Why Globalization Works By Martin Wolf Yale University Press US$30.00
Globalization, the economic and political phenomenon that has marked the last decade, has generated both fans and critics. It has been blamed for modern society's ills, like the widening gap between the rich and poor and between developing and industrial nations. It has been blamed for the exploitation of children, a deteriorating environment and a loss of cultural diversity, among other ills.
One could say that neo-liberal ideology has taken a beating from the copious evidence of its shortcomings. Or, at least, that its defense is not based exclusively on classical ideas such as those by Adam Smith and other fathers of liberalism.
However, Martin Wolf, a commentator for London's Financial Times newspaper, jumps onto the soapbox to defend the phenomenon, becoming a staunch supporter of the economic model. While he validates some of his critics' views, he dedicates the bulk of his space to refuting the arguments of globalization's detractors, armed with a positive vision of economic history.
The book is an argument for "liberal international economic order." In those words, Wolf promotes a global capitalist model, with limited state intervention and corporate freedom to act. Although Wolf relies on macroeconomic statistics, his work is frequently supported by economic theory. For example, arguing the difference between productivity and capital investment for employment, the author tries to calm fears of the working class in rich nations, who face competition from underpaid workers in poor countries. But, here, reality contradicts itself. For multinationals opening factories in China or Latin America, lower productivity overseas is compensated for by lower salaries. For the moment, there is no evidence of any change in the trend of sending jobs to emerging-market countries.
The author reiterates the old idea that economic growth comes exclusively from the...