A Future Perfect: The Challenge and Promise of Globalization

by John Micklethwait

  Marx would hear Asian voices and see white schoolchildren proudly wearing T-shirts with pictures of black English soccer stars. Multicultural London (which is now home to thirty-three ethnic communities, each with a population of more than ten thousand) might well exhilarate a man who was called “the Moor” by his own children because of his dark complexion. He could stop at almost any newsstand and pick up a copy of the Frankfurter Allgemeine Zeitung that would be no more than a day old. Nearly swept off his feet by a passing Rolls-Royce, he might be more surprised to discover that the vehicle, like the rest of Britain’s car industry, is now owned by a German company.

  If Marx were to venture back to his old haunts in Soho, he would find a cluster of video-production companies and advertising agencies that sells its services to the world. If he climbed up to Hampstead Heath, the Marx family’s favorite picnic spot, he might be surprised to discover that the neighborhood’s most expensive house is now owned by an Indian, Lakshmi Mittal, who has built up one of the world’s biggest steel companies. London is home to around a quarter of Europe’s five hundred biggest companies. Its financial-services industry alone employs directly or indirectly 850,000 people, more than the population of the city of Frankfurt.[4]

  Yet even as Marx marveled at these new creations of the bourgeoisie and perhaps applauded its meritocratic dynamism, it is hard to believe that some of the old revolutionary fires would not burn anew. Poverty of the grinding sort that inspired Engels to write The Condition of the Working Class in England (1845) might have disappeared; the rigid class system of the Victorians might have evaporated; Marx might even be slightly shocked by the absence of domestic servants. But the founder of communism would have no trouble tracking down inequality and sensing that it was on the increase.

  Barely ten miles separate elegant Chelsea (where, ironically enough, the Marx family lived when they first came to London, before being evicted for not paying the rent) from the crumbling wasteland of Newham, but they p. 331 seem like two different countries. In one, you might be forgiven for thinking that the biggest problem is the availability of residential parking permits; in the other, two thirds of the sixteen-year-olds fail their basic high-school exams, and the mortality rate for people under twenty-five is 50 percent above the national average.[5] As he studied the newspaper and looked at the pictures on the flashing television screens of, say, Somalia or even parts of Los Angeles, Marx might well see globalization as a process that is only just beginning—a job half done. Once again, he might consider, the world is hurtling toward a “crisis of capitalism”—not unlike the last one that his own theories did so much to make ruinous.

  The Priority of Liberty

  This, then, is the beginning of the future, perfect or not, that we have tried to describe in this book. The fact that it has much in common with the world of yesterday (and especially the world of a century ago) is not surprising. History condemns us to repeat ourselves, though not necessarily to repeat all our mistakes.

  Throughout this book, we have tried to build a measured defense of globalization. Yes, it does increase inequality, but it does not create a winner-take-all society, and the winners hugely outnumber the losers. Yes, it leaves some people behind, but it helps millions more to leap ahead. Yes, it can make bad government worse, but the onus should be on crafting better government, not blaming globalization. Yes, it curtails some of the power of nation-states, but they remain the fundamental unit of modern politics. Globalization is not destroying geography, merely enhancing it.

  In most cases, the bulwarks of our defense have been economic. The simple fact is that globalization makes us richer—or makes enough of us richer to make the whole process worthwhile. Globalization clearly benefits producers by giving them greater choice over their raw materials, production techniques, and human talent, not to mention over the markets where they sell their goods. Equally clearly, globalization benefits consumers by providing them with better goods at better prices. Globalization increases efficiency and thus prosperity.

  These economic arguments need to be made, and with far more eloquence, by our leaders. Too many politicians take the Clintonesque tack of defending the easy bits of globalization—typically, the successes of their own country’s exports—and shying away from talking about the benefits that flow, say, from imports or foreign takeovers of “their” companies. This is p. 332 not only economically illiterate but dangerous, because it allows myths to emerge, such as the idea that globalization is a zero-sum game. But there is also a broader need to wrench globalization from all the dry talk of markets penetrated, currencies depreciated, and GDPs accelerated and to place the process in its proper political context: as an extension of the idea of liberty and as a chance to renew the fundamental rights of the individual.

  Nowadays, “liberalism” has become just another political slogan. In the United States, Ronald Reagan made it into something of a swearword for Republicans, and Democrats still use it gingerly. Around the world, liberal parties stand for everything from conservatism (Canada), fascism (Russia), and people with beards who want to legalize cannabis (Britain). Yet most of the tenets of modern democracy actually stem from the classical liberalism of a group of writers and thinkers who, from the seventeenth century onward, argued that society should be based on the rights of individuals rather than on the hierarchy of a “great chain of being,” stretching from God downward, with everyone assigned a fixed place.

