THE DISMAL SCIENCE Enemies of the WTO Bogus arguments against the World Trade Organization. By Paul Krugman Posted Tuesday, Nov. 23, 1999, at 4:30 p.m. PT
If a picture is worth a thousand words, a two-page spread in the New York Times, featuring more than a dozen pictures, can speak volumes. And sure enough, the lavish Nov. 15 advertisement by the Turning Point Project, a coalition of activists opposed to globalization in general and the World Trade Organization in particular, said more than any merely verbal exposition about what really motivates those activists could. Indeed, it revealed quite a bit more than its sponsors intended.
The occasion for the ad was the upcoming WTO "ministerial" taking place in Seattle in a few days. The WTO has become to leftist mythology what the United Nations is to the militia movement: the center of a global conspiracy against all that is good and decent. According to the myth, the "ultra-secretive" WTO has become a sort of super-governmental body that forces nations to bow to the wishes of multinational corporations. It destroys local cultures, the headline on the ad read "Global Monoculture"; it despoils the environment; and it rides roughshod over democracy, forcing governments to remove laws that conflict with its sinister purposes.
Like most successful urban legends, this one is based on a sliver of truth. The gradual global progress toward free trade that began in the 1930s, when Franklin Roosevelt introduced the Trade Agreements Program, has always depended on international negotiations: I'll reduce my tariffs if you reduce yours. But there has always been the problem of governments that give with one hand and take away with the other, that dutifully remove tariffs and then use other excuses to keep imports out. (Certainement, there is free trade within the European Union, but those British cows, they are not safe.) To make agreements work there has to be some kind of quasi-judicial process that determines when ostensibly domestic measures are de facto a reimposition of trade barriers and hence a violation of treaty. Under the pre-WTO system, the General Agreement on Tariffs and Trade, this process was slow and cumbersome. It has now become swifter and more decisive. Inevitably, some of its decisions can be challenged: Was the U.S. ban on dolphin-unsafe tuna really a trade barrier in disguise? But the much-feared power of the WTO to overrule local laws is strictly limited to enforcement of the spirit of existing agreements. It cannot in any important way force countries that are skeptical about the benefits of globalization to open themselves further to foreign trade and investment. If most countries nonetheless are eager or at least willing to participate in globalization, it is because they are convinced that it is in their own interests.
And by and large they are right. The raw fact is that every successful example of economic development this past century--every case of a poor nation that worked its way up to a more or less decent, or at least dramatically better, standard of living--has taken place via globalization; that is, by producing for the world market rather than trying for self-sufficiency. Many of the workers who do that production for the global market are very badly paid by First World standards. But to claim that they have been impoverished by globalization, you have to carefully ignore comparisons across time and space--namely, you have to forget that those workers were even poorer before the new exporting jobs became available and ignore the fact that those who do not have access to the global market are far worse off than those who do. (See my old Slate piece "In Praise of Cheap Labor [/Dismal/97-03-20/Dismal.asp].") The financial crisis of 1997-99 temporarily gave those who claim that globalization is bad for workers everywhere a bit of ammunition, but the crisis did not go on forever, and anyway the solution to future crises surely involves some policing of short-term capital movements rather than a retreat from globalization as a whole. Even the Malaysians continue to welcome long-term foreign investors and place their faith on manufactured exports.
What about the environment? Certainly some forests have been cut down to feed global markets. But nations that are heedless of the environment are quite capable of doing immense damage without the help of multinational corporations--just ask the Eastern Europeans. For what it is worth, the most conspicuous examples of environmental pillage in the Third World today have nothing to do with the WTO. The forest fires that envelop Southeast Asia in an annual smoke cloud are set by land-hungry locals; the subsidized destruction of Amazonian rain forests began as part of a Brazilian strategy of inward-looking development. On the whole, integration of the world economy, which puts national actions under international scrutiny, is probably on balance a force toward better, not worse, environmental policies.
But anyway, these are side issues, because what that advertisement makes clear--clearer, I suspect, than its sponsors intended--is that the opposition to globalization actually has very little to do with wages or the environment. After all, leaving aside a photo of tree stumps and another of an outfall pipe, here are the horrors of globalization the Turning Point Project chose to illustrate:
A highway interchange, a parking lot filled with cars, a traffic jam, suburban tract housing, an apartment building with numerous satellite dishes, an office with many computer screens, office workers on a busy street, high-rise office buildings, a "factory farm" with many chickens, a supermarket aisle, a McDonald's arch.
Each picture was accompanied by a caption asking, "Is this Los Angeles or Cairo?" "Is this India or London?" etc.
What is so horrible about these scenes? Here's what the ad says, "A few decades ago, it was still possible to leave home and go somewhere else: The architecture was different, the landscape was different, the language, dress, and values were different. That was a time when we could speak of cultural diversity. But with economic globalization, diversity is fast disappearing."
You can't argue with that; lives there the tourist with soul so dead that he does not wish that he could visit rural France, or Mexico City, or for that matter Kansas City the way they were, rather than the way they are? But the world is not run for the edification of tourists. It is or should be run for the benefit of ordinary people in their daily lives. And that is where the indignation of the Turning Point people starts to seem rather strange.
For surely the most striking thing about the horrors of globalization illustrated in those photos is that for most of the world's people they represent aspirations, things they wish they had, rather than ominous threats. Traffic jams and ugly interchanges are annoying, but most people would gladly accept that annoyance in exchange for the freedom that comes with owning a car (and more to the point, being wealthy enough to afford one). Tract housing and apartment buildings may be ugly, but they are paradise compared with village huts or urban shanties. Wearing a suit and working at a computer in an office tower are, believe it or not, preferable to backbreaking work in a rice paddy. Today In Slate [/Dismal/99-11-23/SideB01.asp]
Now, of course what is good for the individual is not always good if everyone else does it too. Having a big house with a garden is nice, but seeing the countryside covered by suburban sprawl is not, and we might all be better off if we could all agree (or be convinced by tax incentives) to take up a bit less space. The same goes for cultural choices: Boston residents who indulge their taste for Canadian divas do undermine the prospects of local singer-songwriters and might be collectively better off if local radio stations had some kind of cultural content rule. But there is a very fine line between such arguments for collective action and supercilious paternalism, especially when cultural matters are concerned; are we warning societies about unintended consequences or are we simply disagreeing with individual tastes?
And it is very clear from the advertisement in the Times that the Turning Point Project--and the whole movement it represents--are on the supercilious side of that line. Although they talk of freedom and democracy, their key demand is that individuals be prevented from getting what they want--that governments be free, nay encouraged, to deny individuals the right to drive cars, work in offices, eat cheeseburgers, and watch satellite TV. Why? Presumably because people will really be happier if they retain their traditional "language, dress, and values." Thus, Spaniards would be happier if they still dressed in black and let narrow-minded priests run their lives, and residents of the American South would be happier if planters still sipped mint juleps, wore white suits, and accepted traditional deference from sharecroppers ... instead of living in this "dreary" modern world in which Madrid is just like Paris and Atlanta is just like New York.
Well, somehow I suspect that the residents of Madrid and Atlanta, while they may regret some loss of tradition, prefer modernity. And you know what? I think the rest of the world has the right to make the same choice.