Time for a new liberal lexicon

18.03.17 Publication:

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 tome was entitled “Imperialism, the highest stage of
capitalism” or, in its French translation, the last stage. If his modern successor, Donald Trump, were to follow
suit in a tweet, he might substitute “Globalisation” for imperialism, adding
“BAD, SICK! BUILD THAT WALL!” Marine Le Pen would surely agree.

author of a century ago might however take one glance at Trump and Le Pen and
demand 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 civilization 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.

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 – ie, 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 knocking on its door. 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.

the word “globalization” 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 harsh, exploitative
mechanisms of “finance capital”, as Lenin and plenty of anti-globalists call
it, produces insecurity and feelings of powerlessness.

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? It would be as if Lenin had appointed Kaiser Bill and King George
V to his Council of People’s Commissars after his own November revolution.

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 globalization 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 globalization and it is
America, epicentre of the West, that is demonizing its own invention.

all illustrates a great piece of writing advice from George Orwell: never use a
long word when a short one will do. Whoever first used the word globalization 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.

there is something strange about the term the populists love to hate. It is
that it implies a sort of active effort to make everything global, a kind of
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 “globalize” anything much at all. America, Japan, China, Britain, Germany:
none of these countries has set globalization as its active goal except,
funnily enough, Britain now that it is leaving the EU.

understood, globalization 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 liberalization 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 Defi Americain”, 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 labeled 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 globalization took hold. More and more countries, all
over the world, were taking part in the openness, 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

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 globalization 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 inter-connectedness—the World Trade Organisation, the EU, NATO, the
United Nations in all its forms—under attack. When times feel hard, blaming
foreigners, those rapacious powers of globalization, is naturally tempting. Where
this will lead, we cannot yet 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.

We now call this
democracy, as the equality of political rights has been extended to the whole
of 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 a newly
formed agent of globalization, 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 and individuals within it. That is nearly 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 health-care 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

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, if followed, to close societies, to lead to
fewer ideas having sex, and to damage the vital ability of democracies to

Now, it is up to all those
democracies to show that, like Willy 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.