A Future Perfect: The Challenge and Promise of Globalization
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On the other hand, a second, nastier trend is also at work. Ever since a certain tea party in Massachusetts, the need for nourishment has been a potent force for transatlantic disharmony. Food safety now looks like one of the easiest places for ugly nationalist emotions to hide. Europe’s Common Agricultural Policy is the single most harmful piece of protectionism in the world; its American equivalent is not much better. OECD countries spent $362 billion on farm subsidies in 1998—around 1.4 percent of GDP. Politicians, whether they are presidential candidates in Iowa or prospective deputies in Normandy, conspicuously avoid talk of reform. The vilification of Monsanto (not to mention the fuss about Coke) was just one example of a growing anti-American slant to the debate about food in Europe. The GM controversy comes in the middle of other battles over beef, cheese, and bananas. Most trade wars do not start with a resounding declaration that trade is evil; they start over rather silly issues that produce retaliation and then counterretaliation. In 1999, the world’s two biggest economies, the United p. 286 States and Europe, almost started a full-scale trade war over bananas, a fruit that they grow few of, that provides them with next to no jobs, that matter to only a handful of companies in each region, and that, by common admission, have no strategic importance to either side.
Unlike steel and microchips, food is personal. To a Frenchman, the idea that Camembert and Brie will be replaced by Cheez Whiz strikes at his very essence. In July 1999, France’s farm minister pointed out that America has the “worst food in the world.” Some forty thousand people around the world are members of Slow Food, a movement founded by an Italian food critic in 1986 as a protest against the opening of the first McDonald’s in Rome.[22]
Certainly, many of those who long for a backlash against globalization regard food as one of the main opportunities. John Gray thinks that America’s sinister enthusiasm for Frankenstein foods could just be the thing to destroy the world trading system that he detests. In Japan, where subsidies for rice are regarded as nonnegotiable trade issues, radicals such as Mika Iba believe they finally have an issue that will make people see the light about globalization. Iba at first sight has very little in common with rice farmers. An obvious member of a distinctively global caste—the herbal left—right down to her hair band and granny glasses, she is nevertheless a passionate opponent of globalization: She thinks that the fragile earth is being sacrificed on the altar of corporate greed, along with a gigantic bundle of “human and social rights.” Her cluttered office in Tokyo is covered with posters and books that all proclaim—in English, naturally—her interest in a series of issues that the average Japanese salaryman would dismiss as disturbingly Western. “Assert Women’s Rights: Resist Globalization” is not a slogan one hears much in Japanese offices, let alone its paddies.
Iba, like many other radicals around the world, has discovered that food is a touchstone for discontent. Her message—that America’s agribusiness, with its factory farms, fiendish laboratories, and foul pesticides, is driving small farmers out of business and leaving consumers with no choice but to eat its tasteless products—resonates widely. Ten years ago, you could go into a Japanese supermarket and choose from a wide variety of foodstuffs, many of them Japanese, she says; now you can get anything you want, so long as it is agribusiness generated. She has also managed to weave globalization and food into her wider preoccupation with women’s rights. Food used to be controlled by women, she says. Now they are lucky if they are allowed to function as the handmaidens of foreign scientists and capitalists. Iba urges Japan to rid itself of its dependence on foreign food. A particularly effective recruiting tool of hers is to take supporters to see giant American farms in places p. 287 such as Iowa. “People just hate it,” she says. “It’s so big, so unnatural. There is no community, no children, no humanity, just endless fields.”
Block Against Block
The fuss about food could fizzle out, though it is extremely hard to see how. But it certainly gives yet another helping hand to those in Europe and Asia who think that regionalism is a more civilized alternative to globalization. Most economists may view regional trading areas such as the EU and ASEAN simply as building blocks of global free trade. But there are plenty of pragmatic politicians who see regional blocs as fortresses against the forces of global anarchy and barbarism. Isolated nation-states are too feeble to resist such powerful enemies as hot money or junk culture, so the only hope for like-minded countries is to pool their resources.
This view is almost official doctrine among the French elite, which has predictably taken the strongest line against GM food; but it has many surreptitious allies around Europe. The EU has repeatedly put regional comfort above its global calling: Witness its unwillingness to absorb the former communist states of eastern Europe and its inability to solve the problems of the former Yugoslavia. The end of the cold war has already dissolved some of the glue that bonded Europe to the United States; repeated conflicts with the United States over trade and foreign policy are dissolving it further still. Despite the trade liberalization of the 1990s, Europe’s economy was only slightly less protected by the end of the decade than at the beginning: In 1999, the citizens of Fortress Europe were forced to spend about 7 percent of the EU’s GDP—or $600 billion—for the privilege of keeping cheaper products out.[23]
Some Asians calculate that a pan-Asian empire is their best chance of preserving their way of life against the toxic influence of the West. During the 1980s, the same Japanese bureaucrats that Iba frowns upon urged a “flying-geese strategy,” pushing their country to invest trillions of yen in ports, dams, and other megaprojects across Asia. Asians need to band together to protect their traditions from the Western cultural onslaught, the argument goes, and the best way to do this is to strengthen Asian economic ties and be self-sufficient.
