Globalization's Biggest Most Dangerous Lie

Over at TPM Cafe, this week Fareed Zakaria's new book, "The Post American World" is being discussed. In it, Zakaria repeats the theory of globalization's most toxic and unproven claim: that countries which participate in trade together do not make war upon one another. So if you want to prevent war, just participate in deep and interwoven trade with the other country and everything will be hunky-dory.

It's a lie.

Zakaria claims that We're Living in Scarily Peaceful Times":

The new and most dangerous twist to all this is that our great looming danger is Russia, China, and the rising oil dictatorships.... This is a worldview bereft of any historical perspective. Compared with any previous era, there is more economic integration and even comity among the world's major powers. The imbalance between the West and the rest is large, not complete but large and in most areas increasing. The newly emerging states want to grow within the existing world order, which John Ikenberry has nicely described as "easy to join and hard to overturn." The world is going our way, slowly and fitfully, with some detours. No great power has an alternative model of modern life that has any real attraction?

This is essentially the same argument that Thomas Friedman made in The Lexus and the Olive Tree' and reiterated even a short time ago in this liveblog:

You know in Lexus I wrote that no two countries would fight a war so long as they both had McDonald's. And I was really trying to give an example of how when a country gets a middle class big enough to sustain a McDonald's network, they generally want to focus on economic development. That is a sort of tipping point, rather than fighting wars.

This argument, repeated over and over on both necoconservative and neoliberal sites, and all over the corporate media, that free trade leads to middle classes leads to democracy leads to kumbayah, is pretty simple, and it is dangerously wrong. Or as Zakaria reviewer David Rieff summarizes:

he reads too much into into two indisputable facts of the current moment --- that there are fewer major wars taking place than in living memory and that there is a greater level of global economic integration than at any time in history.

The truth is, the free trade zealots also have spent too much of their careers seduced by neoclassical economics' favorite mythical beast, Homo economicus, the Rational Man; and not enough time reading history.

For a start, contrary to the free trade zealots, this is not the first period in world history in which there has been relatively "free" trade, nor is it the first time in which there has been "globalization." For example, as is pointed out in an article entitled European Social Security and Global Politics By Danny Pieters, European Institute for Social Security Conference

Globalisation is not a new phenomena. During the second part of the nineteenth century there was a strong move toward the liberalisation of international transactioins, and international trade expanded rapidly until the beginning of World War I

And just which country in Europe was undergoing the most rapid growth and industrialization during the perioed from 1870-1914? As this essay states, Germany

embarked upon an extensive education program; it specialised in technical ares and so there was a greater push in that direction. It produced more and better scientists, and so Germany began her industrial advance. Also, the French threat, even if it was superficial, spurred the Germans in authority into action, and made them make Germany stronger and superior.

German expansion was also helped by the expansion of the railway network, so that goods and mail could get from one place to another, and to more places, faster and more efficiently.

Needless to say,much like the mercantilist expanding autocracies now fawned over by so many of the free trade zealots, during this time Germany was a monarchy, ruled by the Kaiser.

Even worse, this isn't just the first time that economies have experience "globalization", it also isn't the first time that this exact same argument has been made. In his 1910 best-seller, "The Great Illusion" Norman Angell wrote that:

the universal assumption that a nation, in order to find outlets for expanding population and increasing industry, or simply to ensure the best conditions possible for its people, is necessarily pushed to territorial expansion and the exercise of political force against others.... It is assumed that a nation's relative prosperity is broadly determined by its political power; that nations being competing units, advantage in the last resort goes to the possessor of preponderant military force, the weaker goes to the wall, as in the other forms of the struggle for life.

The author challenges this whole doctrine. He attempts to show that it belongs to a stage of development out of which we have passed that the commerce and industry of a people no longer depend upon the expansion of its political frontiers; that a nation's political and economic frontiers do not now necessarily coincide; that military power is socially and economically futile, and can have no relation to the prosperity of the people exercising it; that it is impossible for one nation to seize by force the wealth or trade of another -- to enrich itself by subjugating, or imposing its will by force on another; that in short, war, even when victorious, can no longer achieve those aims for which people strive....

There is quite simply no difference at all between the theses of Angell a century ago, and Friedman and Zakaria now.

And what happened only 4 years after "The Great Illusion" was published? Well, another book that Zakaria and Friedman ought to read is Vera Brittain's autobiography, "Testament of Youth". Vera Brittain was a comfortable affuent middle class girl who was accepted to Oxford University shortly before World War I broke out. By the time it was over, her brother, Edward; her fiance Roland Leighton; and every other young man she had been close to, had been killed. Brittain's book is a searing documentary about the utter destruction of an entire generation of British young men caused by the war.

Just how many people were killed by World War I? One source puts just the number of military deaths at 10 million. Including the wounded, in some European countries over half of the entire generation of young men were casualties. Another source says:

the percentage of a country's population directly afflicted. During the course of World War One, eleven percent (11%) of France's entire population were killed or wounded! Eight percent (8%) of Great Britain's population were killed or wounded, and nine percent (9%) of Germany's pre-war population were killed or wounded! The United States, which did not enter the land war in strength until 1918, suffered one-third of one percent (0.37%) of its population killed or wounded.

