Starting a new occasional series, I’ll be keeping a look out for particularly egregious examples of breathless and/or mendacious “Globalisation” pieces from neo-liberal commentators. This isn’t to say that the antiglobo side doesn’t also talk a load of bollocks; it often does. But there’s already a cottage industry going keeping tabs on them, and immanent criticism of the neoliberal agenda is more up my alley.
I’ll be scoring things which catch my attention using the following scorecard (note; this is a first draft and suggestions would be welcome).
Misleading characterisation of economies as “Globalisers”
Mentions India as “globaliser” without qualification — 1 point
Mentions China as “globaliser” without qualification — 3 points
Mentions Korea or Malaysia without qualification — 3 points
Reproduces “falling inequality” results from Sala-i-Martin or similar without emphasising dependence on China and India – 2 points
Refers to Botswana, Singapore or Hong Kong as if they provided development models — 2 points
Mentions Heritage Foundation or Cato Institute Economic Freedom indices — 1 point, with possibility of 0 points in truly mitigating circumstances
Equivocation between capital and goods market openness
Refers to capital controls as “protectionism” — 3 points
Refers to “capital flows to developing countries” in abstract without reference to actual net capital flows — 1 point
General failure to distinguish between capital and goods openness – 1 points
Particularly egregious or mendacious examples of above — 2 points, 3 in extreme cases
Ludicrously overstated estimates of the benefits of capital market openness – 2 points
Conflation of WTO agenda with “openness”
Uses % of trade in GDP as measure of “globalisation” when context is specific advocacy of WTO agenda items – 2 points
Talks about TRIPS agreement as if it increased economic freedom – 3 points
In general, argues back and forth between general statements about trade and specific statements about currently live negotiations – 1-4 points on a sliding scale
IMF/ World Bank apologia
Claims that IMF does not interfere with national sovereignty – 2 points
Blames failure of IMF programmes on “corruption”, “failure to liberalise” or any other factors which did not change during the program — 2 points
Pretends that World Bank is not responsible for projects financed with World Bank loans – 1 point
Refers to “moral hazard” as if it was a problem for developing countries – 2 points (any article which contains the phrase “bail-outs” will be prima facie assumed guilty on this count)
Talks about “market access” of countries with no non-official creditors in discussions of debt relief – 4 points
Pretends that IMF programmes did not make things worse in cases when they did – 2 points
Pretends that IMF did not “endorse” economic policies which were contained in programmes which they signed off on – 1 point
Europhobia and miscellaneous
Claims or implies that the European Union is anti-globalisation — 1 point
Blames the French without making specific allegations – 2 points
Mentions farm subsidies in an article without mentioning textile subsidies – 1 point
Talks about “devastating impact” of cheap food imports on domestic agricultural sector in article which also refers to positive impact of cheap manufactured imports – 2 points
Specifically in the case of Vietnam, says or implies that children working in Nike factories would not alternatively have been going to school — 5 points
Refers to “corruption” in countries without meaningful corruption problems — 4 points
Refers to Phillippines post-1998 without mentioning Indonesia – 1 point
Talks about privatisation of domestic industries as if it was relevant to “globalisation” – 2 points
Cliche
Refers to “basic economic theory” – 1 point
Refers to “Economics 101” – 1 point (American commentators) or 3 points (European or UK commentators for whom the reference is meaningless as well as cliched)
Says or implies that there is no anti-globalisation movement in developing countries – 2 points
Says or implies that developed world antiglobalisation movement is entirely middle class – 1 point
Says or implies that developed world antiglobalisation movement “has no idea of what it is in favour of”, “is opposed to trade” or “wants poor countries to stay poor” — 1 point each
Says or implies that protests at IMF, WTO or World Bank summits are “irrelevant” – 1 point
Refers to “rigour” of not particularly rigorous arguments (What kind of rigour do neoclassical economists have? Analytical rigour) – 1 point.
Refers to collapses of negotiations as “a tragedy for the Third World” – 2 points, plus 1 point if said “tragedy” is blamed on someone whose fault it wasn’t
References to Swiss bank accounts, Mercedes, etc – sliding scale of 0-3 points depending on offensiveness and/or accuracy of charge
I’ll be keeping two scores – a general “Globollocks” score and a separate “Cliche” score, because I suspect that unless kept under tight control the Cliche category will end up dominating the whole thing. By way of example, I award this Oliver Kamm post 10 points for Globollocks (4 for unqualified mentions of China and India, 4 for capital/goods equivocation and 2 for use of “exposure to global economy” as a proxy for “globalisation”) and 3 cliche points (“analytical rigour”, “wants poor countries to stay poor” and “basic economic theory”). I’ve no idea whether that’s a low or a high score until I start scoring a few more. If you see an example that looks like it might be worth scoring, give me a shout.
[EDIT]: Just for clarity, I’m scoring individual pieces, not entire ouevres and certainly not people. Oliver Kamm in general writes a lot of stuff on globalisation and by no means all of it is Globollocks. In general, in fact, most Globollocks is written by people who actually do understand the issues they’re talking about, but oversimplify them. I think that Globollocks has its roots in the way in which various flavours of antiglobo abused Paul Krugman’s work on strategic trade. Anyone at the time who saw how badly and egregiously this was used in the service of out-and-out protectionism could possibly be forgiven for deciding to never again make anything that might possibly be seen as a concession.
