Economist focuses on global market roles

By Jaeyoung Yang

Contributing Reporter

Chief economic commentator and Associate Editor of the Financial Times Martin Wolf laid a case for globalization at a crowded talk in Luce Hall Monday.

While many sociologists have written about this modern phenomenon, Wolf said his book, “Why Globalization Works,” which he used as the discussion’s focus, is the first to argue for globalization in terms of the market economy as a whole. During the talk, Wolf touched on the past and future of globalization, and how government policies affect market globalization. Wolf said the amount of globalization today is still “insufficient,” and should be increased in the coming years.

“In many ways, there is too little globalization, not too much,” Wolf said.

Globalization, Wolf said, is a natural “extension of the market economy,” and fosters the growth of industrialization in societies, thereby improving poverty rates throughout the world. During the last globalization period of the 1990s, the number of people in extreme poverty fell, he said.

Wolf said the growth of Asian economies, including those of China, India, Japan, South Korea, Hong Kong, Taiwan and Singapore, shows the success of globalization.

“Where globalization has worked, predominately in Asia, it has been remarkably good,” Wolf said. “The era of globalization is the era of the Asian miracle.”

The recent rise of globalization is the result of technology advances, especially in communications, and trade liberalization of the 1980s and the 1990s, Wolf said. Wolf also stressed the role of supportive governments with the dependable rule of law in fostering globalization.

“Markets need strong and supportive states,” Wolf said.

But Wolf said a supportive government, like that of the United States, is a rarity. Far more common, he said, are predatory, weak or failing states. Some governments, he said, find themselves in a dreadful spiral in which their inability to collect taxes prevents them from fostering good economic conditions. The difference in the quality of states is the biggest problem facing the world today, Wolf said.

Wolf said there must be both external regulations and internal constitutional and moral reforms to solve this problem and create secure states that can contribute to globalization.

Wolf also talked about past trends in globalization, arguing that globalization is not new. There was a similar trend towards globalization in the early 20th century, which ended abruptly due to World War I, he said.

The same forces that destroyed globalization in the early 1900s could surface again today, Wolf said. In addition to these forces, Wolf said new threats to globalization include the economic rise of China, “mega-terrorism” and conflicts over resources. But he said he remained modestly optimistic that the risks are manageable.

“It has collapsed before, and it can conceivably collapse again,” Wolf said. “Are we going to lose faith in the market, or regress to [protectionist] policies?”

Students said they found the lecture instructive.

“It was interesting that he summarized his book,” Jay Heuser, a graduate student, said. “The discussion afterwards was interesting as well.”

Wolf has worked with the Financial Times for 17 years and writes a weekly financial column Wednesdays and alternate Fridays.

Martin Wolf, associate editor of the Financial Times, and Ernesto Zedillo, former president of Mexico, answer questions regarding the benefits of globalization for the market economy.
Sophie Perl
Martin Wolf, associate editor of the Financial Times, and Ernesto Zedillo, former president of Mexico, answer questions regarding the benefits of globalization for the market economy.

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