In Defense of Globalization

Rating:
Summary: Not "Made [for] the USA"
Review: In his own words, Mr. Bhagwati set out to write a "complete and comprehensive" defense of economic globalization--there can be little doubt as he left no stone unturned. The discussion covers all the material topics: affects on labor, environmental degradation, coping with financial conflagration, et. al. That the reader will be better informed about the counter-arguments is indisputable; however, I felt that the pure breadth of the work at times distracted from making more persuasive and illuminating arguments. I rate it three stars because, regardless of its shortcomings, it still presents a well articulated, and easily digestible defense of this trend.

In my opinion, Mr. Bhagwati spends far more of his time extolling the virtues of freer trade from the perspective of the developing world, and spills too little ink answering the critics in this country. Perhaps this is a product of his background, or perhaps his audience was geared more towards the developing world. Nevertheless, I found his treatment of some topics cursory at times. For example, his treatment of "outsourcing" and its affects in the developed world, I found, wholly inadequate -- and a more sympathetic audience he could not have had!

My concern with reading this book was to develop a cogent counter-argument to what I call the "zero-sum crowd": those that see globalization as development at the expense of the U.S. middle-class. Overall I believe "In Defense of Globalization" was not made for this task. Rather, it is a good roadmap for understanding the "broad strokes" of the phenomenon, and a critical read for two groups: those completely opposed to the concept and policy-makers residing in the developing world. Those in search of fodder for talks around the kitchen will find little to convince a audience that closing a textile mill in Greensboro, South Carolina to open one in Malaysia is a long-term positive.

Rating:
Summary: Globilization With a Human Face
Review: In the 1990s globalization was seen a positive force that would be the proverbial rising tide that would lift all boats, and with an expanding world economy it drew support from many corners of the globe. After 9/11, with the world economy contracting, the pendulum tilted the other way, and it became the source of everyone's misery.

Now cooler heads are prevailing with calls for a more managed globalization. Colombia economics professor Jagdish Bhagwati has produced a well-written and well-argued book to meet the critcs head-on, calling for a more nuanced, softer globalization. He divides his critics into two categories. First, there is the hard-core anti-capitalist, anti-corporate crowd whose opinions are formed mainly by university departments of sociolgy, cultural studies, and comparative literature. These are trendy intellectuals who partake in high-altitude thinking with little regard for the realities on the ground (except when they are rioting at trade conferences). They are so out of touch with reality that Bhagwati chooses not to waste any time on them. Secondly, there are critics who generaly agree with the idea of globalization, but are concerned the social problems that accompany it; this is the group that Bhagwati addresses in this volume. A long-time trade economist, he is himself sympathetic to the social goals of the second group. The book tackles each problem on a chapter by chapter basis.

1)Poverty is diminished. Evidence: India, for three decades as a closed economy had a growth rate of 4 percent and a poverty rate around 55 percent. After opening to foreign trade and investment, growth averaged 5 percent and poverty dropped to 26 percent. China fared even better. After opening their economy, growth has been close to 9 percent annually and poverty has fallen from 28 percent to 9 percent. Bhagwati's motto is openess brings growth, which reduces poverty.

2)Child labor is reduced. His favorite example here is Vietnam. With more access to global markets, workers salaries increased, making it possible for them to take their children out of the workplace and to send them to school.

3)Gender discrimination is reduced. He argues that women are empowered by the fact that they can travel abroad, find work and send money home to support their families. This is controversial but there is some truth in it.

4)Promotes democracy. There is discussion of China's entry into the World Trade Organization. Global trade will create a middle class - already has - who will eventually demand democratic values. The rise of democracy is inevitable. This argument is compelling, while there are still many detractors.

5)Culture is enriched. There have been many diatribes against the spread of American low culture, symbolized by junk food and tawdry entertainment. Bhagwati is sympathetic to their plight. However, he also points out that, " the United States is at the cutting edge of women's rights, children's rights and much else that more traditional, at times feudal or oligarchic regimes elsewhere find threatening to their cultural and social order."

6)Wages and labor standards are improved. Here he urges that one must measure wages and labor standards against similar environments that have not been opened up to the forces of global trade, rather than compare against Western standards. One will find that globalization proves beneficial.

7)Globalization does not neccessarily harm the environment. He concedes that free trade must be combined with environmental policy. Though he is vague on the role of government in the economy, he does call for an active role for NGOs in environmental protection. With the right policy, corporations can actually help reduce pollution in developing countries.

8)Corporations are beneficial. Bhagwati lists a host of good effects that multinationals leave in their wake, as described in 1 throught 7. In addition, they bring modern technology and better management practices to developing countries. It is the only way poor countries can lift their way out of poverty. International organizations have not been as successful.

In the last part of the book, Bhagwati makes some policy recommendations - unemployment insurance, retraining programs, measures to mitigate the volatility of agriculture, etc - to soften the impact of globalization. Inspite of the tremendous positive force of globalization, he does recognize that things can go very wrong. Nevertheless, his arguments are convincing and the alternatives are not an option.

Rating:
Summary: Mandatory Reading
Review: Jagdish Bhagwati's IN DEFENSE OF GLOBALIZATION takes on several important tasks. First, it responds to globalization's critics, both the screaming in Seattle types and the NGOs. He then goes through the areas that concern those who care about development in poor countries, including women's rights, the environment, employement conditions, etc. And finally, he shows that while globalization has an overwhelmingly positive affect on the issues discussed, there are some downsides that need to be anticipated and dealt with.

