Economics: Why Globalization Works
In his book Why Globalization Works, Martin Wolf provides an argument regarding the critiques of globalization. He argues from an informed point of view basing his arguments on research, analysis, and facts summoned as early as in the 18th, the 19th century, and the millennium years. He explains how globalization works and points out clearly that the main factor undermining global economic progress is not the market but rather the state governments and inequalities among people. As a result, poverty becomes a very likely price for undermining globalization. Wolf conclusively demonstrates the profound advantages that historically come along with globalization both in theory and practice over different or alternative system. Wolf convinces that the market is one of the most powerful vehicles that provides a smooth road to a better international economy hence a better way of improving the life of civilians at large.
The author begins by giving an outline of the history of the global economy of the nineteenth century. He uses this outline to explain the mechanics of the world trade. Additionally, he starts by opposing the critics of globalization and showing that they undermine sovereignty, weaken democracy, intensify inequality, and greatly devastate the environment. Truly, the opponents of globalization inhibit the growth of the state’s economy as Martin Wolf demonstrates.
Martin Wolf supports his statement by arguing and pointing out that there would be a high economic growth in case of free movement of people and goods from one place to another, basically from one country to the other. He does this by analyzing a period when there happened a great positive change in economic growth. This was in the first half of the nineteenth century before the First World War. Most people left Europe for America, Oceania, the south and the east of Africa while most of the Chinese and Japanese migrated from Asia to other continents. This was in a bid to foster good relation and integration of people from different countries; this forms the very essence of globalization. Based on this migration, Wolf gives a profound advantage of globalization by pointing out that the period was marked by a great economic growth and peaceful relationship among the immigrants and the migrants.
Undermining liberal market had elevated the economy of numerous countries greatly improving the living standards of many people of the era. It came along with the increased worldwide depression and the rise of unemployment level among other factors that endangered the good living standards of the civilians. Wolf presents this to identify what globalization meant or rather that it was a prime factor in shaping the life of individuals at the time. However, he uses the collectivist era to explain the fall of liberal market giving a definite reason as to why there were low living standards among the civilians. The collectivist era undermined liberal economy hence led to poor quality of life among the people of the time. The author uses this era to establish his argument in regard as to why globalization was to improve the life of individuals. However, it did not help but made people face difficult times due to the deteriorating economy of the countries. Just after the World War II, the United States of America initiated a post-war program that generally was meant to revive the liberal global order. The program was supposed to meet three of its objectives; first, it was to promote economic growth and raise the living standards of the civilians. Second, it was to extend prosperity in the world to check communist expansion. Lastly, the program was to provide the adoption of a liberal democratic institutional framework. As a result, harmonious and interstate relations were to be naturally created. For the prosperity of this liberal goal, Martin Wolf argues that it was not meant to be dependent on the size of the territory, the military power, or the population under its control. It rather implied the combination of internal economic development and internal exchange.
Though countries did much to remove barriers such as movement of goods, capital, and services, they did not do much in regard to eliminating barriers applied to free movement of people between countries. There was less free flow of individuals among different states. The author states that there is still limited immigration among individuals; as a result, they inflict an instrumental harm on the developing countries. The degree of movement was highly pronounced in the developed countries, a factor that still persists today. Economic liberalism, as it was initially meant, was supposed to involve the movement of people directly proportional to the movement of goods, services, and capital. This explains the reason why the developing countries were and still are disadvantaged as nothing was done to allow a free flow of individuals to these countries. These developing countries remain closed to free movement not only of people but even goods and services hence are likely to suffer from poverty among the civilians. Wolf feels that there is less globalization in these countries which is the reason for the poverty and low living standards among the residents of these countries. Though Wolf states that globalization is the main solution for the developing countries, he feels that they have failed to embrace it or practice less of it. That is why they are left behind by the developed countries like the United States who has actively promoted the rise of globalization by allowing free movement of individuals, goods, and services.
However, Martin Wolf says that much has not been done to promote globalization in the world. He builds his argument looking at the country’s economy from the standpoint of a state or rather a country that is governed by those who are in a position of leadership. He clearly points out that the government ought to protect the county’s economy by coming up with the policies that call for the protection and guarantees the security of property rights and the rule of law. By so doing, it is ensured that the properties will benefit general population but not a corrupt ruling class. He argues that the market economy needs good economic policies and open markets as well as good governance, believable and transparent institutional frameworks that do not conceal information to the population over time and across economical procedures. This ensures that the state stands to serve its citizens in this matter and protect them from the harmful effects that may come along with it. As a result of good governance of the states, there would be better globalization and improved living standards among the citizens of the states.
Wolf mentions two classes of anti-Globalists or those who tend to argue against globalization hence destroying institutions that aim at improving the life of the general population. The first class pointed out includes the old fashioned individuals who rise from farm lobbies and trade unionists. On the other hand, the second class is comprised of the NGOs with a great number of individuals. These globalization forces are only united for what they are against, but in real sense, they do not offer another alternative way of globalization as Martin Wolf argues. Instead, their arguments are built on emotions, sentiments, and protests that provide no solution to a better way realizing a good economy that enriches the lives of the general population. Commonly, they have split objectives that are dangerous to the survival of the general society at large. However, Martin Wolf in his argument regards the statements from these groups as something that has not to be taken seriously, hence after digesting them point by point, he approaches these statements with a lot of patience.
Globalization is the reason why there is a decline in poverty on a continent like Asia as Wolf argues. This especially concerns China and India. During the early 1980s, the level of poverty was high in percentage, but it drastically fell later in the 1990s with a poverty drop of 9.5 percent as indicated by the World Bank. Also, as result of globalization, there was a pronounced rise in equality among the people with the rise of the middle class all over the world. Human welfare was not to be left behind; it was enhanced by the effects of globalization in the following decades. Life expectancy rose from 55 in the 1970s to 64 years in 2000.
This was a great achievement and quite profound evidence that human welfare had raised to an advanced. In the developing countries, life expectancy stood at two thirds of that of high earning countries. The level of children exploitation was reduced due to globalization . The number of children that were exploited drops dramatically especially in Asian countries being 26 percent. In the sub-Saharan Africa, the drop was standing at 35 percent in the year 2000. This effect clearly demonstrates that the economies of countries had done well in the era of globalization, not to forget the social progress over the couple of decades as a result of globalization.
Another milestone in relation to globalization that acts as a great blow to ant globalization forces is how international companies have continuously done well over the last years as compared to local companies. Martin Wolf argues that employees from these international companies are well paid and work under better working conditions than their counterparts. This is evident from the international oil companies that continue to dominate in the market place promoting the the country’s economy.
In conclusion, Martin Wolf presents clearly the vast benefits that globalization has inflicted into our society and the world at large. He finds globalization to be the best way for countries to realize better economies that, in turn, will improve the life of individuals in those states. Also, Wolf finds it important for the integration and immigration in different countries that comes with globalization since it provides a better tool for promoting good international relations among the states in the world. This will be realized if people are able to freely move from one continent to another. Also, he feels that globalization is the cure for the developing countries helping to improve their economy by participating in a free flow of goods, services, and individuals. Lastly, he finds the ant globalization forces baseless and pointless as they do not provide a solid and profound reason as to why globalization should be done away with.