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Book Reviews
Jagdish Bhagwati
In Defense of Globalization
 The celebrated economist
that wrote this book needs hardly an introduction. Perhaps the name
awarded to him by left wing sympathizers through out the world ought to
summarize it all. He’s been called ‘the world’s foremost free trader’ for
many years now. Undoubtedly one of the strongest candidates to be knocking
on the Nobel Prize’s door for decades now, Bhagwati summarizes his
perspective on globalization, a much talked about phenomenon especially in
recent decades. Bhagwati deals a mortal blow to the arguments of
celebrated economists like Amartya Sen and Joseph Stiglitz, rendering much
of them paralyzed. Perhaps it’s the title of Stiglitz’s book
(Globalisation and its Discontents) that prompted Bhagwati to title his
book like he has. Bhagwati writes persuasively and has facts, common sense
and historical evidence to back his points. Coupled with that is his
uncanny witticism clad sarcasm that reduces his opposing arguments to the
stature of rodents.
The core of Bhagwati’s argument revolves around the debate over the
economic implication of globalization, especially in the developing world.
Too much has been written about how bad is economic integration, how it
has led to ruination in poor countries and how organizations like the WTO
and IMF are really satanic in fervor. For Bhagwati, the question whether
globalization is good or bad is fruitless. He devotes his time to arguing
that not only globalization is good, but has a potential to do far more.
This distinguished Columbia economist shows through empirical analysis and
evidence that poor public policy outlook in regions such as East Asia and
Latin America are the main causes of their financial meltdown and not free
trade itself. Bhagwati consistently shows the fruits of open trade have
brought to countries across the world, poor or rich, and how it could be
pursued further. In essence, globalization does not need a ‘human face’-
it already has one- more so than the opposers of free trade. Bhagwati
identifies the evils often associated with globalization to poor
governance, hegemonic tendencies of developed countries, hypocritical
double standards in international organizations and pure ignorance. Thus
he relieves free trade from these erstwhile shackles, arguing that it is
the single most important phenomenon to material well being of the nations
of the world. In all, the book moves forward at blistering pace,
demolishing every pseudo edifice of mercantilism on the way, providing
sizzling entertainment to the reader.
However, reservations could be made about two arguments in the book.
Firstly, his argument, the classical liberal one put forward by Adam Smith
and David Ricardo, of ‘comparative advantage’ is not convincing enough. It
is true that most countries will indeed find their niche in the world
market to develop their unique selling points, but at least in two
circumstances this could not be the case- 1) the country concerned having
no resources to base exports on and 2) a country’s companies being wiped
out at their infant stage by giant MNCs and thus it being dependent on
MNCs for employment and imports for consumption which potentially has
national security implications for that country. To resolve this, surely
we need to return to the Smith and List’s notion of ‘infant industry
protection’, whereby a potentially competitive industry needs some
breathing space to realize its full competitiveness before being exposed
to the cutthroat competition in the international market. Perhaps Bhagwati
means so, but his argument is not always clear on this issue.
Secondly, his arguments on multiculturalism being facilitated through
globalization are rather idealistic. Indeed, certain aspects of Oriental
cultures have made a great impact on the Occident, but surely the control
of the channels through which these interactions can occur by the ‘west’
undermines this whole process. As a result, in countries in India, the
youth have increasingly failed to distinguish anything native and western
merely as ‘different’ but have invariably placed them in a ladder of
superiority-inferiority, with the Indian counterpart always occupying the
latter rung. This ultimately deals a blow to the pride and confidence of
the nation concerned.
These reservations aside, a work that is no doubt nothing short of a
masterpiece from a scholar from who we have now gotten used to receiving
classics.
– Aruni Mukherjee
November 14, 2004
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