Tall tales about trade: a lot of strong cases are made for and against globalization. most aren't true.

The world is a chaotic place. From the moment our ancestors evolved from monkeys to humans, they developed rationales to explain how the world works--or doesn't work. That process continues today. While yesterday's myths were spread mouth to mouth, from grandparent to grandchild, today's myths are spread by the most modem of technologies--through the Internet and radio talk shows. Often they are about globalization. Like many stories, globalization myths have kernels of truth. They are public responses to concerns about technological, economic, cultural, and or social trends that are both scary and disruptive.

However, globalization proponents and critics sometimes use these myths to mislead the public. Readers of this magazine may want to encourage a broader discussion about globalization--and these "myths" may provide a means to begin such a discussion.

MYTH #1: Globalization yields worthless absurdities because markets are illogical.

David Morris, in Free Trade: the Great Destroyer (Earth Island Press, 1993), writes: "The absurdities of globalism are becoming ever more evident. Consider the case of the toothpick and the chopstick...At a Saint Paul restaurant...I picked up a toothpick wrapped in plastic. On the plastic was printed the word 'Japan.' Now Japan has little wood and no oil. Nevertheless it had become efficient enough in our global economy to bring little pieces of wood and barrels of oil to Japan, wrap the one in the other, and send them to Minnesota. This toothpick may have traveled fifty thousand miles. But never fear. We are now retaliating in kind. A Hibbing Minnesota factory now produces a billion disposable chopsticks a year for sale in Japan. In my mind's eye I see two ships passing one another in the Northern Pacific. One carries little pieces of Minnesota wood bound for Japan, the other little pieces of Japanese wood bound for Minnesota. Such is the logic of free trade." (1)

Mr. Morris thinks trade is illogical because he values protecting the environment over promoting trade. It is certainly less ecological for the Japanese wood to be used to produce matchbooks, but it may well be efficient. It is also less ecological for the Minnesotan wood to be exported to Japan as chopsticks. The logic of markets may at times contradict the logic of promoting the global common good. But policymakers and investors are learning to reconcile both goals. Sustainable development is an objective for trade liberalization, according to the WTO preamble. The dispute settlement mechanism seems increasingly sensitive to the need to promote environmental protection while promoting trade. Nonetheless, policymakers have a long way to go.

Markets, however, are increasingly differentiating those firms that are sensitive to the environment and those that are not. For example, a survey of some 2,594 Americans by Hill and Knowlton found some 79 percent took corporate citizenship into account when deciding to buy a company's product. Investors in Britain have demanded a new ethical share index, an index joint venture between the Financial Times and the London Stock Exchange. A growing number of the world's largest firms follow triple bottom line reporting--on their socially responsible and ecologically friendly operations as well as their financial situation. Markets are learning that firms that value the environment, consumers, and workers are well-managed firms.

MYTH #2 Expanded trade can foment democracy.

In February, President George W. Bush spoke to a joint session of Congress about how trade is part of his larger vision to expand freedom. "The cause of freedom rests on more than our ability to defend ourselves and our allies. Freedom is exported every day as we ship goods and products that improve the lives of millions of people. Free trade brings greater political and personal freedom." U.S. Trade Representative Robert Zoellick reiterated this point in March testimony to Congress. He noted, "Economic freedom creates habits of liberty. And habits of liberty create expectations of democracy. Zoellick added: "It is not an accident that after Mexico embraced...NAFTA, it was drawn to a democratic opening as well." (2)

There is no direct relationship between political freedom and economic freedom. One need only look at Singapore or China: two nations with high levels of economic freedom and low levels of personal freedom. Nor is there any evidence that Mexico's economic liberalization led to greater democratization in Mexico.

America does not export "freedom" with our goods and services, whether we export computer programs, music, or wheat. Nor do we import freedom. Our freedom does not decline when we import capital from Saudi Arabia or purchase goods made in Burma--nations with a minimal commitment to human rights and democracy. However, we may prefer not to import such goods and services, and by so doing, promote change.

President Bush is correct to say that economic freedom creates habits of liberty, and that in turn can create expectations of democracy. But there is no direct link or sure path. It is much better to say that trade establishes relationships between nations, and citizens of those nations can learn from and influence each other.

