Mr. Chairman, Mr. President, Ladies and Gentlemen of the University Philosophical Society, Ladies and Gentlemen:
I don’t know how many of you have actually seen the letter that the Society sends to prospective speakers. It’s more of a summons than an invitation: “World’s oldest debating society”… “Founded: 1684″… “Previous speakers: Alexis de Tocqueville and Winston Churchill” … “Previous members: Jonathan Swift, Edmund Burke, and Samuel Beckett.”
Receiving it, you puff yourself up, say of course I belong in that company – at last someone recognizes it – and immediately send off your acceptance.
Then, if you are like me, as the day approaches, you start to prepare and you wonder, who are these people anyway? So you search out their website and discover they not only hear outside speakers. They give speeches to themselves – and post them. One title captured the overall tone: “Romance Me Arse.”
Not quite what you’d expect from Tocqueville, Churchill or Burke. Swift and Beckett, that’s another matter.
But if you are like me, you wonder, what have I got myself into? Now, after two days on campus, I’ve found that what I’ve got myself into is a group of very bright students who are interested, interesting and fun.
So I am delighted to be here tonight and to have had my new friends ask me to join such a distinguished panel of debaters.
The proposition of the evening is: “This house believes that despite its flaws neo-liberal globalization is a good thing.”
Mr. Chairman, I rise to support the proposition.
Some have told me that your real concern about globalization is that American corporations are taking over the world.
I know exactly what you mean. I have similar concerns myself. As an American, I am often depressed … all these foreign influences.
I get up in the morning, start to work in my American-brand Chrysler PT Cruiser, and then realize it was built not by an American company at all but by a German company, Daimler – and rides on French tires, Michelin.
I stop for breakfast at Burger King, McDonald’s biggest competitor – and reflect that its parent company is from some country with a king or queen.
I call the office on my Finish cell phone – Nokia.
I need to check an email, so I pause at a Starbucks to log my Taiwanese-built laptop onto their wireless T-Mobile hotspot, only to realize that T-Mobile is really Deutsch Telekom.
At the office, I flip on the Fox News Channel and hear that Fox’s parent company just held its annual meeting in their home city, Canberra, Australia.
That afternoon, depressed at America succumbing to this silent economic and cultural invasion, I decide to pour a stiff drink. But almost all the distilled spirit brands sold in the US belong to London-based conglomerates.
So I seek out a decent brew, except of course there is only one decent brew. It’s made not far from here: Guinness.
I look for a soft drink. I don’t want caffeine. My major choices: Orangina (French) and (this is a brand I don’t believe you have here) Canada Dry.
Despondent, I take out my Sony Walkman – Japanese — and put on a recording from a true American band. I know it’s an American band. Its lead singer seems to spend all his free time at the White House or touring Africa with U.S. Cabinet members. He was everywhere I turned at the Republican Convention in New York this summer, more prominent than almost anyone but the President. A true American leader of a true American band: Bono and U2.
Mr. Chairman, this is my first point about globalization: It is global. It is not just American. The companies – and band — I’ve mentioned are all emblems of globalization, and they come from all over. I could have named many more — from Denmark, Italy, Switzerland, Greece, South Africa, Brazil, Mexico, India, China, Korea. All doing business in the United States and elsewhere … all fixtures of globalization.
My second point – actually a series of points — has to do with corporations.
Globalization is not just about – or even mainly about – corporations involved in global trade. Global markets emerged between the 1830s and the 1880s with the dissemination of the railroad, the telegraph and the steamship.
Had global trade and the laws in accord with it been fully in place just a little earlier, Ireland would have known no Great Famine. Thanks to global trade, the 20th Century knew no famines of true scarcity. It knew political famines – regimes trying to starve out dissident populations – but none because local crops had failed and food could not be brought in.
No one wants to go back to the days before global trade.
