A forum at the International Monetary Fund in Washington Wednesday debated the issue of globalization and whether closer integration of economies is a good thing.
Jagdish Bhagwati of Columbia University stoutly defends globalization. He says people and countries benefit from the increased trade that is the core component of globalization. No country, he argues, has benefited more than the United States, where expanding trade was a key catalyst for the creation of nearly 20 million new jobs in the 1990s. Professor Bhagwati is puzzled that there such concern in America about the outsourcing of certain white collar jobs to countries like India.
"We have to ask why outsourcing is a major issue in this country and not in Britain, for example, or European countries," he said. "And I think it leads us back into this whole question of how does the United States, which is so strong that it is in fact a hyper-power, the leading dog on the block, you know, barking and biting and so on. Why does it always get into a funk?"
Oil analyst and author Daniel Yergin essentially agrees with Professor Bhagwati's defense of globalization. He notes that the concept is poorly understood, particularly perhaps, among the educated students in Europe and America who have become its fiercest opponents.
"It does lead to this question," he said. "How can this abstract, Latinate word excite such fiery passions? Why is it such a rallying cry? And the conclusion one comes to is that it is a short hand for [opposition to] much change."
Professor Bhagwati, who teaches economics, says that while increased trade, openness, deregulation, and increased reliance on the private sector are good things, developing countries should move gradually so that social disruption is minimized.
"Everyone understands that the speed of transition is something that should be managed rather cautiously, taking the politics and even the economic difficulties into account," he said. "And I think this is where we need to worry a little bit more."
Both speakers say the evidence is irrefutable: poor countries that have opened themselves to globalization - China, and more recently India - are the ones that are registering the fastest economic growth and moving the greatest number of people out of poverty.