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Why the protests will go on:
Proponents and enemies of globalisation will never
agree about what makes the world better, says Richard
Tomkins
Financial Times, Aug 25, 2001
By RICHARD TOMKINS
Who holds the key to human happiness? Economists or
the anti-globalisation protesters? Perhaps this will
be the issue that decides who triumphs as the two slug
it out in the court of public opinion.
On the one hand, you have the economists arguing that
open markets are good for everyone. Yes, they make the
rich richer - but they make the poor richer, too,
lifting living standards wherever they go.
On the other hand, you have the protesters arguing
that - well, they hold such a confusion of views that
it can sometimes be hard to tell. But, whatever else
it may be, it is underlined by the feeling that
globalisation is doing more harm than good.
When the anti-globalisation movement first hit the
headlines by wrecking the World Trade Organisation
meeting in Seattle two years ago, politicians,
economists and the financial community were outraged,
labelling the protesters violent anarchists with views
too extreme to warrant a hearing.
Interestingly, though, as the protests have gathered
strength this position has softened. Perhaps
globalisation could do with a tweak here and there,
its advocates now say.
Perhaps the west could open its markets a bit more to
developing countries' goods; perhaps multinationals
should take a little more care over labour standards
in the developing world; perhaps loans to poor
countries could be replaced by grants.
An example of the more accommodating stance came this
week when Felix Rohatyn,a former Wall Street
investment banker and until recently the US ambassador
to France, suggested in these pages (Personal View,
August 20) that a new Bretton Woods conference should
be called to weigh up the protesters' claims and
recommend policies to deal with them.
It is a fair bet, however, that no amount of tinkering
with the existing set-up will placate the
anti-globalisation movement, since most of the
protesters fundamentally disagree with politicians,
economists and business leaders over their definition
of what makes people better off.
Economists say that competitive capitalism is the most
effective way of generating economic growth and that
globalisation, or economic liberalisation, is the best
way of spreading economic growth to poor countries.
But anti-globalisation protesters reply: "So what?"
Economists have rigged the argument to suit themselves
by choosing to define economic growth as an end in
itself.
In fact, economic growth is a proxy for the pursuit of
happiness - and a pretty poor one at that. All it
does is measure a nation's output of goods and
services paid for with money. That definition takes no
account of other things that contribute to happiness,
such as family, friendship, community and tradition.
And it attributes no value to the negative aspects of
economic growth that anti-globalisation protesters
are so concerned about, such as environmental damage,
growing wealth differentials and the exploitation of
sweatshop labour.
In fairness to the economists, material wealth works
quite well as a proxy for human happiness when
people are striving to satisfy their basic needs for
food, clothing and shelter. In the west, it remained a
good measure as families moved on to the next stage,
equipping themselves with products that made
their lives easier, such as washing machines and cars.
More recently, however, gross domestic product has
become a much less reliable measure of happiness in
the west. Repeated surveys in the US have shown that
Americans are less happy now than they were 30 years
ago, even though incomes have risen over the same
period.
It was not supposed to be that way. Back in the 1960s
-when, incidentally, the world enjoyed exceptionally
high rates of eco nomic growth without the supposed
benefits of globalisation - people thought they were
heading for a utopia in which machines would do all
the work and an increasingly highly educated public
would be able to relax, sit back and start
appreciating the finer things in life.
Instead, globalisation and hyper-competition arrived,
resulting in longer working hours, higher stress
levels, a disruptive pace of change and growing job
insecurity. Increased competition between
economies also squeezed the public sector, threatening
the quality of public services; and workers who
were pitched into ever-intensifying competition
against people in far-off lands derived little
happiness from the sight of bosses rewarding
themselves with outsize pay packages.
Today's anti-globalisation protests are concerned more
with the perceived exploitation of poor nations
and worries about environmental damage than with
declining levels of happiness in the world's richest
countries. Yet in each case the issue is the same. How
far does it make sense to pursue GDP growth as a
public policy objective if only the benefits are
counted and none of the costs?
It may well be that, in developing countries, people
put more value on satisfying their material needs
than on preserving traditions, keeping families
together or saving the planet; but without attempting
to make the calculation, we shall never know. And
until someone comes up with a radically better way of
measuring our progress towards human happiness than
GDP growth, the anti-globalisation protests
seem likely to go on.
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