Globalisation is one of the most liberating things to happen to mankind: Johan Norberg at CCS
Centre for Civil Society partnered with the University of Chicago Center in Delhi to host eminent author and historian, Johan Norberg for a public lecture on 16 October 2014. Norberg, best known as the author of In Defense of Global Capitalism, spoke about how globalisation is an opportunity for developing countries.
Tasmania versus Tierra del Fuego
Norberg began his talk by comparing the two islands of Tasmania and Tierra del Fuego. Tasmania, an island off Australia’s south coast, separated entirely from Australia 10,000 years ago. The island had no contact with the mainland — no boats, no exchange, no trade. When it was rediscovered a few hundred years ago, it was found that they had moved on an entirely different level than the Aborigines in Australia. While on the mainland they had developed modern technologies, this was not the case in Tasmania. On the island, they had failed completely to make the same progress. Furthermore, they had forgotten the technologies that they had had 10–15,000 years ago, before the island had separated. The archaeologist who described this talked about a slow strangulation of the mind because they had forgotten the science and economics. According to Norberg, however, the lack of development was not due to a strangulation of the mind — it was that they had lost access to the brain of other people. The group of 5,000 on Tasmania was not enough to uphold the advanced division of labour and create innovations.
On the other hand, the island of Tierra del Fuego off South America — which is not much bigger in terms of size or population than Tasmania — was a very different story. On visiting the island 150 years ago, Darwin had found that they had advanced tools and implements, and advanced division of labour. The difference, Norberg emphasised, was not a quality of the brains, or the culture they started with. It was that they were in frequent contact with people across the strait, on the mainland.
The Best Machine in the World
Through the example, Norberg demonstrates that globalisation is not new. We have always been traders in one way or another. But globalisation is not about big systems or multilateral institutions. It is the ability of people to move across borders to exchange with other people and learn from them. It is the ability to benefit from what others are doing and for others to benefit from what one is doing.
Moving to a theoretical example, Norberg asked the audience to imagine a machine which could turn rice into modern day computers, tablets or phones. In a situation where one was good at producing rice but not at these advanced devices, a person could put their rice into the machine and get computers on the other side. Even better, he said, would be a machine in which you could input anything, and get anything in return — rice for furniture, clothes for computers. This would be the best machine in the world, because people have different skills, different cultures, and different environmental conditions. They are good at different things, but the best way to create prosperity would be to allow all of them to enter what they were good at into this machine and get what they needed in return. This machine exists, concluded Norberg, and it is trade. Trade, is what globalisation is about.
The present era of globalisation is the result of two components: technological and political. The technological component is innovation and the creation of new technologies. In the early 1960s, for instance, telephone cables under the Atlantic could only carry 36 phone calls at a time. By the 1980s, this number went up to 4,000. Today, with fibre optic cables, we can make almost as many calls as we’d like! Technology has greatly helped increase human productivity, and reduce the distance between people, making it possible to exchange ideas and research — to be more like Tierra del Fuego and less like Tasmania.
The second component, Norberg stated, was the political component. If the political institutions do not support the technological innovations — if the government controls what one can read, say or do with the Internet or what one can create with a machine, then the technological advances alone are of no use. Political liberalisation and economic reform are needed to support them.
Why is Globalisation an opportunity for developing countries?
Access to science, technology and the ideas and research of others is important when a country does not already have these at the outset. Globalisation benefits all countries and all regions — and it is most important for emerging economies who are taking their first steps towards prosperity. Redistribution cannot come close to the benefit that comes from a situation where a person can do more tomorrow than they can today — which is a situation the globalisation makes possible. In fact, redistribution hurts the increase in productivity and growth.
Through globalisation, poorer countries can leapfrog straight to more advanced technology; they need not go through all the movements that other countries had to. They can use the fact that there are wealthier markets in other places, both for the capital they can borrow, and the markets they can sell to. We’ve seen the greatest reduction in poverty in the last two to three decades, and Norberg emphasised that this is unequivocally attributable to globalisation.
Globalisation makes it possible also for people to be free — to not have their fate, their opportunities and their ideas decided by where they were born. Norberg concluded that globalisation is one of the most liberating things to happen to mankind.