{ 42 comments }
Oliver Kamm 10.16.03 at 6:12 pm
Globollocks indeed: the trouble with this sort of exercise is that if it is to look as clever as you think it is, then you need to check your facts a lot more carefully than you’ve done before embarking upon it.
For example, there are no ‘unqualified mentions [or even qualified ones] of China and India’ in the post you link to. Go back and read it, and you will see that this is so. In the post that immediately preceded it I do indeed mention China and India, in a quotation from somebody else (Vincent Cable MP). What do you suggest I do with that quotation? Suppress it? There is an important debate among economists on how and to what extent these countries should be treated in the ‘globalisation’ debate, in which David Dollar & Aart Kray of the World Bank seem to me to have much the best of the argument. You’re entitled to disagree with that judgement, but your readers should be aware that you assume a partial and highly debatable point of view without having first argued for it, let alone demonstrated it.
I cordially invite you to identify at any point in the post you link to an ‘equivocation’ between capital and goods. The arguments for free trade in goods and services indeed do not necessarily apply also to the removal of capital controls (and I have made this point in earlier posts referring to the views of Jagdish Bhagwati). But my post is *about* trade: the reason capital enters the discussion is that a current account deficit, such as a rapidly-developing country will typically run, must be balanced by a surplus on capital account. Your designation of my point as an elision of the distinction between capital and goods is a grossly misleading characterisation of that point.
Likewise your strictures against using ‘exposure to the global economy’ as a proxy for globalisation. The title of the paper whose conclusion I refer to is ‘Does Globalization make the World More Unequal?’ You are entitled to disagree with those authors’ methods whereby they reach their conclusion, but it is a serious body of work by highly skilled economists, and not, as you insinuate, a conceptual sleight-of-hand or an instance of intellectual idleness.
‘Analytical rigour’ is a cliche, and you’re right to call me on it. The other two phrases you castigate (“wants poor countries to stay poor” and “basic economic theory”) are, respectively, a misquotation by you (of a phrase that – unlike, say, ‘golden opportunity’ or ‘level playing-field’ – matches no documents on Google, which is odd for a cliche) and an outright fabrication on your part.
In absolute terms and also relative to the market, you would thus appear to score quite highly on your own scale.
dsquared 10.16.03 at 6:29 pm
You are entitled to your views except one. I nevertheless stand behind every single one of the scores awarded.
On a couple of factual points, you mention India and China once each, in the sentence “As we are seeing in the cases of India and China, poor countries that grow rapidly thereby diminish global inequality”, which does not appear to me to be quoted speech.
Second, your accusation: “There is an important debate among economists on how and to what extent these countries should be treated in the ‘globalisation’ debate, in which David Dollar & Aart Kray of the World Bank seem to me to have much the best of the argument. You’re entitled to disagree with that judgement, but your readers should be aware that you assume a partial and highly debatable point of view without having first argued for it, let alone demonstrated it.” is unfair. I explicitly exempt from the Globollocks charge any discussion of China and India which recognises this debate; you didn’t.
Third, it is not true to say that “But my post is about trade: the reason capital enters the discussion is that a current account deficit, such as a rapidly-developing country will typically run, must be balanced by a surplus on capital account. Your designation of my point as an elision of the distinction between capital and goods is a grossly misleading characterisation of that point.”
Your actual argument is “Developing countries need foreign capital to fund the current account deficits that arise when their investment opportunities exceed their domestic savings. By that route, they are able to specialise, improve productivity (and thereby real wages), and raise output growth. As we are seeing in the cases of India and China, poor countries that grow rapidly thereby diminish global inequality”. That’s about capital and investment, not trade. It would still be just as valid in a world where there were huge tariffs.
My stricture against using trade/gdp ratios is context-dependent and the criticism is of you, not Dahndert & Williamson.
And finally, if “wanting poor countries to stay poor” is a misquote of “demanding that poor countries stay poor”, it’s hardly an egregious one.
I can only conclude that you have in fact been reviewing my scores against a post other than the one I actually linked to.
Jason McCullough 10.16.03 at 8:09 pm
Maybe you should create an expanded version for scoring comments?
Doug Muir 10.16.03 at 8:24 pm
Sick fun.
Let’s see here. There is indeed an “unqualified mention of China and India”, but not as “globalizers” — no, not even implicitly. All he says is that they’re growing, and who could argue with that? No points from this reader, Dan.
Capital-goods equivocation, it’s a bit of a stretch. He never mentions tariffs or any trade in goods at all, so how can you say he’s equivocating? OTOH, while I’m pretty sure I disagree with your basic position, I completely see where you’re coming from WRT to the fuzzing between globalization (trade) and globalization (investment). The two are inevitably linked, but they are two different things, and a great deal of bad argument has resulted from the sloppy or mendacious confusion of the two. So I’ll give it to you. Four points.
For your third point, I think the standard is just silly (and it really looks like you made it up just for this particular post). “Exposure to global economy” is IMO a reasonable if somewhat sloppy shorthand for globalization; the two things are not the same, but there’s a pretty clear and strong positive correlation. (Just how clear and how strong depends on how you define “globalization”, sure.) I’d frown if I saw them given equivalence in an academic paper without any further intellectual spackling, but it’s a frickin’ blog post. Pause before you heave that fist-sized hunk of granite, Daniel; your posts aren’t always models of precision and rigor, either.
Kamm has already conceded one cliche point, and I agree with you and not him WRT the second — ‘wanting poor countries to stay poor’ is close enough. But no points for the third; he says ‘economic theory’, not ‘basic economic theory’. You made the rules; it’s no fair bending them on your first time out.
