Globalization is Good by Johan Norberg

"These protesters believe they are the Defenders of democracy and freedom over the past decade
Millions have joined the anti-globalization movement to prevent the spread of global capitalism we
all want a better world free from poverty and Injustice but good intentions don't make the world a
better place in this film I am going to explain why I believe that the anti-globalization movement is
ignorant and dangerously wrong the protesters claim that globalization creates poverty they are
wrong all countries used to be poor it's only in this new era of modernization that countries have
started to escape destitution in the past 50 years 3 billion people have been lifted out of poverty this
is historically unique far from making the world a poorer and more unfair place my research as a
writer has convinced me that global capitalism could make the whole world as wealthy and free as
Europe is today if only we we let it in fact poverty is on the way out in those countries that have
integrated into the global economy 150 years ago my country Sweden was poorer than most African
countries are today and this Bay was little more than a dump for Stockholm's excrement and
garbage but we embraced globalization by which I mean a free market economy based on the right
to start a business and trade without restriction and just look at our wealth today I'm setting out on
a journey first to Taiwan to see how globalization leads to wealth and democracy second to Vietnam
to find out what multinationals are really doing to developing countries and finally to Kenya to try
and discover why Africa is still so desperately poor far from being a threat to mankind I'm going to
show that global capitalism is savior Taipei capital of Taiwan just 30 years ago people in this tiny East
Asian country were poorer than many Africans today malnutrition was wide and there were no
natural resources today its people are as rich as the Spanish evidence of taiwan's wealth is
everywhere and rising in the 10 years since they began modernizing Taiwanese poverty rates were
cut by more than half today absolute poverty is virtually non-existent here and real wages are 10
times higher than they were 40 years ago this miracle only happened because the country
consciously embraced global capitalism but before a country can do that it must have capitalism at
home and the first step towards that is land reform if people don't own their land they have no
incentive to make it profitable in the 1950s the Taiwanese government began buying land from the
old Elite and giving it to the population yields increased rapidly and Taiwan was supplied with food
releasing Manpower for industry once this was a farmhouse surrounded by rice padis it's where Mr
Wang once lived and he still comes here to play maong with his friends Mr Wang illustrates how
Taiwan benefited from Land Reform his parents were poor Farmers until the government gave them
the land in 1968 once he owned the land Mr Wang's father thought it worthwhile to build a mill
today Mr Wang is a millionaire he turned his father's Mill into a factory making those cheap plastic
toys for which Taiwan became known in the 60s his journey from rural Beginnings to Industrial
wealth reflects how Taiwan has developed at a nearby tea house I asked Mr Wang how it all began
toys such as Bobby dolls children's building bricks sports gear like skateboards stanless steel scissors
with plastic handles at the beginning we were working 24 hours a day in shifts the Machinery in the
past was more likely to cause accidents you had to learn and absorb slowly that's what caused the
injuries to my fingers because I didn't know better these early factories were sweat shops but back
then all Taiwan had to offer was cheap labor and long hours Mr Wang told me how the governments
pushed for industrialization during the 60s meant his parents were encouraged to build their Factory
at that time the then vice president was encouraging people to go into manufacturing industry by
telling us your home is a factory the living room is a factory originally we were growing crops the
field we were cultivating was given to my father by the government the government was reforming
at the time they wanted to encourage small small and medium Enterprises the government decided
which land was for industrial use which meant you could build a factory there my father was given
this opportunity and so of course we made use of the land and now our children are grown up and
doing the same Mr Wang's generation gave Taiwan sweatsh shots churning out cheap goods for
Western markets ugly blights on the landscape yes but don't oppose them they were a transitory but
crucial stage on taiwan's road to riches if the anti- globalizers had been around when Taiwan
industrialized they would have protested against the factories and told us we were exploiting cheap
labor surely they would have organized a boycott and perhaps you would have decided not to buy
things made in Taiwan if enough of you had decided that Taiwan would still be poor today as Mr
Wang and his generation became successful more and more factories sprung up which meant there
was an increasing demand for labor once industrialization was well underway competition for labor
made wages rise so only really competitive companies could survive companies like ASA flourished
by responding to competition with Innovation Stan shei Asus chief executive officer is known for
inventing taiwan's first desktop calculator and the world's first Pen watch today Acer is the seventh
largest IT provider in the world this is the first um machine we export to the international market so
