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In Defense of Globalization

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Aside from a small handful of real Luddites, I don't think there are many people left who are against all forms of globalization, nor can there be many who are completely in favor of it, warts and all. But you'd never know that based on most of what's written on the subject: most literature on the subject tends to treat discussions of the global economy in black-and-white terms. Authors, essayists, and columnists too often rely on gimmicky strategies that pull on the heartstrings but do little to examine the real pros and cons of an increasingly global world, focusing more on what's wrong than on what can be done. And discussion I've seen too often takes too narrow a view -- life in a particular village, the impact on a specific industry -- for a well-rounded debate to take shape.

In Defense of Globalization is the first effort I've seen in a long time that manages to avoid most of those pitfalls, relying on objective and unemotional discussions of evidence rather than anecdotes, and presenting its arguments in a straightforward and gimmick-free way. It is full of important information and still eminently readable.

Opponents of globalization usually base their arguments against the international market economy on a few strong points: that it encourages child labor, that it erodes democracy, that it weakens the plight of women in the developing world, that it kills local cultures, and that it harms the environment. In this book, scholar and author Jagdish Bhagwati addresses each of those issues in a series of chapters that make up the heart of the book.

But globalization proponents will not find in In Defense of Globalization a blind defense of their views. Mr. Bhagwati takes the anti-globalization points seriously. He goes so far as to show that he shares many of the anti-globalists' views and values (especially regarding poverty), and he points out many areas where unchecked global capitalism has the potential to do more harm than good. This makes the book much more effective than it would have been otherwise.

But despite all that, Mr. Bhagwati still sees free trade as the best was to raise incomes and speed up the long-term development of the world's poorest economies, and he compellingly illustrates why any kind of trade protection -- no matter how noble its intent -- in the end leaves the protected and the protected against worse off. And unlike many efforts of this kind, it doesn't simply stop at pointing out what's wrong -- it offers many options for improving the current situation.

In the end, In Defense of Globalization is not aimed at partisans on either side of the globalization debate if what they are looking for is information to back up what they already believe. This is a book will make anyone who thinks much about globalization think again ... and perhaps realize they share more than they thought with the opposite side.

How can one resist a book that begins with the phrase, "does the world need yet another book on globalization?" To this saturated topic, Jagdish Bhagwati does not try to force a radical new outlook; rather, he surveys the evidence against each accusation levied by the critics of globalization and ends up producing one of the most elegant, eloquent, and persuasive books in favor of globalization.

One problem that any such book faces is that the anti-globalization movement is rather amorphous, bringing together all sorts of groups that make all sorts of accusations; to get around this, Mr. Bhagwati divides his book into the major themes (the link of economic growth to poverty, of trade to the environment or labor rights, etc), and looks at what the various NGOs are saying against globalization. To his credit, Mr. Bhagwati has considered most of the subtleties, nuances and variations of the NGO arguments.

Having done this, Mr. Bhagwati explains whether and why the NGOs are wrong. Predictably, the NGO fears usually prove exaggerated or simply untrue. To their polemic rhetoric, Mr. Bhagwati answers with anecdotes, news reports and econometric studies. Whether one agrees or disagrees with him, no one can accuse Mr. Bhagwati of brushing aside the critics.

Refreshingly, the book is not an unconditional acceptance of globalization. "In Defense of Globalization" is a defense, but it is not blind to what is wrong about globalization; Mr. Bhagwati is cautious, for example, about uninhibited capital flows; he is also critical about the invasion of intellectual property rights into trade agreements; he is also suspicious of businesses that bribe politicians to alter trade agreements to their favor. And so on.

Yet, his verdict is staunchly pro-globalization. He urges against using trade-curtailing answers to economic problems; he also alerts us that many of the ills identified by NGOs have little to do with globalization ("What has globalization got to do with that?" he writes more than once). More importantly, he offers ideas about how to make globalization better, from managing immigration, to rethinking the trade sanctions, to the role that NGOs ought to play, and many more. Nothing here is new; but he assembles the various ideas that he has pronounced over the years in books, op-ed pieces and academic journals.

There is no doubt that "In defense of globalization" will be the book to beat from now on. No anti-globalization treatise should be published without being able to refute Mr. Bhagwati's arguments. For having elucidated this debate even further, Mr. Bhagwati deserves to be read and to be thanked.

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!

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.

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.

