Samizdata

Paul Staines writes:

New data shows that the developing world’s share of global trade has surged to a 50-year peak. Rising oil and commodity prices coupled with vigorous global trade growth meant developing countries saw their share in world merchandise trade rise sharply in 2004 to 31%, the highest since 1950, according to WTO figures released this morning.

The data provides clear evidence that trade liberalisation continues to play a growing role in economic activity and is increasingly important for development and poverty alleviation. More countries are engaging in international trade and participating more actively in setting and negotiating trade rules.

Just like with India and Hong Kong, trade liberalisation is key to African prosperity. If we truly want to Make Poverty History, the world needs free trade – not protectionism.

How long Economics in One Lesson has been available to read free, online, I have no idea, but since she only just heard about this, I feel entitled to say with similar lack of shame (unless of course a fellow Samizdatista has already flagged this up and I missed it) that her posting was how I finally found out about this myself.

It has been a while since I read this book. The bit I recall with the greatest vividness concerned the broken window fallacy. This fallacy says, fallaciously, that broken windows are good for the economy because they are good for the window-mending business. What the broken window fallacy neglects to mention is that broken windows are bad for all the businesses that the window mending money might have gone to instead, but now cannot.

The most extreme statement of this fallacy is the claim that the ultimate window breaker, war, is good for the economy, because that way lots of work is “created” in all the industries that subsequently set to work to repair the destruction. When Keynesian economics was in its pomp, you did hear people actually saying this. Maybe, if those are the kind of circles you still move in, you still do.

Yet war is creative, in a back-handed way, and provided that you lose. It destroys wealth, but it can also destroy certain impediments to future wealth creation. Mancur Olsen, in his book (alas not available on line so far as I know) The Rise and Decline of Nations (lots of five stars out of five reviews here), says that, yes of course, losing a war does destroy wealth, but that it also destroys what he calls “distributional coalitions”. In plainer language, losing a war breaks up politically well-connected rackets, like state-enforced cartels and trade-unions. Thus the post-WW2 economic miracles of Germany and Japan.

This is what you would call a high risk strategy for achieving economic dynamism. I mean, just for starters, be careful who you lose your war to. Pick the wrong country to surrender to and you are liable to end up with an even huger, politically even better connected racket, in the form of your rapacious conquerors. In other words, broken windows followed by more broken windows, and nobody ever mending them.

Anti-liberal NGOs like War on Want and the World Development Movement are using World Water Day (today) to campaign against private investment in water infrastructure. The World Development Movement says that water privatization is: “making it less likely that clean water will ever get to the poorest people.”

Unfortunately the World Development Movement is mistaken. As Global Growth’s development economist, Paul Staines, says (pdf file):

Practical and technological requirements for huge sanitation projects on a metropolis-wide scale require the resources of big enterprises to implement them, the private sector can not only provide the capability but also the capital required. 2 billion people thirst for clean water, Western antiglobalisation NGOs who arrogantly put their ideological interest ahead of the interests of the developing world are full of **it, and if they succeed in their campaign the fast growing cities of the developing world will be as well.

Private investment in water is expanding access to clean, running water. It contrasts strongly with nationalized water systems where politically-favoured groups receive below-cost water, starving off future investment so that unfavoured groups go without. Private investment offers the best plan for increasing access to water.

Crossposted from the Globalisation Institute Blog.

My February last Friday has just ended, and it was definitely one of the better ones. Patrick Crozier spoke about libertarianism and private road ownership. Excellent talk, excellent discussion. The result of Patrick’s time writing for and bossing the now only archived Transport Blog, which he has now ended. (He now writes this.)

Among those present was Alex Singleton, and he naturally talked about his newly launched Globalization Institute, which, of course, has a new blog.

It occurs to me that you might expect the word itself, ‘globalisation’ (I prefer an ‘s’ in the middle there), to be the equivalent, at the global level, of ‘nationalisation’ at the national level. Yet, while nationalisation means the national government stealing things, globalisation means something quite different and much nicer. If globalisation was the same at the global level as nationalisation is at the national level, globalisation would mean a World Government stealing things.

Does this matter? Well, maybe it does, because we surely do need a word to describe the equivalent of nationalisation, but at the global level. I have been drinking and may have forgotten the obvious, but my impression is: we do not have such a word.

Surely the existence of the word ‘nationalisation’ made it far easier to oppose the thing itself. Not having a word for this other form of ‘globalisation’, predation by the government of the globe, makes it harder to oppose, I think.