Shortages and the Class Struggle, by Sean Gabb

Shortages and the Class Struggle
A Libertarian View
Sean Gabb
(28th September 2021)

There is in the United Kingdom a shortage of lorry drivers. This means a dislocation of much economic activity. Because it cannot be delivered, there is no petrol in the filling stations. Because there are not enough drivers, and a shortage of fuel, we may soon have shortages of food in the shops. Christmas this year may not involve its usual material abundance.

These difficulties are wholly an effect of the new political economy that has emerged in England and in many other Western countries since about 1980. An army of managers, of agents, of administrators, of consultants and advisers and trainers, and of other middle class parasites has appropriated a growing share of the national income. This has happened with at least the connivance of the rich and the powerful. Since, in the short term, the distribution of the national income is a zero-sum game, the necessary result is low and falling real wages for those who actually produce. So long as the productive classes can be kept up by immigration from countries where even lower wages are on offer, the system will remain stable. Because leaving the European Union has reduced the supply of cheap labour, the system is no longer stable in England.

There are two obvious solutions. The first is to rearrange the distribution of income, to make the productive classes more able and more willing to produce. Since this would mean reducing the numbers or incomes or both of the parasite classes, the second is the solution we mostly read about in the newspapers. This is to restore the flow of cheap foreign labour.

In summary, that is my explanation of what is happening. For those who are interested, I will now explain at greater length. According to the mainstream theory of wages, labour is a commodity. Though workers are human beings, the labour they supply to employers is of the same general nature as machine tools and copper wire and cash registers and whatever else is bought and sold in the markets for producer goods. A wage therefore is a price, and we can illustrate the formation of wage rates with the same supply and demand diagrams as we use for illustrating the formation of prices:

The supply curve slopes upwards because most work is a nuisance. Every hour of labour supplied is an hour that cannot be spent doing something more enjoyable. Beyond a certain level, workers can only be persuaded to supply more labour if more money is offered for each additional hour of labour. As with other producer goods, the shape of the demand curve is determined both by the price of what labour can be used to produce and by the law of diminishing returns.

To show this, let us make the following assumptions:

First, that all labour employed or employable by a firm is of the same quality;

Second, that all other factors of production are fixed in quantity;

Third, that the price of whatever is produced by a firm is £10, and that its demand curve is perfectly elastic.

Suppose that the employment of one extra worker will increase output by ten units a day. This will increase revenue by £100 a day. The maximum daily wage paid to that worker will be £100. If the wage is somehow fixed above that level, it will not be worth employing him. If, however, we make the secondary assumptions that all other firms in that market are in exactly the same circumstances, and that all workers are employed on daily contracts, firms will compete for workers and workers will compete with other workers until that is the daily wage of all workers.

Let us now suppose that another worker appears from nowhere and offers his labour, and let us suppose that, because of diminishing returns, his employment will increase our firm’s output not by ten but by nine units a day. This being so, the daily wage rate will fall to £90. If, on the other hand, a new worker does not appear, but an existing worker disappears, and increasing returns now mean that the last worker employed before him has added eleven units per day to total output, the daily wage will rise to £110.

This is a grossly unrealistic illustration. But this does not in itself falsify the theory. Economic theory works by looking beneath the multitude of transient circumstances we find on the surface of things, to see the underlying reality. No basic economic theory explains how a market does or should work at any one time. What it shows instead are the underlying forces that shift markets in the long term towards an equilibrium that is itself constantly shifting. This being so, the marginal productivity theory of wages is part of an overall theory of distribution that roughly explains the earnings of each factor and subdivided factor in a country with reasonably free markets. It is not very good at explaining wages in the service sector, and may apply at best indirectly to wages in the state sector. But it is a true theory, and it only ceases to operate when some forcible rigging of markets prevents it from operating.

Our problem in England is that large areas of economic activity have been rigged. There is an immensely large state sector, paid for by taxes on the productive. Most formally private activity is engrossed by large organisations that are able to be so large either because of limited liability laws or by regulations that only large organisations can obey. The result is that wages are often determined less by market forces than by administrative choice. In this kind of rigged market, we cannot explain the distribution of income as a matter of continual choice between marginal increments of competing inputs until the whole has been distributed. It may be better to look at a modified wages fund theory. A large organisation has a pot of money left over from the sale of whatever its product may be, minus payments to outside suppliers, and minus whatever the directors choose to classify as profit. This is then distributed according to the free choice of the directors, or how hard they can be pushed. Or we can keep the mainstream cross-diagrams, but accept that the demand curve is determined less by marginal productivity than by the overall prejudices of those in charge.

