To successfully advocate life, liberty, and the pursuit of happiness–all God-given human rights–the United States needs to lead by example. The Acton Institute supports efforts to remove barriers to trade and to bring all persons into the circle of exchange. Free global trade, the protection of property rights under the rule of law, and the cultivation of democratic ideals are essential to ensuring increased recognition of human rights and respect for human dignity throughout the world.
"The AFL-CIO and our affiliates believe the ultimate test is whether globalization increases freedom, promotes democracy, and helps to lift the poor from poverty; whether it is empowering the many, not just the few; whether its blessings are widely shared; whether it works for working people. Clearly, the global market that has been forged in the last decades fails this test." These words, spoken by AFL-CIO president John Sweeney at the inauguration of the Campaign for Global Fairness, cut to the heart of the opposition in many quarters to free trade and "globalization." But does globalization truly fail to make the grade?
Trade, in itself, is a human right. The freedom to say "yes" or "no" in an exchange is what enables each of us to seek out and realize opportunities in keeping with our own values and needs . Freedom of the press means very little if ownership of a printing press and the freedom to use it are curtailed. Governmental restrictions on trade in pencils and paper or in computers and a printing press restrict the freedom of writers to exercise and develop their God-given talents. Private property and the freedom to contract are fundamental human rights, as each person is entitled to enjoy the fruits of his labor. And these rights do not stop at water’s edge.
Trade barriers place limits upon the freedom to engage in mutually beneficial exchange, and they are predicated upon the mistaken belief that people are unable to judge what is best for themselves and their families. When the judgment of politicians and a politicized process are elevated over the judgment of individuals, governments prevent people from making decisions that are in their own best interests. Diminished opportunities and increased prices are the result of limited choice.
In a free economy, on the other hand, an organic system of production develops among those interested in trade. Consumers and producers in one area of the world seek out consumers and producers in another, and an international division of labor permits greater efficiency in meeting human needs worldwide. Contrary to Sweeney’s claim, the effect of this is not diminishing opportunities for the poor and working families, but greater opportunities to generate wealth and achieve a higher standard of living.
There exists near unanimous agreement among economists that free trade serves the interests of all people. On an aggregate level, countries open to international trade grow at a much faster rate than countries less open to trade. A well-known paper by Jeffrey Sachs and Andrew Warner of Harvard University reports that developing countries with open economies grew by an average of 4.5 percent annually during the 1970s and 1980s while closed economies grew by only 0.7 percent. Developed countries with open economies grew during the same time period by 2.3 percent annually while those countries with closed economies grew by 0.7 percent.
The growth that results from international trade is directly felt in the wallets of working families. The American Economic Review published a paper last year that found trade exerts "a qualitatively large and robust…positive effect on income." In fact, according to the 150 country analysis conducted by economists Jeffrey Frankel and David Romer, an increase in the ratio of trade to Gross Domestic Profit (GDP) by one percentage point raises real income per person by between 0.5 and 2 percent.
The Development Research Group at the World Bank released a similar report this year examining the macroeconomic policies of 125 different countries ( "Growth is Good for the Poor" ). The report concludes that openness to trade is part of a "core set of institutions and policies" necessary for improving living standards, without concentrating wealth in the hands of the few . The authors of the report explain their findings this way:
"Globalization is associated with improvements in overall human well-being," writes Jay Mandle, a liberal economist at Colgate University, in the June 2nd issue of Commonweal . Mandle’s positive view of globalization is founded, in part, upon his comparison of the level of exports and GDP per capita for a country, with the country’s score on the United Nations Human Development Index (HDI), which combines information on life expectancy, education, and material well-being. "The countries with the lowest HDI are those that score lowest in the other two measures; those with the highest human welfare scores export the most and have the highest output levels."
Sweeney overlooks an additional benefit to trade between nations, outside the purely material advantages that trade clearly brings. As goods and persons freely flow across borders, so do ideas. Many countries only begin to encounter Christianity and Western concepts of liberal democracy when they begin to trade with people in other countries. Just as foreign goods enter a country and soon find their way into the hands of willing consumers, foreign ideas also find their way into willing hearts and minds.
As wealth grows in a country, typically so does the call for democratic reform. Dictatorships or monarchies that permit some freedoms in the market have a tendency to evolve into political democracies, evidenced in recent years in Greece, Portugal, Spain, and other nations. Acton Institute President Rev. Robert A. Sirico testified on this point before the House Ways and Means Committee in the context of permitting trade with China:
"Building a truly global economy," writes Bishop Diarmiud Martin, "means, above all, building a system that permits the active participation of all persons and nations in realizing the God-given potential with which they have been endowed, an economy that is truly at the service of the entire human family."
Avoiding the temptation for nations to turn inward and choosing instead to embrace the free economy and the entire human family is the only moral course of action. When globalization is put to the test it passes with flying colors, as people flourish in freedom internationally, as they do closer to home.