Monday, 27 October 2003

Why we should fight anti-globalists

Back in 1936, Liberal economist F.A. Hayek received a new book from a
colleague, and contemplated writing a detailed criticism of it, but in the
end decided against it. The theories in it were too flawed and incoherent,
he thought, so no one would take them seriously. Surely the author himself
would soon change his mind. Why waste time that could be used to develop his
own thoughts?

The colleague was John Maynard Keynes, and the book was the General Theory
of Employment, Interest and Money. When Keynesianism conquered the world’s
economic ministries one by one, Hayek regretted his decision for the rest of
his life.

We risk repeating Hayek’s error when we choose not to take anti-globalists
seriously. Many serious thinkers adopt this approach, however. Typical are
the comments of a trade economist who told me that it was a great waste of
time to confront anti-capitalists. They are guided by ideology and not
facts, and do not understand economic principles, so reasonable arguments
won’t change their minds anyway.

This argument is fine as far as it goes, but it misses the point that
anti-globalists must be met head on not to convince them, but to make sure
they don’t convince others. If they are not challenged in a public debate,
their confused views will guide all public policy soon.

People and politicians in general get their knowledge from the media, not
from university economic departments. And if the media is filled with the
likes of Naomi Klein, John Pilger and Ralph Nader every day, the public will
come to share their perspective. Anti-capitalist NGOs have already given
politicians an excuse to ban genetically modified organisms, they have given
intellectual property rights a bad name and they regularly humiliate
corporations, which all too often react to public criticism by quickly
apologizing for doing what all companies should do, try to make money.
Anti-capitalist NGOs also contributed in their way to the collapse of the
WTO talks in Cancun. They had helped to radicalize developing countries so
that in the end officials from these countries refused to offer lower
tariffs on manufactured goods in exchange for agricultural liberalization.
Slowly but steadily these groups gain a bigger influence in–and more
resources from–institutions like the U.N. and the World Bank. In these
institutions’ headquarters you can nowadays count more NGO-activists than

But the long-term influence of the movement goes beyond even these immediate
events. Anti-capitalists are changing the intellectual climate among the
young and the students in the West. Being anti-market is today the “in”
position; it is fashionable whereas globalization is associated with
bureaucracies like the EU and the IMF. According to surveys, globalization
(that is, free interaction in data, products, etc., between the people of
the world) is now associated with negative connotations among the young in
Europe and America.

Some market advocates reassure themselves that at bottom this is all about
trade policies, and that the anti-globalists are no different from other
traditional protectionist forces, and therefore won’t have a more dramatic
effect. But that is a misconception. The globalization debate is not
primarily about tariffs and quotas, it is about corporations, taxes, capital
movements, regulations, environmental policies, privatization, etc. If we
ignore the discussion of today, we lose the battle of tomorrow.

Right now a young generation in its formative years spends its time at
seminars or with books that teach them to distrust private enterprise and to
believe in the state’s ability to save the world. And they happen to be the
best educated students, in the best universities, from the better-off
families. They are right now commencing their long march through the
institutions. In a few years we will meet them as professors, as politician,
as journalists and editors. This is the same process we saw after the
student revolts in the late 1960s.

But this is not inevitable. The excitement that we saw over globalization in
the 1990s was due in part to the fact that, for the first time in years, a
broad public had become interested in the global economy and its effects.
That should have been a golden opportunity to explain the complex process
that is the market economy. When there was a growing attention to poverty
issues, people were willing to listen to the explanation that global poverty
and hunger have been reduced faster in the era of globalization than ever
before in world history, and that it happened fastest in countries that
opened themselves to trade with the outside world.

We can rekindle this excitement if we meet anti-globalists in public forums.
But apart from such trade economists as Columbia University’s Jagdish
Bhagwati, who does an important job as a traveling salesman for traveling
salesmen, the free traders have been mostly notable for their absence. The
intellectual plane was slowly ceded to the anti-capitalists.

My personal experience from meetings and debates with anti-globalists is
that–if you can stand being booed and hissed at–it’s worth meeting them
head on in public debates. If you keep pointing to the facts, most people in
the audience will be willing to listen. You can’t be disappointed that your
opponent does not change his mind, you’re not there for him but for those
spectators who are intellectually open and have a sincere interest in the
issues. If you are not there, they will only have the anti-capitalists to
listen to. Often times they have not rejected the pro-capitalist
arguments–they just have never heard it. Hayek is not precisely required
reading in their curricula.

And one should not even give up on the anti-globalists themselves. My
experience debating and challenging anti-capitalists has taught me that,
once intellectually pushed, many of them do try to think up more
constructive solutions to the problems they point. Many leave much of the
anti-capitalist rhetoric behind. Some can even be converted to the wisdom of
the free-market position.

One of the leading European anti-capitalists, George Monbiot, recently
admitted that the protectionism and emphasis on local production he defended
in the past would make poor nations even poorer. In time for the
WTO-meeting, the British left-wing paper the Guardian started a web site
against agricultural subsidies. And the biggest campaign against rich
country protectionism and the EU’s common agricultural policy has not been
organized by free trade economists, but by the development and relief
organization Oxfam. Many traditional anti-globalists have been influenced by

The direction in which this movement will go in the future will depend on
the extent to which its activists are confronted and forced to be
constructive. And that’s important if we are interested in what kind of
perspective the young generation is going to be influenced by. As Keynes put
it at the end of the General Theory: “soon or late, it is ideas, not vested
interests, which are dangerous for good or evil.”

Johan Norberg

Mr. Norberg, author most recently of “In Defense of Global Capitalism”
(Cato), debates anti-globalists throughout the globe.
Wall Street Journal Europe, 22 October 2003