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Globalisation is another word for the extension of free trade worldwide. It is desirable because it encourages competition and enables the division of labour, which, Adam Smith cogently argued, creates wealth. If the two of us are stuck on a desert island, with only fish and coconuts to eat, and if I am better at catching fish and you are better at picking coconuts, then the island’s total product will be greater if I catch all the fish for both of us and you pick all the coconuts. Likewise, if Japan produces cars at a lower cost than Iceland, and Iceland produces seafood at a lower cost than Japan, both countries benefit from exchanging cars and seafood. It is international free trade and the international division of labour that explain the enormous economic growth of the last two hundred years, practically eradicating poverty in Western countries and significantly reducing it elsewhere.
The Moral Dimensions of Trade
There are three ways of obtaining from others the goods you want: to persuade them to give the goods to you; to seize the goods from them; and to offer them a payment that they would accept. The first approach is practical only within the family or a very small face-to-face society. That leaves the two other approaches, relevant in interactions between strangers: fighting or trading. The free market is a forum for free cooperation, not a battleground. Thus, it has a moral dimension. Moreover, trade is a dynamic rather than a static process. You are encouraged to identify and develop the abilities most in demand by others. Although there is in all life an element of luck, the free market rewards and therefore stimulates hard work, ambition, adaptability, trustworthiness, politeness, and punctuality. You are motivated to serve others as effectively as possible.
The Ideology of a Global Elite
The support for globalisation does not, however, entail support for a recent phenomenon, globalism, the rejection of national identities: the ideology of a global elite occupying central banks, big financial firms, international organisations, the Brussels bureaucracy, most universities, and the media. These are the people who love all countries except their own. Well-educated and often well-spoken, they know several languages and have nothing significant to say in any of them. They firmly believe that they should hold power because of their superior education and intelligence, looking with disdain on the ‘deplorables’, as Hillary Clinton called those who did not vote for her. They usually call themselves liberals, but they would not unreservedly support the freedom of ordinary citizens—the man on the Clapham omnibus—to choose. Their ideal is crony capitalism, an unholy alliance of big business and big government.
Bailing out Banks
I do not believe in a ‘deep state’ or other conspiracy theories, but certainly this global elite wields much invisible power. This became evident in the 2007–2009 financial crisis. Arguably, central banks should provide liquidity to financial firms during periods of stress to avert panic and bank runs. But this is distinct from the postulate that, during booms, bankers may appropriate all profits, whereas during crises they could pass their losses on to the taxpayers. In Iceland, the government in 2008 refused to rescue the banks. This did not lead to any disaster. By 2012, four years later, the economy had recovered.
Activist Judges
According to an Icelandic proverb, the mouse that sneaks is no better than the mouse that jumps. Perhaps the least obvious globalists are the activist judges who seek not to uphold the law, but rather to promote the globalist ideology. One example was when the British Supreme Court in 2023 blocked the government’s plan to move asylum seekers to Rwanda where their claims would be processed. Another example was the European Court of Human Rights’ 2024 judgement that the Swiss government had violated the right of elderly women to adequate protection against climate change. Both decisions were absurd creations of claims against governments, ultimately against taxpayers, but disguised as global rights.