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Book Review: The Race to the Top

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The Race to the Top: The Real Story of Globalization
by Tomas Larsson (Washington, D.C.: Cato Institute, 2001); 164 pages; $18.95.

“Globalism has become the new, fashionable catchword for a process that has been developing with increasing intensity for more than 200 years — the internationalization of the division of labor.

Of course, in one sense, international trade is as old as recorded history. From Herodotus to Marco Polo, travelers, adventurers, and merchants made their way to faraway places and returned to their homelands with exotic tales of strange customs, while also often laden with stores of sundry commodities to incite the demands of their countrymen.

Wherever they went, they told of ports and cities alive with commerce and trade, populated and visited by merchants and travelers like themselves. Spices and jewels, cloths and tapestries, furs and animal skins, ornaments and household items — these were among the vast number of goods that passed from one part of the world to the other long before modern times. Caravans of commerce brought a certain degree of unity to the human race long before men gave serious thought to the possibilities of a global community of man.

But it was only following the great explorations of the 15th and 16th centuries, with the opening of new trade routes from Europe to Africa and Asia and the discovery of a “New World,” that the modern era of international trade began its development. It has followed an accelerating trajectory since the 18th century, as both the technical means and the institutional order have permitted the potentials of global commerce to expand dramatically.

The 19th century’s ground transportation marvel, other than the steamship, was the railroad. The first railway line was opened in 1829 between Liverpool and Manchester in Great Britain. It enabled the traveler to make time at the impressive speed of 16 miles per hour. By the end of the 19th century, railroads crisscrossed most of Western and Central Europe, and were being extended into Eastern Europe.

In 1869 — the same year as the Suez Canal was opened — the first transcontinental railroad system was joined across the United States outside Ogden, Utah. And European foreign capital investment was constructing railway networks in South America, Asia, and Australia.

Today, at the beginning of the 21st century, a journey of a day and a half by airplane can carry a person to almost any major city on the other side of the world from the point at which a traveler starts. The travel time by airplane across the Atlantic or across the continental United States is now a matter of hours rather than days or weeks.

The development of radio and then television in the 20th century enabled the transmission of instantaneous voice information and live pictures from all around the globe at any moment in time. And now the Internet enables personal messages and documents to be sent virtually to any point on the planet within seconds. Time and space have been dramatically compressed, especially during the last 100 years.

But in spite of how small the world is now becoming, there are strong forces attempting to impede the further global integration of men in their common purposes of commerce and trade. The Race to the Top: The Real Story of Globalization by Tomas Larsson attempts to explain the benefits and potentials from the global economy as well as the resistance to it from various quarters.

Larsson is a Swedish journalist who spent 10 years reporting from Thailand. He has traveled widely throughout Asia and brings his wide store of knowledge and experience to bear to dramatize and bring alive the reality of the globalization process.

Central to his entire analysis is the insight that globalization offers one of the most important avenues for escape from poverty for the multitudes of the poor in what has been often referred to as the “Third World.” The perpetuation of poverty in these countries, Larsson argues, has been primarily due to the uses and abuses of political power by the privileged elite who have manipulated government policies for their own purposes.

Opening markets both domestically and between countries creates opportunities for individuals to find niches of potential prosperity for themselves. Supposed sweatshops in Thailand or Indonesia provide jobs for the children and the young who otherwise would either starve or make their living from activities such as prostitution.

Open markets give access to domestic and international capital markets for poor entrepreneurs in these lands to have access to the financial means to start up and operate businesses in the global market. And open markets supply more and less-expensive goods from around the world, allowing those on limited and meager salaries in poor countries to stretch their modest incomes as far as possible.

The arguments against globalization

In presenting his case for the open, global market, Larsson also refutes many of the arguments made against globalization. For example, he responds to the charge that globalization means the end of local and national culture, traditions, and customs, as the world becomes commercially “Americanized.”

Just consider the McDonald’s menu around the world, he points out.

In the Philippines you can order McSpaghetti, in Thailand a pork burger with chili and basil, in India a Maharaja McMutton burger, in Japan a teriyaki burger, in Norway a salmon burger, in Uruguay an egg burger. The cola is sweetened according to local preference…. The goods may be global, but their meaning is always local. So the Chinese do not cease to be Chinese the moment they get their teeth into an American hamburger.. Cultural diversity is not threatened by global commercialism. No one need sell his soul for a french fry.

Most of the dangers in the poorer countries of Asia, Africa, and South America, Larsson emphasizes, do not come from an imperialism of global commerce. They come from the governments and special interests within their own countries. In countries like Malaysia and Singapore the political authorities attempt to limit access to the Internet and to information conveyed over it as a means to control the thoughts and ideas of their own citizens.

The claimed “danger” from Western cultural influences is really the fears of the local political elite that the masses of people will discover the ways they use their power for privilege and plunder. And their rejection of Western-style “individualism” and “democracy” as being inconsistent with the traditions and customs of “Asian order” is really nothing more than an attempt to prevent the emergence of opposition political parties and alternative centers of economic influence that would endanger their control of the governments in their countries.

In this context, Larsson also demonstrates that all the talk about some “third way” between “unbridled capitalism” and Soviet-style socialist planning is merely a smoke screen for those in political power or desiring such power to maintain the existing and disastrous system of regulations, controls, and interventions. This neomercantilist and protectionist system prevents the people from using their own competitive talents and abilities to climb out of poverty and enter the modern world of prosperity and plenty.

Larsson also argues that continuing globalization should not be hostage to international negotiation and multilateral agreement. Open markets and free trade should be pursued “unilaterally” whenever possible and not be held up and delayed by the long, drawn-out processes of intergovernmental treaties and accords.

“Truly progressive and concerned people will not fight globalization,” Larsson concludes. “Instead, they’ll fight to overcome the multifarious barriers at home and abroad, to the spread of globalization…. Our job is to create a dynamic, open, and tolerant society. A society for masters of the art of living.”

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    Richard M. Ebeling is a professor of economics at Northwood University. He was formerly president of The Foundation for Economic Education (2003–2008), was the Ludwig von Mises Professor of Economics at Hillsdale College (1988–2003) in Hillsdale, Michigan, and served as vice president of academic affairs for The Future of Freedom Foundation (1989–2003).