Globalization – chartreuse, perhaps?

Child with globeI too read The Undercover Economist and while I enjoyed it as much as Will did, I am still not convinced that Globalization is Green. The book did provide a lot of food for thought and it made me rethink why I have such a gut opposition to globalization. I think I’ve come up with a few answers.

1. The global economy is not perfect. My number one frustration with economists is that they like to talk about perfect systems when they know quite well that reality is something completely different. (I often have this problem with physicists as well.) Tim Harford is very good about admitting what is model and what is close to reality. His whole point is that if we embrace globalization fully and get rid of tariffs and other protectionist laws, everyone will be better off. That may well be true but I don’t see globalization happening that way. Every country is trying hard to globalize while still keeping the upper hand, whether in terms of agricultural subsidies or import taxes on foreign steel and in the process a lot of people are getting screwed over. That’s the kind of globalization I’m not a fan of.

2. Globalization tends to erode traditional cultures. I have strong yet conflicted feelings about Westernization. I do believe it’s important for people to be exposed to knowledge and viewpoints from around the world but at the same time I hate to think that everyone is being exposed to “American Idol” and McDonalds. I am not a huge fan of American culture and it makes me sad to hear about countries and regions whose youth are abandoning traditional ways in favor of becoming more Westernized. Perhaps I’m just being sentimental but I believe we are losing knowledge and social cohesion when people give up village life to go into the city or when indigenous tribes are forced off their land to a new area because that land has become a valuable economic resource.

3. Economic defenses of globalization tend to ignore all the important stuff because they are externalities. I would be very excited if Tim Harford wrote another book where he laid out a proposal of how to account for all the “externalities” – things like pollution, traffic, reduced natural resources, landfill space, etc. that are not part of the economic transaction. He did give a few interesting examples about how we should combat air pollution by charging people extra money to drive during rush hour or in smoggy areas so there is a direct connection between the undesirable activity and the monetary penalty. However, there’s a lot more scenarios out there to figure out and I don’t think anyone is making much progress, even though trade and globalization is expanding rapidly. I want to see real costs with all those externalities factored in.

4. Local food is important. This one may reveal the depths of my hippie-ness and I’m okay with that. There is something that makes me really uncomfortable about trading food all over the world. Part of it is a transparency issue – it gets harder and harder to figure out how my food was raised when it is made from a mixture of products that were shipped in from all sorts of places. Part of it is a security issue – it just seems dumb to have a large population in an area that can’t provide enough food (or water – hello Los Angeles!). And I’m sure part of it is my rather radical belief that it’s healthier for people to eat food that was grown close to home because it has the right nutrient levels and familiar bacteria and appropriate adaptations for the climate. I’m not against trading for things that can’t be grown in one area – I love bananas! – but shouldn’t the bulk of our food come from nearby? this!

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