Few issues have stirred such conflict and confusion as "Globalization" in recent years, fueling a spate of ideological battles between governments, international financial institutions, NGOs, protestors and economists. From the fray, Jagdish Bhagwati has produced In Defense of Globalization, a book primarily aimed at dismantling the fears and allegations that have come to be associated with this complex process. Bhagwati's analysis, however, reveals a deep concern for the human side of the burgeoning global equation; it is Bhagwati's challenge, then, to be a non-dogmatic, yet utterly staunch proponent of globalization's promise.

He comes close to succeeding. Ultimately, the book exists to win over critics and skeptics, addressing each of their major fears in turn: child labor, women's rights, the environment, labor standards, political issues and the adverse relationship between national cultures and multi-national corporations. Bhagwati casts these issues as matters largely tangential to globalization - outside issues that may have been exacerbated by trade, "fears masquerading as evidence" (ix).

Confronting these downsides, Bhagwati invariably promotes globalization as a benevolent force, a facilitator of change and purveyor of opportunity. Acknowledging its inherent potential for harm, Bhagwati at once deflects and absorbs the concerns of the opposition - in globalization lie solutions.
While an avowed champion of trade and globalization, Bhagwati does not advocate accelerating the global economy at full-tilt. He recommends that countries enter the currents of world trade at an appropriate speed, rather than attempting to convert their economies in one fell swoop. More notably, Bhagwati balks at allowing the flow of capitol across borders to proceed without oversight and regulation, given the risks this poses to the stability of developing nations (211).

Bhagwati's analysis is at once thoughtful, comprehensive and frustratingly simplistic. Employing a wide array of rhetorical devices - from pop-culture metaphors to personal anecdotes to economic theory - In Defense of Globalization goes to great lengths to make its case. For the most part, its contentions are difficult to refute - globalization does offer an array of gains for all parties, a promise that has already been delivered upon in many parts of the world. Bhagwati's unrestrained optimism, however, threatens to leave the orbit of credibility.

In discussing labor standards, for example, Bhagwati decries the notion of a "race to the bottom" - the prospect that increased competition between industrialized and developing countries would result in declining wages and working conditions. Globalization, he suggests, will instead spark a race to the top, a claim Bhagwati leaves unsubstantiated. Too often, Bhagwati will simply begin to dismantle an opposing argument, then shift the debate into different, supposedly overlooked terrain. In this case, he characterizes the fear of slipping standards as unfounded, then goes further to imply that it is venal - a concern for human rights that masks an anxiety over declining profitability (132). Meanwhile, the idea of a "race to the top" remains dubious and unsupported.

Another contentious section concerns American companies and their lobbying for Intellectual Property Protection. Bhagwati is unflinchingly critical of pharmaceutical companies' demand for full compensation and patent rights in foreign markets. Here, Bhagwati is on firm moral ground; at full prices, poor countries cannot afford to purchase critical supplies of drugs, leaving their citizens untreated for preventable diseases. However, Bhagwati takes this scenario and applies it to industry as a whole; IPP does not in every instance cover such essential types of goods.

Although In Defense of Globalization is neither impartial nor thorough, the book does present a comprehensive look at the ideological and practical complications of globalization. It does not resort to the dread jargon of other economic books, preferring a leisurely, open style that embraces questions and invites speculation. While Bhagwati's ideas may come off as slightly whimsical due to this approach, the effect is probably in his favor. After all, the debate over globalization, in its brief history, has been consistently short on solutions.

The true worth of this book will be known a decade or so from now, as statistics are accumulated and interpreted for those countries who are just now opening their economies to trade, investment, and technology flows. After all, this globalization phenomenon remains, at the present time, relatively new, and most people, though they have a loose understanding of it, do not fully understand its implications for life at home or abroad. In fact, Bhagwati's book is worth buying solely for his explanation of, in addition to, his pronouncements on globalization.

Did Bhagwati write this himself? I ask because I wasn't aware that economists wrote with the wit and charm that the affable Bhagwati exudes here. His book is peppered with colorful tales (such as the one about Indian car manufacturers who, protected from foreign competition in the 1960-80s, built cars of such legendary worksmanship that the only component in the car that didn't make a noise was the horn!) and hilarious one-liners.

Here, briefly, are the book's strengths:

1. He describes globalization's opponents. Bhagwati commences the book by describing two separate groups of people who attack globalization, each with different motives and ferocity. The hard core group often includes those who are, at a deeper level, anti-capitalist and anti-American. This group perceives the spread of globalization as the spread of American-style capitalism and, perhaps, American exploitation of weaker governments and countries. Bhagwati notes that this group is rarely able to back up its impassioned rhetoric with concrete evidence or economic thinking/models. Unequipped to focus on any topic for long, they resort to their loud anti-American and anti-corporate slogans.