Neither is globalization – or at least the controversy about globalization — about corporations establishing manufacturing plants, offices and other facilities in multiple countries. This phenomenon dates to the 1950s, 60s and 70s. You can see the benefits of it all around Dublin. I doubt that anyone here wants to shut down the local Intel or Microsoft plants – tell the companies to go home.
Nor is the major controversy about globalization driven by corporations “outsourcing,” moving jobs to other countries. Those who talk about outsourcing do not just mean textile and electronic plants in China or other parts of Asia. They also mean the plants around Dublin.
We had a presidential candidate in the United States this year who talked about “Benedict Arnold CEOs,” those who outsourced jobs to other countries. It didn’t catch on. The reason had to do with what the U.S. Department of Labor found when it actually counted the kind of jobs he was talking about. They found 100,000. Then they counted the number of “in-sourced” jobs — those that foreign companies had created in the US — and found as many as 12 million. Honda, Toyota, European pharmaceutical manufacturers, banks like Credit Suisse and Barclays, Royal Dutch Shell, BP, law firms, consulting firms, accounting firms: all have been shipping their low wage jobs to the United States.
The same is true here in Ireland. The same is true in all developed and developing countries. We’ve all received far more jobs from abroad than we have shipped abroad.
No, in talking about globalization we are not strictly talking about corporations at all.
We are talking about something much bigger.
We are talking about the emergence of truly global capital markets, the collapse of communications and transportation costs (particularly communications costs) and the extending of market economics, rule of law and property rights to places that had not known them before – all of which has happened since the election of Ronald Reagan and accelerated with the fall of the Soviet Union.
And we are talking about the impact of all this on the Third (that is, the Developing) World.
Mr. Chairman, Globalization has a face.
Some say it is the face of workers in a Nike factory in Malaysia, and I say yes. Yes, these workers are paid above local pay scales. Yes, their working conditions are better than local norms. And yes, because it is a global player, their employer can be, and is being, pushed to do better – which pushes up the wages and standards of the non-global players in the region.
But it is also the face of the phone ladies of Bangladesh. They buy cell phones using micro-loans from a bank that accesses the international capital markets. They rent out the phones by the minute, mainly to local farmers, creating an income that raises their families’ living standards beyond anything that they had known before. The farmers use their rented minutes to break free from the monopoly of local brokers and get better prices for their crops, thereby raising the living standards for their families.
It is the face of the women of the Venezuelan jungles, who have used the same technology to reach the global markets for their wares, raising their families’ incomes and breaking free from slavery to the men of their villages.
It is the face of a software engineer in Bangalore in India. He is pursuing an occupation unimaginable to his grandfather and, through it, achieving a solidly middle class income to support his wife and children, an income his grandfather would have found equally unimaginable. The Indian middle class is now larger than the entire population of the United States.
And it is the face of an entrepreneur in Guanchow, China. He, too, is achieving middle class income and wealth in an occupation entirely apart from what anything any generation before him could pursue or comprehend.
Globalization also has a number: one-half … fifty percent.
In 1990 the World Bank set as a goal cutting poverty in half in twenty years. It happened in ten years. Between 1991 and 2001 the number of people living in serious poverty in the world dropped by fifty percent.
It happened because of the spread of property rights, which made possible the blooming of enterprise, the accessing of global markets and the benefits of globalization. It happened primarily in India and China and the other places I mentioned, place where rights of property have been most effectively extended.
Mr. Chairman, despite all I’ve said, there is a problem, there is an inequity, there is an injustice with globalization as I’ve described it. It is that globalization does not go far enough.
The human will to create enterprises is as strong as the human will to create art or the human will to love. It is the same, really. Nowhere do you see its power – or the need for greater globalization — more profoundly than in the informal sectors of developing economies around the world.
Perhaps you know of the work of Hernando de Soto. De Soto is Peruvian economist. Early in his career, he worked at the World Bank. He is the father of the concept of the informal economy.
Several decades ago de Soto went into the slums surrounding his native Lima. Like many Third World slums these were thought to be districts with virtually no economic activity, just poverty and misery. Instead, de Soto found them bustling with new businesses, men and women in trades and prosperity, up to a point.
