Bhagwati's globalism

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The Colorado Freedom

Bhagwati's globalism

by Ari Armstrong

The following article originally appeared at Boulder Weekly on December 1, 2005.

Jason Bosch is a regional activist who organizes screenings of leftist propaganda films through Argus Fest. The two main themes of Argus Fest seem to be that capitalism is bad and people are pawns of corporations. For instance, one graphic at shows a giant Wal-Mart monster smashing people's homes and stealing their money. Because, as is obvious to elitists on the left, people couldn't possibly work for or shop at Wal-Mart by free choice because doing so improves their lives.

In an Oct. 19 e-mail, Bosch sent out the following announcement: "Ethical Trade Action Group is going to present their Sweatfree Purchasing Policy to the Denver Public School Board on Thursday, Oct. 20, 2005. Sweatfree purchasing policies offer hope that public institutions can act to put an end to sweatshop abuses rather than continuing to use our tax dollars to subsidize sweatshop labor. We are asking that the Denver Public Schools join over 70 other U.S. public institutions in adopting a sweatfree purchasing policy and to become a part of the national movement to put an end to sweatshop labor."

In reply, I wrote, "In In Defense of Globalization, Jagdish Bhagwati, a Columbia professor, suggests that the sorts of anti-'sweatshop' activities that you are promoting in fact lead to the impoverishment of people in poor regions. He marshals overwhelming evidence to prove that globalization in fact raises wages in developing regions. So again I urge you to read his book. In exchange, I'll read a book you select on the topic. Then, we'll host a forum to discuss the two books. Don't you think you owe it to the people in developing regions to make sure your policies don't hurt them?"

Initially, Bosch wrote back in support of the plan. But he has yet to suggest a book for me or agree to a date for the forum.

Anyone who criticizes the globalization of free markets owes it to the world's poor to read Bhagwati's book. I was turned on to the book by a program in October sponsored by Liberty Fund and the Institute for Humane Studies (which also offers programs for college students; see

Emily Chamlee-Wright, an economics professor at Beloit College, led the October discussion. She wrote the 1997 book, The Cultural Foundations of Economic Development: Urban Female Entrepreneurship in Ghana, based on her experiences in that country. She noted a few hopeful signs in Africa, but she also described the widespread corruption, oppression, poverty and state-sponsored murder there.

Capitalism means a legal order that respects individual rights, and especially well-defined property rights, and that gives rise to a sophisticated division-of-labor economy characterized by voluntary human interaction. The freer the markets, the faster people can climb out of poverty and improve their standards of living.

Bhagwati cites data from Xavier Sala-i-Martin (also of Columbia) showing that, between 1970 and 1998, poverty declined dramatically in Asia as relatively open markets led to dramatic growth in productivity. Meanwhile, "Poverty increased dramatically in Africa because African countries did not grow," Sala-i-Martin writes.

A conclusion I reached in October is that most Americans, and especially wealthy leftists, simply cannot imagine the horrific poverty rampant in pre-industrial Europe and in anti-capitalist regions of the world today.

So what is a "sweatshop," anyway? Presumably, it is a factory where most of us would not enjoy working. However, our short work weeks, long vacations, pleasant conditions and high wages are the consequence of one and only one phenomenon: increased capitalization developed over many years in relative economic freedom. With more factories, machines, education, etc., workers in advanced economies are able to produce vastly more (and more varied) goods and services.

A region that starts with close to nothing has to develop its capital over time. Initially, the alternative for many people in such regions is an uncomfortable job with long hours and low pay, or subsistence farming and abject poverty. And yet America's left wishes to "help" the world's poor by ensuring that they remain unemployed, by eliminating the formation of regional capital, and by preventing American dollars from flowing to those who would otherwise be at risk of malnutrition.

Bhagwati offers overwhelming evidence that economic globalization is a benevolent force that lifts people out of poverty, improves living and working conditions, and improves the lives of children and women. Why, then, do so many American activists oppose it? Bhagwati offers three explanations for American anti-capitalism, "other than strong socialist convictions." Some incorrectly see capitalism as unjust. Some, under the influence of deconstructionism, nihilistically seek to destroy markets and the ideology of capitalism. And some want people to be better off but lack the knowledge of what institutions make that possible. Bhagwati also explains that the relentless critics of corporations "zero in with a 'gotcha' mentality, seizing on every venal misdeed of a multinational they can find, seeking to validate through these specific examples their general anti-corporation biases."

Bhagwati makes some errors. He sometimes confuses capitalism with international controls. He offers a woefully inadequate explanation of international money flows, and, most important, he fails to consistently defend the morality of individual rights. But he also offers impressive evidence and logic proving that economic globalization is a beneficial and humane force in the world.

The Colorado Freedom