this is 1981 we train about three s engineer in Taiwan based on this type of machine so I'm so happy
about that this really great and this is the first computer in in of 83 we introduced one of the first uh
compatible computer in the region oh and where was this exported almost everywhere Mr shei
invited me to join him at his lunchtime workout in the company gym I wanted to know what he
thought was the key to Taiwan success was it easier to start a business in Taiwan than in other
countries yeah I think so people they really like to own their own business so we have a joke in t City
there say every six PE person in the street there is one chairman but one in six persons you meet on
the streets have a company is there less bureaucracy and restrictions then than other countries uh I
think so uh the government regulation of course is reasonable and even many people uh start the
business without knowing all the regulation a deregulation economy provides the ideal
circumstances in which ASA continues to thrive and innovate constantly improving people's living
standards what will be the products of the future that you will produce we recognize today we have
a lot of Technology but how to do more application to package in a way it's easier to serve the more
population I think is our vision and make a it like oygen okay you don't fear is existing but it's so
important to our daily life across Taiwan families reflect the country's progression Grandparents
were rural Farmers parents Factory workers and today's generation well-paid software engineers
and businessmen Fuji Chang Works in it in the capital and has a taste for expensive cars yet like so
many of his generation his roots are far from the city together we drove to Tai Chung the town
where he grew up my father was a factory worker he worked much harder than us and was
exhausted every day he sweated while working and was always really tired this is because our
education levels are different my brother and I had higher education and I finished the Master's
Degree our work is mainly office bound so our jobs are really different as one is based on labor and
the other on intellect we used to be very poor but now we are middle class comfortably off most of
my generation now works in the high-tech industry this mirors taian changed in the last 20 to 30
years Fuji's mother still works in a factory but for her generation this was a step up from farming and
meant parents could afford to educate their children properly Rising Prosperity also increases the
Returns on that education my parents were farmers back then I really really wanted to be educate
but when I finished Primary School my parents told me that I was the eldest so I had to earn extra
money for the family I used to make shoes I had to earn them money because I had two kids fui and
his younger brother needed to be educated and very happy with what he has achieved so far he's a
good man always striving to get ahead he's very good to me how can I put this well he got married
recently and I went to Tai Bay City his general manager and the deputy general manager told me
that my son was brilliant I was so happy to hear it that I cried the previous generation made the
paper boxes the current one produces the goods and software to put in them in contrast to African
countries that try to be self sufficient and produce everything they needed at home Taiwan
specialized in those sectors where they could produce well and orted the rest because they were
constantly exposed to foreign competition companies had to be more productive and Innovative in
order to survive and grow from bicycles and toys to Cs and computers within one generation I think
that sums up Taiwan story from Rags to Riches globalization makes a country wealthy and it's this
wealth which breeds a middle class with a vested interest in economic freedom and democracy I
believe democracy is another happy side effect of globalization today Taiwan is a democracy like
Britain just 40 years ago Taiwan was a dictatorship under the iron rule of changai Che I visited his
memorial with yon Wang writer at large for a business magazine and a political activist who had
taken part in the pro-democracy demonstrations right here uh after J kek died in 1975 I think there
Taiwan has began to go through a transformation because in the past in 60s and70s T RI very heavily
on this labor intensive industry so in the 80s we start to make computer parts refrigerators air
conditioners TV sets things like that are more High higher value added the idea of middle class
started to become reality in the 80s so together with the political movement and I think the middle
class want to have more freedom whether uh in their political rights or in their economic rights so
would you say that globalization and economic development played a decisive role in the shift to
democracy yes definitely globalization and the economic growth that Springs from it are the rocks on
which democracies are founded it's no coincidence that the richest countries in the world like
America and European nations are the most stable democracies critics of globalization claim that this
process of democratization is really Americanization but if people in other cultures want to drink
Starbucks or eat at McDonald's why shouldn't they too often we want cultures to remain Frozen and
intact so we can treat their countries like exotic museums which we visit for pleasure but shouldn't
they have the same rights as we do besides it's not as if McDonald's is ever the only choice Taiwan
got rich by rewarding those who used the best ideas and Technologies from all around the world and
they still do just look at this place cha for Te they borrow the latest Starbucks Concepts to make their
