GLOBALISATION IS NOT NEW

The globalisation debate and how nations, businesses, Cultures and individuals cope is one of the defining issues of our day. In the absence of other issues it has joined imperialism, colonialism and communism and can be wielded like a club in any ideological direction. It’s not new, it’s not a policy hatched by some secret cabal, it’s a process that has been underway ever since the first person climbed down from a tree. Indeed some historians suggest trade as a percentage of GNP is lower than in 1990, the movement of people is certainly lower now than then. Those who revisited the crusaders fought with swords cast in India from ore mined in Tanzania. The French saw King Louis XIV drink Yemen coffee served on Chinese porcelain, sweetened with sugar from Sao Tome and smoked Virginian tobacco.

China had great trading ships, twice the size of Columbus’ tiny fleet, and sailed and traded with India, Africa and the Islamic world. One fleet had a crew of 20,000 men. This was centuries before Columbus. Opponents accuse globalisation of favouring the rich, big business and concentrating wealth. Bill Gates owns a smaller percentage of America than Rockefeller did. Look at the Fortune 500 companies, most of the leading companies ten years ago have disappeared. As did the great Royal fortunes in most of Europe earlier. Company taxes as a percentage of revenue in OECD countries have marginally grown over the past decade.

It’s the speed of change that destabilises people, but is this all bad? No-one complained about the speed of change in medical research. Prince Albert died of typhoid from the Thames. The richest man in the world died 150 years ago of a disease that could be solved by simple antibiotics that are now cheaply and readily available to the poorest people in most countries. Life expectancy is up, infant mortality down, literacy exploded over the past 50 years, Hundreds of millions have been lifted from extreme poverty, especially in China, and economies then have adopted open economic strategies.

Technology and science are man’s best friends. Johan Nordberg won the Nobel Prize for Peace for discovering super rice and super wheat, saving millions of lives. Nowadays protestors would try to stop him. Agricultural production in the U.S. has gone up by nearly 800% in 75 years. Most American farmers did not have electricity in 1900 and their life expectancy was 49 years. Railways in the U.S. cut freight costs by as much as 95% between 1815 and 1990. Refrigeration changed forever economies such as Australia, New Zealand and the Argentines. Now 40% of the world’s manufacturing exports by value go by air. A three-minute phone call between New York and London cost $300 only 50 years ago.

In my youth it took years to pay to purchase the Encyclopaedia Britannica, now it costs a few dollars for a CD. Thirty years ago Ghana had the same living standard as Korea, now Korea is as rich as Portugal. Portugal’s living standards have exploded since she embraced democracy and joined the EU. North Korea was richer than South Korea at the time of partition. Now North Korea’s people starve and live in fear. Burma and Thailand’s living standards were the same after the war, now Thailand is 25 times richer per person. Thirty years ago Japan was a developing country, the Baltic States and the Czech Republic had living standards closer to France and Denmark before the Soviet experience. Their income per person was just half that of their previous equals by the time the Soviet Empire imploded. A Taiwan factory owner paid his workers US$7.50 a month 45 years ago, now it’s $7.50 per hour. The Argentine had a higher living standard than Australia or New Zealand in 1900. What went wrong? What are the common denominators?

Open economies and societies do better. Globalisation is not a threat to the world’s poor. Marginalisation, the denial of what the world offers is the threat. There are still grave injustices. Free trade in agriculture would return to Africa 4 to 5 times more than all the overseas aid put together. 10 times more than all the debt relief offered so far. The EU and U.S. consumers pay 50% more for their sugar than they need to. This robs jobs from poor countries. Abolishing cotton subsidies would return $250 million a year to Africa. The Cairns group of Ministers led by Australia should be praised by the NGO’s because no other political group offers a better, more immediate, permanent and effective way of assisting the poorest producers in the world.

Globalisation should not be diminished or idealised, it offers the gift of opportunity, but if politicians, bureaucrats and phoney capitalists wish to plunder and protect their narrow interests, then there’s nothing you can do to prevent such economic suicide.