Why Globalization Works (review)

Each generation writes anew its history, as George Herbert Mead remarks in his Movements of Thought in 1936. Today, Wolf adds another history of globalization with a challenging comparison of the world in 1900 with that of the beginning of the 21^st century. A century ago, the world was heavily globalized already, before 19^th century liberalism broke down into the political chaos of the 20^th century. Against this background, Wolf's primary motive to write a book on globalization is not academic but moral.

He sees a renewed wave of anti-liberal "millennium collectivists" on the rise who threaten to destroy the possible blessings of globalization by reminding us that the 1920s and 1930s have shown how quickly the pendulum can swing from globalization to catastrophe. Wolf's point of view is a pronounced economic one. His presentation of globalization's critics is as brief and general as his deliberations on democracy and the relationship between the state and the economy.

It is not liberal markets, he argues, but poor political management which causes persisting poverty and a lack of economic prosperity in contemporary societies which do not profit from globalization. Hence, he defends globalization against its critics and calls for more free trade. Detailed evidence is presented for the close relationship between liberal economic policy and a decline in inequality and poverty. For Wolf, there are no alternatives. Planned economies of Soviet or other design, have failed, whereas economic activities via markets usually increase the welfare of the largest number.

Thus, it does not come as a surprise that Wolf contradicts the critics of globalization as transnational corporations are not and will not be more powerful than states. For him, the alleged "tyranny of brands" is "much ado about nothing" (230). Transnational corporations neither exploit poor countries nor their workers. Even though his language often shows excitement and anger, disapproval and affection, Wolf continuously presents strong statistical evidence supporting his defense of globalization.

However, there is one decisive weakness in his central argument, as it could easily be turned around: In the 20^th century, the world did fall into totalitarianism, two world wars, the Holocaust, and the Cold War, because modernized societies did not manage to convince their citizens that in the end they would profit adequately from free trade. Wolf seems to underestimate this risk when he assumes it could simply be cured by more free trade and a consequent rise in welfare. To be sure, the absolute level of material welfare alone is not a precise predictor of citizens' overall life satisfaction, political support, and their susceptibility to the temptations of demagogues. Many historical examples show that the relationship between welfare and citizens' acceptance of institutions is more complicated. In the citizen's view, social change and economic development lead to both a rise in general welfare and more uncertainty about what to consider normatively correct and desirable concerning new role expectations in the age of globalization. Both effects occur simultaneously within societies – and as consequences of globalization in general, as in a globalized world we have to adjust to new situations more often than ever before.

From its beginnings, sociologists have warned us of this seemingly contradictory development in the process of modernization. In his "Roses. A social hypothesis", Georg Simmel exemplifies how more equal and widespread participation in desirable goods may surprisingly lead to a sharp rise in social awareness of remaining inequalities. Such welfare dissatisfaction may cause such protests as the contemporary anti-globalization movement. This is the paradox of the globalization age: citizens of Western nations are anything but poor. Prosperity is — even though slower than in recent decades — still on the rise from year to year. Nevertheless, it seems that dissatisfaction with social change has risen dramatically since the 1970's.

Nevertheless, Wolf is right when he stresses the potentially beneficial consequences of globalization. He is naïve when he cites the breakdown of the liberal world around 1900 as a proof of potential threats which could be cured by more...