So I come up with five points. I should add that this scale is IMO middlin’ dopey. Not counting the cliches — I agree that they’re odious, though I tremble at your boldness — not counting the cliches, at least a third of the things you want to award points for are debatable, and a couple of them are just silly (what’s wrong with Singapore as a model?) But I suppose it’ll give pleasure to people who 1) read _The Economist_ regularly, although they disagree with almost everything in it, and 2) would be very good at the _Times_ crossword, if they ever read the _Times_, which they’ll hasten to tell you that they never do. In other words, pretty much this blog’s target demographic. So, knock yourself out, guys and gals.
Doug M.
Zizka 10.16.03 at 9:50 pm
Dan, have you EVER “assume[d] a partial and highly debatable point of view without having first argued for it”?
Say it isn’t so, Dan. A lot of us look up to you.
You might score a few Tom Friedman articles to provide a baseline. Actually you might have to change your scoring system to include “Cute references to concrete third world phenomena”.
Here’s a sample Friedman piece to score:
The Datsun and the Shoetree
a different chris 10.16.03 at 10:16 pm
>There is indeed an “unqualified mention of China and Indiaâ€, but not as “globalizers†— no, not even implicitly. All he says is that they’re growing,
Not a good start, Doug. We are well aware that people who support the current bs labeled “globalization” use China and India the way the Bushies always used Saddam and 9/11. Never claiming the two were connected, but hoping you’ll do it for them..
So it belongs in the scoring system. Furthermore, Oliver is guilty because, and I’m quoting *you* now: “..all he says is that they’re growing.”
So he mentions China and India for no particular reason at all, apparently? M’kay.
Tom 10.16.03 at 10:44 pm
“You might score a few Tom Friedman articles to provide a baseline.”
I was going to suggest Amity Shaels at the FT, but Friedman’s a better target. (Amity mostly talks bollocks about the US economy)
Oliver Kamm 10.16.03 at 11:00 pm
There’s much I could say about your response, and about some fair observations that have been made on this page by others, but a single point stands out and overrides everything else in the discussion. You have levelled charges without having first checked that my post says what you claim it says. You’ve even gone as far as attacking a ‘quotation’ that is in fact a fabrication by you. That’s straight unscholarly and unprofessional conduct, which undermines your entire exercise.
[On a very minor point, raised by another reader, the second ‘cliche’ you cited is indeed close to what I had said even though, inexcusably, the words you enclosed in quotation marks were not the actual words I had written. But they are not a cliche. A cliche is a phrase worn hackneyed by repeated use, whereas this phrase is, so far as I can see, unique to me – unlike a term such as ‘neo-liberal’, which is a genuine cliche.]
dsquared 10.17.03 at 12:19 am
You have levelled charges without having first checked that my post says what you claim it says. You’ve even gone as far as attacking a ‘quotation’ that is in fact a fabrication by you.
No I haven’t and no I haven’t. Quite frankly, since the posts are linked and quite easily available to anyone who cares, I’m happy to just let any readers make up their own minds as to how fair or otherwise I’ve been.
Doug, on the two substantive points where there is significant disagreement:
1: Exposure to global economy is only a reasonable if somewhat sloppy shorthand for globalization if you’re using “globalisation” in a very loose sense in which nobody would ever possibly be opposed to it. Precisely because it’s possible to develop a la Korea, China or Malaysia, increasing your involvement in the world economy on your own terms rather than signing up to the Washington Consensus, it’s a very pernicious source of Globollocks conclusions in most contexts.
2: Singapore is not a useful development model because “be a port halfway between China and India” is no more a useful piece of policy advice than “discover diamonds” (which is the reason for including Botswana).
I’d note, half in context that this feature replaces my previous outlet for this kind of comment, which was constant despairing moaning at Brad DeLong. A common feature of Globollocks is that its authors are usually (as Oliver is) perfectly aware of the flaws in the existing neo-liberal institutions, but gloss over them in support of the agenda.
Personally, I flagged this up as immanent criticism precisely for the reason that in principle I’m in favour of free trade (and indeed, of free things generally). But I tend toward the opinion that any comment written in support of free trade at the current place and time has to be very careful or end up being objectively in favour of the current IMF, the current WB and the current WTO. Hence, Globobollocks.
Mr Spectator 10.17.03 at 7:55 am
Does this mean Oliver Kamm is going to have to stop arguing with Stephen Marks on Beatnik Salad?
Doug 10.17.03 at 8:53 am
What a fun little game:
Use of the phrase “Washington consensus” without definition – 2 points
If said use is clearly pejorative – +1 point
Use of a global medium (or means of transport) to protest or oppose “globalization” – 2 points
I’m sure there’s more…
Doug Muir 10.17.03 at 9:04 am
“Singapore is not a useful development model because “be a port halfway between China and India†is no more a useful piece of policy advice than “discover diamonds†(which is the reason for including Botswana).”
Twaddle and bosh. There are a hundred other ports between China and India. Why is Singapore the only one with a Borders?
It seems to me that you’re falling into a common fallacy of casual observers of Singapore: viz., you glanced at a map, noticed it sat on a strait, and decide that must explain it all.
That’s just wrong. Singapore’s ‘strategic location’ is almost entirely illusory. For many centuries, the straits were dominated, not by Singapore, but by Melaka. Melaka’s location is actually better — not only does it overlook the Straits, but it has easy access to fresh water and a river connection going inland. And Melaka was a large and deliriously prosperous city when Singapore was literally a fishing village on a mud flat.
