countries' subsidies encourage wasteful
use of energy and natural resources, and harm the environment. It is at least
arguable that rich countries' protection of intellectual property discriminates
unfairly against the developing world. And without a doubt, rich countries'
approach to financial regulation offers implicit subsidies to their banks and
encourages reckless lending; it results, time and again, in financial crises in
rich and poor countries alike.
All
these policies owe much to the fact that corporate interests exercise undue
influence over government policy. Sceptics are right to deplore this. But undue
influence is hardly new in democratic politics; it has not been created by
globalisation forcing governments to bow down. On the contrary,
special-interest politics is easier to conduct in closed economies than in open
ones. If allowed to, all governments are happy to seek political advantage by
granting preferences.
It is
dispiriting to watch as big companies work out how to maintain their influence
nationally and extend it to the global arena, using “civil society” and
“corporate social responsibility” as levers. Naturally, in the light of the
protesters' concerns, the multinationals are willing to sit down with
governments and NGOs—they have lots of ideas for
collecting extra subsidies, and piling punitive taxes and regulation on their
less responsible competitors.
Barking up the wrong
tree
The
protesters' main intellectual problem is that their aversion to capitalism—that
is, to economic freedom—denies them the best and maybe the only way to attack
and contain concentrations of economic and political power. The protesters do
not need to embrace laisser-faire capitalism. They need only to discard their
false or wildly exaggerated fears about the mixed economy; that is, about
capitalism as it exists in the West, with safety-nets, public services and
moderate redistribution bolted on.
Under
this form of capitalism, economic growth does not hurt the poor, as sceptics
allege; indeed, for developing countries, capitalist growth is indispensable if
people are ever to be raised out of poverty. Growth in mixed economies is
compatible with protecting the environment: rich countries are cleaner than
poor ones. And if prices are made to reflect the costs of pollution, or allowed
to reflect the scarcity of natural resources, growth and good stewardship go
hand in hand. Above all, free trade does not put poor countries at a
disadvantage: it helps them.
Try this for size
If some
of the protesters could accept these tenets of mixed-economy capitalism, a narrower
but far more productive protest manifesto would come into view. Its overriding
priority would be to address the scandal of third-world poverty. To that end,
it would demand that rich-country governments open their markets to all
developing-country exports, especially to farm goods and textiles. (Concerns
about displaced workers would be met not by holding down the poorest countries,
but by spending more on training and education in rich countries, and by
cushioning any losses in income there.) It would insist that western
governments increase spending on foreign aid, taking care that the benefits
flow not to rich-country banks or poor-country bureaucrats, but to the poor,
and especially to the victims of disease. To protect the environment, it would call
for an end to all subsidies that promote the wasteful use of natural resources,
and for the introduction of pollution taxes, including a carbon tax, so that
the price of energy reflects the risk of global warming.
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This
programme to accelerate globalisation and extend the reach of market
forces—although at first it might be better to put it another way—would also
have a good-governance component. Under that rubric, “trade policy” should
ideally be abolished outright: governments have no business infringing people's
liberty to buy goods where they will, least of all when the aim is to add to
corporate earnings. Short of instant abolition, trade policy should at least be
brought into the light so that corporate interests find it harder to dictate
its terms. Governments should hold themselves accountable to voters at large,
not to companies, industry associations, special interests or indeed to any
kind of non-governmental organisation, whatever its ideology or dress code.
Among
other things, accountability means accepting rather than denying
responsibility. Corrupt or incompetent governments in the developing countries
deny responsibility when they blame the IMF
or the World Bank for troubles chiefly caused by their own policies. Rich-country
governments, notably America's, also use the Fund, the Bank and the WTO—institutions which in practice could never defy their
wishes—to deflect blame. Worst of all, governments everywhere deny
responsibility when they explain broken promises, failures of will or
capitulations to special interests as the unavoidable consequences of
globalisation. That is no harmless evasion, but a lie that rots democracy
itself. Critics of economic integration should be striving to expose this lie;
instead, they greet it as a grudging endorsement of their own position.
The
crucial point is that international economic integration widens
choices—including choices in social provision—because it makes resources go
further. Policies to relieve poverty, to protect workers displaced by
technology, and to support education and public health are all more affordable
with globalisation than without (though not even globalisation can relieve
governments of the need to collect taxes to pay for those good things). When
governments claim that globalisation ties their hands, because politically it
makes their lives easier, they are conning voters and undermining support for
economic freedom. Whatever else that may be, it is not good governance.
Whenever
governments use globalisation to deny responsibility, democracy suffers another
blow and prospects for growth in the developing countries are set back a little
further. Anti-globalists fall for it every time, seeing the denials as proof of
their case. They make plenty of other mistakes, but none so stupid as that.