What I like about this book is that it uses fairly complex economics in an accessible fashion. I also like that Bhagwati seems to be arguing not to win points but because he genuinely cares about the lives of people in developing countries. He is essentially offering a challenge to those on the left whose goals he shares to defend their positions.

If I have one complaint, it's that the humor is occasionally a little corny. Bhagwati is too quick to tell jokes at times when we want him to be serious. But I suspect that this may in part be a matter of taste. Judge for yourself. In the end this is an extremely entertaining and very important book.

Rating:
Summary: Good Analysis
Review: Many of the criticisms of globalization are so ridiculous that they don't even deserve a response. However, Dr. Bhagwati takes the time to address them in this book. Perhaps this isn't written for the serious economics student.

However, towards the end, Dr. Bhagwati briefly touches on some possible remedies for the potential adverse effects of globalization. Some of the thoughts were insightful and very helpful.


Rating:
Summary: Super book that helps us raise the level of the debate
Review: This is an especially timely and important book. Our political discourse has made trade liberalization synonymous with exploitation and uses the word globalization (whatever it can actually mean) as a pejorative. Prof. Bhagwati is a world authority on trade and has great gifts in debunking phony arguments against the benefits of trade wherever in the political spectrum they might arise.

Prof. Bhagwati has spent decades, beginning in the early days of Indian independence, as an economist trying to improve the lot of the poor all over the world. He has done the spadework with his own hands and seen directly the implementation of well meaning policies that instead made the poor even poorer. He has seen how trade liberalization has actually improved the situation in many countries and not just in theory.

However, you cannot mistake him for an ivory tower ideologue. He engages false arguments directly and in person. He debated the students in turtle suits protesting shrimp farming. He takes on American politicians who use the mask of aid to poor countries as a Trojan Horse to muscle local laws and regulations that end up making the receiving country worse off and more dependent. He takes on the NGOs and demonstrates that their using nonsensical arguments weakens their otherwise worthy role as democratic watchdogs.

This is a book that should be read by everyone. You will be better informed on this important issue because almost none of us are as well informed as Prof. Bhagwati and he has done a great job in getting a great deal of it down in only 265 pages (plus notes, and index). You do not have to agree with him to benefit from this book. In fact, where you disagree with him, he will force you to sharpen and strengthen your arguments (as great teachers always do).

I personally am not as sanguine as Prof. Bhagwati in the role of bureaucrats, and socialist - liberal - progressive solutions in improving the lot of the poor in the world. However, I do agree with him that the great American ship-of-state, regardless of its intentions, can and does swamp many smaller (and leakier) boats trying to stay afloat in the world economy. The difference being, that Prof. Bhagwati has actually worked on these issues in the real world, whereas I am simply a citizen who has read and thought on these issues. So, while I am not yet convinced by his political solutions, I am willing to not reject them out of hand because of the credibility his practical work deserves.

We can all do better, and it is the ongoing dialogue and debate that is important. Prof. Bhagwati does us the service of informing us, making us think, and assisting us in raising the quality of the debate. I urge you to take advantage of this great book and read it carefully from cover-to-cover.


Rating:
Summary: This is a readable masterpiece in international economics
Review: This is an excellent book that takes a subject [Globalization] that has become increasingly emotionally loaded and politically intense. As the U.S. experiences a rising Current Account Deficit, there is a strong perception that Globalization is like a scorpion who has turned its own deadly sting on itself. Everyday, one sees articles in the press mentioning how the U.S. is loosing its manufacturing jobs to China and its programming jobs to India.

Bhagwati, as any classical economists, views Globalization as the manifestation of the competitive advantage of international trade. In other words, whatever we can obtain from overseas at a lower cost than we can obtain locally will boost the demand for our own products (due to lower costs). With higher demand comes higher economic growth, higher productivity, and rising living standards. On the other hand, ill fated protectionist policies, contrary to their humanistic intent, completely annihilate this economic virtuous cycle.

However, Bhagwati is not your usual unrestrained free trader. He feels that governments have to better address the dislocation in labor that is directly affected by international competition. He states the U.S. should spend more resources on research and on education. This is so our labor force remains most productive in being engaged in cutting edge industries that have not yet become commoditized.

Bhagwati, an Indian, focuses much energy on the benefit of Globalization for all emerging markets. Contrary to all the anti Globalists demonstrators in Seattle, Cancun, and elsewhere, Bhagwati makes a forceful and well documented case that Globalization is a very positive force that lifts countries out of poverty. It causes a virtuous economic cycle associated with faster economic growth. He dismantles the concerns and myths perpetrated by anti-Globalists chapter by chapter. Thus, chapters are titled: "Culture: Imperiled or Enriched?," "Corporations: Predatory or Beneficial?," and "Environment in Peril?" In each cases, Bhagwati armed with irrefutable historical data comes on strongly on the side of Globalization and breaks one anti Globalist myth after another.

Bhagwati states that in many cases, Globalization is blamed for whatever goes wrong within a country. But, that this is a politic of deflection used by corrupt and ineffective political leaders. Instead of implementing more effective domestic policies and international policies, many government leaders prefer to blame all ills on Globalization, which indirectly means on the U.S.

Bhagwati makes an eloquent case that any economic ills in emerging markets is not all the U.S. fault just as U.S. job losses are not all China and India's faults.

During this Presidential election year with the loss of U.S. jobs as one of the main Democratic themes, this is a very important book to read. It would be crucial for Kerry to read it too, otherwise he may fight a loosing campaign pinned on protectionist policies. By now, even though Globalization and international economics are complex matters, too many voters intuitively understand these subjects to vote in a President on a campaign of protectionism and international economic isolation. Bhagwati rules!