The Globalisation Renaissance

First Published: 2008-06-06

As the old cliche goes, history has a way of repeating itself, and Globalisation is no different.

Globalisation as it is known today is a renaissance of the mid 19th century movement. In the 1840s Richard Cobden and John Bright lead the “free trade” campaign when they fought Britain’s Corn Laws that imposed high tariffs on imported grains. These two gentlemen espoused the view that free trade would help maintain peace through inter-dependence. And it did. The repeal of the “Corn Laws” ushered in a period of trade liberalization and goodwill. The resulting lower prices and expanding trade boosted incentives for English entrepreneurs and England, for a period, became the world leader in shipping, commerce, insurance and finance.

Of course the free trade or classical liberal revolution changed with the advent of the claims that Socialism would save the world. “People felt uncomfortable with the imperfect world and conventional wisdom was that countries could be self-sufficient and Governments could control everything to everyone’s satisfaction.”

As Brink Lindsey points out in his recent book Against the Dead Hand the Globalisation Renaissance “is the fitful haunted awakening from that dream.”

Competition, Capitalism and Consumer Choice

Human nature is such that we (individuals, businesses and governments) would prefer no competition. This leads to the acceptance of the centrally planned economy hoping for protection by government from loss of a business to new or more efficient operations.

Witness the US pushing the world toward free trade, while lobbying efforts by the steel companies and labour unions have forced increases in tariffs on steel imports there. The Republican Administration is apparently trying to improve its voter appeal in the industrial heartland of America before the upcoming Congressional elections and thus dumping, in this instance, their traditional free trade policy.

The vast majority of people want more material comforts and conveniences…this means economies must continue to grow to ensure more wealth is created. So, with the move toward Globalisation, more people, in more countries, will be better off if they become more competitive.

To prepare, The Bahamas needs to be informed of the details of Government’s monthly treks to FTAA and WTO meetings. Yes citizens might get angry when some of the commitments that have been made are revealed, but people will eventually come to terms with Globalisation.

Because this is an imperfect world, there will be hardships along the way to Globalisation. Some businesses might not be as dominant in the future and Government, like business, will have to live within its means and become efficient. However, once Globalisation is implemented, studies have shown that more people will be better off.

Free Trade works

To quote Brink Lindsey again: “The political discovery process is leading us away from the waste and cruelty of error toward the greater opportunity and abundance that result from sound policies and institutions. The Promised Land may still be a distant dream, but at least we are heading in the right direction.”

In a nutshell, free trade should be supported, but with less bureaucratic control. Buying and selling is really very simple. To complicate it with an excessive world wide bureaucracy will only impede the functioning of free markets, where the consumer is king. Further more, making trading difficult will not be enough for a secure future for those people willing to make the effort necessary to succeed.

The fact is that free trade and participation in the global markets for tourism and financial services is the very basis for Bahamian prosperity to date. These markets will force economic efficiency and competency if the Government allows and encourages such developments. There will be casualties along the way, because, after all, this is an imperfect world. But, it’s a safe bet that The Bahamas will survive Globalisation.

The Nassau Institute

Date: June 28, 2002.

by Rick Lowe – On Second Thought

On Second Thought was a weekly column for The Bahama Journal from July 1997 through September 7, 1999.

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