Opinion
Give real globalization a chance to prove itself
Summary
A common world market could work in everyone’s favour if state intervention is withdrawn but capital has globalized far faster than labour and a fully open model is yet to be tried out
There exist items of news that we should have left behind in the 20th century but must endure anyway because man-made institutions of governance evolve too slowly. Last week, a fishing boat packed with an estimated 750 refuge-seekers sank in the Mediterranean Sea, taking hundreds of lives, mostly Pakistani. Its ripples of data reached us only for the scale of an otherwise frequent sort of tragedy wrought by desperation and dreams of better life prospects in rich countries. Else, it usually takes a documentary like Sally El Hosaini’s The Swimmers, about Europe-bound Syrian champs who literally had to swim for their lives, to acquaint the busy world with the pressures and perils of human migration outlawed by nation-states defined in this context by borders of exclusion. This is just the way it is, of course. It is part of a world order long and deeply invested in by many. National barriers dropped—or even softened—are an unlikely candidate for a resolution by the United Nations, no matter which other arc our history ends up bending towards. Yet, globalization, as pursued with post-War vigour till it got cast adrift over the past decade or so by geopolitics, had dreamt of exactly that as far as flows of trade and capital went—a borderless world.
Fantasy or not, the aim of a common world market, one that is free of trade barriers and capital controls, has always been in tune with market economics. Free trade is a laissez faire ideal, after all, and free-market advocacy makes the case that a sphere of exchange whose self-balancers are left to work freely will see an open pursuit of self-interest work in favour of everyone, as if led by an Invisible Hand. Should prices that float on waves of buying and selling—and its forces of demand and supply—get warped by state intervention, though, our collective welfare would depend willy-nilly on the wisdom of policy, with which the prevalent incentives of political power need not align. Unless policymakers can actually claim to know better than what signals of commerce say, it’s best not to interfere. Think of information as the invisible stuff this Hand is made of. By this theory, if a market is at liberty to process inputs of greater volume and diversity than the state’s policy wonks possibly can, and that too with fewer lags if not in real time, it will do an efficient job of resource allocation. If capital goes where it’s sought most, for example, it would be put to best use. Likewise, other flows. For decades, the appeal of this theory and its logic led a push for open markets around the globe, with the US as its chief champion. Today, global governance of trade is in shambles, America has grown both barrier happy and sanction wieldy, ebbs and flows of capital have turned choppy, supply links across oceans have got flipped, open offshoring has taken a knock and drawbridges going up have seen the sails of globalization sag.
In one frame of analysis, we globalized too fast and must suffer nausea now that a political backlash has stirred globe-spanning policy turmoil. By another, it was the lopsided way the world sought to globalize—capital flows ahead of labour—that must accept blame for uneven results, anger and hardened borders. The sad part, as seen in xenophobic impulses fanned by politics, is that welcome mats for people in search of better lives—for whom dignity is often enough—have shrunk in ways that make it even harder for us to test what real globalization can achieve for the world at large. For everyone, that is, as market theory promises.