Therefore the growth of a large and unproductive middle class, and the screwing down of all other wages to pay for this. This is not inevitable in rigged markets, but is possible. It has come about since the 1980s for three reasons:

First, the otherwise unemployable products of an expanded higher education sector have used all possible means to get nice jobs for themselves and their friends;

Second the rich and the powerful have accommodated this because higher wages and greater security for the productive might encourage them to become as assertive as they were before the 1980s;

Third, that these rich and powerful see the parasite classes as a useful transmitter of their own political and moral prejudices.

Where the lorry drivers are concerned, a friend showed this yesterday in a brief e-mail:

This is something due to the lack of HGV drivers due the outsourcing to agencies for driving. The agencies grab the most of the money and the drivers get paid pants for a long, difficult job with terrible conditions. No wonder no one wants the job. I know a couple of drivers who tell me qualified drivers are stacking shelves rather than drive since the pay and conditions are better

I know nothing of that particular market. But I do know the education market. I used to work now and again as a supply teacher. From every £10 an agency charged a school, about £5 went to the teacher it supplied. Many teachers, I might agree, are worthless at any wage. Also, I do appreciate that middlemen are often useful for creating markets that would not otherwise exist. But you see these agencies in almost every sector, even in those where customary employment markets already exist. It is a reasonable inference that they are a means of diverting income from those who work to those who live by skimming-off.

And this is the cause of our present difficulties. It explains why there are so many calls for the flow of cheap foreign labour to be restored. It may be that many businesses in this country are run with so little enterprise and investment that they survive only with cheap foreign labour. Much more than this, the parasite classes have realised that the growing labour shortage faced since we left the Single Market is forcing up wages for the productive, and that is not a short term response, but part of a more general readjustment, and that this will be bad for them unless they can make those labour supply curves more elastic at lower wages.

An almost obligatory end to anything written by a libertarian is a call for an end of regulations and cuts to government spending. I think these would help. But we have a class war in which no side seems to want a free market. So, for what it may be worth, I choose the workers. They did themselves no favour when they last had a seat at the table in the 1970s. So it may be again. I choose them even so. As for the parasite classes, I can shut my eyes and see them them at pavement cafes in the King’s Road, twittering into their i-Phones over skinny lattes served by Bulgarian waiters. Watching them unplugged from their host would, all other considerations aside, be enjoyable.



By Duncan Whitmore

The recent resurgence of the dollar price of Bitcoin in tandem with a steady decline in that of gold presents us with an opportune moment to assess the quality of cryptocurrencies (CCs) as a potential monetary medium of the future. The question becomes all the more pressing once we remember that the current order of state induced inflationary finance is likely approaching its end, a prime factor in governments seeking to assert greater degrees of control over their populations.

Although this essay will mainly be sceptical of CCs as a monetary medium, we should remember that the primary concern of libertarians is with unshackling monetary control from the state, and, thus, in promoting the freedom of money. This means that the most suitable monetary medium should emerge from voluntary trading in the marketplace, in much the same way as language emerged as a result of individual people trying to communicate. Precisely which commodity/ies will be selected as a result of this process is of secondary importance. There is, therefore, no need for libertarians qua libertarians to be particularly fixated upon, for instance, either gold or the gold standard, as many are wont to do. While gold would be far superior to state fiat money, it is not without disadvantages for the consumer. In particular, the relatively high value of very small quantities of gold makes it less suitable for day-to-day transactions compared to, say, silver or copper. In fact, this circumstance meant that the shift, during the nineteenth century, to the predominance of gold as the monetary medium at the expense of other metals necessitated a much wider use of money substitutes (e.g. bank notes) and the consolidation of the metal itself in bank vaults, well out of the public’s hands. This paved the way to the complete severance of the substitutes from the gold that backed them, leaving us with the 100%, state controlled paper standard from which we suffer today.1 Circumventing this state control is the priority. If this is achieved by CCs rather than by gold or by any other precious metal then no crypto-sceptic libertarian should cut off his nose to spite his face merely because his personally preferred alternative to state fiat money has failed to gain preference. Continue reading

