The term “globalization” has become a catchall term for all manner of political,

economic, social, environmental, and cultural change. Accomplished minds like Noam

Chomsky, Ralph Nader and Thomas Friedman cannot agree on what globalization

actually is or what caused it or what it will cause.

Despite its elusive definition, or perhaps because of it, globalization has acquired

many critics in the past decade or so. The anti-globalization movement first reached the

public consciousness through massive protests, which occasionally turned violent, at a

1999 meeting of the World Trade Organization (WTO) in Seattle. The protests have

accompanied almost all subsequent gatherings of the WTO. The regularity of dissent

implies some sort of cohesion within the anti-globalization crowd. However, depending

on the critic, globalization is either a cause or effect (or both) of all manner of political,

economic, social, environmental, and cultural ills.

For economic purposes, and presumably for the author of In Defense of

Globalization, Jagdish Bhagwati, the term “globalization” refers to the liberalization of

trade and trade barriers between countries and corporations. Still, Bhagwati’s defense

requires explaining the daily exchange of billions of dollars (and yaun and euros)

between far-flung companies. The exchange is facilitated by labor agreements that have

frequently been negotiated by the oft-maligned WTO.

More than one person has called Bhagwati the most published economist of his

time. Indeed, his mentor, Nobel Laureate Economist Paul A. Samuelson said of him: “I

measure a scholar’s prolific-ness not by the mere number of his publishings. Just as the

area of a rectangle equals its width times its depth, the quality of a lifetime

accomplishment must weight each article by its novelties and wisdoms...Jagdish

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Bhagwati is more like Haydn: a composer of more than a hundred symphonies and no

one of them other than top notch.”

Bhagwati is a professor at Columbia and a Senior Fellow in International

Economics for the Council on Foreign Relations. He has also advised the United Nations

on globalization at the urging of Kofi Annan and advised the WTO as well as its

predecessor, the General Agreement on Tariffs and Trade (GATT).

Bhagwati’s goal is to demystify globalization for the layperson while taking on

the sincere concerns of its critics. The complexity of globalization makes this undertaking

no mean feat. By and large, Bhagwati is successful in this task. This should come as no

surprise since Bhagwati is perhaps free trade’s biggest advocate. He addresses the

greatest concerns of globalizations critics (exploitation of labor, political corruption,

environmental hazards and more) in detail, but while waving globalization’s flag,

Bhagwati is fair enough to address failures of the past and present.

By labeling such a massive amount of economic activity it is suggested that

globalization is a recent trend or phenomena. However, trade between countries goes

back to the West’s initial forays into China for silk and doubtless even earlier than that.

The East India Trading Company dates to the Seventeenth Century. Nevertheless, the

scale of trade has increased dramatically since those comparatively prehistoric times and

increases in all aspects from one year to the next.

What is recent is the feeling by many corporations to demonstrate some sort of

social responsibility in the face of globalization critics. The goal of corporations has

always been to be profitable. The rise of global corporations, or multi-national

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corporations (MNCs) according to Bhagwati, has in some ways coincided with the dawn

of the Information Age. The average American is more likely to have a personal financial

stake in an MNC—either through ownership of stock or a mutual fund—than ever before.

A company’s profitability, or lack thereof, is public knowledge faster than ever. With

ownership comes a demand for transparency.

In a previous era, both large and small corporations concerned themselves only

with profits and not with their public image. Although the rules may have changed, the

expectations of corporate responsibility by the public have changed as well. In the

January/February 2008 issue of Foreign Affairs, Klaus Schwab, Executive Chair of the

World Economic Forum encourages greater corporate responsibility. Schwab points to a

growing weakness in the nation-state, which, in turn, has shown the limits of political

power. He wrote, “The lack of global leadership is glaring, not least because the existing

global governance institutions are hampered by archaic conventions…” He acknowledges

that sovereignty still has potency, “but authentic and effective global leadership has yet to

emerge. Meanwhile, public governance at the local, national, regional, and international

levels has weakened. Even the best leaders cannot operate successfully in a failed

system.”

Schwab believes that since corporations provide so many services to the public

and to its own employees they are the natural choice to slide into the leadership void he

described. His article is a challenge as much as anything for corporations to raise their

own standards in a newly transparent environment.

Transparency can have a downside for MNCs, however. With the exception of its

own shareholders, many Americans find it unseemly that ExxonMobil is posting record
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quarterly profits while the cost of a gallon of gas heads toward four dollars. Many

Americans find some executives’ pay needlessly exorbitant. They wonder why companies

like Wal-Mart cannot afford to pay its employees a living wage and provide them with

affordable health insurance. Citizens, not just those especially concerned about the

environment, cannot understand why they foot the bill for an oil spill in San Francisco

Bay. Furthermore the indiscretions of Enron, Tyco and WorldComm, to name but three,

have not faded from memory. Many worry what corporations are doing when they are out

of the view of the public eye.

While Schwab urges an enhanced role for MNCs, Bhagwati points to several

instances where corporations’ involvements in affairs of state were less than noble.

Specifically, he talks about Royal Dutch/Shell’s involvement with a corrupt Nigerian

regime in the late 1990s and ITT and Pepsi’s complicity in the overthrow of

democratically elected Chilean President Salvador Allende.

