Martin Wolf’s Why Globalization Works Almost Succeeds Completely

Martin Wolf is a very bright fellow, formerly at the World Bank and now an economics maven for the Financial Times. His book, “Why Globalization Works takes on two different groups from an empirical approach, the anti-globalists and the anti-government capitalists. In refuting both and in defending globalization, Mr. Wolf almost succeeds completely in putting to rout the critics of globalization. Where he falls short, though, is where most economists fail, in their reading of politics.

The primary issue with which Mr. Wolf must contend is a definition of globalization, for through that, the anti-globalists define themselves. But the fact that he must do so in order to describe what its opponents are shows just how far liberal capitalism has come in seventy years. In 1935, capitalism was on its last legs, as Wolf points out. Those attacking it needn’t rely on its failings, as they were apparent on every street corner. Instead, there were countless alternative ideologies. Today, just what are the anti-globalizers proposing to put in its place? Wolf finds no coherent competing ideology has emerged that even a few favor.

In attacking the anti-globalizers, Wolf comes close on occasion to being overly statistical but his writing never bores (unlike most economists his is a gifted user of the English language). Where the facts support his case, he uses them well. Where they do not, he admits it – a most welcome change from the polemics of most books on the subject. His fundamental belief, that integration into the global economy benefits the poor more than exclusion from it, is certainly proved. But not without some acknowledgement that there are failings in the global capitalist system

Where he is equally interesting in his defense of the state in the modern economy. For many defenders of the market economy, the state is the enemy. It taxes business into bankruptcy, it can’t run the economy itself, it’s in the way, and it generally causes evil wherever it tries to act. Mr. Wolf shows this to be nonsense. A highly developed market economy requires a highly developed state to function. Contracts and property rights are the cornerstone of the market, but they require the state to permit them. Mr. Wolf shows that where the sate is weak (e.g., Sierra Leone) there is no market.

Where he falls down is in his dismissal of the threat of populist democracy. In the end, a global market economy among liberal democracies has a certain inevitability about it. But, the transition from what is to what will be inevitably creates winners and losers. And if the losers out number the winners, they can out vote them as well. This could prevent the spread of both democracy and markets and few economists, Mr. Wolf included, have dealt with the question. Indeed, few political scientists have either. Yet it is the fundamental question of the century, how to get there from here. The Kensington Review still seeks the answer as well, but Mr. Wolf’s book comes highly recommended all the same.

© Copyright 2005 by The Kensington Review, J. Myhre, Editor. No part of this publication may be reproduced without written consent.

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