Speculation, Human Action and Financial Markets

Speculation, Human Action and Financial Markets

By Duncan Whitmore

Within the past two weeks, retail investors congregating on the social media site Reddit bid up the stock of ailing company GameStop at the expense of large Wall Street hedge funds, all of whom had significant financial stakes reliant upon the price of the stock falling rather than rising. Several of these hedge funds were thrown into serious financial difficulty as a result of the price rocketing from around $20 a share to a high of nearly $400 in the space of only a few weeks. At the time of writing, the day traders have apparently turned their attention to the manipulated silver market, which is also starting to see significant gains. Fed up with a rigged casino market in which all of the spoils go to large Wall Street banks and financial firms, the amateurs appeared to have beaten the latter at their own game – at least, that is, in terms of having forced them to reveal the corrupt nature of the system if not in monetary profit.

This latest round in the battle of the populists vs the elitists is part of the ongoing collapse and rejection of inflationary state corporatism (the Western form of socialism that was birthed by World War One) and political globalism. Every blow that is dealt to this odious, oligarchic system – such as by Brexit and Trump – is one to be welcomed. However, whereas outright socialism (such as that practised in the former Soviet Union) entails direct state ownership over the means of production, the corporatist system operates through capitalistic facades such as nominally private businesses, free trade and exchange, stock markets, and so on. As a result, the socialised elements of our economic system have, for too long, been able to get away with offloading the blame for the problems they cause onto “capitalism” or “too much freedom” instead of the root cause which is state privilege and state interference with genuine private property rights. Indeed, that was exactly what happened after the housing market crash in 2008, with the whole fiasco being blamed on “greedy”, private bankers instead of the state induced, inflationary financial system. The long run result of our failure to identify the state as the true source of the problems has been that state failure has been rewarded with state growth.

Unfortunately, therefore, it is not enough for libertarians to simply cheer on the demise of the current, rotten system. In addition, we have to ensure that the proper enemy is identified and outed as state force and fraud, not the capitalistic institutions through which they operate. We must keep an eye not only on the current crop of elites, but also the circling vultures of popular, hard left politicians such as Bernie Sanders, Elizabeth Warren and Alexandria Ocasio-Cortez, who will be poised to blame everything indiscriminately on “capitalism” before advocating for total economic socialism as the answer.1 It would be a complete disaster if we were to allow one form of tyranny to be succeeded by another. Indeed, even the so-called “Great Reset” – which, far from being any kind of “revolution” or “renewal”, is actually a repackaging and rebranding of the present system in a far more potent form – is being sold as a reset of capitalism, the latter of which has supposedly failed us. Continue reading

A Dark Green Background

A Dark Green Background

By Neil Lock

UPDATE: Since first publishing this article, I have examined a further relevant document from the UK government: the 2019 “Report to the Committee on Climate Change of the Advisory Group on Costs and Benefits of Net Zero.” This has shed some interesting new light on the matter, so I have updated the essay to give some more details on the costs versus benefits angle.

This essay follows on from my review of the UK government’s recent “Ten Point Plan for a Green Industrial Revolution,” which you can find at [[1]]. Today, I’ll trace the history of the global warming agenda, and in particular the bad things governments – particularly in the UK – and their cohorts have done to us in promoting, supporting and implementing it.

There’s a long, sordid back-story to the deep green agenda. It goes back fully 50 years. Everything in this back-story is available on the Internet to those who are willing to look, and able to sort the wheat of evidence from the chaff of lies and politics. A lot of it, indeed, is in government documents! That’s how I learned all this myself.

There are somewhat similar back-stories on other aspects of the green agenda. Notably, on air pollution. But today, I’ll confine myself to global warming, also known as climate change.