2. Certain chapters are very strong, while others give readers the suspicion that Bhagwati either A) doesn't have any persuasive arguments to offer, or B) does but lacked the enthusiasm to lay them out. In the weaker chapters, one pictures the aging economist slipping on his bed clothes, packing his notes and models away, and yawning something about a promise to make amends in later chapters.

In particular, I felt his chapters on poverty and culture were his best, while his declarations on child labor and women's issues were lacking.

Bhagwati explains the correlation between economic growth and poverty reduction, and he is superb at explaining the underlying economics for the layperson. The reader cannot help but be convinced that outward-oriented economies do better (much better) because they gain from trade, improved resource allocation, foreign investment, and technology transfers. I doubt that Bhagwati uses the economic literature selectively, so it appears that the performance of India, China, Taiwan, South Korea, Singapore, and others robustly back up the economic theory.

But, as I said, other chapters scream for more evidence and discussion. As far as I can tell, Bhagwati's defense against those who charge globalization with perpetuating and enlarging child labor is a single study done in Vietnam. This study found that when Vietnam opened itself more to trade, the prices received for a few Vietnamese commodities rose, allowing Vietnamese parents to substitute increased income for their children's labor. I would have liked to hear more.

There are other highlights and lowlights I might mention, but won't. Bottom line is that the book is sound and it's an essential piece for those wanting to understand globalization better. His scope is broad and he concludes with some policy recommendations, which was nice. His treatment of globalization is fair, and he seems aware of its downsides and opportunities for improvement through better governance and institutional design. Ok!

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.

This is a solid, although biased, introduction to globalization. Bhagwati defends many practices associated with the general term "globalization." He offers reliable explanations based in mainstream economics for why globalization works. He also is critical of certain aspects of globalization, especially issues related to "hot money" financial flows.

The book is informative and relatively comprehensive. Unfortunately, Bhagwati has the unfortunate habit of too frequently taking aim at strawman arguments and being far to dismissive of opposing points of view. Thus, this book is likely to contribute little to changing anyone's mind over globalization. Another unfortunate aspect of the book is that the author's often goes out of his way to take potshots and levy gratuitous insults at his opponents. This adds nothing to the debate. Furthermore, the book could have used another round of editing to cut out many unnecessary passages and anecdotes.

Overall, Bhagwati serves up a comprehensive look at many of the issues associated with globalization and the book should be read for that reason. However, once one has read this book it would be wise to move on to authors less interested in polemics.

Bhagwati's(B)book is mistitled.Based on the actual content of the book,the correct title would be"The Pros and Cons of Globalization:How we can improve the process of globalization".B in fact presents a number of sound points that anti-globalists make,such as one of the points made by Adam Smith in 1776:"...freedom of trade should be restored only by slow gradations,and with a good deal of reserve and circumspection.Were these high duties ...taken away all at once,cheaper foreign goods might be poured so fast into the home market,as to deprive all at once many thousands of our people of their ordinary employment and means of subsistence.The disorder..might no doubt be very considerable".(Smith,1776,pp.435-436,The Wealth of Nations).The two qualifying comments that Smith appends to this discussion on the rest of p.436 apply only to the developed countries of Europe and NOT to the underdeveloped countries of the rest of the world.Finally,Smith concludes that"To expect...that the freedom of trade should ever be entirely restored in Great Britain,is as absurd as to expect that an...Utopia should ever be established in it.Not only the prejudices of the public,but what is much more unconquerable,the private interests of many individuals,irresistibly oppose it."(Smith,1776,pp.437-438).Of course,what Smith is talking about when he mentions the words"free trade" is the theory of comparative advantage.One of the most important conditions required to operationalize the theory of comparative advantage and guarantee the benefits of free trade to all trading countries is that there be no emigration or immigration of labor or capital(physical or financial)between countries.The result of the theory of comparative advantage is that both trading countries win,some more than others.If this condition is not satisfied,then you have a situation of absolute advantage,which means that one country wins and the other country loses.Much of the pro-globalization argument is based on the skewed gains that result from absolute advantage and not comparative advantage.Unfortunately, B does not make this point clearly in his book when he talks about the need to restrict financial flows of capital between countries.B also needed to be clear that it is the private sector multinational corporations that are playing games with the free trade argument,supporting it when they gain,but opposing it when they see some future ,expected losses.Smith coundn't have been more clear on this.