Tim Worstall

Prime Moonbattery.

Grauniad:

But Davos, the people who hobnob there, and the institutions they represent, have not gone away. Their ideology, money and rules still dominate the world, creating ever greater social inequalities, destroying democracy and leading us all towards planetary collapse. “Globalisation”, a word invented to convey the false hope of an integrated, inclusive world, has in reality meant the opposite: the rejection and exclusion of hundreds of millions who contribute little or nothing to production and consumption and are thereby considered useless by 21st-century capitalism.

This is from Susan George, and no, I don’t know who she is either.
The one paper that I know of which has actually studied the effects of globalisation with any academic rigour came up with the fact that it does, indeed, increase inequality between countries. However, not for the usually assumed reasons. Those poor countries that take part in it become richer, have faster growth rates than the already rich countries, and thus close some of the income gap. Those that do not take part in it remain where they are, sunk in poverty and misery, and as the rich world continues to grow, they fall further behind. From those facts Ms. George seems to think that we should have less globalisation, when, obviously, the problem is we have too little.
Prime moonbattery.

In

5 responses

  1. Gordon Avatar
    Gordon

    But if all those brown people start getting rich, for whom will we hold benefit concerts?

    Reply
  2. Jim Avatar
    Jim

    “The one paper that I know of which has actually studied the effects of globalisation …”
    Just out of interest, which paper would that be? I do hope it’s not by David Dollar of the World Bank, since “academic rigour” is not really his forte.
    Tim adds: it was by a couple of British academics. I think my copy got wiped but I’ll see if I can find it.

    Reply
  3. Jim Avatar
    Jim

    No progress finding this, then? It’d be good to see the evidence you use when you’re calling people idiotarians, after all.
    Tim adds: you’re right, I can’t find the paper. I’ll just have to argue from the basics then. Those countries that have joined the global economy (free trade, WTO membership, all those things that make up that dread word) are growing, and have grown, faster than those that have not. As it is growth that lifts people and nations out of absolute poverty, to oppose globalisation is to oppose that very thing that one purports to desire, the reduction of poverty.
    To oppose on ideological grounds the very thing that provides your goal is, to me, prime idiotarianism.
    Prime example is S Korea v. N Korea. One is an autarky and poor, the other is open to trade and rich. Both started from the same point 50 years ago. QED.

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  4. Jim Avatar
    Jim

    Yes, South Korea is a good example. It’s a good example of a country that redistributed land to the poor, protected its markets, intervened massively in every aspect of the economy, benefitted from aid and preferential market access from a benificent superpower, focused on building competitiveness, and only opened up *when it felt it was ready*. This behaviour pattern is very common in countries which developed in the 20th century. So maybe we should stop beating up other poor countries when they try and do the same.
    If you think that ‘free trade’ policies are what lifted poor countries like South Korea (or, to take a more recent example, China) out of poverty, you really need to go away and read up a bit, because that is totally wrong. Increased trade volumes are generally associated with increased growth, but that is an *outcome* rather than a policy *choice*. Conflating totally different concepts such as trade policy and trade outcomes into the undefined catch-all of ‘globalisation’ is just stupid.
    Tim adds: We can also point to North Korea, which, at least from what it says, concentrated upon greater equlity, protected its markets, intervened massively in every aspect of the economy, benefitted from aid and preferential market access from a beneficient superpower…and oops, they’re shit poor. Or Hong Kong, which did noe of these things, simply threw the doors open to free trade and got richer earlier, faster and more thoroughly than S Korea did. Or China or India which have only grown at any speed since they abandoned the more absurd of their “protections”. Or Latin America, which spent the 40’s to the 70’s following every fashionable prescription about import substitution and the protection of nascent industry and actually went backwards. Or New Zealand which finally abandoned such stupidity and was rewarded with a burst of growth.
    Where I fundamentally disagree with you is on trade “policy”. You seem to belive that a country should have one. I regard it as stupidity for them to do so. Straight Hayek here. Information is dispersed in society. Decisions should be made by those who are best informed. Thus decision making should be dispersed throughout the society. Trade “policy” is by definition made by whichever bunch of kleptocrats have got to the top. They will always get it wrong as they do not, and cannot, have sufficient information.

    Reply
  5. Jim Avatar
    Jim

    South Korea had good trade and industry policies (focus on exports, competitiveness, technology and efficiency), North Korea had bad ones (collectivise everything, be completely mad). If you believe there is no such thing as a ‘good’ trade and industry policy, then the massive divergence in their fortunes must be inexplicable. In that case, you are apparently blinded by ideology, the very thing you accuse all those ‘idiotarians’ of. Hayek may be nice in theory, but then so is Communism.
    Your other examples seem a bit uninformed. Hong Kong is (and has been ever since it was founded) a tiny port that makes its money on trading (trade is around 300% of GDP, many times higher than most countries) so it’s not really generalisable to actual countries.
    The growth of China and India had little or nothing to do with trade liberalisation: instead they grew after they stopped penalising private enterprise and, in China’s case, after they de-collectivised agriculture. Both maintained high tariffs well into the 1990s. That is, they embraced markets, but not *free markets*. There is a difference.
    Your description of Latin America, meanwhile, is exactly backwards, as it grew much faster in its era of ‘import substitution’ than in the era of structural adjustment and all that. In the 60s and 70s it regularly had per capita GDP growth of over 4% and only once went negative: after 1981, it saw negative growth half the time and never went above 4%.
    Lastly, the example of New Zealand is not relevant since it was already a rich country, and we’re talking about poor countries.

    Reply

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