In Defense of Globalization: With a New Afterword

Book review: In defense of globalisation By: jagdish Bhagwati Vartika Singh M.A Development Studies Tata Institute of Social Sciences, Mumbai Introduction: The author: Jagdish Bhagwati has done his PhD from Massachusetts Institute of Technology, has also served as an external advisor to the Director General of the WTO in 2001, as a special policy advisor on globalization to the UN in 2000 and has held many such important positions. He currently serves on the Academic Advisory Board of the Human Rights Watch (Asia) and on the board of scholars for Centre for Civil Society. In 2006, he was awarded Japan's Order of the Rising Sun, Gold and Silver Star among various awards of the top notch category. He writes frequently for The New York Times, The Wall Street Journal, and The Financial Times and is the author of Free Trade Today, The Wind of the Hundred Days: How Washington Mismanaged Globalization, and A Stream of Windows: Unsettling Reflections on Trade, Immigration, and Democracy. He has authored more than five hundred volumes and three hundred articles and among others is his famous book called India: Planning for Industrialisation, joint 1970 OECD with Padma Desai, his wife. The book: The book “In Defense of Globalisation” comes at a time when the protests against this very phenomenon are at the peak and not a day goes by without impassioned authors and activists’ involvement in debates on globalisation. This book marks a contrast with the other famous books written on the same topic in the sense that it seeks to provides a coherent, clear and comprehensive sense of how globalisation works and how it might be made to work better. And who else other than Bhagwati fits the chair. The prolific writer that he is, he has very successfully made efforts to link Shakespeare and Lady Murasaki with Karl Marx and John Maynard Keynes. In this book, he takes on each and every aspect of the globalisation’s critics and uses sound economic principles rather than mere rhetoric to show that if fully utilised, globalisation is the most powerful weapon of social integration in the world today. And his arguments to all the questions make for a supremely worth read. According to Flakmagazine, it is not just another addition to the shelf of books on globalisation, rather it has been commendably written, is level headed and reassuring. Armed with a wit, uncharacteristic of most writers on economics and drawing on references from history, philosophy and literature as well as some 'state of the art econometric analysis,' he is out to prove that the anti-globalization movement has exaggerated claims that globalization has done little good for poor countries. And no matter which group the reader belongs to, he/she is sure to fall into the arguments that the author has very aptly set up, and for those who wish to know what’s at stake in the globalisation wars, are bound to end up satisfied. In this review I have undertaken a topic wise analysis of the issues that the author mentions and at the same time tried to link up with the views of other eminent authors, like Joseph Stiglitz, Anthony Giddens and various others, on the same issues. The first section deals with the issues regarding the enthusiasm about globalisation and anti-globalisation sentiments across the world. To begin with, first and foremost he questions the reasons behind the rise of anti-globalisation protests. Bhagwati defines globalisation as an “integration of national economies into the international economy through trade, direct foreign investment, short-term capital flows and flow of workers and humanity generally”, that is aimed at benefiting all the economies at the same time through increased levels of technology, spread of drugs and media etc. But he also points to an important difference between free trade and free capital flows. Though these are very parallel in their processes, they give very different results when implemented. Freeing capital flows in a haste without establishing regulatory

this book is laid out as a presentation of some of the negative perceptions (and misperceptions) about economic globalization with respect to trade with systematic and considered refutations. the premise is given that economic globalization is "good" as it is aimed at alleviating poverty - a blight that has proven to be stubbornly resistant to economic equalization (i.e. socialism) in many different contexts. the book aims at defending globalization against the charge that it is social unjust - rather as bhagwati argues, it is socially benign and even helpful; globalization has a "human face". bhagwati very skillfully dissects the charges of social injustice promulgated by economic globalization - he concedes that in some situations the charge is founded (for example migrant workers, human trafficking) and even remarks that significant swaths of the poor are not even connected to the official economy and are unable to reap benefits of increasing trade flows - a point that undermines a primary rationale presented for economic globalization. however, overall the picture that is painted is much more detailed and compelling that export-oriented economies can help alot of poor people. the politics of globalization is also addressed with some alarming insight into the murky world of the NGO. clearly not all NGOs are made equal - only a few NGOs from rich nations are able to effectively lobby corporations and politicians and so their agendas dominate. millions of NGOs in the poor countries are connected via a rather tenuous solidarity to those in better situations. the triumph of the microcredit industry is a wonderful example where the poor NGOs have been able to shortcut this whole setup. overall however, domestic interests all too often are at work in slowing progressive liberalization of trade. specific trade-related difficulties with the bretton woods institutions are sketched out. the IMF's role in the asian financial crisis is explored and the world bank's reputation for loaded conditionality on their measures is also explored rather negatively as it seems a chance to take a swipe at joseph stiglitz. however, the WTO gets the most attention for bowing to corporate interests (software and pharmaceuticals) with the inclusion of TRIPs. The big message here is that TRIPs is a hijacking of the WTO's dispute resolution mechanism; a departure that could prove fatal for the efficacy of the WTO as a whole. some interesting economic theory is also presented - bhagwati's own "growth immiseration" paradox, for example, where an exporting nation can saturate a market causing the price to go down and reduce the overall gains made. another is the "ladders of comparative advantage" which is wonderfully exemplified by the waves of export-orientation experienced by first japan, the NIE (vietnam, south korea, etc.), china and now the new players like the phillipines and indonesia. some of the economic statistics are just staggering. one that comes to mind: in the 70s, 10%+ of the world's poor came from africa and 70%+ came from asia. 20 years later, this has reversed with 60%+ of the world's poor coming from africa and 20%+ from asia. trade has an ethical dimension. two examples: is it ethical to trade with dictatorial regimes; do rich nations become enablers? is it ethical to trade with producers in egregiously gender-biased communities (where reports of males spending newfound wealth on booze instead of their families have surfaced)? i think bhagwati sees that trade is the first step in a wider engagement and that reflexive sanctions are the worst climate in which to make any progress towards international social norms. the first part of the book is an excellent mix of argument and evidence-backed economics. myths regarding the race to the bottom with respect to environmental policy and labour wages are demonstrated to not correspond with reality (the issue of which country offers competitive advantage to a multinational is very complicated and one

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