At a fundamental level, Bhagwati understands that the goals of the state and the

corporation are different. Corporations, at the end of the day, exist to make a profit.

Governments, especially democracies, exist to help their people. The only thing they have

in common is the need for oversight, which Bhagwati endorses through such measures as

the United Nations’ Global compact. Any overlap of roles should remain coincidental.

Despite Chevron’s advertisements about lessening their carbon footprint or Miller

Brewing Company’s commercials about coming to the rescue of Hurricane Katrina

victims the public is probably best served by assuming that corporations will continue to

put profits first.

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As such, corporations will continue to lobby governments for their own benefit

and citizen-based, special interest driven non-governmental organizations (NGOs) will

challenge corporations’ misdeeds to the very same government.

Yet, to deny that corporations influence politics in a positive fashion is to be not

only overly cynical but to fly in the face of research. Bhagwati undoubtedly has access to

ample empirical evidence to show that increased trade in despotic or non-democratic

nations is likely to be a strong step toward democracy and, therefore an improvement in

the quality of life of the country’s citizens.

Rather than focus on the numbers, he picks apart critiques of the democracy-

globalization relationship. Bhagwati is at his strongest when he points to the Organization

for Economic Development (OECD)—an organization that is a grandson to the Marshall

Plan—as support. OECD members have experienced a parallel increase in trade and

democratic elections. A member of Swedish parliament (and economist), Carl Hamilton

backs up Bhagwati’s assertions.

The rise of globalization neatly corresponds with the fall of the Berlin Wall and

the end of Soviet influence in Eastern Europe. Bhagwati successfully argues that this is

not a historical coincidence. The obvious contemporary exception is China. While China

is far from a democracy, few would argue that the current regime is not as violently

oppressive to its own citizens as previous generations. Perhaps the Chinese are simply

putting on a better face to the world as the 2008 Beijing Summer Olympics near, but

post-Olympic China is certain to be monitored for political and economic changes.

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There is a further point to be made about globalization being a tool of personal

empowerment—if not of clear-cut democracy. Paul Collier, author of The Bottom Billion,

has demonstrated in several research papers and articles, that foreign investment in

developing nations is the best alternative to bring an end to tribal governments and reduce

the spillover cost to neighboring nations.

Collier does not advocate unqualified aid and/or investment. He insists that,

“properly designed, aid is more effective than the political strategy of democratization,

and more cost effective than military intervention.” Collier estimates that using

traditional methods to turn the fortunes of a failing country would take approximately 60

years and cost in excess of $100 billion. His estimates do not include what effect outside

military intervention might have. Given that the United States is engaged in two wars that

appear to be of considerable length and has expressed little reluctance to embark on a

third (Iran), aid to developing nations, through United States corporations, seems

preferable to even the slimmest military involvement.

Collier sharply observes that the extended, and seemingly open-ended military

involvement in Afghanistan and Iran in and of itself is evidence that military solutions

alone are not enough to revive a failing state.

Similarly, corporations supplanting government in places of leadership

(symbolically or literally) as Schwab seems to endorse, would be too one-dimensional a

solution.

Throughout Bhagwati’s book the theme emerges that even though globalization

may be the catalyst to significant change for the better, it is not monolithic; it is the

confluence of economic, political, social and cultural forces.

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As vague and all encompassing as the term “globalization” has become, the same

could be said for the word “culture.”

Instinctively, countries think of “culture” as those things that make them unique to

other parts of the world. However, it might equally be argued that “culture” are those

things that other countries associate with a particular state or region. In the United States,

citizens quickly tag things as being “Asian” or “French” or “German.”

Culture, as many have said, is the number one export of the United States and

Bhagwati from that perspective. Countries all over the world have expressed resentments

of varying intensity about the presence of American culture in their own country. From

McDonald’s to SUVs to Hollywood action movies people have vigorously and

continuously voted with their feet. While conservative elements, especially in Islamic

countries, reject American culture out of hand, overwhelming majorities have welcomed

it with little reservation. According to a study completed in 2007 for Social Research

citizens in Lithuania and Ukraine maintain strong identities to their homeland but at the

same time indicate receptiveness to cultures other than their own. This is not insignificant

considering that both nations are not even a generation removed from being part of the

Soviet Union.

But, what of Americans themselves and their culture? Any person who has

traveled throughout the United States, including a foreigner, is certain to notice regional

differences—in all aspects of life. Or would they? The perception of many non-

Americans is that there is a pervasive American culture that exists in Louisiana and

Maine. In some cases, Americans welcome the impression of unanimity. On the other
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hand, a native of either Maine or Louisiana would almost certainly laugh at the

suggestion that life in one state is similar to life in the other.

If there is a flaw in Bhagwati’s book it is his failure to address the internal conflict

the United States is having with itself regarding culture. He does not omit the issue but

considers it a non-issue: “Americans certainly find it difficult to see global integration as

a threat to culture, for they are truly an exceptional nation here, as in most matters (119).”

It would be excessive to cite Pat Buchanan and say that America is in the midst of

a culture war, but in the face of globalization the country is reevaluating itself.

