Capitalist buccaneer Sir James Goldsmith is on the rampage again. On Nov. 15, he testified before the U.S. Senate Commerce Committee. Then he appeared on Charlie Rose's public-television talk show. Now, he's taking out huge ads promoting his year-old book The Trap, just released in America.
What ax does the feared corporate raider have to grind? Believe it or not, Goldsmith is passionately attacking global free trade and its principal institution, the General Agreement on Tariffs & Trade (GATT).
Goldsmith's argument centers on the threat that is posed to the industrial West by the collapse of communism and the spread of capitalism throughout much of the developing world. Social upheaval abruptly has brought some 4 billion people into the world economy, and Goldsmith contends that fierce competition from such low-wage workers will clobber American and European workers. "The social divisions that this will cause will be deeper than anything ever envisaged by Marx," he warns in his book.
BUILDING BLOCS. The way to avert the carnage, he argues passionately, is to replace global free trade with regional trading blocs. These blocs would put up strong protectionist barriers against outsiders, but permit free trade within regions. Logical groupings might include North America, Europe, Southeast Asia, and Latin America.
Other btes noires the wealthy industrialist and current Member of the European Parliament takes on in his 186-page book include the welfare State, intensive agriculture, and nuclear power. The book is set up in an easy-to-digest format in which Goldsmith answers questions posed by Yves Messarovitch, economics editor of Le Figaro.
How good a case does Goldsmith make? His economic argument for protectionist trading blocs isn't persuasive. In the case of the U.S., he underestimates the economic vitality of the information economy, and how productive American workers are in the global economic sweepstakes.
Yet Goldsmith's argument is less about economics than values. He argues that "economic growth is only beneficial insofar as it serves the needs of society, consolidating stability and increasing contentment."
Economic statistics are a mismeasure of a nation's well-being, he contends. Look at the U.S, he writes. Despite a quadrupling of U.S. real gross national product in the past 50 years and giant strides in science and technology, communities are breaking down and violence is up.
Like many turn-of-the- century European conservative intellectuals, Goldsmith blames the Enlightenment for the wrong turn Western economies have taken. He wants to rein in science and technology, reaffirm traditional social values, limit immigration, and preserve cultural identity--all to ensure a more stable society and harmony with nature.
He's right, in a sense. Yet there is a very different vision underlying GATT. A world open to freer trade is one that is open to new ideas, new ways of organizing life, and civilized discourse among different peoples. Better yet, the freer flow of commerce and information nurtures democracy and is hostile to closed-minded bureaucracies.
Goldsmith too easily glosses over the fact that protectionism invites bigger government and economic stagnation. Many things are going wrong in the West. But in no case is protectionism the answer.