Virgil Henry Storr (May 2003)
Some thoughts on globalization and the free market.
Anti-globalization has evolved into a veritable religion, a religion that’s quite catholic in its aspirations. Parishioners of the church of anti-NAFTA, the church of anti-WTO, are as diverse a congregation as you’ll find anywhere. Usually these groups would be at each others throats but, in the temple of anti-free trade, white-supremacists and human rights activists, polluters and environmentalists, anti-abortion groups and feminists worship comfortably alongside one another. Clearly, some of these groups are not like the others. How can we make sense of this strangeness? Why, for instance, do the Pat Buchanans think that globalization will ruin America (costing Americans jobs and the American economy its robustness) while the Arundhati Roys think that globalization is all about American hegemony, American colonial aspirations, American exploitation of blacks and browns, American greed, American profits?
Well, it’s either that the Good Guys or the Bad Guys or (as I’ve concluded) that all sides have simply gotten it wrong (likely for different reasons). The Bad Guys (most of them) are simply misinformed. That Americans and America are, on net, made better off by globalization is unarguable, no matter how we do the arithmetic. In the 90s, as Clinton opened trade borders and pushed free-trade initiatives (the North Atlantic Free Trade Agreement, the World Trade Organization and bi-lateral agreements with a host of countries) with the same intensity that Bush, et al, push war, the American economy soared, American businesses got access to foreign markets, goods in America got cheaper, more Americans found jobs. Yes, some American industries declined and some disappeared altogether but others thrived and much more (and higher paying) jobs were created than were lost (that’s simply a fact).
Yes, I hear the Good Guys saying from their perch, the globalization train has served this country well on net but, they continue, the gains have been disproportionately captured by the rich and it has come on the backs of poor people (usually brown and black hued people) in Latin America and Africa and Asia and Eurasia and even in America. There’s something to that. The rich have gotten much richer over the last few years and the gap between the rich and the poor has become an abyss. Unfortunately, this has a lot more to do with the success that anti-globalization forces have had in holding back the globalization train than it has to do with the failure of the market to deliver the goods (if you’ll pardon the pun). In the fight against truly free-trade and truly free-markets, the anti-globalization movement has been the unwitting pawn of big business.
The Enrons, the Bechtels, the WorldComs and their champions in the Republican Party want free trade even less than the Steel Workers Unions and the Greenpeaces do. Why? Because markets are the only effective check on corporate greed, corporate excesses, corporate profits and corporate power. Being pro-business is not synonymous with being pro-markets; in fact, those two positions are diametrically opposed to each other.
Trade, in its most basic form, is simply two people agreeing to voluntarily exchange goods or services. We’re all familiar with this kind of relationship: I’ll give you my three white marbles if you give me your cat’s eye rainbow marble. Markets are these types of relationships, the African bazaar, the West Indian open air market, the Arabian souk, the Latin American mercado, writ large. It’s when corporations begin filling their pockets with politicians, bureaucrats and regulators, it’s when states sponsor monopolies, it’s when access to capital and credit get restricted, it’s when the IMF and the World Bank assume they know best that markets become pernicious. Oh, and btw, it’s when markets become corrupted that free-market activists cry the loudest.
Multinationals, on the other hand, want government subsidies and preferential tax treatment at home and abroad; they like environmental and other regulations which make it harder and more expensive for competitors to check their ability to bilk customers and underpay workers; multinationals love exclusive contracts with foreign governments to exploit natural resources. In this way, the so-called ambassadors of globalization are but modern day, networked and satellite telephoned versions of the East India Corporation and the British South Africa Company, with one dramatic exception. Although the colonizers talked endlessly about their bringing civilization, education, religion and ultimately freedom to the colonized, everyone, the colonized in particular, saw right through those pronouncements. Everyone, for instance, recognized that when the British said they were bringing civilization what they really meant was that they were engaged in brutal, beastly, bloody conquest. Multinationals, however, seem to have convinced the world that what they’re promoting is actually free-trade and free-markets. The Good Guys have a legitimate beef with someone but it’s not with markets. They’re aiming at the wrong target and what’s worse they’re helping the big-businesses that they hate so much.
But . . .
