Tuesday, November 9, 2010
I am a huge proponent of globalization. In theory, nothing would be better than to tear down the borders, open up trade among all people, extinguish prejudice, xenophobia and bias based merely on tradition, and to embrace one another as part of the same human family in a loving global hug. Yet my bets are against that happening in my lifetime, although I will work toward that aim. The reality is, regardless of what our righteous brethren in their lofty ivory towers would like to theorize, there are real differences between what we see in charts, graphs and numbers and the real people they represent. When we stand on the ground and view the world through our own eyes rather than our rose colored glasses, it gets hard to swallow the sewage ridden rhetoric that pure capitalism tries to force feed us with its invisible hand. I was very happy to read that Mr. Bhagwati realizes this and gives appropriate consideration to the fact that market failures do exist and need to be corrected by a visible hand. The only thing that I really don’t agree with in this article was that there seems to be a blurred line between short-run and long-run change. The assertions that these positive outcomes can exist with a free global market, one that can never be adequately controlled by a government, makes grandiose assumptions about both the will of the people and a non-existent (or negative) time preference. It also avoids the simple fact that although the number of available labor hours for hire is not finite, the resources that require labor to become outputs are. As Malthusian as it sounds, if we were able to achieve globalization, then at some point we would have to revert to protectionism to avoid poverty ourselves. That's not to say that we shouldn't push in that direction. We should just realize that there is a reality beyond our ideological views.