Singapore was a third world backwater until the 1960s, so obviously the strategic location wasn’t doing it much good. On the other hand, Singapore’s economic growth predates China’s by 15-20 years — Singapore was racking up breathtaking annual growth while China was still going through the Cultural Revolution, and Chinese trade with the outside world was actually contracting.
Or do you really think India-China trade was that big a deal in, say, 1970 – 1975 — a period when Singapore’s GDP grew by more than 10% per annum, and per capita income grew by 40%?
Honestly.
Doug M.
dsquared 10.17.03 at 9:11 am
Use of a global medium (or means of transport) to protest or oppose “globalization” – 2 points
Use of that irritating joke – 1 cliche point.
Doug Muir 10.17.03 at 9:14 am
The diamonds thing is pretty feeble, too. Angola, Congo, Namibia, and Sierra Leone are all major diamond producers.
The diamonds have been more important for Botswana than location for Singapore — but they’re still, at most, a necessary-but-not-sufficient condition.
Botswana has managed feat, painfully rare in the developing world, of turning an extractive industry into a blessing rather than a curse. IMO that deserves more than a disparaging comment about diamonds not being a useful model.
Doug M.
dsquared 10.17.03 at 9:18 am
Doug, Singapore’s development is a result of its history, which is in turn a result of its importance to the British Empire. It quite simply wasn’t a “Third World backwater” when the British left; unlike Melaka, it had the main rail terminal for the Malayan peninsula and it was the world centre for exports of tin and rubber. Its further development was as a free-port and tax haven, an industry in which there is considerable path-dependence. This isn’t a model that, say, Zambia, or Honduras could adopt.
Factory 10.17.03 at 9:51 am
Hmm you also forgot the old cliche of using the existance of the Internet as an argument for why globalization is necessary.
Matthew 10.17.03 at 10:07 am
Haha, taking on Olivier Kamm! Beware, he’s a remarquably single-minded defender of all things neo-liberal, with remarquable amounts of free time. I’ve caught him (by coincidence) writing negative reviews of ALL Chomsky books on Amazon (!), and writing many letters to the Guardian.
He does argue his case though, which is at least interesting and stimulating. He’s not a “wingnut”.
Matthew 10.17.03 at 10:18 am
Actually, having read his brazen denials of his globbollocks, maybe he is ~slightly~ insane. He’s an investment banker by the way. Conflict of interest anyone?
I’d add a cliche:
-Arguing “anti-globalisation” movement is absurd because it is global. (this label being semi-convenient and unwanted by many of the said campaigners): 2 points?
dsquared 10.17.03 at 10:39 am
I’ve actually got a lot of time for Oliver Kamm’s site and certainly don’t propose to be starting a more general fight with him; I’ve made an edit above accordingly. I strongly believe that my chief target in this series will be Brad DeLong, an undeniably first-class economist who seems fatally addicted to writing globollocks. (By the way, Brad, if you’re reading this, the line about Vietnam above is specifically aimed at you).
Doug Muir 10.17.03 at 12:29 pm
Singapore’s GDP in 1962, in constant 1995 US dollars, was about $500 per capita.
Not only was that Third World, it was poor third world. Singapore was poorer than the Philippines, poorer than Peru, poorer than Ghana.
It’s about $21,000 today.
The main rail terminal for the Malay penninsula was at Georgetown/Penang, not Singapore. Singapore didn’t even have a rail connection until 1924 — before that, you had to cross the straits by ferry to catch your train in Johor Baru.
Butterworth, not Singapore, was the major center for exporting tin. Glance at a map and you’ll see why. The big alluvial tin deposits are all in the west and northwest, from Kuala Lumpur up to Ipoh.
Third world it certainly was. “Backwater” I suppose is in the eye of the beholder, but it was smaller and/or poorer than all its regional competitors, so IMO it qualifies.
Doug M.
Doug Muir 10.17.03 at 12:35 pm
“[Singapore’s] further development was as a free-port and tax haven, an industry in which there is considerable path-dependence.”
Well, that’s pretty much just plain wrong. Singapore’s growth was firmly based in manufacturing, especially during the first 20 years. Manufacturing grew comfortably faster than trade throughout the period in question (c. 1960-80) and indeed for some time thereafter.
Textiles, clothing, footwear and electronics led the way; all four of those sectors saw sustained long-term growth rates in the 15%-25% range. Oil refining, food processing, tobacco, metal products and the chemical industry also grew as fast or faster than total GDP.
Tax haven? Good grief. Singapore, with its corporate income tax rate of 25% and its sharply progressive personal income tax, is a tax haven? It has some sensible tax policies and some tax incentives (like the “pioneer” program of tax breaks for big investors), and most of all it’s a _stable_ tax environment, but it is not now and never has been a tax haven.
— Try googling that one, and see what you get. A sample:
http://www.asiaweek.com/asiaweek/96/0308/feat8.html
Free-port and tax-haven… no. Singapore’s primary development was as a a manufacturing center, trade entrepot, and (after 1980) a service provider, especially in IT and financial services.
No offense, but you seem to have some odd ideas about how Singapore got to where it is today.
“This isn’t a model that, say, Zambia, or Honduras could adopt.”
Yeah, there’s no chance of any of them basing growth on the manufacturing and aggressive export of stuff like textiles, clothing, footwear and electronics.
Singaporean policies like massive investment in education, public-private partnerships in infrastructure, and vigorous and effective anti-corruption drives would also be pretty much completely irrelevant.
