Globosclerosis and The Limits Of Open Markets
David Brooks characterizes the fall of the West as globosclerosis:
[from Op-Ed Columnist - Missing Dean Acheson - Op-Ed - NYTimes.com]Today [as opposed to the post-WWII, cold war world, when Westphalian nation states were at their peak] power is dispersed. There is no permanent bipartisan governing class in Washington. Globally, power has gone multipolar, with the rise of China, India, Brazil and the rest.
This dispersion should, in theory, be a good thing, but in practice, multipolarity means that more groups have effective veto power over collective action. In practice, this new pluralistic world has given rise to globosclerosis, an inability to solve problem after problem.
As if we solved problem after problem in the 60s, 70s, and 80s.
Brooks is hand wringing about the ‘failure’ of the Doha round of World Trade talks, where the globalizing West seeks to ‘liberalize’ trade by getting India, China and others to drop local subsidy of local agriculture.
The notion of this being ‘liberal’ is a slight of hand, a trick: it really means opening more markets to the economics of global corporations, which leads to rapid consolidation based on economies of scale and high energy inputs, with the result that more people are forced from small scale farms and flee to increasingly feral cities to become part of the ‘Bottom Billion’ living in shanty towns.
Brooks — despite being a columnist for the liberal New York Times — is conflating the supposed ‘openness’ and ‘liberalism’ of free trade with a long list of other ills: Dafur, Zimbabwe, and Iran. The supposed thread linking these various messes is the failure of the world’s power structures to align in an obvious way to fix the problems involved. And Brooks is right, in part, that in a multipolar world, it is increasingly unlikely that decisive action can be taken to quickly attack and resolve major issues. Indeed, it is hard to imagine that the various world powers can even agree on a shared perspective for these issues.
It is time to rethink free trade, and not to lump it in with a long shopping list of other issues that require our support. It is distinct and different from countering genocide in Darfur, or opposing Iran’s nuclear ambitions.
We need to oppose free trade that accelerates the depletion of the world’s aquifers and desertification, that dislocates rural populations and sends them as economic refugees to live in the slums of already overgrown megacities, and relies on Twentieth Century energy economics (including high costs of labor, cheap oil, low cost international transport, and treating the atmosphere as a sewer). Disguised in the hypothetical liberalizing impact of a globally linked and open economic agricultural system is the capacity to destroy local systems of food production and other localized economies, on a worldwide scale.
I no longer believe in the wisdom of open markets to lead inevitably to just outcomes. Partly this is because of the ‘tragedy of the commons’, where the true costs of production are not accurately reflected in the costs passed along to the consumer by exploiting unrenewable resources, like water in deep aquifers or dumping CO2 in the air. And partly this is because taxation and other governmental policies can be rigged to support the growth of these companies at the expense of individuals in other countries, or at the expense of people everywhere.
Personally, I am happy with the premise that coalitions of nation states are losing the ability to take drastic actions, to force global policies on others.
[Just in passing: Free trade was the rallying cry for the Opium Wars in China in the 1800s, when China refused to open itself to the rapacious trading practices of the West despite the growing addiction of the West for tea, the making of which was a secret at the time. England began trading opium to China to acquire the silver that was the only option for the purchase of tea, since the Chinese deemed all objects of Western manufacture — weapons aside — of low quality. This culminated in the Boxer Rebellion, and the overthrow of the Qing dynasty by Western powers, which was another coalition of Western states advocating free trade. I think that China has not forgotten that episode, which was as traumatic for the Chinese as the Civil War was for the US.]
I have lost faith in the judgment of Western growth-based globalism. Brooks on the other hand favors the League of Democracies coalition that McCain and others advocate:
The best idea floating around now is a League of Democracies, as John McCain and several Democrats have proposed. Nations with similar forms of government do seem to share cohering values. If democracies could concentrate authority in such a league, at least part of the world would have a mechanism for wielding authority. It may not be a return to Acheson, Marshall and the rest, but at least it slows the relentless slide towards drift and dissipation.
On the contrary, the best anodyne to the messes that globalism has engendered is localism. Smaller polities — like the Bay Area, Catalonia, or the Hawaian Islands — working to become self-sufficient and less reliant on the actions of increasingly less powerful nations. And like the case of Catalonia, the smaller regions should hold back more of their tax money to be applied locally. This does not mean that smaller regions can’t take direct action on issues of global importance — like decreasing the production of greenhouse gases, or working toward regional solutions of water policy, for example. There is no reason whatsoever to conjecture that the US or other national governments are likely to come up with better or quicker responses to these challenges than localists can.
Victor Davis Hanson makes the ‘liberal’ open markets argument in today’s NY Times, which I think is 180 degrees off. Food prices are rising as more people in the developing world want a richer diet, and energy prices are skyrocketing, also contributing to a rise in food prices. The answer: more globalism, Hanson says:
It is understandable that poorer nations are near paranoid in their fear for their own farmers’ livelihoods should they import a glut of imported American and European food that is a product of sophisticated economies of scale. But with food shortages looming, all countries should now support open trade in food to encourage as much supply as possible for a hungry planet.The best thing that the United States, the beacon of world capitalism, could now do is to stop interfering with its own farmers, let markets and need determine what they grow and how they farm — and then by such a principled American example persuade the rest of the world to do the same.
Yeah, sure: like the skyrocketing worldwide price of rice because of a six year drought in Australia. Note that southeast Asia decreased local production of rice because of the low cost of importing it from Australia, and now are scrambling to redevelop local production, and the Australians are retooling to growing crops that are more drought tolerant. The high hidden costs of all that centralization of production in one geography is only paid when catastrophe strikes; and it always does, sooner or later.
I support the idea that US Government subsidies to agribusiness are likely to be counter to the best interests of most US and world citizens. However, it is questionable to let unbridled market forces alone — in the absence of agreed on policies in the face of global warming, decreasing arable land, and desertification — to handle the world’s need for food. Until the markets are based on the true costs of food production — including the actual costs on nonrenewable resources — we can’t trust them to come up with good outcomes.
Posted 1 year ago & Filed under bottom billion, brazil, catalonia, david brooks, doha, globosclerosis, john mccain, opium wars, tax regionalism, league of democracies, victor hasen davis, world trade association, china,