Regionalism is particularly alluring because it seems to gather up most of the benefits of economic integration without the unpleasantness of having your car industry be run by somebody several thousand miles away. Indeed, at first sight, the division of the world into three giant regional trading blocs p. 288 does not look too cataclysmic. The two biggest blocs are already fairly self-contained. In the eleven European countries that have introduced the Euro trade with the rest of the world accounts for only 11 percent of GDP, and in the United States it accounts for 14 percent. Regional fortresses would still leave plenty of room for companies to compete and for countries to exploit comparative advantages: France can continue to trade its wines for Germany’s cars.
In fact, the loss under such a system would be immense. The EU and the United States do four hundred billion dollars a year worth of trade with each other. And the long-term cost would be even bigger: Europe would lose its access to America’s expertise in high technology (to take just one example); America would lose its access to Europe’s luxury industry (to take another). Asia would lose its access to the world’s markets. Everyone would lose some of their incentive to innovate and specialize. The creation of regional fortresses would also exacerbate all that is worst in each region. The European political class would get more self-important, and the European welfare state more unwieldy. The United States would become isolationist. The poorer parts of the world—particularly Africa—would lose massively, as barriers to the world’s markets would condemn them to stagnation. And the sight of the rich world patrolling those barriers would exacerbate political antagonisms.
The biggest loser from regionalism, however, would not be this or that region but liberty itself. The freedom for Americans to drive German cars or the freedom for Germans to use American software might seem a little prosaic, but it rankles when you lose them. What rankles even more is that the loss of these liberties leads to the loss of others. Travel becomes more difficult. Exchange students find obstacles in their way. And as continents turn in on themselves, the exchange of ideas and arguments that drives intellectual enlightenment dries up. A Frankenstein world could yet evolve out of the squabbles about Frankenstein foods.
p. 289 There is only one cure for the evils which newly acquired freedom produces; and that cure is freedom. When a prisoner first leaves his cell he cannot bear the light of day: He is unable to discriminate colors, or recognize faces. But the remedy is, not to remand him into his dungeon, but to accustom him to the rays of the sun. The blaze of truth and liberty may at first dazzle and bewilder nations which have become half-blind in the house of bondage. But let them gaze on, and they will soon be able to bear it. In a few years men learn to reason. The extreme violence of opinion subsides. Hostile theories correct each other. The scattered elements of truth cease to contend, and begin to coalesce. And at length a system of justice and order is educed out of the chaos.[1]
IF ONLY MACAULAY were completely rather than just mostly right. It is tempting to argue that the responsibility for making globalization work—for protecting it from its enemies, smoothing out its imperfections, and spreading its rewards—lies with the process itself. The best way to improve the living standards of the poor is, indeed, to give them access to the best bargains and the brightest ideas that the world has to offer. The best way to prevent the sort of turmoil that has engulfed Asia, Russia, and Latin America is to subject their crony-dominated economies to outside inspection and international competition. Give globalization time, and it will prove itself.
The problem is that the world is not quite as simple as that. Globalization, no less than the nineteenth-century liberalism that so attracted Macaulay, needs to be fought, politicked, and argued for. Things rarely change of their p. 290 own accord; somebody has to change them. Schools do not build themselves, tariffs do not disappear. Lousy policy in the wake of the First World War ushered in an era of dog-eat-dog protectionism that crippled the economy and nurtured Nazism. A more enlightened series of decisions in the wake of the Second World War laid the foundations for decades of expanding trade and roaring prosperity. Are today’s leaders worthy of comparison with the giants who remade the world in the 1940s? Or are they more like the homunculi who ushered in the drift and disaster of the 1920s? And, above all, what should they do?
A Place in History
The responsibility for making sure that globalization works lies principally with two groups of people: politicians and businesspeople. Neither group seems an ideal steward. Politicians make a profession of appeasing vested interests; businesspeople would rather think about making money than improving schools. If Macaulay were right, it would be a simple matter of reminding these reluctant guardians of the common good. But the common good can sound like a pretty vague goal when it means sacrificing immediate self-interest.
And yet there are a few glorious examples of people from each of these professions who have made exactly that sacrifice and who have been rewarded amply by posterity. Consider as role models Sir Robert Peel and John D. Rockefeller. Each man could easily have been remembered as just another examplar of human folly. Peel received a seat in the British Parliament as a twenty-first birthday present from his father, a parvenu cotton spinner who worked his child laborers fifteen hours a day and expected the day workers to slip into the beds vacated by the night workers. The young Peel spent most of his leisure time on the great landed estates of Tory England and was emotionally drawn to Lord Eldon’s curmudgeonly “thin end of the wedge” version of Toryism, under which you should defend all traditions, however vile, in order to prevent everything from collapsing together.