  This belief in individualism, which was at the heart of both the Enlightenment and the American Revolution, was actually a fairly global movement itself. Its foundations were laid in Britain by groups such as the Levelers (whose belief that “the poorest he in England has a life to live as much as the richest he” so unsettled their rulers) and thinkers such as John Locke, who argued that individuals had a right to break their contracts with their sovereigns if he or she trampled on their rights. Later British theorists such as Adam Smith and John Stuart Mill refined and expanded the creed, turning it into the foundation of a new academic discipline (economics) and a new branch of philosophy (utilitarianism). But by then it had been carried around the world—and adapted to local conditions—by everybody from Thomas Paine (who announced the birth of the “rights of man”) to Thomas Jefferson, Voltaire, and Alexis de Tocqueville. As we have already seen, both John Maynard Keynes and Friedrich von Hayek claimed allegiance to it (though Marx, of course, despised it).

  In the process, liberalism has become something of a broad church, yet it always returns to two fundamental principles and one fundamental prejudice. The first principle is that rights belong to individuals rather than to governments or to social groups. The second is that the essence of freedom lies in individual choice. The ideal society allows individuals to make as many decisions as possible without reference to some external authority. The fundamental prejudice is skepticism and an abhorrence of certainty. One reason why liberals are drawn to free markets is because they distrust the power of p. 333 bureaucrats. Absolutist creeds, whether those of the seventeenth-century papacy or of Marxism, are to be distrusted. And, crucially, liberalism—unlike its bastard child, libertarianism—is also distrustful of itself: It may be predisposed against governments interfering in people’s lives, but it is quick to admit that there are times when this makes sense—for instance, in order to tax them so that it can provide education and health care.

  The twentieth century was an awkward century for liberalism. The creed managed to see off the horrors of totalitarianism, yet by the end of the century the state was enormously more powerful than it had been at the beginning. The Fabian presumption that “the gentleman in Whitehall” or Washington knows “better what is good for people than the people know themselves” lingers not only in the nannyish environmentalism of Al Gore but in the preachy moralism of many Republicans. (In Britain, Blairism has even managed to combine both.) As for technology, for much of the twentieth century it only strengthened John Stuart Mill’s lament that “the tendency of all the changes
taking place in the world is to strengthen society and diminish the power of the individual.” Mass production reduced workers to cogs in an infernal machine. Computers gathered information on us all.

  The Open Society

  Globalization redresses this balance in two ways. The most obvious is that it puts limits on the power of government. This advantage is most obvious in commerce. Free trade makes it easier for businesspeople to escape from interfering officials by moving their money and operations abroad. As we have pointed out, companies seldom want to flee, but the very fact that they might acts as a brake on those officials. The sullen fury of a Bangalore bureaucrat staring at the satellite dishes that allow “his” software companies to export their products without his grasping fingers interfering would delight Mill (even though he worked for the often more extortionate East India Company). More important still, free trade allows ordinary people to buy products from companies who make the best of their kind rather than from those that enjoy cozy relationships with governments. Similarly, they can put their retirement money in pension funds that are not tied to schemes of national aggrandizement.

  Governments are not retreating from this easily. They can still slap controls on the flow of capital (as Malaysia did in the wake of the Asian crisis) or even on the flow of information. (Singapore employs a staff of censors whose job is to surf the Internet ceaselessly looking for objectionable inforp. 334mation to block.) But the world is nevertheless a lot freer today than it was just a few decades ago, before globalization got into high gear. In 1966, for example, the British Labor government imposed a travel allowance that virtually confined Britons to their own country except for two weeks’ worth of penny-pinching foreign vacation. Today, any politician who suggested such a restriction, even to fight terrorism, would be carted off to an asylum.

  Indeed, the recent history of globalization can be written as a story, albeit an uneven story, of spreading a political culture that is based on individual liberty to areas that have been longing to embrace it for years. The last dozen years of the twentieth century saw not only the spectacular death of the biggest alternative to liberal democracy, totalitarian communism, but also the slow death of other collectivist models. Around the world, countries have abandoned attempts to plan their way to prosperity. Even the Asian crisis, in its own awful way, has made it more difficult for the continent’s authoritarians to boast that they had discovered a nondemocratic way to generate growth.

  Many on the left would argue that globalization has merely involved a change of master. Globalization may have liberated us from the onus of having to get our television programs—or our health care and pensions—from our governments, but it has forced us to get the same things from giant companies that are just as remote and even less accountable. The gentleman in Whitehall has been replaced by the knucklehead in the boardroom or, if you work in the Académie Française, by the illiterate in Hollywood.

  This suspicion is healthy and should be encouraged. But so far the evidence is that it is misplaced. Of course, businesses will try to control markets, but that does not mean that they will be able to. As we have seen, one of the wonders of global capitalism is its capacity to hurl challenges at incumbent champions. Most of the forces of globalization—particularly the availability of capital and technology—favor small companies. In parts of Europe and Asia, commercial oligarchies are clinging to power, but only because governments collude with them. There is nothing global about, say, the importance of guanxi in Asia—quite the opposite. By the same token, the Department of Justice campaign to restrain Microsoft’s power, no matter how misguided, has a legitimately global aim of trying to open up a market.