Doug M.
Doug Muir 10.17.03 at 12:51 pm
The funny thing is, although you’ve gotten your facts wrong, I agree with your original point. Using Singapore as a poster child for globalization is actually pretty stupid.
Sure, Singapore benefited from free trade, especially the Kennedy Round way back when. But it’s been much MUCH more cautious about things like privatization and capital flows. As recently as 1990, “Singapore, Inc.” still owned over 500 firms, including airlines, ports, roads, telecoms, banks, hospitals, power plants, factories, TV and radio stations, a brewery and the national lottery system. Many of those have been divested, but many more have not, and Singapore remains an essentially dirigiste state.
Foreign investment is allowed and indeed encouraged, but on Singapore’s own terms. Capital flows are carefully monitored, and — especially since 1997 — subject to sharp intervention. The Singapore dollar is not pegged, but it is managed (and rather well — trade-weighted basket, periodically readjusted). In other words, in terms of anything /but/ trade, Singapore is no more than semi-globalized.
But both you and the folks you’re critiquing seem to be addressing Singapore as a symbol, rather than the much more complex and interesting reality.
Doug M.
dsquared 10.17.03 at 1:13 pm
Fair enough, I’ll take this into account when handing out future scores. Luckily, it doesn’t require a revision of the only outstanding one.
Andrew Edwards 10.17.03 at 2:44 pm
Ummm…
For example, there are no ‘unqualified mentions [or even qualified ones] of China and India’ in the post you link to.
From the linked post:
These data accord with what you would expect on grounds of economic theory. Developing countries need foreign capital to fund the current account deficits that arise when their investment opportunities exceed their domestic savings. By that route, they are able to specialise, improve productivity (and thereby real wages), and raise output growth. As we are seeing in the cases of India and China, poor countries that grow rapidly thereby diminish global inequality. The anti-globalisation campaigners are in effect demanding that poor countries stay poor and that global inequality intensify. [emphasis mine]
Are there two versions of this post, or something?
dsquared 10.17.03 at 3:52 pm
To be fair, there are; in the post immediately preceding it, China and India appear only in the context of quoted speech.
Zizka 10.17.03 at 6:11 pm
Doug Muir: The word in the literature on Singapore is that “There will always be a major trade city in that area, and it’s makes not particular difference exactly where it is”. (I.E., there is no natural harbor or other obvious location for the city). I don’t have my reference available, but it seems to be a truism.
So at some point something about Singapore cause Singapore to become the big trade city there, rather than some other city in the area. But I think that this happened in the XIX c.
No randomly chosen city (e.g. in South Borneo, Northern Australia, or interior Malaysia) could do what Singapore has done, and not only that, unless Singapore screws up, no competing city can replace Singapore. So Singapore is only an example for a few other cities with a comparable advantage.
Zizka 10.17.03 at 6:19 pm
I have read that Sweden was a very poor country at the turn of the twentieth cnetury, but by taxing resource exports (timber and iron ore) they built up their infrastructure and their welfare state.
And since the most successful development story of all, by far, was Japan after 1850, why doesn’t the contemporary discussion talk more about that example. (Bellah was more than a generation ago.)
Socialism in the first case, rule by the samurai class in the second. Pretty good recipes, right?
jw mason 10.17.03 at 6:39 pm
I loke the idea of this, but you really should go after print stuff (like annoying columnists in the FT) rather than blogger:
1. It really doesn’t matter what blogs say; and
2. If you attack bloggers they’ll come here and post tedious defenses, and they may even link to this site and bring all their readers, and we all know how that will end…
Matt 10.18.03 at 3:30 am
Just wanted to throw in my little observation. Singapore (and Hong Kong before being swallowed by PRC) are just too small as city states to serve much as examples to large countries. Sure, you can extract some general things but thats about it.
Bob 10.18.03 at 10:21 pm
These two survey papers by Jeffrey Frankel shed much welcome illumination on the many entangled issues relating to globalisation:
http://www.cabe.ca/cbe/vol6_3/FRANKEL.PDF
http://www.ksg.harvard.edu/cbg/research/j.frankel_nber_globalization.of.economy.pdf
Oliver Kamm 10.18.03 at 11:39 pm
Thank you for the gracious edit on your post. I agree with your observation about the misuse of strategic trade theory (it will reinforce the judgement on my monomania of one of your correspondents that I can think of a particularly striking example by Noam Chomsky), and acknowledge that some supporters of free trade have, in an effort to popularise a good policy, themselves indulged in bad economics (e.g. the claim, which Krugman rightly dismissed at the time of the Nafta debates, that such agreements are job-creating measures). Obviously, I do not consider that I am guilty of the same misrepresentation, but – as another of your correspondents points out – self-justifications from bloggers don’t make for interesting reading to anyone but their authors, and I don’t therefore propose to enter more of them. My only additional point is directed to the gentleman who believes I’m an investment banker with lots of free time (in which case I must be the only one). Whatever my profession is, it has no bearing on the validity of my arguments or the truth (or otherwise) of my conclusions, which must be judged on independent criteria. To believe otherwise is an instance of a well-known and persistent logical fallacy.
Oliver Kamm 10.19.03 at 12:12 am
P.S. I’ve only just noticed the China/India point. Yes, there are two versions of the post. Apologies for my consequent entirely misplaced rebuttal; the sentence in question is, nonetheless, correct.
