PJ O'Rourke used to say that there was a type of journalism called “MEGO” -- My Eyes Glaze Over -- and the archetypal exemplar was “Whither Gambia.” Sure, for people in Gambia this seems fairly important, but as something that might appear in an American newspaper, to be read by the average American, well, heads nodding, eyes glazing.
Writing something with the headline “Whither Globalization” could be my entry into the genre. What's worse is that many very important people do in fact debate this very subject -- at which not only eyes have problems but my liver withers and narcolepsy attacks. For there's a base and underlying problem with those very important people even discussing this -- it's nothing to do with them.
Yes, yes, we all know, there are those who insist that the whole thing is the rich nations ripping off the poor. Alternatively, those like me who insist that it's about the poor getting rich the same way the already rich did -- making stuff that others buy. But nearly all are arguing that it's the result of some policy or other. Therefore some policy needs to be crafted about whether it should continue, expand, or shrink. Or, as we can also put it, very important people think that they should be very important by defining very important things.
And the actual truth about globalization is that it's simply nothing to do with what politicians have done. It's what everyone else has done which has made this vast expansion of international trade possible.
To give an example from history. After the American Civil War, in the 1870s, American tariffs upon imports doubled and trebled. The US economy also grew from being a side issue into the largest in the world. So, the shallow look at this and talk about how protected national economies can and do, and even should grow. Those who think deeper see that the ocean going steamship had an effect. Yes, tariffs rose but the total cost of trade is border barriers plus the cost of transport. The total cost of trade fell in this period -- because the steamship reduced costs by more than the tariffs rose. We can even prove this -- trade volumes rose even as tariffs did.
Now, it's true that post-WWII tariffs fell. Which is what the shallow think is the starting point for globalization. But the shipping container was invented in the mid-1950s. As was the jetliner. Cheap telecoms came later as did the internet -- but the four of them together mean that the other costs of trade, the costs that are not tariffs and policies, fell like a stone. Globalization wasn't caused by the GATT and WTO actions, it was caused by technological change. Sure the reductions in tariffs aided, but to stop what was going to happen they'd have had to rise massively.
The Bangladeshi RMG industry doesn't exist because someone planned it. It exists because other changes made it possible and so folk did it. We all know the origin story too, an apartment, a few sewing machines, and off it went. This is true of all trade of course. Someone notes they can do something, they try it, if it works they do more of it. Governments, bureaucrats, very important people, they can stop this, but they can't create it.
Like, say, the creation of marmalade. Which took place in Dundee in Scotland, a place entirely bereft of oranges, sugar, or citrus oils -- the necessary ingredients. But one day there was a confiscated cargo of Seville oranges on sale for cheap during one of Britain's many European wars. Which a Dundee housewife turned into marmalade, that variation upon jam. I am not kidding. Well, maybe a bit, but Janet Keiller, of Dundee did start it all -- let's try this with that stuff.
The things that go global are those experiments that work. Reductions in transport and communications costs mean that more things have that opportunity to go global. And that, really, is it. That's globalization. It's not a policy imposed, it's not something the chin strokers came up with at all. And, of course, that does mean that it's something the very serious thinkers don’t need to have a policy upon now either.
We all, as individuals, are entirely capable of deciding whether we wish to trade with Rasel next door, Mahmud in the next village over, or John or Jorgen half a world away. Leave us be, to do as pleased and globalization will be the aggregate of what we all, individually, decide to do.
Or, as we could put this, let's have a really liberal world order. One where the outcome is what we decide to do, not what people decide is to be done to us.
Tim Worstall is a senior fellow at the Adam Smith Institute in London.
