Samizdata

Anti-globalizers fail to look at the world in an aggregate way. Instead, they base their beliefs on anecdotal evidence. They find a worker in a factory who has been badly treated and blame this on globalization, and label all factories producing for Western companies as sweatshops. But they turn a blind eye to the big picture. They do not see the effect of inward investment in creating competition for labour, which pushes up wages and conditions. They do not know why the Asian Tigers are now rich. They do not see the economic growth rates of those countries – like India – who have liberalized, believing that globalization simply produces poverty. Indeed, they tend not to use any aggregate data at all. Because the big picture does not fit in their worldview, they junk it. They stick their fingers in their ears and then continue to argue against globalization with anecdotes.

The anti-globalizers are very good at confusing capitalism with absence of capitalism. They point to countries which have not liberalized and are therefore poor, and then blame this poverty on globalization. Because the facts do not fit their worldview, the facts must be wrong.

They want those in poor countries to become rich but without making the same ‘mistakes’ as Western countries. To the extent they support trade, it is a very odd form of trade. It involves people doing exactly the same type of work as their ancestors did, but with the wages being higher. They regard trade as a redistributive process rather than as a way of creating wealth. They do not see how wealth creation is anything more than a capitalist myth – after all, they say, we live in a finite world. All the evidence for the existence of wealth creation is ignored, because their worldview is trapped by the Fixed Quantity of Wealth Fallacy.

The anti-globalizers claim that the environment is getting worse. But the facts are not on their side. They look at the roads in London, see lots of cars and say that air pollution is getting worse and worse. They fail to look at the data – they do not need to because their worldview tells them that the environment is getting worse. The data however shows that the air quality in London is the cleanest since records began in 1585. On most measures, the environment is getting better.

Nevertheless, in the name of helping the environment, they promote the idea of a future Britain where we all live simpler lives, use local currencies, work locally and buy from local organic farmers. They have a romantic image of the Middle Ages economy, with people all happier, picking buttercups in the fields. They completely ignore that the economy of the Middle Ages was nasty and oppressive for the majority of those living under it, where people died at a young age. They fail to grasp that with wealth comes the ability to solve environmental problems. Instead they prefer to oppose the creation of wealth.

The anti-globalization movement is intellectually bankrupt. It is capable of shouting slogans and protesting international meetings. But in terms of providing solutions to the world’s problems, it has nothing to offer.

I was at the University of Paisley last week debating the subject of free trade. One of the other speakers was Martin Meteyard, Chair of CafeDirect plc, a corporation which sells ‘fair trade’ coffee. He had brought with him a packet of Mexican ‘fair trade’ coffee which he proudly showed to the audience.

I was a bit surprised that he had chosen Mexican coffee. After all, compared with other coffee producers, Mexico is a rich country. Granted, Mexico’s wealth is not at British levels. But with a per capita GDP of $8900, the country is considerably better off that other coffee producers like Kenya ($1100), Uganda ($1200) and Tanzania ($600).

Mexico also has much better trading terms than other coffee producers. It is part of the North American Free Trade Area and has a free-trade agreement with the European Free Trade Area (and thus the EU). Industry accounts for 36% of the economy and services 69%. Only 5% of Mexico’s economy is agricultural.

The fundamental problem in the coffee industry worldwide is that there is too much production. This means that the price is low. What is needed is for people to exit the market, and in Mexico it is easier than anywhere else to turn your back on coffee – after all, agriculture accounts for only 5% of the economy. (Yet, according to CafeDirect, 25% of ‘fair trade’ coffee comes from Mexico.) Is CafeDirect really engaging in a great moral act by helping Mexicans stay in the market?

Paying a few pence extra for a cup of ‘fair trade’ Mexican coffee might make you feel like a better person. Unfortunately, how you feel does not make the world a better place.

So Kofi ‘Food-for-Oil Scandal’ Annan has met with Tony Blair to discuss an eight point programme for setting the world to rights.

I am appealing to the Chancellor and the UK government to use the upcoming UK presidencies of the G8 and the EU to work for the necessary political breakthrough and the additional resources needed to achieve those goals.

The only way political breakthroughs are going to lead to an end to poverty is when political leaders do a great deal… less.

The socialist charity and political lobbying group Christian Aid, has a new campaign called Vote for Trade Justice.

Free Trade: some people love it.

Imagine getting mugged after a tough day’s work.
Every. Single.Day.
By the same muggers.
Grind you down, wouldn’t it

That’s what it’s like for people struggling to make a living in the world’s poorest countries. Why?

So called Free Trade. Our government claims Free Trade is the solution to the world’s problems. But that’s exactly what you’d expect them to say. Why? Because it allows the world’s richest countries and their fat cat companies to profit.

Ok, so let me get this straight… Western farmers, their operations subsidised with other western taxpayer’s money and their own domestic markets distorted by ‘protective’ tariff barriers which increase the price of imports, sell to African countries and that is… Free trade? FREE TRADE?

What the hell is free about it?

Western agricultural producers are a nightmarish mix of tax subsidy and production quotas, with bizarrely priced surpluses that are occasionally and erratically dumped on Third World markets… and at the same time western consumers are denied access to both First and Third World products at their true economic cost by a vast raft of arcane state and super-state imposed regulations. Please explain who exactly is engaging in laissez faire here. The only intelligent bit is calling it “so called” free trade.

The problem is that vested economic interests (big business and big labour) have zero interest in free trade. They do not give a damn about the Third World, all they see is the extremely low labour costs in the developing countries and what that implies for their own narrow sectional interests… and they have the state to protect those interests with laws.

So is Christian ‘Aid’ screaming “Remove all tariffs to imports NOW”?

Of course not. They are calling for an end to “Free Trade”. What is needed is not democratically sanctified politically managed trade (which we have now) but real, genuine, non-government regulated free trade. The fact that Kenya actually does manage to sell significant quantities of very high quality green beans in Britain is a testament to how some people will succeed in spite of western regulatory systems which would rather their producers just lived in abject poverty and that westerners pay more for their food than they need to.

If Christian Aid really cared about people in the Third World rather than just posturing for their own self-important gratification, they would be demanding true laissez faire free trade in which low labour cost agricultural nations could take on the western open air industrial chemical factories, sorry I mean farms, without having the state/super-state controlling access to the target market tilt the scales against them.

Demand for more ‘organic’ produce increases by the year and many Third World countries are well suited to serve that premium high margin market. That is where the foolish self-appointed Paladins of the Oppressed should be directing their attention rather than calling for mere tinkering with the statist system of trade controls that is so integral to the problem in the first place.

With friends like Christian Aid, people in the developing world do not need enemies.