Continue reading

Universal Basic Income: Some Political and Economic Advantages

Universal Basic Income:
Some Political and Economic Advantages

Sean Gabb
16th August 2020

My vision of Utopia has remained constant since I was thirteen. It is a nation of free citizens, keeping jealous watch over a state strong enough to defend the borders and keep a minimal internal peace, but restricted from doing anything else. Sadly, this vision is further out of reach today than when I was thirteen. The modern British State is a vastly extended despotism, limited only by incompetence and corruption. It is also a despotism to which the majority of people, with whatever success and at whatever overall cost, look for immediate benefits. Libertarians and conservatives may dream of a coup in which the present order of things will be torn apart and replaced with something more natural and sustainable. But we might more usefully dream of winning the Lottery or being offered three wishes by a fairy. Any scheme of change requires the acceptance that, even if it can somehow be captured, the British State cannot in the short and medium term be minimised. Continue reading

Matthieu Creson on Globalisation: A Comment

Matthieu Creson on Globalisation: A Comment 

By Duncan Whitmore

In a recent essay posted on this blog, Matthieu Creson decried the apparent retreat from globalisation in the wake of COVID-19 and “the withdrawal of countries into themselves”, risking the loss of “what has been for more than half a century one of the main growth drivers” in rich countries and poor countries alike. While Creson is right to be concerned by the possible return of protectionism and economic isolationism, his monolithic conception of globalisation is unlikely to prove helpful when defending its beneficial elements.

Creson is more than keen to explain to us what these beneficial elements of globalisation are:

Extreme poverty affected more than a third of the world’s population in 1990; today it only concerns 10% of this same population, even though the world has seen in the meantime an increase in population of 2 billion human beings. What is more, there has been a drop in infant mortality of more than 50% […] Every day, and in spite of the increase in world population, 140,000 people are able to escape from extreme poverty.

He does not, however, detail specifically the precise qualities of globalisation that produce these marvellous results. Quite a few times, Creson complains that problems caused by the state and statism, such as environmental disasters, are blamed for being “intrinsically linked to globalized capitalism alone”, and that “whenever a world crisis breaks out, they always blame it on globalized liberal capitalism, which they see as moribund”:

Globalization has always functioned as a convenient scapegoat, which saves us from having to acknowledge the (often statist) origins of the evils for which we make globalization unduly responsible.

But he offers no reason as to why academics, pundits and commentators are seemingly able to get away with this blame game so easily when, as he rightly recognises, it is usually states that cause these problems whereas the kinds of economic progress brought about by globalisation can and should ameliorate them. Continue reading

Why we need more, not less globalization

Matthieu Creson

Why we need more, not less globalization

Since the beginning of the Covid-19 crisis, we have often been reading in the press and hearing on television news that liberal globalization would be the main culprit to blame. This crisis would allegedly demonstrate the fundamental harmfulness of globalization, which would subordinate our health to the “dictatorship of profit” and to “ultraliberal ideology”. Is this interpretation of events well justified? If it were followed through in practice, would the call for “deglobalization” currently issued by a host of politicians – ranging from the left to the right -, environmentalists and anti-globalist economists not ruin what has been for more than half a century one of the main growth drivers in rich countries as in countries belonging to what used to be called the Third World? Worse: will we not eventually suffer from the decline in globalization and the withdrawal of countries into themselves in the event of a new planetary crisis – be it sanitary or of a different kind?

Globalization: a “neoliberal” disaster doomed to disappear?

In an interview with Le Point (April 9, 2020), Francis Fukuyama blames the current globalization, which he associates with “neoliberalism”, and the limits of which would now be clearly apparent. Even before the outbreak of the Covid-19 crisis, globalization would have shown signs of its decline, so much so that the health crisis would have only hastened its questioning. Thus Francis Fukuyama declares: “I believe that we are witnessing today the end of neoliberalism, which is even already dead, and that we are going to return to liberalism as it had existed in the 1950s and 1960s, when market economy and respect for private property coexisted with an effective state, which intervened to reduce social and economic inequalities.” What the health crisis would reveal, he adds, is “the need for a strong state.” First of all, why is the term “neoliberalism” still so often used? By “neoliberalism”, we generally refer to the 1980s, to the era of Reagan and Thatcher, marked by privatizations, deregulation and the expansion of free trade. Yet Reagan and Thatcher simply applied classical liberal ideas, thus returning to the principles of liberalism as defended in the 20th century by Ludwig von Mises and Friedrich Hayek. We may here remark that in many cases the use of the prefix “neo” appended to the noun “liberalism” often serves to discredit the latter. Conversely, should we also speak, to characterize the 2010s, of a certain “neo-statism”, allegedly justified to correct the supposed misdeeds of the market and of globalization?

