Mabie debate details pros, cons of globalization

Issues of globalization were the topic of a debate Thursday, Oct. 12 in Chapin Hall.

Participating in the debate, titled “The Balance Sheet on Globalization: Good or Bad?” were Lori Wallach, director of Public Citizen’s Global Trade Watch, and Gary Hufbauer, Reginald Jones Senior Fellow at the Institute for International Economics.

The debate was sponsored by the JW Mabie Fund for Economic Policy.

William Jaeger, an associate professor of economics, served as moderator for the event. He began the evening by introducing the topic and the two speakers. He said that the process of global interconnection and interdependence has been around for a long time and always had many supporters and detractors. However, last year’s protests over the World Trade Organization (WTO) meetings in Seattle increased public awareness of and involvement in issues of globalization. Jaeger said that the debate would aim to address many questions that had been raised in the year since the Seattle protests.

Wallach began by noting that globalization was not just an economic force, but a phenomenon that defines both culture and law. She made the point that globalization got rid of markets broken up by cultures and countries and instead tried to create one world demand in one market. She distinguished this from international markets, which she said allowed for countries to trade when they determined it was good.

“The current system is doing more bad than good,” she said. “We’re not one big market. What we’re doing now is causing cultural homogenization.”

She went on to argue that globalization was not inevitable but that it came from a certain world-view and depended on policy choices. Wallach finally raised concerns that globalization forced relaxation of environmental and labor regulations and eroded democracy because it discounted local decision making in favor of a “one size fits all” approach.

Hufbauer opened by describing the 20th century as a time of massive social experiments in politics and economics. He said that out of this experimentation came the conclusion that the greatest prosperity and liberty came from a socio-political system of parliamentary democracy, private capitalism and free trade.

“The militant opponents [in Seattle] do not seek incremental reform to this model,” he said. “They want to demolish private capitalism, open markets and free trade and investment. The militants want to define what’s correct, but fair access to markets is critical to growth.”

He then outlined what he perceived as three giant fallacies undermining opposition to the WTO. First, he said, detractors think that unless everybody wins, globalization loses. Second, they believe that environmental problems arise from multinationals and trade, not from poverty. Finally, he said they think that national capitalism is bad for workers and, thus, international capitalism is bad for all. In closing, he stated that though there were obviously problems in the world, globalization aimed to improve people’s lives, especially in poor countries, by helping them secure the economic rights that those in prosperous nations enjoyed.

In the rebuttals and responses to questions that followed, the two stuck to much of what they said in the opening, citing their own statistics to substantiate their points.

Wallach said that citizens from many developing countries who saw that the WTO’s economic plan did not work were primary supporters of the Seattle protests. She cited data that showed stifled growth in developing countries that adopted the WTO plan and said that those people were fed up with the system. Wallach reiterated that her group was not anti-trade, but it wanted to allow for local self-determination, to protect people’s basic rights and needs and to ensure fair trade so that weak countries would benefit from world trade.

“Does trade always have to come first, or can you stop some trade and look at its long-term effects?” she asked. “This is the same old fight over what government’s role should be in the market.”

Hufbauer claimed that it was wrong to believe that WTO regulations trumped everything and only allowed for a one size fits all program. He maintained that opponents had made it out to be a “mythical all-powerful being” that it really wasn’t.

“The WTO cannot force a country to change laws on anything,” Hufbauer said. “It’s simply a contract. If a country doesn’t like others’ positions, it can withdraw.”

Hufbauer also stood by the position that global trade offered numerous benefits to the poor and allowed technological development to speed up. To halt the progress that the WTO was making to advance the causes of developing countries would be what he described as “freezing out” those without opportunities.

Other topics of debate on the evening included NAFTA and the precautionary principle as it dealt with food quality. Audience questions ranged from issues such as if child labor was better than a perceived alternative such as prostitution, what changes the two would like to see made to the WTO and what would constitute a reasonable restriction to trade.