Yes to Globalization, No to Global Governance, Part III

The biggest economic threat facing most developed nations is almost surely the combination of demographic change and poorly designed entitlement programs.

Simply stated, that’s a recipe for terrible tax and spending policy and also could lead to fiscal collapse.

But I’m sometimes tempted to say the biggest threat is global governance.

More specifically, international bureaucracies such as the United Nations, International Monetary Fund, the European Union, and Organization for Economic Cooperation and Development are largely controlled by the left and are pushing to create one-size-fits-all rules that will embed statist economic policies on a global basis.

However, I don’t want to throw the baby out with the bath water. While globalism (global governance) is bad, globalization (free trade) is good.

I already have two columns in this series.

• Part I cited Dan Henninger and John Bolton.
• Part II cited Ilya Somin.

Today, let’s review what others have written.

About two weeks ago, Ryan Bourne and Daniel Klein wrote a piece for CapX that nicely summarizes the distinction between the two concepts. Here are some of the key passages.

Globalism is a menace. Globalisation is not. So what’s the difference? …Globalisation happens when people from different corners of the world interact through trade, investment, cultural exchange and technology. …But globalisation is not new. It’s not a philosophy or an ideal. It’s not a policy agenda. …Globalisation is people choosing to trade or interact internationally… Globalism is a very different beast. Globalism is a mindset and an agenda. Its proponents believe that certain issues require top-down management through global or multilateral organisations and agreements. …Globalism suppresses resistance by undermining sovereignty and competition, censoring critics and subverting democracy.  …Globalism is therefore a grave threat to our liberties and prosperity. Inherently, globalism pushes for expert-led rule at a level above the nation state, which eliminates experimentation and creates systemic risk. Take the Paris climate accords… The agenda raises the cost of living of all, and especially the poor. Or take the OECD’s global minimum tax cartel, which…demands every country impose at least a 15% corporate tax rate – gutting tax competition, tying the hands of small economies and handing more power to Europe’s bloated welfare states.

Unfortunately, as Ryan and Daniel point out, Trump doesn’t distinguish between good and bad.

Trump is fighting the wrong enemy. …tariffs…attack globalisation – our private decisions to act internationally – by making voluntary, mutually beneficial trade more costly. Yet the true enemy isn’t economic freedom to trade and the globalisation that results; it’s globalism, the technocratic drive to control the world through transnational bureaucracies and alliances that chip away at liberty, democracy and sovereignty. …The aim should be to defeat globalism, not globalisation.

A few years ago, Roger Kimball wrote something similar for the Spectator. Here are some excerpts.

…globalism systematically attacks and undermines the moral and political filiations that make genuine freedom possible. …the socialist-inspired utopian chorus is alive and well, playing to full houses at an anti-democratic redoubt near you. Consider the apparently unkillable dream of “world government,” a sort of farm-team try-out for what we now call “globalism.” …A sterling contemporary example is the Great Reset, recently proposed by the Davos-based World Economic Forum… Here at last was an opportunity to enact a worldwide tax on wealth, a far-reaching (and deeply impoverishing) “green-energy” agenda, rules that would dilute national sovereignty and insinuate politically correct attitudes into the fabric of everyday life. …the WEF plan involved nothing less than the absorption of liberty by the extension of bureaucratic power. …the substance is an erosion of traditional sources of strength and identity together with an assault on the middle class.

Fortunately, the recent scandal involving the WEF presumably means its baleful influence will fade.

I’ll close by sharing my 2X2 matrix on the difference between globalization and globalism.

P.S. Some people argue that non-market economies such as China should not be part of the globalized economy. I want China to evolve into a pro-market country that adds to global prosperity, but that’s an increasingly difficult argument to make because the Chinese government practices cronyism.

P.P.S. A global free market should be based on “mutual recognition” rather than international red tape.