How should one interpret Francis Fukuyama’s assertions? We may here recognize a widespread idea, according to which we would currently be suffering from the consequences of the “conservative revolution” of the 80s, a revolution which would have extended to the 90s and 2000s, if not ideologically, at least in practice. However, the systematic attack on globalization is fundamentally biased as it dismisses the examination of its possible benefits – and the benefits of globalization are real, as shown by many books and articles that have been published over the last forty years or so. For one thing, it is not because globalization does indeed pose new problems, or makes problems that have long existed even more acute, that we should strive to put an end to it. And it is illusory to believe that the problems raised by globalization will be solved by a return to more state interventionism: if there is a lesson, perhaps, to be learnt from the history of liberal capitalism, it is that liberal capitalism itself tends to solve the new problems it may have generated or exacerbated, in a much better and much more effective way than the state can do. Entrepreneurs, innovators and civil society players tend to imagine solutions to problems which arise through a creativity which state bureaucracy is only too apt to stifle.

This does not mean, of course, that the state has no role to play in a crisis like that of Covid-19. The state should already play a role which the liberal essayist Johan Norberg rightly described1, in these times of health crisis, as hippocratic: Primum non nocere, “first, do no harm”. As Johan Norberg put it, the Swedish strategy to deal with Covid-19 has been based on this very principle, and it is not at all sure that this strategy will turn out to be worse than lockdown policies implemented by countries like France, Italy or Spain. History will tell.

Besides, when extolling the alleged merits of a “strong state”, we always tend to confuse the extent of the state with the real effectiveness of its action. Perhaps the time has come to stop believing that there is necessarily a correlation between the scope of the state within society and its capacity to make good decisions and act quickly and adequately. In countries where the state is still too present in sectors which should not be under its control, the state tends to be both invasive and ineffective: it is by limiting the states’ sphere of influence, it is by further liberating civil society from excessive state control, that the state will thus be able to fulfill its role effectively, for it will then only intervene within its sphere of legitimacy.

Admittedly, Francis Fukuyama advises us to remain realistic in our views. The “de-globalization” movement that is likely to take place will be of a quantitative nature rather than of a qualitative one, in the sense that the Covid-19 crisis will not undermine the foundations of globalization as such. If this were the case, he concedes in the same interview with Le Point, “the world would regress to the level of development it had reached fifty years ago, a prospect which would be impossible to envisage”. That said, it is necessary, he believes, to “change the balance between liberalism, social welfare and state intervention”. We can therefore see that Francis Fukuyama advocates a return to a model which surprisingly seems to correspond to the French modèle social, the alleged virtues of which we keep extolling in France with unabated self-satisfaction. A “model” that the world over is said to envy us unanimously, but which is also the source of many issues in our society which have hitherto prevented us from carrying out essential economic and tax reforms, which many countries elsewhere in Europe have managed to adopt.

One of the ideas that have resurfaced in France, and in Western countries more generally, during the pandemic is that current events would have amply demonstrated the limits and the alleged failure of “neoliberalism” and globalization, a conclusion that was already often drawn more than 10 years ago during the global financial crisis of 2008. The old dream shared by anti-globalists has not yet disappeared: whenever a world crisis breaks out, they always blame it on globalized liberal capitalism, which they see as moribund. Alas for them, globalized capitalism always ends up recovering, thus always refuting the same predictions about its final collapse. The same phenomenon will most probably happen again in the aftermath of Covid-19.

