Open World: the truth about globalisation, by Philippe Legrain

Why the globe should warm to globalisation

Does the world need another tome about globalisation? Philippe Legrain, a young reporter turned policy adviser, thinks so, and, against the odds, his book turns out to be a spirited attempt to raise the level of debate.

The central argument of Open World is a good one, and elegantly made; the idea of globalisation has become a convenient catch-all for everything we abhor about modern life. Contrary to myth, the globalisation of trade is not responsible for the lack of capital investment in high-value activities such as steel production in the West. The main reason why wages in poor countries are lower is not globalisation, but antiquated machinery.

Neither is globalisation responsible for stagnant wage-packets in the advanced industrial world. That can be attributed to organised labour's lack of bargaining power following the demolition of trade unions. Globalisation, Legrain argues convincingly, is a convenient scapegoat behind which businesses conceal their weakness and politicians conceal their lack of mettle.

Open World is best read as a rapid rebuttal of the flimsy critique of anti-globalisation activists. Pouring scorn on Naomi Klein's theory that today's cluttered brandscape ends up colonising our minds, Legrain offers a photo of a grinning Taliban, proudly displaying a sports bag with Nike's trademark Swoosh in one hand and a Kalashnikov in the other. Real cultures and beliefs, he maintains, "are scarcely eroded by commercial artefacts". He is even more scathing of environmentalists such as George Monbiot, who would prefer to see those in the developing world get by on mother nature's recipes.

For someone so tenacious in criticism of the activists, Legrain is overly complacent when it comes to his analysis of the global economy. Lost in the inarticulate din of the anti-globalisation movement is the real mystery: the inability of the global market to facilitate transfer of its technology and know-how to the south.

Under the current wave of globalisation, Legrain reminds us, most trade that appears to be global is still conducted within regional blocs. Over two-thirds of Western Europe's goods trade is with other countries in the region, and the three members of the North American Free Trade Agreement also trade mostly with each other.

Legrain assures us that "the poor are getting richer in globalising countries", but his argument is somewhat circular. Only countries that attract foreign investment are deemed to have joined the global economy, and they are a lucky few. Also worth remembering is that, under the current wave, rates of growth are lower than the long-term average: in 1960-1980, output per person grew by a global average of 83 per cent; in 1980-2000, average growth was only 33 per cent.

Legrain's attempt to explain the global technology gap boils down to the platitude that "it takes time to build up people's skills and accumulate capital". Perhaps as a consequence, Legrain's closing entreaty – "Choose hope" – recalls more the patience of an evangelical Baptist than an economist confident in his prognostications.