And this but, is a particularly troublesome one.
Not only do markets make us richer, free market advocates aver, but they are more just than any other kind of economic relationship. I’ll give you my three white marbles if you give me your cat’s eye rainbow marble, remember? Only I get to decide what I will and will not do with my self and my stuff, so long as no one else’s rights are violated. Being free and having my property rights respected are, thus, synonymous in this schema.
Although free market advocates like to think that the moral case for free markets (built on a respect for property rights) is as compelling an argument as the pragmatic case (that markets are beneficial), I’m not so sure. Respecting property rights is all well and good if the existing regime of property ownership is legitimate but if it’s illegitimate, if property was got through theft, through corruption, through racial privilege, through, say, colonial conquest, then that’s another matter. Markets don’t correct this sort of injustice in fact they perpetuate it, they have no way of compensating the victims, no mechanism for disbursing reparations. And, so its no wonder that the Good Guys (however misled they are about the economics of free trade) are deeply suspicious of markets.
Jamaica Kincaid, in A Small Place, made the point quite brilliantly. “Do you know why people like me are shy about being capitalists? Well, it’s because we, for as long as we have known you, we were capital, like bales of cotton and sacks of sugar, and you were the commanding, cruel capitalists, and the memory of this is so strong, the experience so recent, that we can’t quite bring ourselves to embrace this idea that you think so much of.” Let me make the point another way. If I were to walk into a room full of people and rob them at gun point, it’s unlikely that I’d be able to convince them that now, after my crime, we should respect each others property rights and only engage in voluntary exchanges going forward. And even if I were to convince them, perhaps by gun point as well, they’re not likely to be happy about it. Certainly, any moral case for establishing a free market that I attempted to make in that room under those circumstances would be sensibly rejected.
Yet that’s what so many black and brown hued people around the world are being asked to do by free market advocates. Never mind that you’re renting land that would have been yours had it not been stolen a hundred years ago, never mind that your employer is educated and wealthy and that you’re not largely because for generations his ancestors denied opportunities to yours, never mind past injustices, let’s do the best we can given the current allocations of resources. In a phrase, that’s morally bankrupt.
The case of Zimbabwe comes to mind. We all know what happened there. Mugabe anxious to hold onto power and nervous that he would lose an impending election (which in the end he simply decided to steal) tried to excite his base by suggesting that they re-appropriate the land that was stolen from them during colonialism by Zimbabwe’s white settlers. Now, Mugabe only cares about Mugabe but his base is comprised mostly of veterans of the war for Zimbabwean independence, the war that kicked the British government out of what was then called Rhodesia. They fought for Zimbabwean freedom and so it is not surprising that his suggestion resonated. After all, the continued presence and prominence of these white settler farmers was proof that the war had not achieved all of its objectives.
So the veterans took up Mugabe’s charge and began “seizing” the land from the “enemies of the state” as Mugabe termed the white farmers. And, as the white farmers (and virtually everyone but Mugabe) predicted, the economy of Zimbabwe collapsed. 80% of Zimbabwe’s labor force is unemployed and inflation is over 220 percent (that is, the prices of goods more than triples every year). Both food and foreign exchange are scarce. The white farmers’ claim to the land may have been illegitimate but the veterans’ seizing of the land was improvident, and not just because of the way they did it.
To be sure, if the Zimbabwean case does anything, it reminds us that the moral arguments in favor of redistribution are usually overwhelming. Colonialism was a damnable injustice. Think humans as chattel. Think the hut tax. Think home guards. Think abject poverty. Think landlessness. But, the Zimbabwean case also reminds us that redistributive land reform (whatever the method) has never succeeded, at either equitably redistributing the land or at improving the economic prospects of the country engaged in the effort. Think Brazil. Think India. Think Mexico. Think the Philippines. Think Korea. Think Taiwan.
Perhaps . . .
And this conclusion is a particularly unsatisfactory one.
Perhaps there is simply no way to really redress past injustices. Perhaps reparations, in any meaningful sense, are impossible. Perhaps, what we focus on instead is building a world where access to capital and information are guaranteed, where obstacles to opportunity are dismantled, where markets are genuinely free. At least then our futures might look better than our pasts.