If Francis Fukuyama does not completely abdicate the principle of reality when he makes the aforementioned remarks, this does not always seem to be the case with various anti-globalist economists. Several months before the health crisis appeared, the economist and 2001 Nobel Prize winner in economics Joseph Stiglitz bluntly declared that neoliberalism “does not work”. And he even went further: “after decades of stagnant or even falling incomes for those below them, neoliberalism must be pronounced dead and buried2”. This reflects in fact the same old wish to see in recent economic history evidence of a hypothetical death of liberal capitalism … when in fact the latter always gets a new lease of life. Joseph Stiglitz is a Nobel Prize winner in economics, a distinction which gives him an aura in his public positions. However, as the essayist Guy Sorman said about another economist, Paul Krugman3, also a Nobel Prize winner in economics, the articles written by the latter economist do not necessarily have a direct relationship with the content of the research that won him the Nobel Prize. Could this remark about Paul Krugman also apply to someone like Joseph Stiglitz? According to Guy Sorman, there are in fact two different Joseph Stiglitzes: there is Stiglitz Number One, who “has the esteem of his peers” and who received the 2001 Nobel Prize with George Akerlof “for the research on asymmetric information and market transparency he conducted in the 1980s4”. By contrast, Stiglitz Number Two is, according to Sorman, “a fiery public intellectual with a Leftist political agenda, a media-savvy icon who revels in publicity” and who “has become leader of a vast anti-capitalist, anti-globalization, anti-free-trade crusade5”.

According to Joseph Stiglitz, three different groups of political ideas would remain after this alleged “death of neoliberalism”: far-right nationalism, center-left reformism (which he describes as “neoliberalism with a human face”, and which he says constitutes an attempt, still far too dominated in his opinion by neoliberal ideas, to update the policies formerly pursued by a Tony Blair or a Bill Clinton), and finally (the only group of political ideas that really matters to Stiglitz), the “progressive left”. The progressive left, which Stiglitz also calls “progressive capitalism”, would thus be the only group of political ideas really aiming to “restore the balance between markets, the state, and civil society6”. Josept Stiglitz also takes up again the widespread cliché, according to which “governments have a duty to limit and shape markets through environmental, health, occupational-safety, and other types of regulation”. This implies, therefore, this other cliché that the market and globalization would have a fundamental tendency to harm the environment as well as people’s health. In his book Why Globalization works (New York and London, Yale University Press, 2004), Martin Wolf stresses that liberal countries were in fact the least disrespectful of the environment, unlike countries like the late USSR, which, among other examples of absolute environmental disasters, had caused the drying up of the Aral Sea in the 1960s by diverting two of its tributaries to ensure the intensive irrigation of cotton fields7 … But today, as the Soviet Union no longer exists, we tend to believe that any pollution, any environmental disaster is intrinsically linked to globalized capitalism alone. Greta Thunberg was born in 2003, more than 10 years after the demise of the Soviet Union, so she has always grown up under the illusion that environmental problems are caused solely by liberal globalization.

In his book In Defense of global capitalism (Cato Institute, 2003), Johan Norberg had already sought to refute the old refrains on globalization as a systematic factor of aggravation of pollution in the world. He noted for instance that, contrary to the popular belief, “all over the world, economic progress and growth are moving hand in hand with intensified environmental protection8”. This can be easily understood: as Johan Norberg specifies, “abating misery and subduing the pangs of hunger takes precedence over conservation. When our standard of living rises we start attaching importance to the environment and obtaining resources to improve it9”. Thus, developing countries initially tend to be concerned above all with getting richer; and it is only when they have moved along this path long enough that they can start to show a greater concern for the environment. So this is sort of the application of the Maslow pyramid to developing countries. The conclusion that we should therefore draw from this is that if we are really sincere in expressing our concerns about the environment, we should then be encouraging the development of poor countries rather than delaying it! This implies, therefore, the expansion of globalization, the decline of which would be disastrous for developing countries, whose economy is highly dependent on foreign direct investment (FDI).

The call for the emergence of a “new world”: let us not fall back into the mistakes of the past

Anti-globalism has long been in existence, but it has definitely been revived during the Covid-19 crisis. We find for example the habitual criticisms of globalization in the manifesto for a post Covid-19 world by environmentalist Nicolas Hulot, which was published in Le Monde on May 7, 2020: “When Europe signs a free trade agreement with Mexico or the Vietnam, coherence is still lacking”, he says. And Nicolas Hulot adds: “While we should avoid falling into the trap of nationalists and protectionists, we must find this third way between autarky and neoliberalism”. Here Nicolas Hulot is just rehashing the longstanding cliché about the alleged appropriateness of the “third way”, which has always failed to come to fruition.

Already widespread in the 90s and 2000s, the hatred of classical liberalism and globalization actually intensified soon after the 2008 crisis and throughout the 2010s, with the return of populism and protectionism. One of the operating modes of this anti-globalization is the truncation and the falsification of the basic lessons of 20th-century economic history. Thus Marine Le Pen in France said after the victory of Donald Trump in the American presidential election of November 2016: “Clearly, the victory of Donald Trump is an additional stone laid in the construction of a new world, whose purpose is to replace an old order10”.