Oliver Kamm 10.19.03 at 11:04 am
P.P.S. Though the other points remain, including the one about the spurious quotation – “basic economic theory”.
But the overall list does include fair points, e.g. regarding the Sala-i-Martin study, which I have previously cited on my blog.
Oliver Kamm 10.19.03 at 11:04 am
P.P.S. Though the other points remain, including the one about the spurious quotation – “basic economic theory”.
But the overall list does include fair points, e.g. regarding the Sala-i-Martin study, which I have previously cited on my blog.
Doug Muir 10.19.03 at 11:18 am
Zizka says, “The word in the literature is…”
Not in any literature I’ve read. Cite?
“But I think that this happened in the XIX c.”
Nope. Singapore had about 200,000 people at the turn of the century, and was dirt poor. Didn’t reach a million until the 1950s (when it was still dirt poor).
“No randomly chosen city (e.g. in South Borneo, Northern Australia, or interior Malaysia)”
Er, northern Australia is a couple of thousand miles away from Singapore, and certainly not on the direct route from China to India (or anywhere else).
Doug M.
Zizka 10.19.03 at 4:24 pm
Pretty sure it was in Abu-Lughod’s “Before European Hegemony” about the world system ca. 1300-1400. If not, in one of her references. I have a lot of books packed up.
“Er, northern Australia is a couple of thousand miles away from Singapore, and certainly not on the direct route from China to India (or anywhere else).” Well, isn’t that Davies point, and mine? Even granted that Singapore relies on manufacturing, isn’t it’s trade niche an essential part of its advantage? Might there have been two Singapores, one a pure trade city run by some incompetent, and the other an unfavorably-located but thriving manufacturing city brilliantly run by Pres. Lee? No — the manufacturing city was going to be located at the trade center. (That’s how Detroit replaced Indianapolic as center of the auto industry).
My point actually reinforced yours, but weakly. There is no reason that there should be a trade city exactly where Singapore is, whereas (if there’s any significant amount of trade) it’s an absolute certainty that there will be a big trade city somewhere near there. Singapore’s rise, like Hong Kong’s, is a function of the general increase in trade. While it is true that the big trade city didn’t have to be located at Singapore, there was going to be one somewhere near there. (Malacca declined centuries ago.)
To preclude irrelevant sniping, despite the fact that the word “Hegemony” is used in the title, Abu-Lugod’s book is not post-modernist. She actually used “hegemony” in the original political-economic sense. She affiliates loosely with Gunder Frank, Wallerstein, and MacNeill as a “world-system” historian, but is much better focussed and less speculative than any of them.
Are we talking about Pres. Lee? If Singapore was a million people before Lee took office, it was an important city, dirt poor or not. (It seems to have nbeen regarded as a significant target by the Japanese and British in WWII.) Whatever else it did, it took full advantage of its favored location, and as such can’t be an example for cities without that favored location (such as Borneo and northern Australia). The rise of Singapore coincided with the end of WWII, the stabilization of China for the first time in 37 years, Japan’s boom, and a worldwide increase in trade. As soon as Singapore successfully occupied its niche, that niche was full (Singapore’s to lose). So give Lee credit for not screwing things up, but he was starting with big advantages.
What we’re arguing about here is the degree to which Singapore’s success can be an example for other developing nations. Davies gave pretty good examples why the example is of limited value. However, yes, if Singapore was competing for leadership with the other cities in the area Lee did all the right things. One of my original points was that there had to be a major trade city somewhere in the area, but it didn’t have to be in Singapore.
the cheap seats 10.19.03 at 11:26 pm
without supporting anyone’s particular position (wink to d-squared), I honestly congratulate those brave enough clean up the language of globalisation in a forum like this for all to see.
It makes more intelligent readers of those viewing which is certainly prerequisite to making free trade work for the greatest number of humans.
Doug Muir 10.20.03 at 9:10 am
“Singapore (and Hong Kong before being swallowed by PRC) are just too small as city states to serve much as examples to large countries. Sure, you can extract some general things but thats about it.”
Singapore has about five and a half million people; it’s small, but it’s not that small.
I disagree that it can’t “serve much as [an example] to larger countries”. In fact, Singapore’s development looks quite a lot like Taiwan’s, and even more like south coastal China’s.
But say we accept your proposition, and decide that Singapore is only potentially relevant to developing countries with between one and ten million people. Well, that group includes 35 or 40 countries, with about 200 million people. So it remains a model well worth looking at.
Doug M.
Doug Muir 10.20.03 at 9:34 am
“If Singapore was a million people before Lee took office, it was an important city, dirt poor or not.”
No more important than Manila, Haiphong, Medan, Palembang, Jakarta, Bankgok, Georgetown or Rangoon — all of which were either larger, richer, or both.
> Whatever else it did, it took full advantage of its favored location, and as such can’t be an example for cities without that favored location (such as Borneo and northern Australia).
Agree on the first part, disagree on the second.
Yes, Singapore had a good location. It also had some potentially crippling disadvantages — like an insufficient water supply, a godawful strategic situation, a complete absence of natural resources of any sort, and a racially divided population. But never mind that now. You seem to be saying that, because it was in a good location, Singapore has nothing to teach anyone else. I think that’s just wrong; at a minimum, it’s sloppy. You can look at any developing country and say, well, they had X, so that makes their model irrelevant. “Oh, Meiji Japan — they had coal, you know, and copper. Only relevant to countries with coal and copper.” Come on, now.