Simply put, World War I is a thorough and devastating refutation of the argument that free trade leads to peace and democracy, Quite the contrary, had Zakaria and Friedman bothered to actually study history, they might have found out that revolutions typically do not occur in eras of increasing plenty. Rather, they occur in times where rising expectations have been dashed:

the "J-curve" theory says that when conditions improve for a relatively long period of time, — and this is followed by a short economic reversal — an intolerable gap occurs between the changes that the people expect (dashed line) and what they actually get (solid line). Davies predicts that this is when revolution will occur (arrow).

Support for this theory was found in a 1972 study of 84 nations. Researchers found a clear relationship between indications of political instability and economic frustration. "Frustrated countries" are those that had poor economic conditions — low economic growth, insufficient food, few telephones and physicians — while being acquainted with the higher living standards of industrialized, urbanized countries.

These studies show that frustration is more likely to develop from relative frustration — the gap between their expectations and the reality that does not live up to these expectations. People in poor countries isolated from the outside world do not realize how poor or frustrated they are. Their frustrations are accepted merely as part of living. In contrast, the people in poorer countries exposed to modern standards feel more "frustrated." To top this off, deprived people who have experienced some recent progress are more frustrated than those who experienced poverty and oppression.

In short, just as Germans were hardly big agitators for democracy during the time the German state was expanding, and autocracy was resulting in greater prosperity, so we should not expect that any autocratic states today that are profiting mightily from economic growth are suddenly going to turn democratic. To the contrary, just like the Kaiser's Germany, it is much easier to direct aggression elsewhere.

Democratic revolutions occur when previously rising expectations have been dashed, and the populace has no outlet for their anger and frustration. In democracies, governments can be changed (as in 1932); but in autocracies, the ruler's cronies are protected from the privations, and with no alternative avenue of recourse, and seeing the manifest injustice of the benefits of the system, the populace revolts.

Fpr example, Taiwan's democratic reforms were sparked by the violence of the "Kaohsiung Incident" of 1979. Similarly, democracy finally came to South Korea in 1987 when workers finally rebelled against artificially low wages:

South Korea is hardly a model of a free economy. The hand of government planners in setting priorities and steering companies has been heavy. The low wages that helped fuel growth did not result from market forces. For 25 years, successive governments deliberately held down pay rates. They virtually barred strikes, jailed militant labor leaders, and decreed tough guidelines for wage increases. To block development of independent unions, companies created their own and installed leaders acceptable to the government. Says a Western diplomat in Seoul: ''Union leaders were practically appointed by the national security police.'' With democratic winds sweeping South Korea this summer, workers were emboldened to push for higher pay, independent unions, and the right to strike,

It is a disgrace that we see these same discredited theses, this same Great Illusion, embraced by corporate media pundits so often. That free trade inevitably leads to peace and democracy is a Big and Dangerous Lie, to which World War 1 is the most spectacular and unequivocal counter-evidence.
There is no guarantee, alas, that we are not now on that same catastrophic path.



nice call out

and frankly good bitch slap which this guy needs. I find it frightening how easily they can rewrite history per whatever corporate agenda they have and it doesn't get called to the mat. I often wonder if the reduction of history classes in K12 is part of the cause.

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Agreed but I think there are two additional elements to consider

1. The appeal to nationalism. I think risks of conflict grow when governments allow an US vs THEM attitude to percolate. This is one of my fears with China, involved or not in the international economy, as its nationalistic fervor can be scary at times and can override good sense. Nationalism blinds.

2. Competition for resources: We are rapidly reaching the extent of "undiscovered" resources. In the future to get access means displacing someone else. China has rapidly been out securing "long term access" to resources (a bit like putting armies on Territories in RISK, before the game has even started). When we say need copper and find that we can't get it because China has bought the mines and the copper is not even available on the market, well who knows what will happen.

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I know what you are worried about but I think it's unfounded for the reality is we are a series of countries, in competition. I think the "US-vs-Them" would be much less so when the philosophy is more "US first, then them".
So in other words a more mutually benefical equilibrium than is going on right now.

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Nationalism, religion trump economics

at least more often than not. Heck, we see examples of that right here in the USA in some red states.

I should clarify that I'm not advocating confrontation with the autocratic states. I'm making a somewhat more limited point that economic integration does not necessarily lead to a democratic society. The two can be intertwined but in no sense can it be shown that one leads to the other.

BTW, I left a truncated version of this blog entry at TPM Cafe. Apparently cutting of the main thesis off this week's book at the knees, is too much for their delicate psyches, because they've refused to post the comment so far.

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something for you to ponder

Fareed Zakaria was interviewed on CNN today and said that Obama might have the policies to put into place what his book recommends.

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