MYTH #3 Globalization is forcing women to work, and that is leading to social dysfunction.

Patrick J. Buchanan is one of America's most forceful economic nationalists. In 1997 he wrote a book, The Great Betrayal: How American Sovereignty and Social Justice Are Being Sacrificed to the Gods of the Global Economy (Little Brown & Company, 1998), describing how he became a protectionist.

"The more I read of local businesses and factories shutting down, workers being laid off, towns dying, the more I began to ask myself, the price of free trade is painful, real, lasting--where is the benefit other than the vast cornucopia of consumer goods?" (3) Buchanan came to blame trade for social problems. He noted that with so many women working, families and society paid a price "in falling birthrates and rising delinquency, in teenage drug abuse, alcohol abuse, promiscuity, illegitimacy and abortions and in the high divorce rate among working parents. The American family is paying a hellish price for the good things down at the mall." (4)

It is unfair to blame trade for the social breakdown that seemed to occur in the United States and many other industrialized worlds. Nor does globalization explain why so many women are working. Woman have always worked and contributed to family income. In the Nineteenth Century, home factories produced many consumer goods. Families worked together as bakers, blacksmiths, etc. It is simply not true that women are working more now because they have to. Many women want to work. Nor can working women be blamed for social problems. Finally, working long hours does not mean that parents do not take care of their children. There seems to be growing evidence today that parents who both work spend more time with their children, despite their jobs.

MYTH #4:

The United States is forcing globalization on the rest of the world.

Many of the protestors at Seattle, Quebec, and, more recently, Genoa see globalization as a phenomenon forced on other nations. These nations, they fear, are being pressed by the United States to adopt the American model of capitalism--a capitalism that posits a limited role for the state, a capitalism that values technology over people and progress over human rights. They worry that few people are aware of the consequences of this system.

Margaret Atwood is one of Canada's wittiest writers. In discussing the Canadian/U.S. free trade agreement in 1988, she admitted, "I don't understand the full scope and implications of this agreement and I don't believe anyone else really does either." She warned that the only position the United States had "ever adopted toward us, country to country, has been the missionary position, and we were not on top." She concluded, "Our national animal is the beaver, noted for its industry and its cooperative spirit...It is also noted for its habit...of biting off its own testicles and offering them to its pursuer. I hope we are not succumbing to some form of that impulse." (5)

Atwood was correct to worry that many people don't really read the fine print of trade agreements or understand the implications for their national systems of governance. Policymakers should make these agreements understandable and post them on the web (as was done recently with the Free Trade Agreement of the Americas.) Policymakers should do a better job of explaining why globalization is occurring and how citizens can use democratic processes and tools such as trade agreements to shape globalization.

MYTH #5:

Globalization will yield a world where racism and intolerance will be stamped out by intermarriage, cultural diversity, and tolerance.

Last fall, Miramax Films released "Spy Kids," a movie about two young children who rescue their parents, former spies, from an evil television actor and his cohorts. The movie is not just about how childhood creativity and innocence can destroy evil. The children and their parents live in some beautiful city in a post-NAFTA/FTAA world, where everyone speaks fluent Spanish and English and the culture is a amalgam of Western technology and Latin joie de vivre.

We should be so lucky that it is this easy.

(1) David Morris, "Free Trade: The Great Destroyer," in Ralph Nader et al, The Case Against Free Trade: GATT, NAFTA and the Globalization of Corporate Power (San Francisco: Earth Island, 1993), 143-144.

(2) USTR Zoellick quotes Bush and made the link to Mexico in his Testimony before the House Committee on Ways and Means, U.S. House, March 7, 2001.

(3) Patrick J. Buchanan, The Great Betrayal, (Boston: Little Brown, 1998), 17-19.

(4) Ibid. 8-9, 113.

(5) Margaret Atwood, "Blind Faith and Free Trade," in The Case Against Free Trade, eds. Ralph Nader et al, 92-96, originally published in The Ottawa Citizen.

Susan Ariel Aaronson is a Senior Fellow at the National Policy Association and the Author of several books on trade.