Globalization and democracy: is it really that bad?

INTRODUCTION The world is shrinking - or so it seems. Governments are quite possibly more interconnected and interrelated now than at any other time in history. This web of interdependency is primarily made possible by trade. And while some argue that free trade is mutually beneficial to all parties, critics of globalization say that, among other things, centralized trade organizations and non-governmental organizations threaten states' sovereignty. More succinctly: Political sovereignty is threatened by global organizations …

…states were reunited, the standard of living in the West was five times that in the East, which had a polluted environment, a feeble capital stock, and a demoralized labor force. That is about as close as any economist can get to a natural experiment in economics. And the answer is plain: Socialism and central planning do not work. Only some form of capitalism and free markets, despite their problems, works over the long haul.