own National tea Traditions popular and trendy and they are expanding with new t- rooms opening
in the US and Japan globalization brings wealth and freedom to everyone but the anti-globalization
movement claims that it's only the dangerously powerful multinationals reaping the rewards all the
it make Nik their workers sh Nik r a company like Nike is often branded the enemy of Liberty and
democracy but it is in fact a huge contributor to wealth and freedom Vietnam till recently one of the
world's poorest Nations the vast majority of the population still lives of the land but that's changing
and it's changing because the country is full of those sweat shops that the anti- globalizers are so
Keen to boycott we've arrived in the capital hoimin city one Saigon and we're on our way to visit the
flagship Factory of perhaps the most notorious of those multinationals say Nike to any anti-globalist
and they'll say Sweatshop of course I wouldn't want to work in one but I've never said that
globalization is a smooth right what globalization does is produce long-term benefits which the
protesters keep ignoring and it's these sweat shops which are the Stepping Stones to progress
Sweden too had its fair share of them as did Taiwan they're a necessary stage in any country's
industrialization the Factor's general manager lit mono showed me around what many protesters
forget is multinational companies are made up of people and people take pride in working for a
company and they want to do the right thing one of Nike's maxims is do the right thing and our
employees take that very seriously so when people protest the brand we feel that there's a
responsibility not only from an ethical standpoint point to investigate whether there's truth behind
allegations but also because our brand is one of our greatest assets for example Nike as a rule does
not employ any workers in any of our contract facilities under the age of 18 for Footwear and 16 for
apparel Vietnam outlawed child labor in 1988 but the economy was still weak and parents relied on
their children working in order to survive but now the number of Vietnamese children in work has
dropped by 2.2 million in just 10 years people can now afford education and more Vietnamese
children are in school than ever before the idea of multinationals hiring hordes of children to slave in
their sweat shops is an outdated myth there's no incentive for a foreign invested company to hire
child labor first of all it's not the right thing but second of all if a worker is found to have had a fake
ID and snuck into a factory we require the factory to pay for the worker to complete school and to
continue paying them their wage the average age in our contract partner factories is about 24 to 25
years old but I assume that they work here for a very low pay um isn't this a way of exploiting cheap
labor in a poor country as many critics would say the average pay here is $54 a month which
compares to a local minimum wage of $18 or $19 a month for a state-owned Enterprise in addition if
you compare um the wages to that of a doctor or teacher they're not very far off many of these
workers they've come from a agricultural based economy they've had a chance instead of working
you know 10 or 14 hours a day in a field to work in an environment that's clean that's safe that pays
them a regular wage where they get free of subsidized meals and uh where basically um there's an
investment in their future training and education but Nike doesn't pay its workers more simply
because it's generous but because a multinational brings foreign Machinery New Management ideas
a bigger market and education for its workers these assets are what make a multinational so
productive and so able to pay higher wages in the canteen I talked to some of the workers during the
lunch break I was planning to go to Korea so I had a break after 2 years I decided to come back to the
factory uh because the company was good and produce good high quality and the management was
also very good so I decided to stay I was a taxi driver but after a while business wasn't good so I
decided to come back and work here my wife works in the cutting department and her salary is
higher than mine in fact sichi is paid three times more than her husband because she's risen to
management level later I visited sichi at home I am the manager of the cutting department and my
job is to supervise the cutting in order to meet our high quality standards in making shoes and I
manage workers and make sure they arrived at work on time my life has really changed because I
don't work on the farm anymore since I joined the company my life has become much better before
on the farm uh perhaps half a million do was the most I could earn a month now I earn about two
and qu millions and life is much better now there's my bedroom I just bought the TV at over100 a
month Ci's salary is now over five times what it was and she has used the extra money to build an
extension I'm trying to save money to decorate and make the place prettier I asked her what hopes
she had for her son's future I want to bring my son up so he becomes a daughter the anti-globalists
urge us to boycott Nike if enough of you do that SII loses her job watching workers playing sport
during their lunch break it was hard to see what the anti-globalists were so stressed out about when
I go out into local community I get asked two questions one is when are you going to expand so you
can provide more jobs and two is can you provide my relative or friend a job in one of your factories
there's a very high demand for these jobs in Vietnam and um what we're seeing now is workers from
