Amartya Sen on Progressive Reform of Globalization

Bijan, et. al.,

This may be a good piece of background for our DC WB/IMF work.

Kendall 
--
If It's Fair, It's Good: 10 Truths About Globalization

Amartya Sen Saturday, July 14, 2001, IHT

CAMBRIDGE, England Even though the world is incomparably richer than
ever before, ours is also a world of extraordinary deprivation and of
staggering inequality.

We have to bear in mind this elemental contrast when considering
widespread skepticism about the global economic order and the patience
of the general public with the so-called anti-globalization protests,
despite the fact that they are often frantic and frenzied and
sometimes violent.

Debates about globalization demand a better understanding of the
underlying issues, which tend to get submerged in the rhetoric of
confrontation, on one side, and hasty rebuttals, on the other. Some
general points need particular attention.

Anti-globalization protests are not about globalization: The so-called
anti-globalization protesters can hardly be, in general,
anti-globalization, since these protests are among the most globalized
events in the contemporary world. The protesters in Seattle,
Melbourne, Prague, Quebec and elsewhere are not just local kids, but
men and women from across the world pouring into the location of the
respective events to pursue global complaints.

Globalization is not new, nor is it just Westernization: Over
thousands of years, globalization has progressed through travel,
trade, migration, spread of cultural influences and dissemination of
knowledge and understanding (including of science and technology).

Globalization is not in itself a folly: It has enriched the world
scientifically and culturally and benefited many people economically
as well. Pervasive poverty and lives that were "nasty, brutish and
short," as Thomas Hobbes put it, dominated the world not many
centuries ago, with only a few pockets of rare affluence. In
overcoming that penury, modern technology as well as economic
interrelations have been influential. The predicament of the poor
across the world cannot be reversed by withholding from them the great
advantages of contemporary technology, the well-established efficiency
of international trade and exchange, and the social as well as
economic merits of living in open, rather than closed, societies. What
is needed is a fairer distribution of the fruits of globalization.

The central issue is inequality: The principal challenge relates to
inequality - between as well as within nations. The relevant
inequalities include disparities in affluence, but also gross
asymmetries in political, social and economic power. A crucial
question concerns the sharing of the potential gains from
globalization, between rich and poor countries, and between different
groups within countries.

The primary concern is the level of inequality, not its marginal
change: By claiming that the rich are getting richer and the poorer
getting poorer, the critics of globalization have, often enough,
chosen the wrong battleground. Even though many sections of the poor
in the world economy have done badly, it is hard to establish an
overall and clear-cut trend.

But this debate does not have to be settled as a precondition for
getting on with the central issue. The basic concerns relate to the
massive levels of inequality and poverty - not whether they are also
increasing at the margin.

The question is whether the distribution of gains is fair: When there
are gains from cooperation, there can be many alternative arrangements
that benefit each party compared with no cooperation. It is necessary,
therefore, to ask whether the distribution of gains is fair or
acceptable, and not just whether there exists some gain for all
parties.

The use of the market economy can produce different outcomes: The
central question cannot be whether or not to make use of the market
economy. It is not possible to have a prosperous economy without its
extensive use. But that recognition, rather than ending the
discussion, only begins it. The market economy can generate many
different results, depending on how physical resources are
distributed, how human resources are developed, what rules prevail and
so on, and in all these spheres, the state and the society have roles,
within a country and in the world.

The market is one institution among many. Aside from the need for
public policies that protect the poor (related to basic education and
health care, employment generation, land reforms, credit facilities,
legal protections, women's empowerment and more), the distribution of
the benefits of international interactions depends also on a variety
of global arrangements.

The world has changed since the Bretton Woods agreement: The current
economic, financial and political architecture of the world,
(including the World Bank, the International Monetary Fund and other
institutions), was largely set up in the 1940s, following the Bretton
Woods Conference in 1944. The bulk of Asia and Africa was still under
imperialist dominance then; tolerance of insecurity and poverty was
much greater; the idea of human rights was still very weak; the
environment was not seen as particularly important; and democracy was
definitely not seen as a global entitlement.

Both policy and institutional changes are needed: The existing
international institutions have, to varying extents, tried to respond
to the changed situation. The World Bank, under James Wolfensohn's
guidance, has revised its priorities. The United Nations, particularly
under Kofi Annan's leadership, has tried to play a bigger role,
despite financial stringency. But more changes are needed. Indeed, the
power structure underlying the institutional architecture itself needs
to be reexamined in the light of the new political reality, of which
the growth of globalized protest is only a loosely connected
expression.

Global construction is the needed response to global doubts: The
anti-globalization protests are themselves part of the general process
of globalization, from which there is no escape and no great reason to
seek escape. But while we have reason enough to support globalization
in the best sense of that idea, there are also critically important
institutional and policy issues that need to be addressed at the same
time. It is not easy to disperse the doubts without seriously
addressing the doubters' underlying concerns.

The writer, Master of Trinity College, Cambridge, was awarded the
Nobel Memorial Prize for economics in 1998.