A.) On what grounds does Walden Bello criticize the World Trade Organization? B.) What does he mean by “deglobalization” and why does he think deglobalization of trade and finance are...
A.) On what grounds does Walden Bello criticize the World Trade Organization?
B.) What does he mean by “deglobalization” and why does he think deglobalization of trade and finance are necessary?
C.) Do you agree with a shift to more regional governance? Why/why not?
You didn't specifically mention the title, but Walden Bello's most famous work on the World Trade Organization is "The Global Conjuncture: Characteristics and Challenges", and his other work makes similar arguments so it doesn't matter too much.
Written in 2001, the essay is really quite dated; it misses out on 15 years of economic development that was largely due to globalization---including the milestone that extreme poverty has now dropped below 10% for the first time in recorded history (source linked below). It has something of the feel of articles written in the 1980s about how the Internet will never take off and nobody will need more than a few megabytes of RAM.
But okay, let's address the actual arguments he makes, cognizant that we now have some hindsight he lacked.
Bello's basic argument is that globalization and the institutions that support it (such as the World Trade Organization and the World Bank) are largely institutions by elites, of elites, and above all for elites---they advance the interests of the wealthy and powerful at the expense of everyone else.
This charge cannot be wholly denied; certainly the "of" and "by" are indisputable, as only a tiny fraction of the world's population will ever have the kind of expertise and clout necessary to become an advisor or policymaker at these global institutions. (I say this not without a sense of irony, as I myself may be in that tiny handful, depending on how things go after I finish my PhD in development economics.) But this is largely true of any such technocratic organization where advanced expertise is required; no one complains that physicists are a narrow elite, or that chemists are a narrow elite. Why is it different with economists? I guess it does make sense that economists make decisions which more directly affect people's lives, and it is important to ensure that they make those decisions with the best interests of the people at heart. The current system may not do that optimally, though I've yet to hear a better one proposed (as I'll get to below, Bello's proposal is not a better system).
The "for" however is a lot more questionable; while globalization has certainly made the rich richer, it has also made most other people richer as well. It is not a small achievement to reduce extreme poverty to the lowest proportion it has ever been in recorded history. It could be that the interests of the wealthy are overrepresented in our trade agreements (actually I think that's right); but eliminating trade agreements altogether would serve nobody's best interest. I strongly oppose many particular aspects of international trade policy, such as the extreme protections for corporate intellectual property---even when it means denying people lifesaving medications---and the increasing use of private arbitration systems to work around the laws of national governments. But the basic concept of spreading trade throughout the globe, lowering tariffs, and reducing barriers to entry is not only sound---it is the only thing keeping millions of people out of poverty.
Let's take a look at Bello's counterproposal, so we can see why it doesn't work.
He first says that he does not want to withdraw from the international economy, which is good; that would be a terrible idea. But then most of what he says sounds an awful lot like withdrawing from the international economy.
He wants to move away from export production and back to localized production, which essentially means eliminating the primary means by which countries like Korea and Japan have lifted themselves from Third World to First World status. It also means giving up most of the efficiency gains that come from comparative advantage---instead of products being made where it is most efficient to make them, they would end up made wherever their consumers happen to live.
He talks about redistribution of income and land, which does make sense, to a point; inequality is clearly too high. But many attempts at such redistribution have failed catastrophically (e.g. China, most of Latin America, Zimbabwe), so we need to be very careful about how exactly we go about this. The Scandinavian model of high progressive taxes and strong social services works well; the more traditionally socialist concept of "land reform" inevitably ends in disaster.
He also mentions "deemphasizing growth and maximizing equity", which is honestly a little baffling for someone like me who understands just how poor much of the world still is. If we equalized all wealth on Earth, even if we could somehow do that without reducing the total quantity (which, let me emphasize, we definitely can't), the average income would drop to about $12,000 per year---roughly the US poverty level. So, if we're not trying to achieve growth in poor countries but simply redistributing current levels of output, what you're basically saying is you want the entire world to be poor.
No, the way to achieve equity is through growth; it is by raising up poor countries to become rich countries as we have done in Korea and Japan and are beginning to do in China. The goal should not be for everyone to be equally poor but for everyone to be equally rich.
Environmental sustainability is also a serious issue of course, but that is not inherently contrary to economic growth; in fact, good environmental policies generally increase long-term growth. Again Scandinavia is a good model; Denmark now produces so much wind power that they have more than they need and export it to other countries in Europe.
There are some things in Bello's proposal I absolutely do agree with: "not leaving strategic economic decisions to the market but making them subject to democratic choice" and "subjecting the private sector and the state to constant monitoring by civil society" are both very important, and really are lacking from a lot of our international trade policy. But many economists are coming around to this view, as empirical data is increasingly showing that strong democracy is very important not just for achieving lower inequality, but also for maintaining stable long-run growth. Unregulated markets are inherently unstable; we must use wise regulation to protect the market from itself.
But another thing we have discovered about governance is that it must be centralized to be effective---it needs to be coordinated and the rules have to be consistently enforced. Bello argues that we need less centralization, more pluralism, but this is exactly backward. The problem is precisely that we have too little centralization, too much pluralism---in particular, private multinational corporations have far too much power to act unchecked. He's only looking at the international institutions like the WTO and IMF, but these are minor players in the world economy; the big players are all huge corporations, of which there are literally hundreds. Foreign direct investment by corporations dwarfs foreign aid by governments by an order of magnitude. The huge quantity of private trade overwhelms the tiny budgets of international regulatory agencies. We don't need less governance; we need more. We need to ensure that international standards of human rights are protected not just in principle, but also in practice---but hundreds of corporations have little incentive to do that in the absence of a global enforcement authority forcing them to.
In short, no, I do not agree that we need more regional governance, more "deglobalization". Globalization works, and we need more of it, not less.