Making sense of globalisation

Colin James book review for NZ Herald Perspectives page for 12 October 2007

Brian Easton, Globalisation and the Wealth of Nations, Auckland University Press, 234pp, $49.99

We are all global now, aren’t we? Well, actually, no. We’re still, the great majority of us, solidly local. For most, “globalisation” is what other people do.

But what those other people do intrudes on our local lives more, and more directly, than it used to. Modern globalisation is not humanity going global by leaving Africa or the long-distance trade of earlier millennia or the long-distance migrations to New Zealand from Polynesia, then England.

The globalisation we talk of now brings us a New Zealand-label jersey made in China or a car or computer made in 15 countries, tosses ownership of our city buses to Scotland and back again and puts a Scottish airport on the books of a local company, gobbles up and spits out our brilliant IT startups, fires people by a stroke of a pen 10,000 kilometres away and funds mortgages from the savings of middle-aged women in Tokyo.

And much, much more. Globalisation makes Chinese pollution and Indian water shortages and extreme weather events in Florida our issues. We cravenly take computers out of briefcases at airports in homage to distant, unfathomable Islamic fanatics.

The new globalisation is the offspring of another episodic telescoping of distance: faster and cheaper transport and instantaneous, near-free exchange of information. For New Zealand this brings threats and opportunities.

Economist Brian Easton brings this together in a very readable primer aimed for New Zealand readers. Aside from the voluble Mike Moore, there is not much on the topic in the New Zealand vernacular apart from leftist diatribes equating globalisation with rapacious capitalism and/or “colonisation”.

Easton is often associated with that political left, so his juxtaposition of Adam Smith’s famous title and the left’s punchbag, globalisation, might presage such comforting diatribe.

And he does excoriate “uncritical ‘free-market’ advocates of globalisation” who overlook the negatives, not least persistent global inequalities.

But he dismisses as “equally unhelpful” “uncritical anti-globalisers” who reject the enriching outcome of trade. An economist, especially one with Easton’s substantial credentials, could not do otherwise. “Such extremism” in the debate, he says, is not conducive to understanding.

Easton sees “good and bad”, exemplified by the “steelworkers who bemoan the loss of jobs to China while wearing Chinese-made clothes bought in preference to more expensive local products”. He sees the World Trade Organisation as “neither comprehensive nor fair but it may be on the way there” by establishing a “world legal framework for international commerce”.

He examines globalisation through a lens of “distance” and its taming. He scans economies of scale, agglomeration, competitive advantage, offshoring, intra-industry global trade, migration and demographics. He examines “convergence”, including of time, culture and health policy, and distance-destroying forces such as trade, finance and international investment. He canvasses the factors that underpin economic development, including resources, information and technology transfer. He takes us into the “rich club” — who are members and how they got there — contrasts that with the enduringly poor economies and charts the path some economies are taking from rich to poor.

Professional economists will find points of disagreement, especially those known popularly as “classical”, “neo-classical” or “neo-liberal” (or, their preference, “liberal”).

But for the non-economist in a small nation buffeted by a big, intrusive world who wants to understand the forces at work, Easton makes the economics accessible and gives it context.

That is in part because for Easton the nub of globalisation is not its goodness or badness but “how to harness it for the common good”. And that takes him beyond economics into social policy, politics, the organisation of the nation-state and the prospects for global cooperation to deal with issues — for example, access to resources and the prisoners’ dilemma that is global warming — that could, if mishandled, set nations at each others’ throats.

Easton is strong on economies’ “inherent” unfairness and the relevance of international and intra-national inequality to social order. But at other times in his ambitiously wide-ranging, multi-disciplinary study he is on less secure ground. For example, he sees in the European Union a global governance model. Perry Anderson’s long, grumpy essay in the 20 September London Review of Books is a sobering contrary assessment.

Easton’s book would have been tighter for omitting such musings. Otherwise, as a short, imaginatively contexted and locally-aimed introduction to globalisation, it has real value.