Globalization at Risk by Gary Clyde Hufbauer and Kati Suominen, Yale University Press, 2010, 312 pp.
Why bother reading yet another book about the current status of globalization? This question needs to be asked because there have been so many tomes produced over the last ten years or so covering this topic. These books can be divided into the authors who are part of the cheer squad, extolling its virtues, and the ones who damn it as being unfair and doing more harm than good since it serves corporate interests rather than the public’s. Between the pro-globalizers and anti-globalizers stand the skeptics and reformers who accept the basic premise of globalization while simultaneously perceiving its faults and accepting the need for reform. This book fits comfortably into this last category, although its road-map for reform suffers from blind spots in the authors’ analysis.
Responding to recent history, Hufbauer and Suominen bring their readers up-to-date on the liberalization of trade, capital and investment. They are a dab hand at presenting the latest economic data, with liberal use of graphs and tables. While this book is not necessarily for the specialist, it is also not a light read.
Setting out the aims of their book, the authors claim that they intend to defend globalization and to suggest ways to reduce risks to its existence, which may be jeopardized by the overreaction to the recent financial meltdown. Their starting point is to argue that “globalisation was a hapless handmaiden in spreading the crisis.” The authors act as apologists for economic liberalization and follow similar lines of arguments that have already appeared in books by Martin Wolf, Jagdish Bhagwati, Johan Norberg, Philippe Legrain, and Mike Moore. Other than bringing the reader up-to-date with the latest developments, this book fails to provide any new insights. And while it suggests some reforms, these are pedestrian and fail to challenge the deep-seated assumptions behind economic globalization, which were found wanting during the financial meltdown.
Rather than a major change of course, the authors contend that trade needs to be freed even more and warns against introducing regulations to deal with the volatility of markets, for they baldly claim that “economic negatives are not caused by globalization but by technological change, educational gaps, inflexible labor markets, domestic economic mismanagement, and the like.” I must admit I had a laugh-out-loud moment when I noted that one of the reforms offered was “better self-regulation.” I had just been reading about the LIBOR scandal in which banks allegedly manipulated interest rates. This was possible because these rates are set through a self-regulatory mechanism set up by the British Bankers’ Association.
The authors have missed an opportunity to produce a serious analysis of the inherent flaws in globalization, which can be put down to their slavish faith in unregulated markets. Instead, the authors are apologist for the currents system. Their roadmap of reforms are timid and certainly will do little to address the problems that globalization faces today.