Naked Economics: Undressing the Dismal Science pdfdrive com

Trade is based on voluntary exchange. Individuals do things that make
themselves better off. That obvious point is often lost in the globalization debate.
McDonald’s does not build a restaurant in Bangkok and then force people at
gunpoint to eat there. People eat there because they want to. And if they don’t
want to, they don’t have to. And if no one eats there, the restaurant will lose
money and close. Does McDonald’s change local cultures? Yes. That was what
caught my attention a decade ago when I wrote about Kentucky Fried Chicken
arriving in Bali. I wrote, “Indonesians have their own version of fast food that is
more practical than the Colonel’s cardboard boxes and Styrofoam plates. A meal
bought at a food stall is wrapped in a banana leaf and newspaper. The large
green leaf retains heat, is impermeable to grease, and can be folded into a neat

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package.”
By and large, the banana leaves of the world appear to be losing to cardboard.
Not long ago I attended a business gathering with my wife in Puerta Vallarta,
Mexico. Puerta Vallarta is a lovely city that spills down from the hills to the
Pacific Ocean. The focal point of the city is a promenade that runs along the
ocean. Near the middle of that promenade is a point that juts out into the ocean,
and at the end of that point, on what I would reckon is one of the most valuable
pieces of real estate in the city, is a Hooters restaurant. When our group spotted
this infamous American export, one man grumbled, “That is just wrong.”
A Hooters in all the world’s great cities is probably not what Adam Smith had
in mind. University of Chicago professor Marvin Zonis has noted, “Certain
aspects of American popular culture—the depravity and the coarseness, the
violence and the sexuality—are eminently worth resenting.”
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The threat of
“cultural homogenization”—the worst of it coming from America—is a common
knock against globalization. But it is an issue that leads us back to a crucial point
from Chapter 1: Who decides? I was not happy to see a Hooters in Puerta
Vallarta, but, as I pointed out many pages ago, I don’t run the world. More
important, I don’t live or vote in Puerta Vallarta. Neither do the rock-throwing
thugs in Seattle or Genoa or Pittsburgh (or wherever else they tend to show up).
Are there legitimate reasons to limit the proliferation of fast-food restaurants
and the like? Yes, they present classic externalities. Fast-food restaurants cause
traffic and litter; they are ugly and can contribute to sprawl. (Before my valuable
work opposing a new train station on Fullerton Avenue, I was part of a group
trying to prevent a McDonald’s from moving in across the street.) These are
local decisions that ought to be made by the people affected—those who might
eat in the safe, clean environment of a McDonald’s restaurant as well as those
who may have fast-food wrappers blown in their gutters. Free trade is consistent
with one of our most fundamental liberal values: the right to make our own
private decisions.
There is now a McDonald’s in Moscow and a Starbucks in the Forbidden City
in Beijing. Stalin never would have allowed the former; Mao would not have
allowed the latter. Which is a point worth pondering.
The cultural homogenization argument may not be true anyway. Culture is
transmitted in all directions. I can now rent Iranian movies from Netflix.
National Public Radio recently ran a segment on craftsmen and artists in remote
regions of the world who are selling their work via the Internet. One can log on
to Novica.com and find a virtual global marketplace for arts and crafts.
Katherine Ryan, who works for Novica, explains, “There’s a community in Peru
where most of the artists had gone to work in the coal mines. And now, because

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of the success of one artist in Novica, he has been able to hire many of his family
members and neighbors back into the weaving business, and they’re no longer
coal miners. They’re now doing what for many generations their family did, and
that’s weave incredible tapestries.”
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John Micklethwait and Adrian Wooldridge,
authors of the globalization tract A Future Perfect, point out that in the realm of
business, a previously obscure Finnish company like Nokia has been able to
thump American behemoths like Motorola.
We’re still just warming up when it comes to the side effects of globalization. A
Hooters in Puerta Vallarta is a mild headache relative to the horrors of Asian
sweatshops. Yet the same principles apply. Nike does not use forced labor in its
Vietnamese factories. Why are workers willing to accept a dollar or two a day?
Because it is better than any other option they have. According to the Institute
for International Economics, the average wage paid by foreign companies in
low-income countries is twice the average domestic manufacturing wage.
Nicholas Kristof and Sheryl WuDunn described a visit with Mongkol
Latlakorn, a Thai laborer whose fifteen-year-old daughter was working in a
Bangkok factory making clothes for export to America.
She is paid $2 a day for a nine-hour shift, six days a week. On
several occasions, needles have gone through her hands, and managers
have bandaged her up so that she could go back to work.
“How terrible,” we murmured sympathetically.
Mongkol looked up, puzzled. “It’s good pay,” he said. “I hope she
can keep that job. There’s all this talk about factories closing now, and
she said there are rumors that her factory might close. I hope that
doesn’t happen. I don’t know what she would do then.”
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The implicit message of the antiglobalization protests is that we in the
developed world somehow know what is best for people in poor countries—
where they ought to work and even what kind of restaurants they ought to eat in.
As The Economist has noted, “The skeptics distrust governments, politicians,
international bureaucrats and markets alike. So they end up appointing
themselves as judges, overruling not just governments and markets but also the
voluntary preferences of the workers most directly concerned. That seems a
great deal to take on.”
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