Why we should fight anti-globalists

Back in 1936, Liberal economist F.A. Hayek received a new book from a colleague, and contemplated writing a detailed criticism of it, but in the end decided against it. The theories in it were too flawed and incoherent, he thought, so no one would take them seriously. Surely the author himself would soon change his mind. Why waste time that could be used to develop his own thoughts?

The colleague was John Maynard Keynes, and the book was the General Theory of Employment, Interest and Money. When Keynesianism conquered the world’s economic ministries one by one, Hayek regretted his decision for the rest of his life.

We risk repeating Hayek’s error when we choose not to take anti-globalists seriously. Many serious thinkers adopt this approach, however. Typical are the comments of a trade economist who told me that it was a great waste of time to confront anti-capitalists. They are guided by ideology and not facts, and do not understand economic principles, so reasonable arguments won’t change their minds anyway.

This argument is fine as far as it goes, but it misses the point that anti-globalists must be met head on not to convince them, but to make sure they don’t convince others. If they are not challenged in a public debate, their confused views will guide all public policy soon.

People and politicians in general get their knowledge from the media, not from university economic departments. And if the media is filled with the likes of Naomi Klein, John Pilger and Ralph Nader every day, the public will come to share their perspective. Anti-capitalist NGOs have already given politicians an excuse to ban genetically modified organisms, they have given intellectual property rights a bad name and they regularly humiliate corporations, which all too often react to public criticism by quickly apologizing for doing what all companies should do, try to make money.

Anti-capitalist NGOs also contributed in their way to the collapse of the WTO talks in Cancun. They had helped to radicalize developing countries so that in the end officials from these countries refused to offer lower tariffs on manufactured goods in exchange for agricultural liberalization. Slowly but steadily these groups gain a bigger influence in--and more resources from--institutions like the U.N. and the World Bank. In these institutions’ headquarters you can nowadays count more NGO-activists than employees.

But the long-term influence of the movement goes beyond even these immediate events. Anti-capitalists are changing the intellectual climate among the young and the students in the West. Being anti-market is today the “in” position; it is fashionable whereas globalization is associated with bureaucracies like the EU and the IMF. According to surveys, globalization (that is, free interaction in data, products, etc., between the people of the world) is now associated with negative connotations among the young in Europe and America.

Some market advocates reassure themselves that at bottom this is all about trade policies, and that the anti-globalists are no different from other traditional protectionist forces, and therefore won’t have a more dramatic effect. But that is a misconception. The globalization debate is not primarily about tariffs and quotas, it is about corporations, taxes, capital movements, regulations, environmental policies, privatization, etc. If we ignore the discussion of today, we lose the battle of tomorrow.

Right now a young generation in its formative years spends its time at seminars or with books that teach them to distrust private enterprise and to believe in the state’s ability to save the world. And they happen to be the best educated students, in the best universities, from the better-off families. They are right now commencing their long march through the institutions. In a few years we will meet them as professors, as politician, as journalists and editors. This is the same process we saw after the student revolts in the late 1960s.

But this is not inevitable. The excitement that we saw over globalization in the 1990s was due in part to the fact that, for the first time in years, a broad public had become interested in the global economy and its effects. That should have been a golden opportunity to explain the complex process that is the market economy. When there was a growing attention to poverty issues, people were willing to listen to the explanation that global poverty and hunger have been reduced faster in the era of globalization than ever before in world history, and that it happened fastest in countries that opened themselves to trade with the outside world.

We can rekindle this excitement if we meet anti-globalists in public forums. But apart from such trade economists as Columbia University’s Jagdish Bhagwati, who does an important job as a traveling salesman for traveling salesmen, the free traders have been mostly notable for their absence. The intellectual plane was slowly ceded to the anti-capitalists.

My personal experience from meetings and debates with anti-globalists is that--if you can stand being booed and hissed at--it’s worth meeting them head on in public debates. If you keep pointing to the facts, most people in the audience will be willing to listen. You can’t be disappointed that your opponent does not change his mind, you’re not there for him but for those spectators who are intellectually open and have a sincere interest in the issues. If you are not there, they will only have the anti-capitalists to listen to. Often times they have not rejected the pro-capitalist arguments--they just have never heard it. Hayek is not precisely required reading in their curricula.

And one should not even give up on the anti-globalists themselves. My experience debating and challenging anti-capitalists has taught me that, once intellectually pushed, many of them do try to think up more constructive solutions to the problems they point. Many leave much of the anti-capitalist rhetoric behind. Some can even be converted to the wisdom of the free-market position.

One of the leading European anti-capitalists, George Monbiot, recently admitted that the protectionism and emphasis on local production he defended in the past would make poor nations even poorer. In time for the WTO-meeting, the British left-wing paper the Guardian started a web site against agricultural subsidies. And the biggest campaign against rich country protectionism and the EU’s common agricultural policy has not been organized by free trade economists, but by the development and relief organization Oxfam. Many traditional anti-globalists have been influenced by that.

The direction in which this movement will go in the future will depend on the extent to which its activists are confronted and forced to be constructive. And that’s important if we are interested in what kind of perspective the young generation is going to be influenced by. As Keynes put it at the end of the General Theory: “soon or late, it is ideas, not vested interests, which are dangerous for good or evil.”

Mr. Norberg, author most recently of “In Defense of Global Capitalism” (Cato), debates anti-globalists throughout the globe.

Wall Street Journal Europe, 22 October 2003