It is time for a new liberal lexicon

22.03.17

Forget ‘globalisation’, says Bill Emmott — we should be making the case for openness and equality instead

The great populist-insurgent of 100 years ago, one Vladimir Ilyich Ulyanov, found time while in cozy Zurich planning his Bolshevik revolution to pen an explanation for why things were “kicking off”, as we say these days: his book was entitled Imperialism, the Highest Stage of Capitalism or, in its French translation, the last stage. Were his modern successor (if political opposite) Donald Trump to follow suit in a tweet, he might substitute “globalism” for imperialism, adding “BAD, SICK! BUILD THAT WALL!” Marine Le Pen, France’s far-right presidential candidate, would surely agree.

One can imagine another author of a century ago, however, taking one glance at Trump and Le Pen and demanding that his publishers issue an updated version of his two-volume epic, The Decline of the West. Oswald Spengler saw the west less in the form of Nato, the US-Japan alliance and the European Union, which all define it for us today, and more as a European-American civilisation that was heading for history’s garbage-can — a verdict that even the coolest observation of the Trump administration’s opening weeks in office could now seem to confirm.

For this is the biggest issue of our times: a matter of whether, having seen so much failure in foreign affairs since 2001 and in economic affairs since 2008, the world’s richest, long most successful countries — i.e. the west — might now be slithering unstoppably down a slope, their slide likely to be accelerated by the populist-insurgents who are coming to power. Or, to put it a cheerier way, the issue is whether the Trumps and Le Pens of 2017 can be proved as wrong as were Lenin and Spengler a century ago.

Certainly, the word “globalisation” lies at the heart of it. It is the centrepiece of the populists’ complaints, a word that has come to signify a new bogeyman, a set of rapacious powers beyond national control, economic forces that shape circumstances according to the interests of alien others, far away. A new sort of imperialism, in other words, one that through the exploitative mechanisms of “finance capital”, as Lenin and plenty of anti-globalists have called it, produces insecurity and feelings of powerlessness.

President Trump, as a beneficiary of finance capital in his business life, would not quite put it that way. Otherwise, why would he have filled his new cabinet with billionaires? Nor could Trump be expected to agree that the world is at the last, or even highest, stage of capitalism. He probably wants to make capitalism great again. But he would agree that globalisation is his enemy, with the curious twist that he considers foreign countries to have been the imperialist scourges of America, while most non-American anti-globalists would put it the other way around. It is the ultimate irony: the west invented what we now call globalisation and it is America, epicentre of the west, that is demonising its own invention.

This all illustrates a great piece of writing advice from George Orwell: never use a long word when a short one will do. Whoever coined “globalisation” has a lot to answer for. If only he or she had followed Orwell and used instead the word “openness”, we might have got to the point rather more quickly.

For there is something strange about the term the populists love to hate. It is that it implies an active effort to make everything global, a strategy to be planetary rather than national. Yet while that may be the sort of thing some companies include in their strategic plans — remember “think global, act local” — it doesn’t accurately represent any sort of public policy to “globalise” anything much at all. America, Japan, China, Britain, Germany: none of these countries has set globalisation as its active goal except, funnily enough, Britain now that it is leaving the EU.

Properly understood, globalisation has been an outcome, not an objective. It has been an outcome of policies that have treated openness as a virtue, including openness to trade, to ideas, to capital, to cultural interplay and, what is now for many the most sensitive issue, to migration.

In the early postwar decades, when trade liberalisation and foreign direct investment chiefly occurred in America and western Europe, this was basically a matter of transatlantic relations, although the French writer-turned-politician, Jean-Jacques Servan-Schreiber, sounded alarms about “Le Défi Américain”, the American challenge, as US multinationals proved nimbler at exploiting emerging pan-European markets. Then it took in Japan, the miracle economy of its time, soon to be labelled an “unfair” trader as it racked up surpluses and then, in the 1980s, “bought part of America’s soul”, as Newsweek described Sony’s acquisition of Columbia Pictures.

It was really only once China followed Japan’s lead by opening its economy to freer trade and foreign investment that the word globalisation took hold. More and more countries, all over the world, were opening up, in a process further fuelled by the way information technology was making communication cheaper and faster. Thomas Friedman of the New York Times jumped in and claimed in his 2005 book that “The World is Flat”, which would be unusual for a globe, though most people knew what he must mean, apart from the billion or so still-impoverished Indians for whom the world felt distinctly hilly.

Who could object to a borderless world, whether spherical or flat? John Lennon had sung that we should imagine it as a sort of paradise to which we should aspire. Ryanair has been bringing more parts of that world within the affordable reach of people of modest means. The internet and satellite technology have made the whole world more visible, almost touchable.