During the Asian Miracle of the 1980s, Japanese ownership of such institutions as

Rockefeller Center was met with howls of disbelief and self-pity. Yet, the economy not

only rebounded, it exploded due in large part to Silicon Valley-based Internet boom

during the 1990s.

Now, presidential candidates speak about jobs lost to Mexico and China. The

country, for the time being anyway, has virtually conceded (with their wallets) that Japan

makes better cars. Lost in this is the fact that American-based companies were

responsible for many of the jobs that left for other countries. By the same token, Japanese

auto companies have opened large plants in Alabama and Tennessee. On a smaller scale,

Chinese-based printing and machinery companies are opening offices and plants in the

United States in increasing numbers. In 2007, United States investment in China was $2.7

billion while China’s investment in U.S. companies was over $9 billion. Admittedly, the

latter figure is inflated by two particular investments—in Morgan Stanley and The

Blackstone Group—that neared $8 billion. Still, the idea of what is “American” is

becoming increasingly difficult to determine.

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Even within its own borders regional differences are becoming blurred. It is

entirely possible to wake up in a Ramada Inn in Ohio on one day and a Ramada Inn in

Oregon on the next day and see a Gap, a Wal-Mart, a Pizza Hut, a Home Depot, a Dunkin

Donuts and a Radio Shack on both days.

A look around the suburbs of America would probably reveal that many of them

look the same. There are lots of strip malls and lots of what have become known as

“McMansions.” Where there aren’t McMansions there are waves of condominium

developments where farmland used to be. This sameness—some would say blandness—is

probably not what the global community thinks of when they think of something that is

“American.” Being American is a way of life and uniqueness that cannot be detected

superficially, at least that is what many Americans like to think. Part of this perception is

related to a sense of independence, the ability to choose free of influence, what is best for

each person. Over and over Americans have chosen the Gap over the locally owned

clothing store. They have chosen the guaranteed low prices and convenience of big box

stores over the family owned department stores of yesteryear. But, in asserting their

independence have Americans ceded some of their identity to the forces that are

globalization?

For the average person, globalization is a win-win proposition. The increase in

competition and benefits of comparative advantage do not take long to identify.

I personally can attest to this just within the past week. While I was not thrilled to

find that my stockbroker’s new office is between a beauty salon on one side and a
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Subway branch on the other, the benefits of this thing called globalization were hard to

miss.

There was fire down the street that started on the second floor of a residence. Fire

trucks—having been notified by a cellular device (probably made in Norway)—arrived

within minutes. The firemen dismounted a truck, built from parts that almost certainly

came from over the globe which were probably assembled in Canada or Mexico. The fire

hoses they used to quickly put out the blaze and minimize the damage were probably

made of fibers from a developing country and maybe even assembled in yet another

developing country. I can only guess where the boots, coats, ladders, chemicals and other

materials came from. And I doubt the family whose home was spared really care.

The fire broke out while I was watching the film El Topo, whose eccentric

director Alexander Jodorowsky said of himself, “I was born in Bolivia, of Russian

parents, lived in Chile, worked in Paris, …founded the “Panic”' movement with Fernando

Arrabal, directed 100 plays in Mexico, drew a comic strip, made El Topo and now live in

the United States.”

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Reference List

Bhagwati, J. Biographical Information on Professor Jagdish Bhagwati. Retrieved on

April 27, 2008 from http://www.columbia.edu/~jb38/biography.html

Chauvet, L & Collier, P. (2005). Policy Turnarounds in Failing States. Oxford. Centre for

The Study of African Economies, Department of Economics, Oxford University.

Chauvet, L & Collier, P. (2005). Alternatives to Godot: Inducing Turnarounds in Failing

States. Oxford: Centre for The Study of African Economies, Department of

Economics, Oxford University.

Čiburienė, J., Guščnskienė, J., & Orehova, T. (2007). The Changes of Cultural Values:

Lithuanian and Ukrainian Case. Social Research. 2007 (2), 33-38.

Ebert, R. (2007, October 6). El Topo. Retrieved April 30, 2008 from

http://rogerebert.suntimes.com/apps/pbcs.dll/article?AID=/20071006/REVIEWS0

8/71006001/1023

Gifford, R. (2007). China Road: A Journey Into the Future of a Rising Power. New York:

Random House.

Klein, N. (2000). No Logo: Taking Aim at Brand Bullies. New York: Picador.

Lee, D. (2008, May 5). To Chinese Firms U.S. is a Bargain. Los Angeles Times. pp. 1A,

4A.

Levy, B.H. (November 2005). In the Footsteps of Tocqueville. Atlantic Monthly, Vol.

296, No. 4, 127-138.

Samuelson, P. On occasion of 70th Birthday Festschrift Conference Jagdish Bhagwati,

the Wunderkind who Became the Tireless Theorist of International Trade.

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Retrieved on April 27, 2008 from

http://www.columbia.edu/~jb38/Festschrift%20Dinner_Speech_Samuelson.doc

Schwab, K. (Jan/Feb 2008). Global Corporate Citizenship. Foreign Affairs, 87 (1), 107-

118.