Global Capitalism

Dear John Judis,

       I’ve spent some time in India lately. Commentators such as yourself, who dread “the perils of the new world economic order,” must see that country as an economic threat second only to China. Here is a country of a billion people, half of them living on less than a dollar a day. For nearly 50 years its government kept the economy closed to the rest of the world and squashed market forces out of existence. The model was Soviet-style planning, plus private property. Now, as part of the global trend that William Greider describes in One World, Ready or Not, it is finally opening up.
       Add modern technology and market forces to all that cheap labor, and what will happen? Mainly, India will get less poor. It’s already happening. Since the reforms of 1991-93, the economy has grown at 7 percent a year, double the historical trend. This is what matters most about the new economic order. As capitalism spreads across the Third World, hundreds of millions of people are going to be lifted out of a poverty so bad that people in the West today, including most of those we call poor, could hardly imagine it. So when we discuss what it all means for America and Europe, let’s keep this in mind. If most of the planet is at last joining in the process that made the West rich, this is, at a first approximation, a fantastically good thing.
       When we forget that, it’s not a harmless mistake. What most infuriates me about the anti-capitalist mode in Western commentary (and in this I include not just Greider’s new book, which you reviewed so sympathetically, but also the new book by Robert Kuttner, which I reviewed not so sympathetically in S
LATE, and the recent article in the Atlantic by George Soros) is the way such stuff feeds back to poor countries. All over the world, opinion-making elites follow these debates. Greider and (especially) Soros were thrown at me again and again in India. “You say open up your markets, trade more–but the West isn’t going to buy our goods,” I was told. “If we look like we’re succeeding, you’ll push us back down to save your own industries. And why should we embrace capitalism when its own champions have turned against it?” Western anti-capitalism does more harm than it knows.
       I suppose you could argue, if you wanted to be honest about it, that it’s us or them. At least Buchanan and Perot have that in their favor: Unlike capitalism’s more intellectual opponents, they don’t disguise the trade-off that drives their thinking. In their view, if Mexico or China or India emerge from poverty, it will be at the expense of America and Europe: It’s sad, Buchanan is saying, but to hang on to what we’ve got, we’ve got to keep them poor. If I believed the economics, I’d reject that as morally reprehensible. Fortunately, the economics is reprehensible too, so the dilemma doesn’t arise. We can do what’s right and get richer at the same time.
       Look around: It just isn’t true that countries get rich at each other’s expense. Would America be better off now if Europe and Japan had stayed poor after 1945? Did its jobs migrate, its economy stagnate, leaving rising poverty and chronic unemployment? Not exactly: America thrived. One of the things that helped it after 1945 was expanding opportunities for trade with other rich countries. Americans would be worse off today if Europe and Japan had stayed poor. What’s changed? Why isn’t this still true? In my view: Nothing; it’s still true. The faster India grows, the better off every other country will be. Unlike you, I do not regard the prospect of global capitalism as “harrowing.” I regard it as the best opportunity for relieving human misery the world has ever seen.

Clive Crook