other parts of the country starting to migrate down to the South looking for jobs like this I wasn't the
only one touring the factory while I was talking to LIT Mr kiet the owner of a smaller local sweat shop
was also visiting Doris buag Customs relations manager was showing him around uh this is a mini
Park uh we constructed it for our workers it's a fresh this is not for reservation for the new
expansion no no that's our uh really designed for our workers to stay and relax during their break
this is a part of our uh expressing our gratitude to our workers one of the other things we've tried to
do is really open up to outside visitors and have them make up their own minds about what we've
been doing um last year Vietnam had over a thousand external visitors to our contract factories and
uh these included college students diplomats non-governmental organizations um other businesses
so we have a whole plethora of people coming through all our factories trying to understand what
we do trying to learn from us and trying to understand the challenges we face as a global brand so
Mr kid this is our Innovation class yes it's uh off the job training for um Vietnamese needle managers
yes and how long for one training course one training course is 3 months I see yeah 3 months course
I see later I caught up with Mr KET his Factory also makes shoes for export and I was curious to know
what he'd made of his visit to night before I visit some uh foreign Factory especially Nike we have a
question why the foreign Factory here they work well and they can EXT walk much more and uh
anyhow they are better why they better than us and after I visit Nike and they know the answer
management from Nike key Factory they know how to make the worker happy and I recognize that
the productivity not only come from the Machinery but also come from the satisfaction from the
worker so I mean for the future Factory one of the part we should concentrate is our working
condition so you see this is uh the land is ready for construction Mr KET had already begun building a
new fa Factory the competition for labor that drives up wages and conditions is already starting here
in Vietnam local factories don't go bust when a multinational moves in as the anti-globalist sphere
they improve and grow thus stimulating the economy and Nike benefits the community in other
ways just a couple of years ago the road outside the Nike factory was empty just look at all this
Commerce close to the factory all of this used to be rise Farms Nike also gives microloans to local
people wanting to start up small businesses I went to see Chien and her mother chian with a Nike
loan they had started a business making rise paper it's now thriving because of the protesters it's
probably proba the case that Nike is more careful than most multinationals but on average American
multinationals pay eight times more than the average income in the least developed countries some
critics would say that yes perhaps the presence of Nike here in foreign investments can create
economic development in this short run but then wages will increase and reach that point that
business will leave and go to another country with lower wages such as China and what is going to
happen to Vietnam then I would challenge those Critics on a couple of points one is Nike has been in
countries like Thailand and Indonesia for over 20 years the wages in those countries in Thailand for
instance the wage is almost double what it is in Vietnam now what happens is as you stay in a
country longer your productivity increases and you find out that workers produce more even as their
wages go up we expect the same to occur in Vietnam we expect wages will go up we also expect to
be here for a long time actually if n Nike does move on because wages have gone up it's a great thing
for Vietnam because Nike will have played its part in developing the Vietnamese economy the anti-
globalists have scary visions of vast multinationals ruling the world regardless of what people think
or want but big is beautiful what we have to fear is not size but Monopoly what's happened in the
age of globalization is that multinationals have got less powerful because free trade has meant they
can no longer be in cahoots with the government they have to be exposed to competition today the
consumers control the corporations and it's those hated multinational corporations and sweat shops
that are helping Vietnam to become rich in just 15 years the Vietnamese economy has doubled and
the amount of people living in absolute poverty has halfed in fact poverty thrives in precisely those
countries that failed to embrace globalization Kenya East Africa just 50 years ago Taiwan was as poor
as Kenya but the Taiwanese are now 20 times richer whereas one in three people here still lives in
absolute poverty people here are poor because Kenya closed its doors to globalization more than
half of the Kenyan population works on the land most farmers are still poor because the Kenyan
government has never given them property rights whereas in Taiwan giving people their own land
was the first step on the road to industrialization and growth here Farmers like Simon Waki can't
even hope to expand Simon is not even allowed to build on his land and anyway it would be
pointless to make the investment as without ownership he wouldn't be able to reap the rewards this
lad still belong to the government I'm farming it at only for a short time even if you're cultivating the
rad the lad is still belong to the government and so we we do it like as if we are moving moving just
we fight for survival for this for today and tomorrow so you will never get the property right to never
