In
the early 1960s, a young Sydenham-Cambridge-MIT-Oxford educated
professor at the Indian Statistical Institute started narrowing
his eyebrows in suspicion at India's import-substitution policy
framework. Little did he guess that he would emerge-in American
academia-as the lead advocate of Free Trade, influential enough
to herald what the MIT economist Paul Samuelson has called 'The
Age of Bhagwati'.
'History has its unforeseen ironies' was the
opening line of Bhagwati's 1993 book India In Transition: Freeing
The Economy. For a nibblet of his conceptual clarity, glance at
the book's contents. Just three chapters: The Model That Couldn't,
What Went Wrong? and What Is To Be Done? Indian liberalisers were
floored.
As the world threatens to recede into protectionist
cocoons, what with America fattening its farmers while blocking
European steel and Chinese brassieres, the WTO advisor and Columbia
professor's thoughts could do with fresh amplification.
Free
Trade works, as Ricardo showed, via the efficiency of every country
pressing forth its comparative advantage to satisfy global needs.
This helps maximise growth, and that's good-even for the poor. While
reciprocal barrier-lowering is desirable, if other countries reject
good trade sense, "then, go thou alone" and grant unilateral
market access, advises Bhagwati, inspired by Tagore. Talk of 'trade
concessions' exasperates the professor-as if granting access is
painful. It is, instead, beneficial. "Except in the few cases
(rarely applicable to poor countries) when strategic tit-for-tat
play is credible, the net effect of matching others' protection
with one's own is to hurt oneself twice over," he says.
What miffs Bhagwati even more is the clamour
for trade with a 'human face'. It has always had one, he argues.
And why call WTO's Doha Round a 'development round'? Development
was always the objective (and trade, the policy).
Yet the professor doesn't approve of 'trade-related'
issues such as intellectual property being forced onto the WTO agenda;
why turn it into a "royalty collection agency"? His best
wit, though, is reserved for economics-savvy audiences. "If,
in lieu of autarky," he once quipped, "the wretched apple
had been traded for something more innocuous, Adam and Eve would
have continued in bliss."
|