Tuesday, January 07, 2014

Why the farmer will never get rich

(My first editorial piece for The Economic Times Jan 11, 2007)
Imagine there's no countries. Unwittingly, John Lennon captured the essence of globalisation in this song. It's an engine to integrate markets so a farmer in a remote district of Maharashtra is almost as well off as his counterpart in US. However, the key word is imagine. Why? You'll know soon. Let's ask the farmer whether he understands globalisation or if he has heard of Joseph Stiglitz or Jagdish Bhagwati. No? But, isn't he the one the noted economists are fighting for?
Hardliner Stiglitz takes a softer path — converts his discontents (as evident from his book Globalisation and its Discontents) to a solution in Making Globalisation Work. The solution is easy to implement, but only theoretically. It's actually like the song. To start with, we need to imagine all the countries are at par — there's no first, second or third world. They discuss agreements on agriculture. Let's restrict globalisation to trade and not stretch it to terrorism. As they say, with attacks in foreign countries having no direct relation with the attackers' own country, terrorism has also globalised.
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At a WTO meet, unlike the Uruguay round in Marrakesh, they agree to share their markets for agricultural good. They make trade laws, clauses, discuss the little boxes of subsidies and the intellectual property rights. Unfortunately, the green, amber and blue little boxes aren't all the same (as in the song). Because in the real world, they are used by the first world as an instrument to manipulate the quantum of subsidies.
Anyway, for our farmer, the market will no more be his village, it may now be somewhere in Europe. They pay him in euros and give the best deal available globally. Wow! That means our villages will eventually not remain poor. Therefore, being an agro-based country, India can become rich — the so-called first world. Hold on, do I smell a circular logic? Of course, our assumption was there's only one world, that is, we are already rich (or poor) — as rich (or poor) as the US.
But, what if we don't imagine? We realise the world isn't integrated and the first world nations are dictating terms to the third world. Globalisation is used to penetrate the untapped markets of the developing nations. The terms are tailor-made to suit the needs of the haves at the cost of the have-nots. So our farmer remains poor, exploited now by some European agent. India can walk out, deny, but perhaps, can never dictate terms to the developed world. What the hell, it's just a song. We may be the third world, but we can imagine.

You may say that I'm a dreamer But I'm not the only one I hope someday you'll join us And the world will be as one.

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