Before September 11, anti-globalization was almost entirely an
intra-Western affair. Until then, Kissinger seemed to be right that
the United States lacked external enemies strong enough to be a
threat. My first thought on hearing of the assault on the World Trade
Center was indeed that the anti-globalization front had finally
kicked over the traces. After all, the attack had done the
protesters' work for them. In the weeks that followed there were job
losses, reduced international movements of people, huge costs to
Western economies, shrinking international business activity--all
outcomes that they had been working for, together with the knock-on
of increased morbidity and mortality in the less-developed world that
they scarcely acknowledged would soon be the accompaniment.

Much Seattle-style protest seems to be a lifestyle choice, feeding on an array of anxieties, real and pretended. Protest gives a purpose to life, protest is fun, protest is sexy, and protest can be made to pay. Some companies appear to be paying Danegeld to bodies openly devoted to undermining international business. The Unilever Corporation is reported to have been funneling millions of dollars to anti-globalization groups. This money passes via a new subsidiary, Ben & Jerry's, to bodies such as Global Exchange, which campaigns to shut down the World Bank and WTO, and the Ruckus Society, which largely did shut down the Seattle WTO meeting. Ironically, some of the money went to a group called United for a Fair Economy, which campaigns against excessive pay for CEOs--though not very effectively as far as Unilever is concerned, since the firm's co-chairman was paid about $1.8 million in 2000. Executives of Unilever have previously advocated trade liberalization, and knew full well, when they took that company o ver, that Ben & Jerry's would support anti-globalization causes. Yet they seemed to think that it was worth buying even though, for unexplained reasons, they felt unable to place restrictions on its behavior.

Nor is this all: Public money has gone for similar purposes. The European Union lavishes taxpayers' money on counter-cap groups. UK National Lottery money has gone to the World Development Movement, a critic of corporate globalism. With a protest gravy train like this, "activists" are plainly onto a good thing.

Joseph Schumpeter once feared that capitalism's success would undermine the work ethic. The counter-cap assault gets its backing today from an ever-changing brew of discontents among the very middle class that is the beneficiary of business endeavor. Some of the individual objections to globalization may have merit but many positions are frivolous ("capitalism should be nicer"), others are mindless ("don't trade, blockade"), and still others are clearly wicked (web sites directing that the cobblestones of Gothenberg could be pried up and used as missiles). No operable and consistent policy alternative is offered; protest strikes out blindly. Less than three weeks after September 11, anti-globalization demonstrators in London had switched to protesting against government plans to involve the private sector in the provision of Britain's health and education services. The Green Party co-sponsored the rally. Two female "activists" danced topless. Seven others were arrested on suspicion of conspiring to commit vio lent crimes.

The counter-cap movement is held together by the suspicion of markets, a strong collectivist instinct, and a belief in protest as a form of moral uplift (signaled, no doubt, by topless dancing). The demands of such a movement cannot possibly be appeased. The movement is Stakhanovite: when one goal is reached, the target indicator shifts upwards, as in some Soviet factory. What, then, drives all this? Lurking beneath the kaleidoscopic variety of causes seems to be a rise in expectations capable of outstripping even the rise in wealth and leisure achieved in Western society, indeed made possible by this very achievement. Fuel is heaped on the flames by readily-aroused hostility to any increase in competition in the workplace.

The constant mutation of protest betrays its negative and opportunistic sides. More sober protesters might take counsel were not so many of them adamant in their beliefs that the global environment is going to hell in a handcart and that world trade is inherently a bad thing--the latter opinion being firmly held by people who, to judge from those I have asked, have never heard of David Ricardo, let alone read him. One sign of widespread bad faith is the misrepresentation of the WTO as a dictatorial form of world government rather than a very limited world association in which legitimate governments are represented.