> The rise of Singapore coincided with the end of WWII, the stabilization of China for the first time in 37 years, Japan’s boom, and a worldwide increase in trade.
The rise of Singapore began after 1960. WWII was well over by then, and China was getting less stable, not more.
Japan’s boom is relevant, but if “being close to a rapidly growing economy” was the answer, North Africa would have grown in the ’50s and ’60s and the Caribbean in the ’90s. (And Singapore is not all that close to Japan. Tokyo-Singapore is a longer flight than New York-LA.)
World trade has been growing pretty steadily since 1945; that’s a constant background noise for more or less everyone everywhere, so you can’t really introduce it as a decisive factor for Singapore. Yes, they did a lot of trading; but what enabled them to catch the rising tide while others floundered?
> As soon as Singapore successfully occupied its niche, that niche was full (Singapore’s to lose).
So the light manufacturing niche was taken? Man, must have surprised hell out of the Koreans, not to mention the Chinese.
Oh, you mean trade. Oh, well — Hong Kong’s share of trade certainly crashed during the period 1960-1990. Malaysia’s, too. Thailand positively closed its doors to the world.
Actually, I’m not sure what you mean. What niche is this?
> So give Lee credit for not screwing things up, but he was starting with big advantages.
Yeah, like living on an overpopulated mud flat whose water could be turned off at any time.
Singapore 1960 looked a lot like Bangladesh today. It was painfully poor even by the standards of that place and time.
Lee is not exactly a lovable fellow, but his accomplishments are still breathtaking.
Doug M.
Zizka 10.20.03 at 4:11 pm
Doug, probably all the points have been made. Other nations can indeed learn a lot from Singapore, but they should not expect Singaporean results. If I or anyone else said that there was nothing at all to learn, we were wrong. But your strategy is to enumerate everything about Singapore relevant to the argument other than their favored location visavis trade routes, accumulating enough detail that it seems that the location wasn’t really that important.
None of the other large cities you name was in a favored position to take advantage of East-West sea trade. In your presentation you made it seem that Singapore was totally insignificant before 1960, which is false.*
“The niche” is the straits sea trade niche. Is that hard to understand? Singapore’s location was a mud flat, but it was competing with other mud flats on those sea lanes, and it was already a trade center long before 1960. Its advantage was its relative location on the sea lanes. The point you insist on ignoring. (Like Shanghai and Hong Kong, Singapore was a new trade city built during the XIX century. Shanghai is booming too now, for similiar reasons.)
*I don’t claim to be an expert on Singapore. Here’s the Columbia Encyclopedia : “[After 1824] the port grew rapidly…. soon overshadowing Pemnand (and Malacca). The development of Malaya in tyhe late XIX and early XX c. made Singapore one of the leading ports of the world for the export of tin and rubber. The constructyion of a railroad through the Malay peninsula to Bangkok swelled Singapore’s trade, and the building of airpports made it more than ever a communications center.” This really contradicts what you have said. I’m sure that if I went to the library I could find more detailed information. Dirty pool. If you play the expert, you should be right.
Doug Muir 10.20.03 at 9:29 pm
“Dirty pool. If you play the expert, you should be right.”
I’m honestly not sure what you’re talking about here. I haven’t denied that Singapore was always (i.e., before 1960) a large city on a major trade route. Looking at the quote you give, I don’t see anything that contradicts, even implicitly, anything that I’ve said — with the exception of the bit about tin, in which case I am right and the encyclopedia, I regret to say, is sloppy if not actually incorrect.
(Again, Butterworth, not Singapore, was Malaya’s major port for tin exporting. Singapore didn’t even have a rail connection to the mainland until 1924. Singapore was the major rubber port, yes — the rubber plantations were in the south. The tin mines were in the north and northwest. Butterworth and Ipoh are still filled with the impressive mansions of 19th century tin magnates; Singapore hasn’t a one.)
“The building of airports made it more than ever a communication center…” Sure. But, again, why Singapore and not any other SE Asian city?
“None of the other large cities you name was in a favored position to take advantage of East-West sea trade.”
Well, that’s just not true. Medan and Georgetown both sit on exactly the same strait as Singapore. Jakarta has its own strait, and plenty of East-West trade flows through it. Manila has a wonderful natural harbor — something Singapore notably lacks — and, in 1960, was quite a bit richer. Jakarta, Manila and Georgetown were all deliberately founded to “take advantage of East-West sea trade”. Haiphong was the biggest rice exporting port in the world for a while — that’s part of the reason Imperial Japan wanted it so badly. Rangoon and Bankgok were both more important ports than Singapore in the early postwar years; they’d both emerged from WWII in much better shape, after all.
Furthermore, I think you’re seriously overestimating the importance of “East-West trade” during the period in question. If you’re talking about trade between Europe and East Asia, it didn’t reach the level of the 1920s again until well into the 1960s. Japan’s trade, for instance, was directed far more towards the US, especially during the period 1950-73. And Singapore’s trade with China simply disappeared after 1949; neither the British nor the Malaysian governments would allow it, as they were afraid of the influence of mainland Chinese Communism on Singapore’s Chinese minority. (Believe it or not, the phrase “Cuba across the Causeway” was in common circulation in the early ’60s, and Singapore was on LBJ’s list of dominoes.)
If you’re just looking at the small scale map, it’s easy to think, oh sure, Singapore sits right on those narrow straits, east to west. But that begs the question of 1) what trade is actually flowing through those straits, and 2) why it should stop in Singapore, as opposed to sailing on by.
