GLOBAL ECONOMIC VIEWPOINT
10 THESES ON GLOBALIZATION
By Amartya Sen
CAMBRIDGE -- Doubts about the global economic order, which extend far beyond organized protests, have to be viewed in the light of the dual presence of abject misery and unprecedented prosperity in the world in which we live. Even though the world is incomparably richer than ever before, ours is also aworld of extraordinary deprivation and of staggering inequality.
We have to bear in mind this elemental contrast to interpret widespread skepticism about the global order, and even the patience of the general public with the so-called ``anti-globalization'' protests, despite the fact that they are often frantic and frenzied and sometimes violent. Debates about globalization demand a better understanding of the underlying issues, which tend to get submerged in the rhetoric of confrontation, on one side, and hasty rebuttals, on the other. Some general points would seem to need particular attention.
1. Anti-globalization protests are not about globalization: The so-called ``anti-globalization'' protesters can hardly be, in general, anti-globalization, since these protests are among the most globalized events in the contemporary world. The protesters in Seattle, Melbourne, Prague, Quebec and elsewhere are not just local kids, but men and women from across the world pouring into the location of the respective events to pursue global complaints.
2. Globalization is not new, nor is it just Westernization: Over thousands of years, globalization has progressed through travel, trade, migration, spread of cultural influences and dissemination of knowledge and understanding (including of science and technology).
The influences have gone in different directions. For example, toward the close of the millennium just ended, the direction of movement has been largely from the West to elsewhere, but at the beginning of the same millennium (around 1000 A.D.), Europe was absorbing Chinese science and technology and Indian and Arabic mathematics. There is a world heritage of interaction, and the contemporary trends fit into that history.
3. Globalization is not in itself a folly: It has enriched the world scientifically and culturally and benefited many people economically as well. Pervasive poverty and ``nasty, brutish and short'' lives dominated the world not many centuries ago, with only a few pockets of rare affluence. In overcoming that penury, modern technology as well as economic interrelations have been influential. The predicament of the poor across the world cannot be reversed by withholding from them the great advantages of contemporary technology, the well-established efficiency of international trade and exchange, and the social as well as economic merits of living in open, rather than closed, societies. What is needed is a fairer distribution of the fruits of globalization.
4. The central issue, directly or indirectly, is inequality: The principal challenge relates in one way or another to inequality -- between as well as within nations. The relevant inequalities include disparities in affluence, but also gross asymmetries in political, social and economic power. A crucial question concerns the sharing of the potential gains from globalization, between rich and poor countries, and between different groups within countries.
5. The primary concern is the level of inequality, not its marginal change: By claiming that the rich are getting richer and the poorer getting poorer, the critics of globalization have, often enough, chosen the wrong battleground. Even though many sections of the poor in the world economy have done badly (for a variety of reasons, involving domestic as well as international arrangements), it is hard to establish an overall and clear-cut trend. Much depends on the indicators chosen and the variables in terms of which inequality and poverty are judged.
But this debate does not have to be settled as a precondition for getting on with the central issue. The basic concerns relate to the massive levels of inequality and poverty -- not whether they are also increasing at the margin. Even if the patrons of the contemporary economic order were right in claiming that the poor in general had moved a little ahead (this is, in fact, by no means uniformly so), the compelling need to pay immediate and overwhelming attention to appalling poverty and staggering inequalities in the world would not disappear.
6. The question is not just whether there exists some gain for all parties, but whether the distribution of gains is fair: When there are gains from cooperation, there can be many alternative arrangements that benefit each party compared with no cooperation. It is necessary, therefore, to ask whether the distribution of gains is fair or acceptable, and not just whether there exists some gain for all parties (which can be the case for a great many alternative arrangements).
As J.F. Nash, the mathematician and game theorist, discussed more than half a century ago (in a paper called ``The Bargaining Problem'' published in Econometrica in 1950, cited by the Royal Swedish Academy in awarding him the Nobel prize in economics), in the presence of gains from cooperation, the central issue is not whether a particular joint outcome is better for all than no cooperation (there are many such alternatives), but whether it yields a fair division of the benefits. To consider an analogy, to argue that a particularly unequal and sexist family arrangement is unfair, it does not have to be shown that women would have done comparatively better had there been no families at all, but only that the sharing of the benefits of the family system is seriously unequal and unfair as things are currently organized.
7. The use of the market economy is consistent with many different institutional conditions, and they can produce different outcomes: The central question cannot be whether or not to make use of the market economy. It is not possible to have a prosperous economy without its extensive use. But that recognition does not end the discussion, only begins it. The market economy can generate many different results, depending on how physical resources are distributed, how human resources are developed, what ``rules of game'' prevail and so on, and in all these spheres, the state and the society have roles, within a country and in the world. The market is one institution among many. Aside from the need for pro-poor public policies within an economy (related to basic education and health care, employment generation, land reforms, credit facilities, legal protections, women's empowerment and more), the distribution of the benefits of international interactions depends also on a variety of global arrangements (including trade agreements, patent laws, medical initiatives, educational exchanges, facilities for technological dissemination, ecological and environmental policies and so on).
8. The world has changed since the Bretton Woods agreement: The international, economic, financial and political architecture of the world, which we have inherited from the past (including the World Bank, the International Monetary Fund and other institutions), was largely set up in the 1940s, following the Bretton Woods Conference in 1944. The bulk of Asia and Africa was still under imperialist dominance then; tolerance of insecurity and poverty was much greater; the idea of human rights was still very weak; the power of NGOs (non-governmental organizations) had not emerged yet; the environment was not seen as particularly important; and democracy was definitely not seen as a global entitlement.
9. Both policy and institutional changes are needed: The existing international institutions have, to varying extents, tried to respond to the changed situation. For example, the World Bank, under James Wolfensohn's guidance, has revised its priorities. The United Nations, particularly under Kofi Annan's leadership, has tried to play a bigger role, despite financial stringency.
But more changes are needed. Indeed, the power structure underlying the institutional architecture itself needs to be reexamined in the light of the new political reality, of which the growth of globalized protest is only a loosely connected expression.
The balance of power that reflected the status quo in the 1940s also has to be reexamined. Consider the problem of management of conflicts, local wars and the spending on armament. The governments of Third World countries bear much responsibility for the outrageous continuation of violence andwaste, but also the arms trade is encouraged by world powers, that are often the main sources of armament export. Indeed, as the Human Development Report of the 1994 U.N. Development Program pointed out, not only were the top five arms-exporting countries precisely the five permanent members of the U.N. Security Council, but also they were, together, responsible for 86 percent of all the conventional weapons exported during the period studied. It is not hard to explain the inability of the world establishment to deal more effectively with these merchants of death.
The recent difficulties even in getting support for a joint crackdown on illicit arms (as proposed by Kofi Annan) is a small illustration of a big obstacle related to the global power balance.
10. Global construction is the needed response to global doubts: The anti-globalization protests are themselves part of the general process of globalization, from which there is no escape and no great reason to seek escape. But while we have reason enough to support globalization in the best sense of that idea, there are also critically important institutional and policy issues that need to be addressed at the same time. It is not easy to disperse the doubts without seriously addressing the underlying concerns that motivate those doubts. That, at any rate, should not come as a surprise.
(c) 2001, Global Viewpoint. Distributed by Los Angeles Times Syndicate International, a division of Tribune Media Services.
For immediate release (Distributed 7/12/01)