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It's not aid but trade that will give us a fair planet, says Meghnad Desai.

Books on globalisation proliferate, but nowadays they rarely enlighten.

They still play the all for or against game with the subject, often take a narrow economistic view, or bang on about some ecological fad of the author. Peter Singer's book is, however, rich in thought, broad in its coverage of issues and thoughtful as well as thought-provoking. In confronting us with aspects of globalisation as they connect with issues of equity and justice, Singer raises as many questions as he answers, but his book will be useful for starting and sustaining debates. Enough praise, though: there are many problems along the way as we read Singer.

He starts with the clich¨¦ that since we live in a global village our ethical standards should conform to global rather than national or feudal standards. He quotes Marx's famous dictum about the hand mill giving us a feudal society and the steam mill the capitalist one. So the jet and the internet give us a global society. But, as Marx would say, so what? We still are divided by class - by income, wealth and opportunities, not to say race, ethnicity, religion and gender. Proximity may breed contempt as much as a feeling of community. To say that we live in a village or a society is not to presume harmony or fellow feeling. Villages may be cute to people living in cute little settlements in developed countries, from where they commute to well-paid jobs in the nearest (though not too near) city; that is, villages of like-minded people with similar incomes.

But in real life, villages and societies are theatres of conflict. Even today, Indian villages have areas marked out for untouchables; you know who is rich and who is poor, who eats with whom and who will be shunned like the plague. Villages are murderous places, be they in Serbia, Cyprus, China or even Northern Ireland. There has to be a basis for fellow feeling that is more than just a warm dose of philosophy.

Singer is aware of this problem. As he takes up the various issues of the environment, trade, humanitarian law and global justice in his chapters, he constantly comes up against the question of the basis for solidarity. After all, as he reminds us in his quote from the Victorian utilitarian philosopher Henry Sidgwick, we should be good to our kin and maybe even those who serve us and "to those of our own race more than to black or yellow men, and generally to human beings in proportion to their affinity to ourselves". The issue is not of white racism; for a black person the same applies with some substitution. We care the most for ourselves and then for our nearest and dearest, perhaps for our kith and kin, but least for those distant from us in blood and neighbourhood terms.

Singer wants a better world, a world that is less unequal, more other regarding, more just. He discusses global warming, the World Trade Organisation, the reform of the United Nations, the structure of international humanitarian law in detail and makes telling points. Thus, in discussing the WTO, he not only says all the obvious things about the fairness of trade but follows up with a careful discussion of the trends in poverty as well as in inequality. Poverty has fallen in the two decades of globalisation, most notably in Asia; on inequality, the jury is still out.

But his real contribution comes when he questions the right of governments to trade away the resources of a country for capital imports or some other financial return. He asks when can we say that a government has legitimacy in doing so? This in turn raises questions about democracy. If trade has to take place on a basis of voluntary exchange between legitimate political entities, then a Mobutu or a Marcos or a Trujillo has no right to sign away resources. How you stop them from doing so is a moot point, however.

The core issue is that although we may live in a global society, most of us live within blocks called states and the international system is besotted by the notion of sovereignty. Indeed, many of the opponents of globalisation insist that a country has a right to treat its citizens as it sees fit. Any outside interference by the Great Powers, especially the US, is deemed immoral. Witness the unease about North Korea and Iraq.

Sovereignty allows you to starve and kill your people. The UN has a charter that enshrines this logic, and interference runs into legalistic obstacles, for example a veto by any of the five permanent members of the Security Council. There has been some breach in this doctrine during the 1990s, but when push comes to shove, the UN often fails. It failed in Rwanda, and if we had waited for a UN resolution in Kosovo, Milosevic would still be ethnically cleansing without any problem.

