A fine book--ruined by facts.

Why Globalization Works By Martin Wolf Yale University Press US$30.00

Globalization, the economic and political phenomenon that has marked the last decade, has generated both fans and critics. It has been blamed for modern society's ills, like the widening gap between the rich and poor and between developing and industrial nations. It has been blamed for the exploitation of children, a deteriorating environment and a loss of cultural diversity, among other ills.

One could say that neo-liberal ideology has taken a beating from the copious evidence of its shortcomings. Or, at least, that its defense is not based exclusively on classical ideas such as those by Adam Smith and other fathers of liberalism.

However, Martin Wolf, a commentator for London's Financial Times newspaper, jumps onto the soapbox to defend the phenomenon, becoming a staunch supporter of the economic model. While he validates some of his critics' views, he dedicates the bulk of his space to refuting the arguments of globalization's detractors, armed with a positive vision of economic history.

The book is an argument for "liberal international economic order." In those words, Wolf promotes a global capitalist model, with limited state intervention and corporate freedom to act. Although Wolf relies on macroeconomic statistics, his work is frequently supported by economic theory. For example, arguing the difference between productivity and capital investment for employment, the author tries to calm fears of the working class in rich nations, who face competition from underpaid workers in poor countries. But, here, reality contradicts itself. For multinationals opening factories in China or Latin America, lower productivity overseas is compensated for by lower salaries. For the moment, there is no evidence of any change in the trend of sending jobs to emerging-market countries.

The author reiterates the old idea that economic growth comes exclusively from the market, and that the problems of globalization are governmental lapses. But history doesn't back him up. Industrialized countries developed their capacity by sheltering it with rigorous protectionist policies. Many of these are still around today.

Wolf also comments on the mutual dependency and mutual strengthening that goes on between the market and democratic states. He repeats ideas in vogue 20 years ago, before the fall of the Soviet Union changed our concept of the world. He seems to lose sight of cases like China and Vietnam, which while governed by communists are economically open to free markets and foreign investment. They show that, despotism and neoliberalism are not necessarily incompatible. Going back through history a bit, one recalls that Augusto Pinochet enforced the ideas of the Chicago Boys--a group of Chilean economists educated at the University of Chicago--on Chile during three decades, which he imposed along with a harsh dictatorship.

No results. In his heroic defense of the open-market economy, Wolf consistently observes that, until now, the neoliberal economic model upon which globalization has been based has not provided the promised results. Joseph Stiglitz, Nobel-prize winning economist and ex-president of the World Bank, in his book Globalization and Its Discontents, wrote that there is not one example of a country that has reached economic development thanks to the implementation of true open-market measures.

Although this book may sound good to those infatuated with neoliberal dogma, Wolf's arguments don't convince.

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