would lose local political control of their destinies. clearly, the risk is that support for restrictions on trade is not dead, only quiescent. those who protest against “ globalization ” appear too often to be self - designated representatives of developing country interests. for all the reasons that i have cited earlier, these protests, however well intentioned, are wrong - headed. in particular, it is essential to note that probably the best single action that the industrial countries could actually take to alleviate the terrible problem of poverty in many developing countries would be to open, unilaterally, markets to imports from these countries. such countries need more globalization, not less. in many important respects, the past half - century has represented an uneven struggle to repair the close linkages among national economies that existed before the first world war. the hostilities bred of war, the substantial disruptions to established trading patterns associated with that conflict, and the subsequent poor economic performance over the next few decades engendered the erection of trade barriers around the world that have taken even longer to dismantle. to repeat that error would increase poverty among a significant segment of the world ’ s population. the united states has been a world leader in terms of free trade and open markets for capital as well as goods and services. we have benefited enormously from the resulting international competition : we have a wide range of goods and services available for consumption ; our industries produce and employ cutting - edge technologies ; and the opportunities created by these technologies have attracted capital inflows from abroad. these capital inflows have reduced the costs of building our country ’ s capital stock and added to the productivity of our workers. most economists would argue that we must reaffirm the united states ’ leadership role in the area of international trade policy in order to improve standards of living in the united states and among all of our trading partners.

alan greenspan : trade policy testimony of mr alan greenspan, chairman of the board of governors of the us federal reserve system, before the committee on finance, us senate, on 4 april 2001. * * * i am pleased to be invited to discuss some of the important issues concerning international trade and the attendant implications for the u. s. economy and the world economy more generally. in doing so, i want to emphasize that i speak for myself and not necessarily for the federal reserve. one of the most impressive and persistent trends of the last several decades is the expansion of international trade. trade across national borders has increased far faster than world gdp. as a consequence, imports of goods and services as a percentage of gross domestic products worldwide, on average, have risen from approximately 12 percent forty years ago to 24 percent today. to most economists, the evidence is impressively persuasive that the dramatic increase in world competition - a consequence of broadening trade flows - has fostered markedly higher standards of living for almost all countries that have participated in cross - border trade. i include most especially the united states. globalization as generally understood involves the increasing interaction of national economic systems. of necessity, these systems are reasonably compatible and, in at least some important respects, market oriented. certainly, market - directed capitalism has become the paradigm for most of the world, as central - planning regimes have fallen into disfavor since their undisputed failures around the world in the four decades following world war ii. globalization, in turn, has been driven importantly by advances in technology. by lowering the costs of gathering information and conducting transactions, new technologies have reduced market frictions and provided significant impetus to the process of broadening world markets. expanding markets, in turn, have both increased competition and rendered many forms of government intervention either ineffective or perverse. the recognition of this prosperity - enhancing sea - change in world markets and, in that context, of the counterproductive consequences of pervasive intervention has led many governments to reduce tariffs and trade barriers and, where necessary, to deregulate markets. these actions themselves have further promoted the very globalization that, interacting with advancing technology, spurred the deregulatory initiatives in the first place. the result of this process has been an advance and diffusion of technical change that has raised living standards in much of the world. the international trading system that evolved has enhanced competition and nurtured what joseph schumpeter a number of decades ago called “