Globalization and Well-Being

Abstract

GLOBALIZATION AND WELL-BEING John F. Helliwell Vancouver: UBC Press, 2002. 104pp, $40.00 cloth (ISBN 0-7748-0992-2), $19.95 paper (ISBN 0-7748-0993-0)One of Margaret Thatchers claims to fame was her relentless popularization of the TINA (there is no alternative) argument that the inevitable march of global market forces had made drastic changes to the fabric of the UK inescapable. In the Canadian context, her present day acolytes often claim that and the pressures of international market competition, make an evisceration of Canada's welfare state necessary and a of Canadian policies with the US inevitable. And although a substantial movement has emerged in opposition to globalization, its rejection of greater trade has partly been based on an acceptance of this presumed dismal logic of market forces.But is any of this true? John Helliwell is one of Canada's foremost economists, whose career of scrupulously careful empirical work has always asked: What is the evidence? The TINA argument for policy harmonization depends on the propositions that: 1) international trade is now more important than local trade; 2) nation-states that accept freer trade internationally cannot escape a convergence to a common (lower) level of the social wage and less redistribution; and 3) nation-states should buy the globalization package because maximizes growth of GDP, which maximizes national well-being. In this short book, based on three lectures given at Green College at the University of British Columbia in November 2000, Helliwell asks, Is really true that globalization has made nation states, and their policies, irrelevant or homogeneous? Does faster growth in GDP mean that a country is 'better off'? Would Canadians in fact be better off if Canadian political and economic independence were to be eroded?Helliwell answers each of these questions with a resounding no!-and he also discusses the reasons why the evidence rejects the TINA hypothesis. He begins by documenting the fact that interregional trade within Canada is orders of magnitude greater than cross-border trade, controlling for distance and population size-and he goes on to ask why is that matter so much more for trade, capital flows, and migration than a naive analysis of market incentives might suggest. His favourite explanation for border effects is that it is cheaper and easier to operate within networks of shared norms and trust, and...the density of such networks declines with distance, especially as one crosses national borders (34). …

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