Burying the myth

Will globalization become the first casualty of the economic crisis? «Protectionism has become a growth industry with numerous nations – including the USA – opting for various direct and indirect barriers to trade since September’s global financial meltdown… Of the Group of 20 nations, 17 countries have implemented some type of trade protectionism,» the Financial Times said yesterday. The British daily mentions a number of examples: iron and steel tariffs in Russia, massive automobile subsidies in the USA and Europe, agricultural restrictions in Brazil and Argentina and «buy local» slogans in the US and China. «If China – with an economy expanding at an annual rate of roughly 7 percent – feels the need to opt for blatant protectionism to mollify worker discontent, think of the mounting pressure on states whose economies have sunk deep into recession,» the FT said. One could add the economic interests at stake at December’s Copenhagen summit on climate change. Western industrial powers, which are responsible for the environmental degradation of the past two centuries, are expected to blame failure by emerging industrial countries to meet pollution reduction criteria in order to justify protectionist measures. So they will tax Chinese or Indian exports, not because they are cheap, but because they are unclean. Still, any talk about de-globalization is premature. Globalization, after all, was a mirage rather than reality. Adam Smith, the father of economic liberalism, believed that the free flow of labor was a precondition of a global market. Today, we have freedom of movement for goods but not for people. Globalization saw the move of capital to countries with cheaper labor. But the tide did not lift all boats. Rather, it pushed unemployment in the USA – the driving force of globalization – to 9.5 percent. In different circumstances, US President Barack Obama would be the ideal leader to revive the Clinton-era myth of globalization and global leadership. Now he will most likely be the one to bury it.