Ten Theses On Globalization
AMARTYA SEN, MASTER OF TRINITY COLLEGE, CAMBRIDGE, WAS AWARDED THE NOBEL
PRIZE FOR ECONOMICS IN 1998.
Over thousands of years, globalization has progressed through travel, trade,
migration, spread of cultural influences and dissemination of knowledge and
understanding.
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 a world 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 socalled “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, Genoa 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
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
AD), 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
Econmetrica 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 PRODUCT 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 exchange, 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 (nongovernment 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 and waste, 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 1993 UN
Development Program pointed out, not only were the top five arms-exporting
countries precisely the five permanent members of the UN 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 anti-globalization protests are themselves part of the general process of
globalization, from which there is no escape and no grate reason to seek escape.
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 antiglobalization 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 the 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.
More Progress in the Halls of Power Than Out
CHRIS PATTEN, external affairs commissioner of the EU, was the last governor of Hong Kong.
Nobody should fudge the difference between peaceful demonstration and violence.
There is a huge gap between those that go to international conferences in Prague, Gothenberg and
Genoa as members of non-governmental organizations with a legitimate concern about the
environment or poverty and those with clubs and helmets who are determined to find an excuse to
throw Molotov cocktails and smash in the windows at McDonalds.
These violent demonstrators should be dealt with forcefully. Everyone regrets the death
in Genoa. But if the demonstrations had been peaceful, that would not have happened.
The problem with the dialogue with the peaceful demonstrators is that there isn’t one
focus, but a disparate number of causes. And, in any event, anti-globalization is an absurd
proposition. You cannot be for or against a process that is underway. You can have views about
how to deal with the problems and promises it creates. There are ways to produce bigger and
better opportunities for people to benefit from globalization. But, you can’t be against it. It is
happening beyond the control of anyone and not at the instigation of any one country, like
America.
In order to deal with the problems and realize the promises, what is needed is
international cooperation. What is needed is precisely the kind of organizations the
demonstrators are campaigning against.
At the European Council meeting in Gothenberg last spring, where alas demonstrators
were also shot, we were debating “sustainable development.” Frankly, we were making more
progress toward sustainable development in the hall than was being made by those outside.
I’m all for having a dialogue. But it is quite difficult when some people don’t want to
listen. What I am absolutely certain about is that those who are demonstrating in a well-meaning
way against freer trade, for example, are in practice advocating policies that will make poor
people poorer and further degrade the global environment.
At the same time there are serious issues we need to address—like the billion people
living on less that $1 a day; like the AIDS pandemic in Africa and parts of Asia; like malaria and
TB; like the international drug trade.
Finally, as these demonstrations are bound to continue, democratic societies will be
forced to face the issue of legitimacy of these protest groups. What gives these self-appointed
activists the right to try to shut down the meetings of democratically elected leaders? Who has
chosen them to speak in their name?
Don’t Trash McDonald’s
JACK GREENBERG, the CEO of McDonald’s, was recently interviewed by Foreign
Policy editor Moises Naim. His comments are excerpted from a longer conversation in
the summer issue of Foreign Policy magazine.
There is an assumption that we’re some big American company that exports
things everywhere else to make a lot of money. Sure, we’re everywhere, but so is Nokia.
So is NBC, so is CNN.
(McDonald’s) is a global brand, but we run our business in a fundamentally
different way that ought to appeal to some critics of globalization. We are a
decentralized entrepreneurial network of locally owned stores that is very flexible and
adapts very well to local conditions. We offer an opportunity to entrepreneurs to run a
local business with local people supplied by a local infrastructure. Each creates a lot of
small businesses around it.
Second, the idea that we damage the environment. Not only is the charge (that we
raise cattle on land slashed from rainforests) not true, but our environmental record is
generally very good. We’ve never bought cattle that were anywhere near a rainforest.
We’ve had the policy for 13 years.
Third, this issue of McDonald’s as a cultural threat. We have become the symbol
of everything people don’t like or are worried about in terms of their own culture. I think
that charge reveals a level of general insecurity about identity rather than anything about
McDonald’s, and it doesn’t square with the facts. You know, we’ve been in countries
such as Japan, Canada and Germany for almost 30 years. I don’t see those cultures
faltering because of McDonald’s. In fact, I think the opposite is true.
Fourth, the idea that there’s a nutritional problem with McDonald’s. The facts are
that we’re selling meat and potatoes and bread and milk and Coca-Cola and lettuce and
everything else you can buy in a grocery store. What you choose to eat is a personal
issue. Every nutritionist I’ve talked to says a balanced diet is the key to health. You can
get a balanced diet at McDonald’s. It’s a question of how you use McDonald’s.
Nobody’s mad at the grocery store because you can buy potato chips and pastries there.
Nobody wants a full diet of that either.
●
We are a lightning rod in France for a lot of criticism. But think about how
consumers are behaving in France. What do the people do? Do they not vote with their
feet by patronizing our stores? Are those restaurants not owned by French? Are they not
buying French farmers’ products? Are they not creating jobs for the advertising agency,
the construction company, the real estate agent, the lawyers, the accountants? Do they
not create jobs for thousands of kids who, in France in particular, have had a hard time
getting into the workforce? I mean, this is a fabulous story for France. It’s not being
told. It is a wonderful story, not something we should be ashamed of or embarrassed
about. It’s a great story. Most companies can’t tell this story, French or otherwise.
●
Jose Bove (the French farmer who trashed a McDonald’s site) and a handful of
terrorists are more interested in using McDonald’s as a convenient symbol than
understanding the facts behind our business. (They should) recognize the essential local
character of McDonald’s and find a more appropriate target for whatever it is that they’re
angry about.