Through much of the period of Singapore’s growth to ‘developed’ status — especially during the 1960s — long-distance trade through the strait was still pretty much ‘colonial’, viz., raw materials going west passing manufactured goods going east. Getting either of these flows to stop in Singapore was by no means a foregone conclusion.
The British built Singapore up to be an entrepot, sure. But the entrepot trade was savaged during the Japanese occupation, and didn’t recover until the 1950s. Then it declined again in the years immediately following independence; the British had used Singapore as a regional trade center, but the British weren’t around any more, and trade patterns were shifting accordingly. (Singapore-India trade, for instance, which was quite important right up to 1940, had pretty much disappeared by 1970.) Indonesia’s asinine _konfrontasi_ policy also kicked a fairly major hole in the entrepot trade.
In at least one case — Indonesian oil — post-independence Singapore managed to capture the flow by building highly efficient refineries and positioning itself as the better alternative: higher productivity than the clunky Indonesian refinery system, but still much cheaper than shipping crude to Europe. This was one of Singapore’s first attempts at ‘trade capture’, and it capitalized on a pre-existing advantage (the British had left a refinery system behind). However, the subsequent investments in modernization, both of physical plant and labor force, were purely Singaporean; and they were so successful so quickly as to seriously annoy the Indonesians, then and thereafter.
But I digress; oil refining was actually a fairly minor piece of the Singaporean _wirtschaftswunder_. In the early years, before the manufacturing boom really took off, Singapore’s economy was indeed driven by trade…
…but quite a lot it was regional trade, not “East-West”. Singapore’s major trading partner at independence was, of course, Malaysia; and this remained the case until well into the 1970s. Indonesia has always been second or third. (Exact data is on that one is hard to find, because Singapore doesn’t include Indonesia in its published statistical list of trading partners, for reasons too tedious to go into here. But they acknowledged about $13 billion of non-oil trade with Indonesia in 2002.)
Thailand is another major regional trade partner, and always has been; it absorbs about 5% of Singapore’s exports, and provides about 5% of its imports, and both these numbers have been pretty stable over the long term. (Thailand provided much of Singapore’s food, especially rice, throughout the crucial development period; Malaysia was too focussed on cash crops, and Indonesia too poor and unstable, to be satisfactory sources of food imports.)
I don’t have a time series breakdown for regional vs. long-distance trade, but it’s clear that regional trade was always of the same order of magnitude, if not bigger than, the long-distance “East-West” flows… especially during the key development years.
Not convinced? Okay, who is Singapore’s major trading partner today? It’s the US — has been since around 1980.
I submit to you that location on the straits of Malacca matters very little for trade going to Los Angeles or Seattle. That trade, for the most part, doesn’t flow through the Straits; it starts and ends there. In this regard, Singapore would be better off if it were a few thousand miles further east.
And, as I’ve stated already, the highest growth rates were never in trade. They were in manufacturing in the ’60s and ’70s, and then in services thereafter.
“In your presentation you made it seem that Singapore was totally insignificant before 1960, which is false.”
Well… no. I’ve said that Singapore had reached a million people by the 1950s; that’s correct. (It had more like a million and a half at independence.) I’ve also said that it was poor, dirt-poor; and that’s correct too. Anything more is your inference, not my positive statement.
“‘The niche’ is the straits sea trade niche. Is that hard to understand?”
It’s hard to see why you think it’s so crucial. Or rather, it’s easy to see, but I think you’re painfully wrong.
Thought experiment #1: Aden sat on a strait that was busier than Singapore’s from the late 19th to the mid 20th century. And Aden, like Singapore, was built up into a major naval base and regional trade center by the British Empire. For a while Aden may even have had a higher per capita income than Singapore’s (depending on whose statistics you trust).
Okay, so a strait location is useful but not sufficient? I’d agree — but now thought experiment #2: switch Singapore and, say, Zanzibar. Keep the population and the post-independence leadership the same, but now Singapore is off the coast of East Africa, and Zanzibar is at the tip of Malaya.
I submit that Singapore still does just fine. Oh, probably worse than the Singapore of our timeline… but fine nonetheless, and much, much better than the rest of Africa. (Zanzibar, on the other hand, I think would do little better, if at all. But that’s another story.)
Too extreme? Okay, I’ll make it easy. TE #3, Singapore switches places with Georgetown. Now it’s still next to Malaysia, but no longer in the middle of the Straits. Submitted, that Singapore would develop almost exactly as it has; and Georgetown would do little better, if at all.
(Actually, I think Singapore would be slightly worse off… but not because of losing the straits location; because of gaining increased dependence on tin. For small developing countries, extraction industries are more likely to be curse than blessing.)
“Singapore’s location was a mud flat, but it was competing with other mud flats on those sea lanes, and it was already a trade center long before 1960. Its advantage was its relative location on the sea lanes.”
No; its advantage was good government. Good government let it take advantage of the other advantages it had. But without good government, its location would have done it little or no good at all.
Doug M.
Doug Muir 10.21.03 at 6:53 am
Sorry, brain hiccup; that last Thought Experiment should read ‘switch Singapore and Kota Baru’, not ‘switch Singapore and Georgetown’.
(Georgetown is in the Straits, at the NW end. Kota Baru is around on the other side of the penninsula, near the Thai/Malay border, and several hundred km away from the Straits.)
It belatedly occurs to me that this thread has drifted rather far from its original topic. If zizka (or anyone else) wants to continue the discussion, it might be better to take this to e-mail.
Doug M.
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