Author: Dan Keeler

The US central banker Ben Bernanke may be fumbling a little with the levers of economic control, but in his few short months as the head of the Fed he has shown he has a firm grasp on the power that his high-profile job affords him. The latest evidence of the blossoming of Chairman Bernanke came as he addressed the Fed’s annual gathering in Jackson Hole, Wyoming. After lulling his audience of fellow central bankers and policymakers with a lengthy but insightful lecture on the history of global trade, Bernanke hit them with a concise and urgent plea to ensure the benefits of globalization would be felt at all economic levels, not just by the rich.

Bernanke’s call for sharing the wealth was not the result of a sudden conversion to socialism; it was symptomatic of Bernanke’s resolute—and, frankly, refreshing—pragmatism. His point is that ensuring people at all economic levels feel they are benefiting from the growth in global trade will make them less likely to try to disrupt it. When they feel as if globalization is hurting them—by, say, exporting their jobs to a low-wage country—they’ll start clamoring for their governments to protect them.

It is a simple and convincing argument and one that is as timely as it is astute. Ever since the process was first encapsulated in a single word, globalization has faced staunch opposition—most spectacularly from those who believe it is a modern form of colonialism or a euphemism for exploitation. Quieter, but in many ways more effective, are the protectionists who attempt to insulate their economies from the rigors of global competition with trade barriers. While their resistance to globalization may be self-defeating, its opponents have a point because, in the absence of responsible, sensitive management, raw globalization really is, at its core, economic colonialism.

Bernanke hit the nail on the head with his call for a sharper focus on the impact of globalization, but governments can only do so much. The real responsibility lies with global corporations, which must ensure they treat the countries in which they operate with respect. One way to do that is by helping the people in those countries when disaster strikes. In our roundtable (page 84) we hear how one of the world’s archetypal global giants, Citigroup, is doing just that. Spurred into action in the aftermath of the tsunami of 2004, the banking group is working in partnership with the UN World Food Programme to set up an emergency relief network that will speed up the arrival of help in times of crisis.

Citigroup is certainly not the only global corporation getting more involved in the global community, and it is the actions of such companies that will help transform Ben Bernanke’s dream of enlightened globalization into a reality. And that would be better for everyone.
Until next month,

Dan Keeler