So, according to Marine Le Pen, the old order would be the globalized liberal order, which she wishes to see disappear in favor of an alleged new order of nation-states, in which the people would supposedly regain the control of its destiny. Is Marine Le Pen aware of the grossly erroneous interpretation she is giving of the most evident lessons of economic history of the past three-quarters of a century? It was clear, indeed, at the end of the Second World War, that the “old order” which had to come to an end was not that of globalization and free trade, but that, on the contrary, of nationalism and protectionism. A century ago, Europe emerged from the First World War in a state of complete destruction. But instead of examining the factors which had led to this situation, and rather than trying to implement solutions that could have helped avoid a new tragedy of the same kind, Europe became increasingly divided. America, too, was increasingly turning its back on the rest of the world. Statism and nationalism progressed, to the detriment of classical liberalism. Then came the 1929 crisis and the depression of the 1930s, marked by the collapse of world trade, the dramatic rise in unemployment and the decline in living standards. Let us note here in passing that it seems very difficult to attribute responsibility for the crisis of 1929 to liberal globalization, as the crisis was in fact largely the result of government monetary policies11. Globalization has always functioned as a convenient scapegoat, which saves us from having to acknowledge the (often statist) origins of the evils for which we make globalization unduly responsible.

Then, in the middle of the Second World War, England and the United States signed the Atlantic Charter (1941), in which was adopted the principle of international free trade. The Secretary of the Treasury under Roosevelt, Henry Morgenthau, declared in his inaugural speech at the Bretton Woods conference (July 1, 1944): “All of us have seen the great economic tragedy of our time. We saw the world-wide depression of the 1930’s. We saw currency disorders develop and spread from land to land, destroying the basis for international trade and international investment and even international faith. In their wake, we saw unemployment and wretchedness — idle tools, wasted wealth. We saw their victims fall prey, in places, to demagogs and dictators. We saw bewilderment and bitterness become the breeders of fascism and, finally, of war12”. This renewed attachment to the principles of free trade was in fact part of Roosevelt’s dream project of building a new world order which was intended to lead to lasting peace, and whose diplomatic component consisted of “collective security”.

At the end of the 5th century BC, Thucydides had undertaken in his History of the Peloponnesian War to extract history from the mere legendary narrative and from simple personal testimony, in order to establish the sole accuracy of related facts. And this not only to enlighten his contemporaries, but also for the benefit of future generations. Indeed, Thucydides wrote:

“it may well be that my history will seem less easy to read because of the absence in it of a romantic element. It will be enough for me, however, if these words of mine are judged useful by those who want to understand dearly the events which happened in the past and which (human nature being what it is) will, at some time or other and in much the same ways, be repeated in the future. My work is not a piece of writing designed to meet the taste of an immediate public, but was done to last for ever.”

In Thucydides’ views, history was a science endowed with real utility for the future. But what is the real purpose of history if its lessons are not taken into account as much as they should be, in order to best guide our current political choices? If we had fully reflected on the lessons of economic history since 1945, we would have been well aware of the misdeeds likely to result from the return of nationalist withdrawals and the revival of protectionism. So let us hope that history does not become again, especially among populists of all kinds, this “piece of writing designed to meet the taste of an immediate public”, in Thucydides’ words.

Why the Covid-19 crisis should be an opportunity to expand globalization

Globalization is often unjustly criticized. This is what Ian Goldin, professor at Oxford, reminds us of in an interview published in L’Express on April 30, 2020. Legend has it that globalization would cause the impoverishment of less developed countries. As Ian Goldin points out, we must on the contrary credit globalization with having allowed poverty to decrease in the world. Extreme poverty affected more than a third of the world’s population in 1990; today it only concerns 10% of this same population, even though the world has seen in the meantime an increase in population of 2 billion human beings. What is more, there has been a drop in infant mortality of more than 50%. Ian Goldin also argues that “globalization has been the most progressive force in history to reduce poverty”. This is also the conclusion drawn by Johan Norberg – whom I’ve already cited – in an interview published by L’Express dated April 23, 2020. Every day, and in spite of the increase in world population, 140,000 people are able to escape from extreme poverty. “The year 2020,” Johan Norberg concludes, “is the best year in history to deal with a pandemic. Epidemics have always existed. For the first time, humanity has a chance to limit one of them to the maximum.”

