Jagdish Bhagwati, Senior Fellow in International Economics at the Maurice R. Greenberg Center for Geoeconomic Studies and professor of international economics at Columbia University, gave a lecture titled "In Defense of Globalization" in the College Chapel on March 1. Bhagwati, an expert on international trade and immigration who has advised the WTO and the United Nations on globalization issues, discussed why he believes the negative effects of globalization have been exaggerated by its critics.
Bhagwati began by acknowledging that globalization has many dimensions, both cultural and economic, but said that the aspect of globalization he would focus on was international trade. There are many concerns associated with international trade and its economic and social implications, Bhagwati said. People in large industrialized nations, such as the US, France and Germany, worry that more international trade will not increase prosperity in their countries, but instead will create a race to the bottom that could hurt their workers. Meanwhile, anti-globalization activists, such as those who protested at the 1999 Seattle WTO meetings, believe there are negative social implications for international trade. These concerns include women's rights issues, the environment, child labor, democracy, and the significant issue of poverty around the world.
There are two ways to look at the effects of globalization, Bhagwati said. Either globalization has a benign effect, advancing certain social objectives like the reduction of poverty or increases in women's rights, or it has a malign effect which sets these objectives back. If the effects are in fact malign, he said, it may be necessary to slow down globalization and tradeoff any potential economic benefits. Meanwhile, if the effects are benign, that does not mean that we should be satisfied with them, Bhagwati said. Instead, we ought to use globalization as a policy instrument to further these objectives even more.
The essence of the debate over globalization, Bhagwati believes, is not whether it can have benign effects, but how we should use such policy instruments of globalization to further our objectives. When you start probing the arguments of those who see no benefits in globalization whatsoever, he said, you begin to realize that they are generally wrong. Rather than arguing over whether globalization is good or bad, he believes that we need to use globalization and try to deal with its occasional downsides.
Bhagwati went on to discuss a major criticism of globalization that is made by pro-worker forces in the US -- that international trade pushes down wages or eliminates jobs for workers within the US. Bhagwati rejected this argument, saying that it is not international trade but technological advances that has reduced demand for certain kinds of unskilled labor. At the same time, there has been an increase in demand for skilled labor dealing with technology, which can create more jobs with higher wages. Bhagwati said that most unrest about globalization, trade, immigration and outsourcing are misplaced, and that the concern would be better spent on looking at the skills that American workers have. Likewise, he said, concerns about the increasing economic power of nations like India and China are misplaced. Rather than being a threat to US gains from trade, the growth of these economies could increase efficiency and competition just as the growth of the Japanese economy did in the 1980s. Bhagwati said that the argument that "the more people get like us, the more we will be screwed" is ridiculous.
At several points during the lecture, Bhagwati identified himself as a member of the Democratic Party and said that he regrets how it is has handled issues of international trade and globalization. "The Democratic Party is supposed to be the more altruistic of the parties," he said, but it continues to oppose trade that could help poor countries move out of poverty and grow our own economy. He believes that the Democrats will have to face up to this dilemma sooner or later, because globalization is not going away any time soon. Instead of opposing globalization, Bhagwati said that Democrats should advocate policies which use globalization for benign effects.
Bhagwati's lecture was a part of the Arthur Levitt Public Affairs Center's 2005-2006 series, "The Responsibilities of a Superpower." The next event in the series will be Stanford professor of political science and sociology Larry Diamond, speaking on "Democracy and Development" on Monday, April 10, at 7:30 p.m. in the Chapel.
-- by Caroline Russell O'Shea '07
