Why Globalisation Can’t Work Globally

THE bursting of the dotcom bubble and the ensuing stockmarket blues; 9/11 and the war on terrorism; the anti-immigration backlash and rising protectionism in North America and Western Europe; and now the Sars epidemic have all given anti-globalisation pundits a field day.

They can now successfully demonstrate how the processes that free the flow of products, technology, money, people and ideas also end up undermining economic welfare, political liberties and even our physical security and health.

It's difficult to deny that analysts and scholars of Globalisation-is-the-Messiah school of thought represented by the likes of The New York Times correspondent Thomas Friedman and the editors of The Economist have turned what was basically the extension of the free market system into formerly state-controlled economies - China and Russia being the most dramatic examples - into a myth, a kind of a New Age religion.

They made it sound as though economic liberalisation would make you prosperous and free, bring an end to class and national conflict, and could even improve your sex life.

So it's not surprising that when it's becoming clear that those unrealistic expectations haven't been fulfilled, the anti-globalisation types on the political right and the left have been getting a kick out of torturing all those sacred intellectual cows - The Borderless World; The Coming Boom; Future Perfect - that were nurtured during the Roaring Nineties.

And let's not forget the most revered cow, The End of History. One of the illusions perpetuated by the globalist religion of Friedman and Co, was that globalisation would sweep away national discord, ethnic hatred and religious zealotry associated with the Old World; that the 'Olive Tree' (representing chauvinism, tribalism, racism) would be replaced by the 'Lexus' (that is, liberty, prosperity, peace); that nations with McDonald's (and the Internet, CNN and MTV) wouldn't go to war against each other.

Well, globalisation has been around with us for more than a decade, and since its inception, the Lexus hasn't crushed the Olive Tree. In fact, the globalisation era has been marked by rising ethnic feuds and religious loathing: the bloodier-than-ever Israeli-Palestinian conflict; the military nuclearisation of India and Pakistan; the disappearance of the multi-ethnic Soviet Union; the implosion of Yugoslavia; a divorce between Czechs and Slovaks; the disintegration in Indonesia; the rise of secessionist and nationalist movements elsewhere - Basques in Spain, Kurds in Iraq, Chechens in Russia, Kosovars in Serbia; and, of course, the spectre of the Clash of Civilisations that followed 9/11 and growing anti-Western sentiment in the Arab and Muslim worlds.

One of the most original critics of the notion that globalisation has helped alleviate ethno-nationalist conflict is Yale University law professor Amy Chua, who, in her provocative bestseller, World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability (Anchor Books, New York, 2002), points to an interesting and disturbing phenomenon: The introduction and extension of free market economies in many developing countries as well as in some of the countries that had been part of the former Soviet bloc has often led to the concentration of starkly disproportionate wealth in the hands of a resented ethnic minority.

These 'market-dominant minorities' - Chinese in South-east Asia, Indians in East Africa, whites in Latin America and South Africa, Lebanese in West Africa, and Jews in post-communist Russia - become objects of violent hatred. If these emerging economies follow the advice of the United States and other Western countries by adopting democracy, they end up empowering the impoverished majority, and unleashing ethnic demagoguery, confiscation, and sometimes genocidal revenge.

Chua, a Chinese-American whose family, as a member of a market-dominant minority in the Philippines, has experienced ethnic animosity and violence, is not an anti-globalist pamphleteer.

She represents the kind of analysis that policymakers need these days: a balanced critique that rejects the notion of globalisation as Heaven on Earth, but also doesn't accept the view that globalisation is a source of all evil in the world.

Hence, she agrees with The Economist that the spread of market economy worldwide can produce more wealth in countries like Indonesia, Mexico or Russia (that is unevenly distributed).

But she also rejects what globalisation prophets like Friedman seem to advance as a theoretical axiom: that economic and political liberalisation go hand in hand. Her findings run contrary to the conventional wisdom (of the Davos Man, that is) and suggest that globalisation as an economic process is under certain conditions best protected by non-democratic political means.

Some societies may not be ready for one man-one vote, multi-ethnic/multi-national democracy, and if they adopt such a system, that could lead to their ethno-nationalist implosion. Hence the conclusion that globalisation is a complex process whose successful outcome is not guaranteed, is dependent on a long list of political, social and cultural variables, and on policies adopted by governments.

This balanced assessment explains why globalisation, democracy and multiculturalism can operate together with some relative success in the European Union and the United States. But it also could serve as a warning to those American globalisation and democracy crusaders who are fantasising about free markets and multi-ethnic democracy in Iraq.