John Micklethwait Interview: Conversations with History; Institute of International Studies, UC Berkeley

Globalism and the Conservative Movement in the United States: Conversation with John Micklethwait, Editor in Chief, The Economist; February 6, 2007, by Harry Kreisler

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Globalization

Let's talk a little about globalism. You've written a book on globalization which is offering a very positive perspective on what globalization is achieving for the world. Let's walk a little through that. One of the things that I'm curious about is terrorism, the 9/11 attack and America's response. To what extent has that unraveled some of the possibilities that were there, or is it just a temporary setback in terms of what these forces will do?

The book we wrote on globalization was a bit ago, and it actually came out just before the attacks, interestingly. But I still stand by the basics of the book. The basics of the book was saying that globalization is a cruel, uneven process but it is an amazing thing for the world. It's dragging millions and millions of people out of poverty. But the danger of this economic process, which is good and useful, is that its political constituency is very limited. The losers of globalization are very easy to identify and the winners are often much harder. The shuttered steel plant is easy, all the people who gain by having cheaper steel in the economy are much wider and more diffuse.

The big thing which also we kept on harping back on that book, which I still do, is the idea that you cannot be an economic determinist about globalization. There's a tendency, and I think particularly in the Bay Area (to pick on the Bay Area perhaps unfairly) to think that if something has technology behind it and something has economic logic behind it, it will work, it will stay. Globalization has both those things behind it, and yet fundamentally politics, nationalism, all those things come into play. A lunatic in a cave in Afghanistan can bring down two of the biggest buildings in New York and change the world. You know, everything was against him, and yet fundamentally those almost medieval feelings could come back -- and quite well documented, you go back a hundred years to the end of the first stage of globalization, you see people writing similarly optimistic books to the title ones you see nowadays, but it all went wrong. Peter Drucker has a statement somewhere along the lines about whenever economic logic and political illogic collide, political illogic eventually will win the day. And that is what worries me a great deal.

Just thinking it about actually, because you asked me about it, I think one thing which we didn't perhaps focus enough on in that book, which has come out more since, has to do with income and equality: the questions about the fact that median wages have stagnated whilst people at the top have gone up. There is an incredibly long argument, which is probably best not to get into, about whether technology or globalization is to blame for that state of affairs, and roughly speaking, I would probably put much more blame on technology, but that doesn't really matter from a political viewpoint, because from a political viewpoint people will blame globalization. Globalization is unpopular. Foreigners making the same goods as you is unpopular. Technology isn't; technology is seen as progress. And so that is added to the levels of problems with [the perceptions about globalization].

What do you see as the way of dealing with this important problem that you've identified, this interface between politics and the economics? What we see again and again is the lack of accountability on the part of international political institutions, the UN, and so on, but also the inability to come together to solve problems such as trade balances and monetary issues. Talk a little about that.

Trade is almost a perfect example. You actually with trade have probably one of the better functioning organizations in the World Trade Organization, and one which seems to work in a much better way than the UN, and yet fundamentally it's still amazingly difficult, and one of the reasons why is because so much politics is still national. It's national [politics] that drive things forward. Look at the French and the Americans arguing about farm subsidies -- two very sophisticated groups of people, yet when it comes down to it they're at each other's throats.

There's a revealing bit in Adam Smith where he talks about how you would feel if you lost [one of] two things. One, you were told that there'd been a great earthquake in China which had [killed] a myriad of inhabitants. So, millions of people have died in a great earthquake in China. One the other hand, the pain you would feel if you lost your little finger. And his point was simple. In the end, you would say, "How terrible it was about all those people in China," but you wouldn't care quite enough, whilst your little finger would really hurt you. What he was trying to say was that all politics fundamentally is local, at least in that sense. That is the reason why; that and a degree of economic obstinacy about the idea that somehow exports are good and imports are bad. It doesn't make sense economically but people get away with it. It's a way in which politicians like to debate things. So, I think it is difficult, yes.

So, the national identity, the focus on borders, all of the things that we associate with the sovereignty of the nation state, still are there, and still are residual problems in the face of all of this ...

Very much so. Look at, as an example, religion or nationalism. Both of them, in a way, are things which people hoped would somehow go away. You could see this a lot in the founders of the European Union. Strangely, if you set people free -- you see this in the Eastern Bloc, you can see this in China to some extent, and you certainly see it in the Middle East -- you withdraw all these tyrannies and you give them democracy, [and] what did they vote for? They vote for nationalism -- those emotions come out -- and they vote for religion, often. People flock to churches. Those [forces] have an effect. There are these emotions which people, for good or bad reasons, find very, very important. Look at the European Union and you see what's happened on the edges. For example, in Britain, you suddenly see the huge rise in [nationalist sentiments] -- what's a smallish rise in Scottish independence and quite a big rise in English independence, saying you know, "Why the hell have we got these people?"

Let's take an issue -- you mentioned the environment. Let's pick up on that again. Is that a place where we're beginning to see political responses to a problem that is global, a problem that to some extent results from the way multinational corporations have not been regulated enough, or are we beginning to see a solution? That oil company thing you may not agree with, that ...

No, I think the multinational thing is rubbish, basically. Multinationals are such a small part of the world economy. The reason why we have so much pollution is much more [because] local companies are doing it, and local farmers who are causing all this pollution. It's one of those tired clichés to blame it on multinationals. There are lots of terrible things that multinational companies do. The environment they may not be great on but it's not really their fault. It's the fault of governments dealing with it.

If you'd asked me two years ago I would've said it's the absolute brilliant example of the "tragedy of the commons" where it's so difficult to get people to do things because they don't think it's in their own interest. I think in a weird way that has changed, people have begun to realize -- I mean, even last week we saw George Bush suddenly talking about climate change. It's partly to do with the evidence changing. The Economist -- we were skeptical about some of the economics of what people were talking about [with] global warming. [The] science [of global warming] we've always been slightly more supportive of, [because of] the evidence there. But as evidence mounts people change their minds, and I think you can see that in a whole variety of other people.

In some ways it could be the test case. You have America, India, China -- no interest at all two years ago in having anything to do with Kyoto. Nothing really will matter unless America comes on board, and India and China come on board. The rest of what the other people are doing in terms of climate change really doesn't amount to much. I was giving an argument with someone in Britain the other day where I was saying Britain should adopt a carbon tax or do things like that, and somebody came quite strongly and not illogically and said, "Well, what on earth is the point, as long as the Americans just blow the stuff up into the air with gay abandon, and the Chinese and Indians don't even begin to start doing stuff? Then really, why should the British impose barriers on themselves, if nobody else will move?" There was a logic to that, but there is now at least the first signs of change, and actually Bush is an interesting figure like that. Bush sees himself as more green than people might imagine. He thinks of his ranch as very, very green, [although] his vision of greenery doesn't altogether seem to accommodate extractive industries. But all the same, there is that possibility. And this, I think, is a chance for a president in his last two years to seize on something. He could come up with a different version of something closer to Kyoto, and that could have a real impact on the world.

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