The Taipei Times
Friday, July 27th, 2001
Ever since their violent protest in Seattle two years ago, anti-globalization groups have followed world leaders to summit meetings around the globe, such as the meetings of the heads of the G8 and conferences of financial institutions such as the IMF. The scale of such protests is getting broader and the tendency toward violence ever more severe.
As in Sweden last month, demonstrators in Genoa, Italy, smashed windows, dismantled cars and assaulted police officers last weekend. It has become a predictable phenomenon: whenever and wherever there is such a meeting, it will be accompanied by the twin brothers of protest and violence. The police in the host countries have to erect barricades, deploy plainclothes officers and prepare teargas, as if facing a war. British Prime Minister Tony Blair has condemned the protesters as performing clowns in an international circus. US President George W. Bush said, "They're condemning people to poverty."
The principal reason for the protests is the claim that globalization will increase the inequalities in the distribution of wealth among the world's rich and poor nations and between the rich and poor in each country. It sounds like the protesters are morally concerned about poor people and poor nations. They seem, however, to have purposely ignored the fact that it is free market economics and globalization that have lifted many poor nations from poverty and created job opportunities for poor people.
History has proven that the two principal factors that can lead nations to economy prosperity are the protection of private property and free market competition. Equality is neither the essence of economic development nor its purpose. It is ridiculous to pursue absolute equality in terms of distribution of wealth, because, quite simply, the capabilities and contributions of each human being are different.
A distribution system that claims to be based on people's needs not only is a utopian illusion, but is supposed to be realized under a communist-style, centralized, planned economy.
The history of communism, however, has confirmed that under such distribution systems, not only are people deprived of freedom, but the inequality that develops in every aspect of people's lives is far greater than that in capitalist countries, because distribution is totally in the hands of those with political power. These political powers form "a new class," as Milovan Djilas [Editor's note: A Yugoslavian communist turned leading dissident] has pointed out in his book of that name, that is more greedy, corrupt and cruel. They use the whole state apparatus to collect personal wealth and privilege. Soviet Russia, the PRC and all other communist countries are notorious examples.
It is true that rich and poor and inequalities in distribution exist side by side in democratic capitalist countries, but people at least enjoy equal opportunities; and it is such opportunities that make wealth and prosperity possible. There many examples of places that have few economic restrictions and are highly globalized and are among the wealthiest places in the world.
According to the Washington-based public policy foundation, the Cato Institute, the world's freest economic regions are Hong Kong, Singapore, New Zealand and the US. Both Hong Kong and Singapore have very limited natural resources but dense populations, and their economic prosperity has almost entirely benefited from fewer restrictions, lower taxes and greater openness to world markets.
Chris Patten, the last British governor of Hong Kong, used to be an economic leftist, advocating government interference in the economy. But by the time he left Hong Kong in 1997, he professed that the experience of Hong Kong had changed him, and that he had become convinced by the free economy.
The example of the US may be more impressive, since Hong Kong and Singapore are cities and New Zealand is a small country. The US has less economic restrictions, lower taxes and a greater degree of openness than most industrialized European countries.
As the number one economic power in the world, the US' GDP was US$9,963 billion last year, according to a The New York Times report of last week, quoting DRI-WEFA -- a newly formed economic forecasting company. That figure is double that of the second economic power, Japan, and is five times greater than that of the third economic power, Germany.
The GDP of the New York metropolitan area was 1.7 times that of Russia, and Chicago alone produced more than the whole of Taiwan.
In addition to emphasizing supposed inequalities in the distribution of capital, anti-globalization protesters also condemned harsh working conditions in Third World countries. As a result of their protests and campaign, many budding factories banked by Western entrepreneurs have been forced to shut down or have not been able to open at all.
The protesters' argument is a regurgitation of Karl Marx's Das Kapital, in which he used outdated (obsolete even as Marx was writing the book) and single source information from some factories in their initial stage of accumulating capital. Marx concluded that the more wealth the capitalists accumulated, the poorer the workers and the harsher the working conditions would become. Therefore, Marx claimed, the poverty-stricken workers' revolution involving the overthrow of capitalism and the establishment of communism would be an unavoidable outcome for mankind.
The history of capitalism, however, has proven that working conditions and workers' welfare are greatly improved as capitalists accumulate wealth.
Democracy also played a big role in reducing unfair or illegal practices. The armies of laborers from Third World countries who try every means possible to flee to industrialized Western countries are a conspicuous modern phenomenon, while the reverse scenario virtually never arises.
Another glaring fact about these anti-globalization showcases is that most of the protesters come from Western capitalist countries. Many of them don't have to work but live under the protection of privileged welfare systems. I wonder if they know or care that when factories are shut down in Third World countries, nobody provides bread for the destitute. Their only option is to become poorer, which is exactly the opposite of what the protesters want.
It is true that working conditions in Third World countries are often far inferior to those in the industrialized countries. But compared to losing jobs and going hungry, it is better to work and make money and eventually lift oneself from poverty.
This is why people from poor countries don't protest against globalization. They want jobs. They want to accumulate wealth through selling their products with the least amount of taxes and governmental restrictions possible.
Adam Smith said in his classic work The Wealth of Nations that he had dreamed that, someday, all tariffs and taxes between nations would be eliminated, so that all goods could be traded freely, and accordingly, consumers would become the greatest beneficiaries by receiving the best goods at the lowest price.
The encouraging trend of globalization today is the best way to move towards Smith's dream.
Cao Chang-ching is a writer and journalist based in New York.