The law set the place of that point, for he found that the law set almost impossible barriers to starting a business legally or acquiring legal title to property.
He assembled a team of researchers and set to work detailing and documenting these barriers.
The de Soto team found that in Lima completing all the steps for obtaining the business licenses needed legally to open a one person garment shop required one person working six hours a day for 289 days.
They began looking around the underdeveloped world and found similar legal obstacles everywhere.
To register title to urban property in Manila in the Philippines requires 168 steps that would take thirteen to fourteen years to complete.
To do the same in Haiti requires 111 steps and would take between six and 14 years.
Such legal and bureaucratic mazes effectively deny rights of property to those without the connections or bribe money to cut through them. Without full rights of property people who would rise, who would start and build new enterprises, must do so outside the law, in the informal economy. And without full rights of property, those enterprises can only grow so far. They cannot access the global capital markets or global commerce.
How big are the informal economies of the Third World? De Soto and his team spent the 1990s measuring their size and reach. They published their findings three years ago.
They found that in Venezuela half the workforce was employed in the informal economy.
In Brazil, sixty percent of the rental housing was informal property.
In 1994 in the states of the former Soviet Union, thirty-seven percent of all production came from the informal sector.
Globally, they calculated that in the Third World and the former communist countries the value of informal businesses and property totaled $9.3 trillion.
How big is that? Here’s how de Soto put it. It is, his words now, “very nearly as much as the value of all the companies listed on the main stock exchanges of the world’s twenty most developed countries, more than twenty times the total direct investment into all [these nations] in the ten years after 1989, forty-six times as much as all the World Bank loans of the past three decades, and ninety-nine times as much as all the development assistance from all the advanced countries to the Third World in the same period.”
Mr. Chairman, I ask you to consider the happy state of humanity if full rights of globalization were extended to all people.
Some years ago a noted European authority was asked when Spain – then under the Franco regime – would become democratic. His reply: When per capita income exceeds $2,000. In fact, when democracy arrived, per capita income was $2,446.
Studies have shown a similar link between per capita income and a nation’s determination to improve environmental quality.
And in just the past week The New York Times reported on a Harvard study that found that terrorism is not tied to poverty but to the kind of transition we are discussing here, a transition that, with growing globalization, will pass.
At the close of The Great Gatsby, in one of my favorite passages in literature, Irish-American writer F. Scott Fitzgerald imagines what went through the minds of the early settlers – actually Dutch sailors – as they arrived off the American coast and viewed the vast continent for the first time. “For a transitory enchanted moment,” he writes, “man must have held his breath, face to face for the last time … with something commensurate to his capacity for wonder.”
But Fitzgerald was wrong. In the promise of globalization we are again facing and not for the last time something as vast and varied as the universes of our imaginations and all the stars within them.
Mr. Chairman, I believe this audience understands what I am saying. Edmund Burke spoke of the ties of mind, sentiment, aspiration and love of freedom that the peoples of these isles and Americans share. He said, “though as light as air [they] are as strong as links of iron.”
I am speaking of those links.
V.S. Naipaul, the Third World author and Nobel laureate for literature, addressed that same bond of spirit when he spoke in New York several years ago of what he called “the beauty of the idea of the pursuit of happiness.”
It is, he said, “at the heart of the attractiveness of the civilization to so many outside of it and on its periphery.” He continued: “I don’t imagine my father’s parents would have been able to understand it. So much is contained in it: the idea of the individual, responsibility, choice, the life of the intellect, the idea of vocation and perfectibility and achievement. It is an immense human idea. It cannot be reduced to a fixed system. It cannot generate fanaticism. But it is known to exist, and because of that, other more rigid systems in the end will blow away.”
So you see, we are talking tonight not simply about economics, trade or finance. We are talking about the assertion and triumph of the human spirit — which is why, in the end, despite its flaws, neo-liberal globalization is a good thing.