For his part, Rockefeller was the architect of one of the most ruthless business monopolies of the nineteenth century: Standard Oil.[2] Rockefeller’s business methods were so unscrupulous that he became the most vilified of all the robber barons—a hard contest to win. For some time, his most famous contribution to society came from the fact that he had managed to create such a threat to competition that the American government was forced to invent antitrust policy.
p. 291 But both men illustrate the virtue of the long view. In 1846, Peel split the Conservative Party—and earned the passionate hatred of his landowning cronies—by opposing the corn laws and championing free trade. The split kept his party out of office for a generation, but in the long term it benefited both conservatism and Britain. It prevented the Tories from degenerating into a die-hard party of the landed elite, a fate that befell similar parties on the Continent, and instead turned it into the greatest vote-gathering machine of the twentieth century. Further, ditching the corn laws advanced industrialization by reducing the price of food.
For his part, Rockefeller remade his image by rethinking philanthropy. As with the other robber barons, there were selfish reasons: self-promotion, a desire to protect his property from expropriation, even a sense of wanting to protect his children from ruination. (“You must give it away,” one of Rockefeller’s advisers urged him in 1905. “It is rolling up like an avalanche that will crush you and your children and your children’s children.”) But philanthropy was also plainly part of his character: He started giving away his money as a clerk in Cleveland, never handing over less than 6 percent of his annual income. By the end of his life he had given away five hundred million dollars, creating one of the most powerful universities in the country, the University of Chicago, and founding several medical institutions.
Such leadership on either the political or the commercial front is in scarce supply these days. For businesspeople, there are some good excuses for inaction—not least the prevailing wisdom that they should stick to business rather than worry their rich little heads about anything so meaningless as society. In politics, we are caught in a downward spiral of expectations: Public-opinion surveys show that faith in government is sinking relentlessly lower; and the lower it sinks, the less room politicians have for heroic actions. It is hard to think of any substantive issue on which Bill Clinton really risked his credibility—and he was a man of iron resolve compared with most politicians in, say, Japan. The times call for Brobdingnagian leaders; we are led by Lilliputians instead.
For a modern Peel or Rockefeller, the potential list of things that might spread the benefits of globalization is a long one, and one rife with clichés. Chapters—nay, books—stretch before us on the need to reform education, construct a new world order, retrain older workers, finance global public goods, and reach out to the socially excluded. The danger of composing such lists is that they tend to be as disingenuous as they are unreadable. We have tried to point to opportunities for profound change, but we remain skeptical about the likelihood of such change happening, other than in the direst p. 292 emergencies. Of course, a full-blown trade war between NAFTA and the European Union would prompt a few clever souls to reconsider protectionism, but by then what would be worth saving? It would be easy to suggest that the people of Nigeria merely embrace the economic policy of New Zealand, borrow the FBI for a year to clean house, and recruit the staff of the Bundesbank to oversee monetary policy. But it is not going to happen.
Instead, the accent has to be on what Sidney and Beatrice Webb christened “the inevitability of gradualism”: intelligent and relentless pressure in the direction of reform. If the odd glorious revolution happens along the way, so much the better, but we cannot count on it. We will consequently confine our discussion to a limited number of examples that most people of all political persuasions would support: the case for reinventing government; the importance of comparing education performance across borders; the power of partnerships between government and business; and, for the budding Rockefellers, the awesome potential of American philanthropy.
The Three Great Leaps
The idea that politicians need to “rethink the nation-state”[3] has attracted a lot of fire from two sorts of people: hard-line globalists who argue that, since the nation-state is doomed to wither away, there is little point in reforming it; and old-fashioned leftists who argue that the state is being reduced to a puppet of international capitalism. These arguments underestimate both the power and the flexibility of the modern state.
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The nation-state, as we saw, is not going to disappear any day soon; indeed, in most of the world, government has continued to expand. Globalization undoubtedly punishes arbitrary state actions and brings closer scrutiny of economic policies. But it does not force states into a common mold or force them to follow a fixed agenda. What works in New Zealand might be inconceivable in New York or New Delhi. Globalization is the enemy of incompetence, not idiosyncrasy.
This undermines the great excuse of all the Lilliputians who govern us: They have been rendered powerless. If they could be forced to read one contemporary book (once, naturally, they have been tested and retested on the intricacies of this one), it should be David Landes’s The Wealth and Poverty of Nations. Prosperity, Landes shows, has always followed policy. In discussing why Britain pulled away from its rivals in the eighteenth century, Landes explains that this was “itself an achievement—not God-given, not happenstance, but the result of work, ingenuity, imagination and enterprise.” p. 293 Britain, as he puts it, “had the makings, but it also made itself,” through the sort of institutions it created, its system of property rights, its meritocratic traditions, and so on.[4] Time and again, leaders cripple their countries. Islam rejected clocks because they might undermine a mullah’s skill in bringing people to prayer. It has also effectively eliminated the half of its talent pool that happens to be women and is mollycoddling the other half. “One cannot call the male children ‘Pasha’ or, as in Iran, tell them that they have a golden penis without reducing their need to work,” notes Landes.