Yet here we are, with globalisation commencing some sort of a retreat and with the panoply of western institutions built during the past 70 years to keep the peace and facilitate openness — the World Trade Organisation, the EU, Nato, the UN in all its forms — under attack. When times feel hard, blaming foreigners, those rapacious powers of globalisation, is naturally tempting. Where this will lead, we cannot know. But to make it likelier to lead to better times rather than worse ones, it is as well to diagnose our ailments properly.

That is why, in good Orwellian manner, the short word is preferable to the long one. But it mustn’t be left on its own. For although throughout the history of economic and social development openness has been a necessary virtue, it has not been a sufficient one. In practice, it has needed some contemporary interpretation of another word alongside it: equality.

The virtue of openness is that it brings change in the form of better ideas, better ways of doing things, better sources of this good or that service. As the science writer (and now Conservative member of the House of Lords) Matt Ridley memorably put it in his 2010 book The Rational Optimist, progress and prosperity arrive “when ideas have sex”. In an age obsessed by Uber, this is known as “disruption”, but there is nothing new about it at all.

The trouble with change is indeed that it brings disruption, from which some people feel like winners and others feel like losers. For that reason, the societies that have absorbed and even embraced change most successfully have been those that gave a wide group of citizens some sort of a voice about what was going on, and about what collective efforts might be needed to deal with its consequences.

In good Orwellian manner, the short word is preferable to the long one. But it mustn’t be left on its own

We now call this democracy, as the equality of political rights has been extended to entire adult populations, but the same principle applied beforehand. Open societies such as 18th-century Britain and the Netherlands, which had relatively fluid elites and which traded ideas widely, prospered more than did closed ones. The secret to evolutionary success over the longer term has been the balancing of that openness with forms of equality that help to build social trust and provide reassurance.

So why has this gone wrong? The first answer is that it frequently goes wrong. The real question is whether stumbling societies can get on their feet again; whether they retain the power to evolve while rebuilding social trust. In 1975 the Trilateral Commission, a private body dedicated to dialogue between America, western Europe and Japan, published a report entitled “The Crisis of Democracy”. That report quoted Willy Brandt as having said, just before he stepped down as West Germany’s chancellor in 1974 that: “Western Europe has only 20 or 30 more years of democracy left in it; after that it will slide, engineless and rudderless, under the surrounding sea of dictatorship, and whether the dictation comes from a politburo or junta will not make that much difference.”

Not a great prediction, given that in the same period Greece, Portugal and Spain all replaced dictators with democracies, but Brandt’s mind was no doubt swayed by the terrorism and disorder being felt in several European countries, by the discovery of an East German spy in his own office, and the economic troubles all western countries were then mired in thanks to the 1973 oil shock.

The second answer, however, is that we’ve messed things up, again. We did so most spectacularly, and potentially fatefully, with the 2008 financial crisis, which we call global but was really American and European. That crisis reflected serious policy errors, of course, but also the excessive, because unequal, political power wielded by the financial industry. That is almost a decade ago now, but the effects live on, in household incomes that are no higher, and often lower, than in 2007. And, crucially, it lives on in the sense that the unequal grip of bankers and other oligarchs has been left largely unchanged.

Plenty of today’s ailments can be traced back to long before 2008, as technology disrupted labour markets, say, and demography raised the burdens on public finances of healthcare and pensions. But what 2008 did was to shake people’s faith in the whole system. It weakened or in some cases destroyed their belief that evolutionary solutions would eventually be found.

The sense of equality has been badly damaged, not just in terms of incomes but of political voice. Openness to fully free flows of capital has been shown to be not just dangerous to economies but also liable to corrupt democracies. Social trust has been eroded.

What Trump has done, as Lenin did a century ago, has been to sense the political winds and to sail into power thanks to their strength. Populists such as him and Le Pen get many things right: they should not be ignored. It is their solutions that are dangerous, because they are liable to close societies, to lead to fewer ideas having sex, and to damage the vital ability of democracies to evolve.

Now, it is up to all those democracies to show that, like Brandt 40 years ago, the declinists are wrong. To do so, they will need to restore the harmony between openness and equality. It can be done. The question is whether it will be done.

Bill Emmott will be speaking at the FT Weekend Oxford Literary Festival on Saturday April 1 about ‘The Fate of the West’, published by Economist Books in April (UK) and May (US)

The Data
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    Demography
    Knowledge
    Innovation
    Openness
    Resilience

    Demography
    Knowledge
    Innovation
    Openness
    Resilience

    Demography
    Knowledge
    Innovation
    Openness
    Resilience