The ill effects of globalization are susceptible to remedies

The Argument

Free world trade is doing damage

will political leaders implement the available cures?

April 21, 2002|By Larry Williams | By Larry Williams,Sun Staff

Free trade, hailed for the last half of the 20th century as the economic salvation of the world, now threatens to bring the world crashing down around our ears.

While trade liberalization has brought enormous economic benefits -- in the United States and many of the world's poorest nations -- its excesses have also bought environmental degradation, political oppression, financial instability and angry resentment of the power of capitalism and Western culture.

From Asia to Latin America to the Middle East, there has been a growing sense that globalization of the world's economy is being organized by the United States and other major industrialized countries through the World Trade Organization and other international economic institutions to increase their wealth and exploit poorer lands.

For some, the answer to this capitalist steamroller is terrorism.

While the United States can bend the policies of governments it is displeased with -- both economically and politically -- such deterrence doesn't work so well against shadowy terrorist organizations that hide in the jungle, remote mountains or crowded Third World cities.

And terrorists who are willing to die to fracture the economic and social status quo can multiply their power, as the United States discovered on Sept. 11 and Israel is learning in its current struggle with Hamas and others.

There seems no easy answer to those and other horrors in this age of globalization. With information and subtle weapons readily available, travel convenient and identities easy to fake, the lessons of terror appear likely to be copied widely.

But wait!

Globalization doesn't have to end in fire, argues George Soros, the billionaire global trader.

In a slender volume, published this spring, he offers prescriptions for the increasingly visible problems of the global trading system.

As Soros sees it in George Soros on Globalization (Public Affairs, 191 pages, $20), some midcourse corrections can steer the process of globalization away from shoals that threaten to destroy the benefits it brings.

On the left are environmentalists, labor organizations and political activists ready to fight to block what they see as the environmental and human damage caused in the poorest nations by relentless globalization.

While Americans worry about computer manufacturing jobs lost to Taiwan, giant transnational computer companies are pushing the Taiwanese to ship the jobs to even lower wage factories in mainland China, U.S. labor leaders note.

And while the United States struggles to clean up the toxic waste sites that still dot our landscape, foreign firms far from the watchful eyes of the EPA are busy creating far worse sites abroad as they produce mountains of goods for the American markets, environmentalists claim.

Above it all, weak local governments, poor financial controls and sheer greed threaten devastating economic collapses in Third World countries like Indonesia, Argentina and Thailand. The harsh economic cures proposed by the International Monetary Fund and the World Bank to remedy such disasters invariably lead to more suffering by the poorest in these countries.

Soros notes that far too few resources have been devoted to correcting the deficiencies of globalization. As a result, the gap between the rich and the poor continues to grow.

The richest 1 percent of the world's population receives as much as the poorest 57 percent. More than a billion people live on less than a dollar a day; nearly a billion lack access to clean water; 826 million suffer from malnutrition; 10 million die each year for lack of the most basic healthcare.

To challenge all of that, Soros proposes reforms to contain the instability of financial markets; to correct the built-in bias in favor of the United States and other developed countries in our existing international trade and financial institutions; to create powerful new international institutions to fight poverty, reduce pollution; and to improve the quality of public life in countries suffering from corrupt, repressive or incompetent governments.

Some of the increased wealth produced by continued globalization could be used to pay for such reforms, Soros says.

On the right, he acknowledges, conservative market fundamentalists oppose such steps, arguing that globalization must be unfettered by regulation if we all are to benefit from the inventive and entrepreneurial talents that free markets unleash.

But markets are amoral, Soros notes, and society cannot function without some distinction between right and wrong.

Soros recognizes the significant challenges to be faced by those hoping to counter the worst effects of globalization and realize his vision of a global open society.

For one thing, while President Bush preaches constantly in favor of free trade, the United States enforces tariffs viewed elsewhere as inequitable to protect American steel, cotton, sugar and lumber from foreign competition.

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