Commentary

Globalphobia in the Streets — Again

The same folks who brought you the Seattle riots are now staging an encore. Their choice of targets tells a lot about the evolving political strategy of the anti-globalization movement - and about what their opponents have been doing wrong.

On April 16 and 17, thousands of protesters will swarm the streets and public spaces of Washington, D.C. in a so-called “mobilization for global justice.” In addition to the usual street theater, civil disobedience, and freelance vandalism, the fun and festivities will include a “permitted rally” on the Ellipse cosponsored by organized labor.

The spectacle is timed to coincide with the spring meetings of the World Bank and the International Monetary Fund. According to the event organizers’ Web site, these two organizations are “the chief instruments used by political and corporate elites to create today’s unjust, destructive global economic order.”

The planners of this march on Washington portray it as a direct and logical extension of last November’s disruption of the World Trade Organization meeting in Seattle. “What we asserted at the WTO must be repeated to the rulers of the global economy,” proclaims the “a16” Web site. “The IMF and World Bank are in many ways the ‘parents’ of the WTO; they operate together to preserve corporate power and constrain the rights and opportunities of the majority of the world’s people.”

The game plan of the anti-globalization movement is thus becoming clear: attack the international economy by attacking the international economic organizations. Having found a winning issue with bashing the WTO, it’s now time to broaden the attack.

The approach is a clever one: International bureaucracies make for an unlovable symbol of the global economy. The IMF and World Bank in particular have much to answer for when it comes to their influence on economic development in poorer countries. By placing these organizations at the center of the debate, critics of free international markets put their opponents immediately on the defensive. When the issue is whether national governments should adopt policies of openness and competition to spur growth and opportunity, the economic case in favor of such policies is overwhelming. But when the issue becomes whether unelected and unaccountable international bureacrats should impose their policy preferences on sovereign countries, those same policies look much more suspicious. In Seattle the protesters succeeded masterfully in shifting the terms of debate in their favor. They are now looking to press their advantage.

There is a fundamental problem, though, with the strategy of the anti-globalization crowd: The institutions they are attacking are not responsible for the policy outcomes they deplore. The real object of the protesters’ hostility is the trend toward freer trade and freer markets that has swept the world over the past couple of decades. But that trend did not result from the machinations of international bureaucrats. And furthermore, the trend would continue even if the WTO, the IMF, and the World Bank were wiped from the face of the earth tomorrow.

The WTO and its predecessor, the General Agreement on Tariffs and Trade, have facilitated the reduction of trade barriers over the years. But their impact has been decidedly modest. The great events that opened up the world economy - the embrace of reform in China, the collapse of the Soviet Empire, and the abandonment by many developing countries of their “import substitution” development model - all occurred outside the context of trade negotiations.

Meanwhile, the IMF and World Bank have actually retarded the pace of pro-market reforms. The verdict of the recent Meltzer Commission report on international financial institutions is instructive. According to the report, IMF bailouts “frequently delay necessary adjustments to emerging problems, resulting in a protracted period of growth suppression.” And World Bank loans too often feed bloated public sectors rather than encourage beneficial reforms. The Meltzer report concluded that “many of the Bank’s failures result from lending to countries unprepared or unwilling to adopt wealth-creating policies.”

The purveyors of globalphobia portray the spread of market-friendly policies as a malignant conspiracy foisted on an unwilling world by secretive bureaucracies. The facts are otherwise. Globalization has not been imposed from the top down; it has emerged from the bottom up. It has been powered by the recognition on the part of national leaders that government controls and self-imposed isolation from the international economy were breeding poverty and stagnation. Which, by the way, explains why representatives of developing countries are generally so adamantly opposed to the anti-market agenda of their self-appointed champions.

Unfortunately, back in this country, the supporters of the global economy too often play right into the hands of the Seattle crowd. Self-described free traders seldom make the case that open U.S. markets are beneficial regardless of whether other countries pursue similar policies. Worse, they demand “reciprocity” from our trade partners and decry “unilateral disarmament.” But since the United States is more open than most countries around the world, such rhetoric leaves the impression that we’ve been left with the short end of the stick. Consequently, the charge that we’ve ceded our sovereignty to faceless bureaucrats in Geneva looks plausible.

At the same time, supporters of trade liberalization too often expose their cause to guilt by association. In an analysis of congressional voting patterns, a Cato Institute study found that members of Congress who voted for lower trade barriers but higher trade subsidies (including IMF funding) outnumbered those who voted for free trade and against subsidies by better than 4 to 1. No wonder so many people believe that globalization is just a racket for big business. Also, the pro-trade camp tends to lump free trade together with support for international institutions generally: Backing the WTO, funding the IMF, and paying our U.N. dues are frequently presented as planks in a common platform.

To respond effectively to the growing anti-globalization movement, friends of free markets must make clear that their cause has nothing to do with top-down internationalism. Their polestar should be the national economic interest, here and abroad, in openness and competition. If international organizations can provide useful service to that interest, fine. If not, they should go. Consistent and clear-eyed free-trade nationalism is the best way to clear the protesters off the streets. The grim alternative is more tear gas and rubber bullets.

Brink Lindsey is director of the Cato Institute’s Center for Trade Policy Studies in Washington.