get the property the property light never how do you think agriculture would change in Kenya if all
of you got property rights if we allowed to do so Kenya will be a very bright very very prosperous
country but Kenya is not prosperous hampered by bureaucracy at home and Export restrictions
abroad Kira is a shanty town clinging to the edge of the capital Nairobi here nearly a million people
are crammed together without running Water Sanitation or electricity there are plenty of
entrepreneurs here but for all their hard work people are poor so why can't their businesses Thrive
yet again it's about land no one owns their plot what do you think would change in your life if you
had a property right to this shop and to land if I can let Capital enough capital and start business like
the other one I can make it could you get help from you can't get help from nowhere it will be a
problem if you don't own your land you can't expand or secure a loan on top of that Traders here
have to buy a license according to the World Bank it takes 11 procedures 68 days and half years
income to get one it's no wonder that half of all Kenyans work on the black market what the people
here demonstrate is that Kenya can't grow given the barriers they face none of them can build their
businesses so capitalism can't take root if you have no money the government won't give you a
license you have to give them money and then they give you a license but the money is needed to
build things like a roof over my head and other things everything depends on money if I obtain lces I
could build I could buy boxes do you see this dust if I had boxes I could sell some from now till night
you can't get money to start a business like this if you have no means it's hard to get machines like
this if you have no money if I had money to start a business I would open my own Barber Shop is the
problem here lack of access to clean water no is it starvation no is it laziness definitely not no it's
poverty due to lack of growth due to lack of Reform everything else is just a symptom of that in fact
even the biggest Horrors famine and War have political causes no democracy has ever been afflicted
by a famine and no two democracies have ever made war on each other Africa has been subjected
by socialism gangster Rule and protectionism Africa has not been too globalized it has been too
marginal ized oppressive and corrupt politicians have systematically shattered Kenya's potential but
there are signs of change in December 2002 a new president was elected outing the notoriously
corrupt regime of President Daniel Arab Moy the new government is breeding New Hope and the
mood in the country is buoyant June Arna a 21-year-old economic student is passionate and
idealistic about her country's potential to grow kind of Kenya I'd like to see a Kenya where people's
ideas could be turned into reality where ideas would be given the opportunity to compete so that all
the talent we'd have doesn't go to the Grave a Canya where all the other ideas out there that
everybody has access to are allowed here anywhere if your Bill Gates and windows is in your mind
you can become a billionaire this is an outdoor Market on the outskirts of Nairobi known as the
juakali Swahili for under the fierce Sun all kinds of goods from pots and pants to HUB cups truns and
toys are conjured out of scrap metal people here are clearly talented and as motivated and
hardworking as the Taiwanese or Vietnamese but what multinational would want to set up shop and
hire these people in such a hostile business environment these businesses are doomed to remain
informal and small scale for now June's dream for Kenya remains an elusive Utopia but it needn't be
like this when the government relaxed restrictions on the mobile phone industry sales soared and
now cheap mobiles have revolutionized the lives of thousands of Kenyans the mobile phone industry
is booming and many Kenyans who can't afford expensive State Control landlines now own mobiles
my grandfather we could only visit him once a year before because he lives very far away and uh my
mother had to save the whole year to be able to Ferry the whole family to see him and he's very
sickly but since the coming of mobile phones she could buy her phone very cheaply give it to him
and now we can call him anytime June took me to a vast secondhand clothes Market in Nairobi
people here sell cheap clothes imported in bulk from abroad like the mobile phone industry its
exposure to globalization has made this Market a massive success we could overnight not tell the
difference on the street between a rich person and a poor person because it was so obvious before
when I grew up people had mostly four outfits their Sunday B which they would wear to church their
school uniform and then two other outfits that they would wear at home but since the coming of
these clothes you know I can change my clothes as many times as I want get them in the different
colors I want Steven is typical of a stall holder who has profited from this booming New Market
secondhand Clo's business has helped me a lot if I hadn't had this business I wouldn't have had any
other way of earning because I have no education so it's helped me a lot to have a good life for me
and my family with our four children who've been able to build a fine house and I have a life that
suits me if it weren't for this I'd probably be a laborer a few years ago the government introduced a
tax on the clothes and recently they have raised that tax considerably so import Duties are yet again
keeping globalization at Bay and threatening one of Kenya's few success stories he said that if this
