31st August 2001
The following article from London's Financial Times promoting
a sustainable globalisation really reflects a break in the ranks
of the proponents of globalisation and so-called free markets,
one of which used to be the Financial Times itself. The pious
hopes of Philip Steven for globalisation with a human face will
go the same way as those who promoted socialism with a human
face, into the history books. In the end, all dogma is self-serving
and all of it is inferior to compassion and the ethical creed
of fairness, both of which.
Corporations Are Losing the Globalization Debate, August 17,
2001, Friday London Edition - Financial Times. A poor case for
globalisation: The world's leaders are failing to address legitimate
questions raised by protesters about the effects of global capitalism,
by PHILIP STEPHENS
The protesters are winning. They are winning on the streets.
Before too long they will be winning the argument. Globalisation
is fast becoming a cause without credible champions. This week
we saw the Washington consensus make way for Washington's retreat.
The International Monetary Fund and the World Bank are scaling
back the annual jamboree at their headquarters in the US capital.
It seems that the US has had its fill of angry protests a few
blocks from the White House. It's a nice irony. The US can count
itself author, architect and principal beneficiary of globalisation.
Guided by the US Treasury, the IMF sets the rules of the multilateral
game. Now both are bowing before the critics of liberal capitalism.
no great harm will come of the IMF's decision to meet over two
days rather than a week. The opulence of the event has always
jarred. Happily, a tight timetable should deflate a few egos
and shorten the speeches. We shall not miss the save-the-world
rhetoric of all those finance ministers. Who cares if the champagne
stays corked, the canapes uneaten? It is, though, more serious
than that. The organised uproar and violence that the anti-globalisation
protests brought to Seattle back in the autumn of 1999 have
now become a permanent backdrop. The numbers of protesters have
swollen. Italy has still to recover from the - albeit mostly
self-inflicted - wounds of the Group of Eight summit in Genoa.
Belgium, the current president of the European Union, fears
similar chaos at December's Laaken summit of EU leaders. The
political kudos that once came with playing host to such gatherings
has been replaced by the fear that all they bring now is a bad
Yet the response to the protests has been largely one of spluttering
indignation. Instead of listening, even learning, the politicians
have lectured. The knee-jerk response has been to tar all the
critics with the brush of thuggery. The tone is hectoring. Liberal
markets are good for us, all of us. Anyone who says otherwise
is a subversive or a fool. Free trade is an unalloyed blessing,
for poor countries as well as rich. The multinational behemoths
bring precious investment to developing nations.
are important truths in all these propositions. It is obvious,
too, that the counter case is often shot through with confusions
and contradictions. These are people, after all, who are waging
a global war against globalisation. The anarchists have no need
of consistency. But the broader coalition often seems just as
inchoate. Non-governmental organisations want the multinationals
tamed. Governments must reclaim the sovereignty lost to unaccountable
and unscrupulous business executives. The IMF, the World Trade
Organisation and the rest are agents of a new imperialism. And
yet then we hear the protesters call for new global rules to
protect the environment and prevent exploitation of labour.
Self-interested trade unions stand with self-proclaimed idealists
in demanding that rich nations protect jobs by imposing their
own labour standards on poor ones. Somewhere in all this there
is a cry for a different set of values. It is often hard to
find, (sic) constituency stretches well beyond the mostly young
activists we see on the streets. Many who abhor their tactics
share their unease.
Globalisation is unsettling, for the comfortable middle classes
as much as for the politically disaffected. The threats, real
and imagined, to national and local cultures are widely felt.
So, too, are the unnerving shifts in the boundaries between
governments, business and multilateral institutions. As consumers
we are stronger; as citizens, weaker. International economic
integration does generate wealth. It also redistributes it.
There are losers as well as winners. In good times, unfettered
capital markets funnel rich-nation finance to the poor countries
that need it. In bad times they carry the curse of contagion.
Shareholder value is a fine concept for those who own those
giant corporations. But what of those who merely toil for them?
As Stanley Fischer, the thoughtful, though soon-to-depart, deputy
managing director of the IMF, has said, free trade can indeed
make everyone better off. But that does not mean that everyone
is made better off. What it does mean is that it is not enough
for political leaders to dust off the economic textbooks, recite
a few mantras about comparative advantage and the division of
labour and expect the rest of us to applaud. The case for liberal
markets is not self-evident.
is required from advanced nations is a mixture of humility and
leadership. (These two, incidentally, are not mutually exclusive.)
A starting-point would be an admission that they have often
got it wrong. The afore-mentioned Washington consensus imposed
on developing nations the liberal economic orthodoxy of the
times. These one-size-fits-all adjustment programmes ruined
more fragile economies than they repaired. But they bailed out
the west's banks. Governments caught up in the financial brush
fires of the 1990s were told to slash spending on health and
education. Such policies were as economically foolish as they
were socially destabilising. But US banks got their money back.
Western politicians may also admit that trade liberalisation
has been skewed to their advantage. Developing nations have
been pressured to open their markets. Rich ones have kept the
doors slammed shut to their agricultural products and textiles.
There is only one ground on which these politicians can successfully
engage with the protesters. Globalisation, they should shout
from every rooftop, is a means. There is no intrinsic merit
in capitalism without frontiers. The purpose is to raise everyone's
Global capitalism, they should then proclaim, requires civilising
rules. It must be seen to be fairer. Poor countries cannot pay
rich nations' wages - but the weakest must be helped and multinational
corporations must observe basic standards of human decency.
Advanced economies must lead by example and open up their markets.
And yes, we all benefit from strong international institutions
- as long as they represent a mutual not a single interest.
The champions of liberal markets are in full retreat. There
is only one way they can make themselves heard again over the
angry shouts of the protesters. They must stop making the case
for globalisation - and start fighting the cause of better globalisation...