Ian Goldin also rightly notes the gap that has occurred in recent years between global economic systems which have become increasingly interconnected on the one hand, and, on the other hand, the status quo maintained, and even the backward policies carried out individually by a number of countries on both sides of the Atlantic. While the systems are more interdependent, he says, policies have failed to evolve accordingly, and have in fact become ever more fragmented, as exemplified by the withdrawal of the United States. This state of interdependence should therefore encourage us to set up greater cooperation, exchange of information and mutual aid between the countries which are exposed to similar risks. “We are like an electronic or a digital system”, Ian Goldin adds. “If one piece goes wrong, the whole system goes wrong13”.

In an interview published in Le Monde on May 9, 2020, the European Commissioner for Trade and former Irish centrist minister Phil Hogan also makes a case for globalization. It is essential for Europeans, he argues, to remain open to the outside world and not withdraw into themselves. According to Phil Hogan, not only must Europe maintain its free trade agreements with other countries, it must also strive to create new ones. The reasons are easy to understand: in Europe, 35 million jobs are connected with exports. And at a time when the growing control of some of our companies by foreign economic players is constantly being emphasized, we should also remember that foreign direct investment (FDI) in Europe has generated 16 million jobs. By 2040, Phil Hogan adds, 85% of global growth will take place outside of Europe, as Asia will continue to see its population grow and extreme poverty decrease. It is therefore essential to anticipate this coming development of the main places where world trade will become increasingly concentrated, not by curbing but rather by expanding free trade agreements. This will be made more necessary than ever once the pandemic we have gone through is over. “In order to bounce back from the recession we are going through, we will need international trade more than ever,” he adds.

As regards the Covid-19 crisis itself, it is also globalization which made it possible to act in record time. (Let us not forget that globalization is not only economic or commercial, it is also that of science and information.) As Johan Norberg also notes in the interview published in L’Express on April 23, 2020, it was Chinese scientists who sequenced the genome of Covid-19, and it was a Berlin company that was then able to produce tests in February, which became widely used thereafter. Moreover, the publication of Chinese studies, as well as access to information coming from Southeast Asia about the right strategy to adopt (but which a country such as France could not carry out or did not want to carry out, namely the strategy based of massive testing, isolation of the sick only and treatment) enabled Dr Didier Raoult and his team at the IHU Mediterranée in Marseilles to set up a vast testing program for the local population, as well as the now famous treatment based on hydroxychloroquine and azithromycin.14 […]

Let us here leave the final word to Yuval Noah Harari: “The antidote to epidemics”, he said in an interview with Le Point (April 2, 2020), “is neither isolationism nor segregation, but information and cooperation. The great advantage of humans over viruses is their ability to cooperate effectively. […] China can learn a lot from the United States about the virus, and how to manage it, it can send experts and equipment to help. Unfortunately, the lack of global leadership today means that we are unable to reap the full benefits of such cooperation.” Given that Europe seems to be intent on exerting an influence on international relations amidst countries like the United States or China, it is doubtful that the revival of anti-globalism we are currently witnessing will be the best way to achieve such an ambition. Let us hope that Europe understands that everyone would in fact benefit from living in a world even more open to exchanges between countries, be they intellectual, cultural, scientific or economic.






5 Ibid.


7 Concerning the often exaggerated criticisms directed towards liberal countries as regards environmental matters, see for example Martin Wolf’s aforementioned book, 188-194.

8 Johan Noberg, Plaidoyer pour la mondialisation capitaliste. Paris: Plon, 2003, 198.

9 Ibid., 199.

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11 Alain Laurent, La Philosophie libérale. Paris: Les Belles Lettres, 2002, 16.



14 Whether this was the right treatment in the case of Covid-19 is still being debated. On Didier Raoult and his treatment, see two of my articles published in French:

Matthieu Creson
Teacher and researcher in Paris, France
Philosophy, literature, art history and business graduate
Article initially published in French on the website of Revue politique et parlementaire on May 26th, 2020: