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In Defence of Global Capitalism
 
Globalisation is Good



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GlobLog - July 2006
A direct link to each entry is obtained by using the button below the entry.


Sunday, 30/7/2006:

13:10 - WHAT THE WORLD COULD HAVE LEARNED ALONG ROUTE 93: 

After having been on the road in the US for two weeks, often searching for places to stay, I got the impression that many motels were operated by Indians. And that is apparently the case. My friend Michael just sent me this quote from Washington Times:

"Indian-American entrepreneurs own nearly 20 percent of all Silicon Valley high-tech startups, and an estimated 55 percent of all U.S. motels are owned by Americans of South Asian ancestry. In 2000, a staggering one of out every nine Indian-Americans was a millionaire and almost 60 percent of Indian-Americans over 25 have graduated from college."

Another success story of globalisation: They get jobs, I get a cheaper motel. They become millionaries and I get better technology. But don´t expect the world´s governments to understand the plus sum-game that trade represents. They just destroyed the Doha round of trade negotiations because they thought that cheap goods and services threatens their economies (or pretend that they think so, to support interest groups in their countries). 

Hopefully, the collapse will lead some countries to abolish tariffs unilaterally because they know that they are harmful - the way most free trade-reforms have been introduced in the last decades. But there is another logic ruling their behaviour right now: In 1990 there were less than 50 regional and bilateral deals. Today there are more than that in East Asia alone, and more than 200 around the world. With the end of Doha, we will see even more deals like that in the spaghetti bowl of crisscrossing and overlapping rules that discriminate outsiders (especially poor countries with little negotiation power) increase bureacracy and distorts trade  flows.

Another big risk is that the WTO´s one major achievement might be undermined: The system of rules and the dispute settlement mechanism. The WTO has no tools to enforce its rulings against arbitrary protectionism, so it´s dependent upon the goodwill of the members, and that might be seriously undermined when there is no prospect of a substantial trade round. The EU and the US have ignored rulings before, even when they had a stake in ongoing negotiations. Now I don´t know what will hold them back.

This can also be summed up by the cover of the latest Economist:



Tuesday, 25/7/2006:

14:52 - A HISTORIC DAY - UNFORTUNATELY: 

What´s the difference between the Football World Cup 2006 and the WTO negotiations 2006?

In the World Cup everybody lost except Italy, in the WTO everybody lost, period.

While staying in a small motel outside Bennington, Mass., I am reached by the news that the WTO´s Doha Round collapsed yesterday. Apparently many blame the US for not offering deeper cuts in agricultural subsidies. They are correct. But so are those who blame EU for not offering more reductions in agricultural tariffs, and the big emerging economies for not offering more in tariffs on manufactured goods.

Everybody involved has allowed their special interests to dictate their policies and betray their own long-term interests. They are either economically ignorant, or cowards.

Unfortunately, I think that Philippe Legrain sums it up well:

"The WTO now risks goes the way of the League of Nations in the 1930s and becoming an ineffective sideshow. There would be preferential trade instead of free trade, bilateral agreements rather than multilateral ones, free rein for protectionist actions rather than the discipline of international rules and impartial adjudication, the law of the jungle rather than the rule of law.

Shame on the narrow-minded mercantilists who have betrayed their countries´ interests and those of the poor by putting the profits of vested interests ahead of the people´s. They may come to rue this day."




Wednesday, 19/7/2006:

04:01 - WELFARE REFORM AND OTHER AMERICAN EVENTS: 

For the moment I am travelling around in Massachusetts, a state with nature, universities, bookstores and coffee shops to last a lifetime. 

And it´s filled with interesting people. By coincidence, I bumped into Andrew Sullivan in a coffee shop in Provincetown, and while travelling on Cape Cod I heard that two wealthy celebrities had somehow got the privilege to build million dollar mansions right in the middle of a nature park. You would imagine that this is the kind of class privilege leftists would complain about - if it wasn´t for the fact that the celebrities were the two socialists Noam Chomsky and Howard Zinn. Some people are more equal than others...

-----

Another absurd thing here is that President Bush, who has not vetoed a single stupid spending bill from Congress, just announced that he will do it for the first time. But only to keep treating stem-cell research differently from all other sorts of research, and keep blocking federal funding of it...

-----

But economically and socially America is in pretty good shape right now. I see more "Help wanted"-signs in shops and cafés in one day in Boston than I do in a year in Sweden. USA Today has an article on the impressive results of the welfare reform of 1996 today. Since then the number of families on welfare has declined by 57.6 percent. Child poverty is down, teenage pregnancies are down. And despite reduced wages during the latest downturn, the incomes of the 40 percent poorest single moms has increased by more than 50 percent!

USA Today also interviews three women who was on welfare whom they interviewed for the first time when the reform was passed. Here are some of the things they say today:

Theresa: On welfare "you slacked a little bit"

Lisa: The changes "showed me how to be a stronger person and a better role model for my kids ... It just makes me feel good to get up every day to work."

Wanda: "Now that I am working in a steady job, I bought me a home. I got built-up vacation time so I can take the kids on trips. I do more things with them ... They probably think I´m the super-mom who has everything."




Thursday, 13/7/2006:

13:27 - IMAGEPROBLEM: 

Hört på stan. (Via Libertati)



12:54 - ON ZIDANE, LATIN AMERICAN POVERTY AND A FEW OTHER THINGS BEFORE I GO AGAIN: 

After having returned from Spain I am now home one day, and leave for the US tomorrow. I wont blog regularly again until late July.

Andalucia was a very interesting place to study an important part of European history: The place where Arabic and European culture met and gave birth to ideas and science that helped Europe into the Renaissance. This was where pioneering Arabic scholars like Avicenna and Averroës taught Europe (and Aquinas) the value of Aristotle’s revolutionary ideas on logic and reason.

-----

At the end of a day with breakfast in Spain, lunch in Morocco and dinner in Gibraltar, I got to see the World Cup final. Of course Zidane’s headbutt to the chest of Materazzi was wrong. But how wrong was it? Many players use violent means to get an advantage, which destroys the whole idea of the game. Zidane apparently did it to punish Materazzi for sexist and racist insults against Zidane’s dying mother. The insults disturb me more than the response.

-----

At one of the conferences in Madrid where I spoke, Cristian Larroulet from Libertad y Desarrollo in Chile presented some interesting insights on Latin America’s development. The left often points out that Latin America has grown less than expected, and that poverty has not been reduced during the 1990s, despite markets reforms.

Larroulet divided Latin American countries in quarters, depending on the extent of their reforms 1990-2003 (according to the economic freedom index), which revealed an interesting pattern:

 Countries

 Growth 1990-2003

 Deep reform

 +4.6%

 Some reform

 +3.2%

 Few reforms

 +2.4%

 No reform

 +1.3%

Countries  Poverty change (<$2)
 Deep reform  – 8.5%
 Some reform  + 2.1%
 Few reforms  + 1.6%
 No reform  + 24.5%

In other words, it’s right to complain about the lack of progress in large parts of Latin America if you simultaneously complain about the fact that few Latin American countries have reformed seriously.

-----

While I’ve been gone, more reviews of my new book have been published. Kjell Albin Abrahamsson has written a great review that I really appreciate. And the extent of the technological revolution I describe should be clear to everybody when this experienced journalist thinks that I made a calculation error when I described that the largest tankers can carry so many containers that they would measure more than 50 kilometers if lined up (which is true, believe it or not).

I am also interested in two reviews from socialists, Andreas Bryhn and Ali Esbati. I will deal with them more when I review all my reviewers (especially Bryhn, who raises interesting points, whereas Esbati is more interested in reviewing my person than my arguments), but it’s fascinating that they both find more nice things to say about the book and its authors than Lars Magnusson in conservative Axess.

-----

In the end, the Bush administration had to give up its attempt to ignore its own laws and the Geneva Convention when dealing with prisoners of war. Not because of outside pressure, but because of the Supreme Court´s rulings. That´s one of the things that makes America great: the rule of law  works, even when the president says that it doesn´t.

-----

A lot of things could be said about the war between Israel and the regions it has recently evacuated, Southern Lebanon and Gaza, but most disturbing is that it is totally pointless and only driven by some people who prefer war to peace.

In NYT, Thomas Friedman sums it up:

“Israel has evacuated Gaza, and what does Hamas do? It doesn´t put all its energy into building a nest for its young there — a decent state and society, with jobs. Instead, it launches hundreds of rockets into Israel.

The Palestinians could have a state on the West Bank, Gaza and East Jerusalem tomorrow, if they and the Arab League clearly recognized Israel, normalized relations and renounced violence. Anyone who says otherwise doesn´t know Israel today. But those driving Palestinian politics seem determined to destroy Israel in its territory — even if it means destroying themselves in their own territory.”

-----

Thanks for all the intelligent support and criticism on my comment on file sharing and copyright. I have received so much email that I have no chance of responding to them all. But I read all of it and take it into consideration while I make up my own mind.

-----

And for those of you who read Russian, here is an interview with me to read while I am gone. When Putin now attacks the opposition openly, Russia certainly needs liberal ideas.

-----

And until then, remember the old saying:

“Winter is the season in which people try to keep the house as warm as it was in the summer, when they complained about the heat.”




Tuesday, 4/7/2006:

16:36 - LEAVING FOR THE SUMMER: 

As usual I am sorry that I have not replied to all the email I get, and now I won´t be easy to reach for almost a month.

Today I am leaving Sweden for Madrid, where I will give two lectures in one day, and then spend the rest of the week exploring Al Andalus, the old Muslim Spain, that gave Europe a link to ancient Greek philosophy and therefore in a way saved us from the Dark Ages. And after that I will go to the American east coast, where those ideas were transplanted to a new country, that saved Europe from totalitarianism in the 20th century.

The travel plan is a pure coincidence, but it sounds a bit like Rose Wilder Lane´s wonderful book The Discovery of Freedom.



Monday, 3/7/2006:

19:04 - IN ALMEDALEN: 

For the first time in my life I am visiting Almedalen during "the politicians´ week" - an annual Swedish summer event with speeches and seminars on the beautiful island of Gotland. If you throw a stone here, it will hit a lobbyist or a distributor of leaflets and flyers. It´s sunny, relaxed and very nice if you are interested in politics and you make tons of contacts. It´s also a massive waste of resources, since you can spend as much as you like and still not even being noticed among the almost 500 different events here.

THe most disturbing thing is that government authorities are everywhere here to campaign for more resources and more power to their own institutions - the pharmaceutical monopoly argues for its monopoly, the aid authority argues for more aid and so on. According to a very moderate calculation from the taxpayers´ foundation the authorities spend more than 2 million SEK to be here this week. So they spend our money to tell us that they should have more of our money. Shame on them.

(Most important this week: Thåstrom on stage to save the Baltic Sea.)



16:03 - IT´S NOT IN OUR GENES: 

Fredrik Erixon explains why Sweden is not as reliable a free trader as we would like.



Sunday, 2/7/2006:

15:06 - NEW NEO: 

The new edition of Neo is just out, with a list of 120 people who will govern Sweden from behind the scenes after the election in September. And I also interview Mario Vargas Llosa, who actually expresses hope about the future of liberal ideas in Latin America.



Saturday, 1/7/2006:

21:50 - MAIL FROM MEXICO: 

Tomorrow morning the presidential election begins in Mexico. The major candidates are Felipe Calderón who will continue the attempts to reform and globalise Mexico or for López Obrador, who says that the country should "turn inwards" since liberalisation hasn´t meant anything positive for the population.

But it has, Alejandro tells me in an email from Mexico City:

"- Between 2000 and 2005, the share of Mexican households owning home appliances increased dramatically. Specifically, the percentage owning a TV set went from 86 to 91%; a refrigerator, from 68 to 79%; a washing machine, from 52 to 62%; a computer, from 9.3 to 19.6%.

- The share of households with electricity increased over the same period from 95 to 97%; with running water, from 84 to 88%; with sewage, from 75 to 85%.

-Homes with dirt floor decreased from 13.2% to 10.2% of the total. Homes with four inhabitants or less increased from 55% to 64%.

(Source: INEGI)"




 

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