Singer is troubled by this and pursues the critique of the UN so far as to say that it is itself undemocratic in giving excessive powers to the five permanent members. We need some popular representation as well as qualified majority voting to replace the vetos. But again the question is: who will bell the cat? Who has the power to reform the veto system since the permanent five can block any reform proposal by using their veto? Since we have enshrined the territorial (often mislabelled nation) state in our international relations, the Sidgwick morality translates as the following: we should care about our fellow citizens and not about foreigners. How many of us in the UK noticed the seven who died in the recent Columbia space shuttle disaster - unlike the inhabitants of Israel, India and, of course, the US, who lost one or more of their citizens? "Large earthquake in Chile, not many British dead" is still a typical headline in our heads.

Singer thinks that citizens of the rich countries, especially the US, have a duty to be more generous to the people of the developing countries. He excoriates the US record in foreign aid - 0.1 per cent of gross domestic product, rather than the UN target of 0.7 per cent (the UK gives about 0.32 per cent, but the figure is rising). Even private giving in the US for international causes is not remarkable - only 0.04 per cent, that is less than the official level. And yet American citizens, when polled, think that the US gives 20 per cent but should give only 5 per cent or 10 per cent.

But Singer omits to ask how much they give to domestic causes. After all, my altruism may extend only to "my own" poor and not to the foreign poor, even though they may be poorer than my own. The truth is, our modern democratic polities are mean even to their own poor, so how can we expect them to behave better to the rest? Is poverty not our problem too?

Adam Smith says in his Theory of Moral Sentiments that I feel more if my finger is pricked than if there is an earthquake in China. Economics as moral philosophy or social science has always been chary of relying on altruism as a reliable motive for human behaviour. No doubt people are other minded and indeed ought to be more so. But you cannot fashion societies, let alone schemes of reform, on this assumption. That is why trade is a powerful incentive for betterment: it is mutually beneficial.

Even though the gains from trade may be unevenly distributed, neither side can lose from trade. All trade is from this point of view fair.

Globalisation is nothing but the resurgence of capitalism in the late 20th century. As foreign direct investment spreads to the poor countries of Asia, many of the people living there decide to quit their life of rural idiocy and join sweat shops in towns. This may seem horrible to moralists of non-governmental organisations, but it is betterment for those making the decision to move. No doubt a concern for their rights in developed countries will price them out of their jobs. Thus does altruism of the rich often kill the poor by kindness. After all, we did not find Europeans marching in their Social Forum in Florence against the vast subsidies given to European farmers who overproduce and dump food on poor countries.

And that is what we should expect and build on. People and nations will generally pursue their narrow self-interest. What will still bring about higher standards of living in poor countries is not altruism or aid but flows of capital seeking higher profits aligned with cheap labour, so long as the products of this marriage are allowed access to markets in the rich countries. It would be better if there were greater competition among the world's industries and no soft regime of intellectual property rights that allows pharmaceutical companies of rich countries to translate their monopoly power into exorbitant prices for retroviral drugs. It would be better if the US and the European Union did not protect their agricultures to the tune of about $500 billion. Forget foreign aid; just stop such crude waste of money.

The economy can operate on the basis of minimal altruism and may indeed be better for it. Where Singer is on stronger grounds is in power relations - humanitarian law, UN reform. But here, individual morality is irrelevant.

It is raison d'¨¦tat , that is, power relations, that prevails. Of course we ought to behave better. We should be cooperative. But politics does not have its Adam Smith yet and no simple spring of action leading to actions that are mutually beneficial. Power has a zero-sum logic. If the powerful forbear, then their capacity to harm could be contained. They might even sign up to treaties and covenants. But if they do not abide by them, all you can do is stop them if you are powerful or wring your hands if you are weak. Hence Kosovo can be prevented and perhaps Iraq will be invaded. But do not expect China to get a summons about its human-rights record, nor the US to be probed about its capital punishment practices that violate human rights.

It would be nice if the world were as Peter Singer wants it. But our world is not one world. Not yet.

Lord Desai is director, Centre for Global Governance, London School of Economics.