Some governments, too, are plainly guilty of opportunism over the issue of globalization. Lionel Jospin wants France to speak for anti-globalization. He backs a Tobin tax (a levy on cross-border capital movements) contrary to the advice of his finance minister, Laurent Fabius. Professor Tobin himself does not think that imposing such a tax would be a good idea in present circumstances: his aim was to stabilize exchange rates, not generate funds for the next fashionable development project. Fabius counters Jospin by proposing a tax on arms sales and he has upped the ante. To Fabius, it is not France but Europe that is uniquely placed to lead the discussion of globalization--a discussion whose statist results he announces in advance as the taking of action to regulate the global economy and protect the environment. He takes the view that Europe's unique capacity to achieve this arises from its experience of regional integration and its balanced institutional framework. Yet this "balanced framework" includes the Common Agricultural Policy, which blocks the marketing of farm crops from poor countries at a cost to them of an estimated $75 billion per year! Next, Gerhard Schroder leapfrogs over to claim that Germany and France should lead the debate. We now face not only state-sponsored anti-globalism, but a bidding war over who is to head it.

Can Backlash Really Prevail?

THE TREND of counter-cap opinion and even some government opinion would lead to damaging or even reversing trade flows. Most "activists" want more regulation and more national sovereignty, while in the same breath demanding that the West intervene, in a virtually neo-colonialist way, to force economic development on poorer nations, at the expense of their sovereignty. To Harold James their hopes seem forlorn. In his concluding chapter he remarks that, absent coherent ideology and without examples of countries successfully de-linked from world trade, big government and nationalism are discredited shells. Cuba and North Korea certainly seem to bear that Out. James's view is a rational one. The question is, will rationality prevail?

James takes the position that international organizations are stronger than they were between the wars. As his subtitle, "Lessons from the Great Depression", suggests, the interwar period serves as his principal economic and intellectual baseline. However, his faith in the strength of modern international organizations sits a little uneasily alongside his vision of a world system too complex to plan and held together by spontaneous coordination. It sits awkwardly, too, with his account of the scant means of enforcement available to world bodies.

Central to his argument is the belief that the "Washington consensus" on economic liberalization differs fundamentally from the inter-war "Geneva consensus." The world of the League of Nations was built on treaties; the modern world is built, he says, on "sustained reflection about appropriate policies." Thus, in deciding that globalization probably will not be reversed, he relies heavily on "intellectual conversion" to free trade. Maybe good ideas can drive out bad after all and Gresham's Law be overturned, though the recurrent history of trade protection scarcely guarantees this, and James himself admits that free market parties do badly in the polls. The question therefore becomes this: Can the world rely on the intellectual commitment of politicians in the face of outside threats , internal protest, and the ever-present clamor for protection by sectional interests? The diffuse interests of the whole of society are always hard to defend in the teeth of lobbying by more tightly-focused groups; Mancur Olson long ago drew our attention to that.

Liberalization has undoubtedly been assisted by the fact that policy positions in many countries are held by individuals trained in Western economics departments, and who therefore do understand Ricardo's theorem, comparative advantage and the benefits of trade. Their positions, however, tend to be advisory rather than legislative. As for the ultimate resilience of academe, it is a frail reed. Recall the passage in Peter Drucker's autobiography about the first Nazi-led faculty meeting at Frankfurt, the most liberal of German universities. After hearing his Jewish colleagues dismissed without salary and forbidden to enter university precincts, the leading liberal got up and asked: "Will there be more money for research in physiology?" An extreme case of human fear, frailty and greed? Fear, frailty and greed, yes; but such behavior may not prove altogether exceptional in the face of violent anti-globalization protest and well-funded conniving.

By pressing ahead with the WTO ministerial talks at Doha this past autumn, even in the face of the September 11 attacks, world leaders have certainly shown that James is right, up to a point, to have spotted an intellectual conversion to free trade. But will those leaders always remain among the converted, and if they do, will they succeed in advancing international economic integration in the face of opposition on so many fronts? The happy smile of Franz Fischler, the EU agricultural commissioner, when he returned from Doha bodes ill. "The final form of the declaration was aimed", reported the Financial Times on November 16 last, "primarily at pacifying Europe's powerful farming lobby."