Globalisation is based on the principle of comparative advantage, which simply speaking states that a country will always benefit from opening up its economy to the world and producing what it has comparative advantage in producing (may it be prostitution/sex tourism). Comparative advantage doesn’t necessarily means absolute advantage: it only means that if Country “A” can only produce product “X” with any relative advantage, whatsoever, and the whole world can produce the same product “X” overall better than Country “A”, i.e. with better absolute advantage but lesser relative advantage, i.e. the world can produce other products with better relative advantage, then it should let Country “A” only to produce the product “X”. This will be beneficial for all, of course Country “A” should be able to produce enough for the whole world or else should share the responsibility.
Isn’t the above idea brilliant? Well, it is. It is actually the most idealistic thing that can happen to the world. No one would ever be poor, but only if Country “A” is given a written guaranty that it shall never be affected by speculative currency movements, that it shall not be limited by resource constraints both material and human, that its people shall always feel happy producing product “A” only irrespective of their talents and aspirations. These guarantees are extremely important because nobody seems to be creating situations for such a scenario to develop. The economic superpowers just want to jump onto the globalization bandwagon. When you ask them why not allow free movement of men along with goods, they say it will disturb the cultural system. When you ask them why not allow a single currency for the whole world so that there is no chance of any speculative currency movement, they say it is impractical. Well, both their arguments are completely adequate, but then Globalization without free movement of men and goods would be partial Globalization.
Let me elaborate upon their arguments a bit further to give them some credit. The first argument is self explanatory; the countries around the world are divided on the basis of strong religious and cultural values. USSR did try forcing common cultural throughout the union but couldn’t succeed. The USA seems to be trying the same for the world, and I have no doubt that it will also fail badly; rather, the USA still has a lot to discover. There just can’t be a common global culture, and no one can give any direction to the emergence of any cultural interchange either. This is something which has to evolve itself, and any direct or indirect efforts to hasten the process may lead to social unrest. At present, at best, the people with strongly aberrant cultural values to their local culture can migrate to compatible foreign cultures and bring about merger of common attributes.
Similarly, a single currency for the world can not be permitted because it will be inefficient in dealing with local economy level imbalances, which can be handled better in a flexible exchange rate system. The single currency would create problems in handling country level issues without affecting the world at large. It can at best be implemented in a region where the constituent countries have similar economies, and the people are ready to move freely with in the region, for example the European Union. One can even thing of combining the currencies of “USA + Canada”, Europe, and Pacific Rim at some stage, but clubbing the economies like the Arab League, Central Asia, CIS, Sub-Saharan Africa, Latin America, China, Indian Subcontinent, etc., with the above three regions is just unthinkable at this stage. These regions have a lot to discover. For that matter, even the merging of culture can happen at some stage, but that would be commanded by precedence to humanistic interests over parochial religious interests, and this doesn’t seem to be happening in any perceivable time period.
So, what’s the hurry to have free economic borders? Can’t it be seen that a small country producing few goods or a large but poor country like India will become extremely dependent upon global events? Can any body stop speculative currency movements, and their negative effects on these countries in such a scenario? Moreover, this can lead to growing human dissatisfaction in the local population in absence of finding the work of their choice. Different people have different aspirations; they can’t be restricted to the choice of a career by a novel idea called Globalization. Isn’t it ironical that the same idea, which boasts of economic prosperity, fails to answer the basic question of human prosperity? Everything can’t be measured in terms of economic gains; it would be prudent not to force Globalization on everybody, and let the weaker nations discover their path to economic and social prosperity (extremely important) before sharing it with others. Till the time it happens, just wait and watch or render help as a disinterested friend.
©2008 Ankur Mutreja