Is Globalization doomed? June Arunga and Johan Norberg think otherwise

Wednesday, February 18, 2009 

By Franklin Cudjoe

Johann Norberg(L) June Arunga(R)There is undoubtedly so much economic pain in the world today, just as there has been staggering solutions proffered, not least, by some economic Nobel laureates.  For instance, the 2008 Nobel Laureate for Economics, Paul Krugman has said the $780bn stimulus bonanza President Obama got from Congress is way too small to make impact on the American Dream.   Never mind, if as President Obama has hinted with his "Buy America" pledge, we are going to see good old protectionism’s flag hoisted by the richest nations on earth.   Our worry, though, is the rippling effect such centrist policies have on the poor in the developing world.

We do not have all the answers, but there is young Swedish thinker who has learnt not to sell edicts to governments, and certainly not to poor people.  John Norberg is Libertarian, but not an ideologue.   As our associate editor, June Arunga said in her introduction to Norberg’s book, In Defense of Global Capitalism, Norberg does not "tell people what they ought to think.  He asks them what they think.  And asking the poor who have been given opportunities to engage in trade, either as traders or merchants or as employees of enterprises involved in international trade reveals things that the official pontificators miss."  

African politicians and bureaucrats in particular, have been missing this important lesson.  They continue to keep close to 70 per cent of their own from being integrated into the formal economy, while scampering the little they are able to salvage from higher taxes on the remaining 30 per cent.  Of course, overseas development aid also provides a chunk for merry –making.

In the face of the global financial meltdown, the big question is, will Africa follow suit by erecting more trade barriers to protect its own? But who should be protected from what?  We already have the highest trade barriers ever erected within a continent.  We should not forget that capital has been said to be cowardly and if the recent marginal economic gains Africa is said to have made should be sustained, we could well be the new frontier for foreign direct investment if we unilaterally submit to more open trade.

Opponents of this thinking might as well reflect on the answers ordinary Africans would have given if they asked what impact free movement of capital has had on their lives.  Our colleague, June Arunga tells us what Johan Norberg asks the poor of this world.  "Did that job at new factory make your life better or worse? Did your first cell phone make your life better or worse? Has your income gone up or down? How do you travel? By foot, by bicycle, by motorbike, by car? Do you prefer a motorbike or walking? "

It is clear as Arunga writes, "Norberg insists on looking at the facts on the ground and asking the people involved what they think and whether trade has improved their lives, from their own perspectives."   His panacea for freedom from poverty and hopelessness is to encourage free trade, not protectionism!

We believe that bringing the attention of Norberg’s insights to your discerning readers will   encourage a renewal of faith in the ideas that have freed many, politically and economically.  Norberg’s book is freely available here. 

For more, please visit the books section of .     

Franklin Cudjoe is editor of and executive director of Ghanaian think tank, IMANI.  This year, IMANI was named the sixth most influential think tank in Africa by Foreign Policy magazine