industry was closed he knows for sure there'll be lots of children walking naked he says he knows
many women who have up to 10 children and these are the only clothes they've ever worn even if
Kenya did away with all its restrictions at home there remains another V C barriers standing between
it and the prosperity that globalization could bring wealthy countries have imposed High tariffs on
almost all the agricultural products Kenya could export to them with the exception of some
vegetables and flowers in the case of flowers the European union agreed to keep tariffs on Kenya's
flower exports low the result Kenya has become the leading exporter of cut flowers to Europe
currently we selling to the European Union mostly that is in Netherlands Germany uh Sweden
Switzerland the UK also we also sell uh to the United Emirates and also to the Americans Jane is the
export manager here I asked her what would happen if the European Union stopped giving the
flower industry specially low tariffs uh that means that the Farms would uh would all perish I mean
it's a disaster to the industry because uh right now the margins that we are having are very small and
whatever we are enjoying right now is because of the duty that has been reduced for us that means
if you put the duty that uh the Farms will certainly uh not operate we'll all close down and the social
impact on that is is terrible the European Union has reduced tariffs on flowers um what would
happen if they reduced and abolished the tariffs for all other goods and allowed all of them into the
European market then the economy in Kenya would would do so well but Kenya isn't doing well
despite these isolated success stories and I believe that's partly because what we are currently doing
is even worse than just trying to keep Kenyan agricultural exports out the European Union protects
our Farmers by subsidizing food for export to countries like Kenya the result formerly thriving
commercial Farms like Peter mangis are suffering in fact over the last few years Peter has had to
stop cultivating large parts of his land some people in Europe they think that they are actually
helping a country such as Kenya when um the taxpayers are subsidizing wheat and so on what would
you say to them oh they're not helping Kenyans because they bring wheat when we we don't need it
when they should bring when we we ask them to bring maybe when we have drought maybe they
could be taken to a country like Ethiopia or Somalia where they they don't grow wheat but when we
need it at the right time they can bring but not when we are harvesting or when we have a bumper
crop but how do you imagine I'm having a crop someone brings another crop from outside outside
the country dumped it here and I want to harvest my wheight is not bought it's not fair at all so the
EU some subsidizes our food exports and hardworking Farmers like Peter suffer and then when
there's a food shortage a few years down the line we send more wheat as food Aid Kenyans are
good at farming both crops and livestock they don't need Aid they need the chance to compete
when rich countries drop their protectionism profits can soore yet the EU is often unwilling to open
its doors to foreign competition with tariffs we keep their goods out with subsidies we destroy their
markets here we spend half of the entire EU Budget on our Farmers the common agricultural policy
we spend so much on farming that each of our 20 million cows could fly around the world once
every year how can Kenyan dairy or bee Farmers possibly compete with that but if we allowed Kenya
to export them and if Kenya did away with its restrictions and red tape Kenya could seriously
compete with us it's not that we in the west are trying to trick poor countries into global capitalism
the problem is we are shutting them out from it the two areas where the poorest countries could
compete most strongly and so become rich are farming and textiles but these are precisely the
goods in which rich countries refuse to trade freely the European Union for example has 10,794
tariffs quotas and subsidies to protect our farmers and manufacturers imagine the amount of
bureaucracy dealing with all that paperwork Once Upon a Time We escaped poverty because we
globalized we produced and traded freely now that we are rich we are withholding those same
opportunities from poor countries if we dropped our subsidies and tariffs we could massively reduce
poverty in Africa the United Nations has calculated that if we did this developing countries could
make as much as450 billion p a year from exports that's 14 times more than they receiving aid today
our world isn't at all too globalized in fact it has far too little globalization wherever the doors have
been open we have seen amazing results therefore one of the worst enemies of the poor today is
the anti-globalization movement they are encouraging the EU and the us to have more not less
restrictions these people are wrong and dangerous at the present time the world's wealthiest
countries are trying to agree to reduce protectionism if this happens it'll make it much easier for
poor countries to trade their way to Prosperity but the anti-globalization protesters however well-
intentioned have given our governments an excuse to back away from these reforms so today we all
face a choice do we Lobby our governments against global ization or do we campaign against the
barriers to globalization that still exist World poverty is not inevitable global capitalism can end that
poverty it has done so wherever it's been given a chance in Europe North America East Asia the issue
at stake in the globalization debate is whether the world's excluded are going to get that same
chance".