  In fact, many of the most vengeful howls directed at globalization come from self-interested business elites who are being forced to surrender to consumer choice. Globalization does not mean homogenization. People want to consume books, movies, even potato chips, that reflect their own identities, and those identities remain primarily national. When politicians complain p. 335 that globalization is changing society, they are correct, but they seldom bother to ask whose society it is. When society is defined by a fairly compact national economy, an elite has a chance of co-opting it. But when society is an open-ended international system, it becomes increasingly difficult for any elite to identify their values with the common good.

  The Individual’s Prayer

  Restricting overmighty states and elites is all very well, but globalization increases the basic freedom of individuals as well. We have already talked about the tyranny of place: Most people’s lots in life are determined by where they were born, something illiberal regimes everywhere have done their best to reinforce. As Leszek Kolakawski, a Polish intellectual, points out, one of the defining features of communist regimes is their refusal to allow people to move from city to city without official permission; they even made short journeys difficult, providing few road signs or decent street maps. Even today, the lives of half the world’s population are bounded by local villages, and local markets.

  Travel and migration have long provided a fraction of the world’s population with freedom from the tyranny of place. The printing press and the television have allowed others a more imaginary form of escape. Globalization is now making these freedoms more pervasive. The impact of the Internet, particularly as it goes wireless, will also be dramatic. The World Wide Web allows people to gain access to information anywhere at any time. And it allows them to do so in a way that undermines local elites and expensive middlemen. People will never escape the pull of geography entirely, as the tendency of business to cluster in particular places shows. But those clusters only survive if they work with the grain of globalization. And the penalty for being born a long way from those clusters is diminishing. Remember the Bangladeshi farmers using their cell phones to check the proper prices for their produce rather than having to accept the diktats of local grain merchants.

  The more these ties weaken, the more people can exercise what used to be called God-given talents. Again, businesspeople are the most obvious beneficiaries: If you have a good idea and the entrepreneurial vim to pursue it, you can take it anywhere you want. If, like Michael Skok of AlphaBlox, you think that your business belongs in Silicon Valley, not the Thames valley, you can take it there. But there are also more spiritual, artistic reasons to believe that globalization is a good thing. The thousands of Miltons who remain “mute p. 336 and inglorious” in their villages often begin to sing only after they move to the “mansion houses of liberty” that are the world’s great cities. Bustling centers of trade from fifteenth-century Venice to twentieth-century New York have usually been centers of creativity, too. Even if your God-given talents are more prosaic, it is becoming ever easier to study abroad, and, thanks again to the Internet, you will soon be able to do so (more or less) without leaving home.

  Somewhere behind the freedom to exercise our talents lies the most fundamental freedom of all: the freedom to define our own identities. This can sound like the moan of a petulant teenager, but it is at the heart of what is becoming one of the main debates of our time, between liberals and the growing band of communitarians. (To the extent that “the third way” means anything at all, its adherents are probably on the side of the communitarians.) Communitarians, as their name suggests, worry about the effect of things like globalization on communities. John Gray, one of globalization’s most searching critics, has argued that human beings’ “deepest need is a home, a network of common practices and inherited traditions that confers on them the blessings of a settled identity.”

  There can be no doubt that people need a home and a network. But does this home have to be the one they were born in? And does this network have to be the one provided by their ancestors? People also have a drive to better themselves, to extend their identities, to cross traditional boundaries, and to try out new experiences. John Gray himself happily abandoned the Newcastle working class into which he was born for the metropolitan intelligentsia. One o
f the many benefits of globalization is that it increases the number of people who can exercise Gray’s privilege of fashioning his own identity.

  This is not to say that conservative and communitarian worries about individualism run wild are empty. In the same breath that he praised America’s faith in individualism, Tocqueville warned of the danger that each man may be “shut up in the solitude of his own heart.”[6] One of the great risks of globalization is that it fosters anomie—the normlessness that comes from having your ties with the rest of society weakened. Anybody who spends long periods of time on business trips knows the loneliness of the long-distance traveler. Ex-pats complain that their children grow up not knowing their grandparents. The most common complaint among Internet addicts is that they end up feeling (rather like the compulsive masturbators of Victorian medical treatises) isolated, lonely, and depressed.

  All too true. Yet the issue that separates liberals from communitarians is not the desirability of human ties but the question of coercion. For liberals, p. 337 the best communities are the spontaneous creations of free individuals rather than the products of bossy politicians, and one of the many cases for globalization is that it lets a million of these spontaneous communities bloom. The smaller the world becomes, the more communities are defined by common interests and outlooks rather than by the mere accident of physical proximity.

  The idea of spontaneous communities will hardly placate globalization’s harshest critics. For some people, the idea that individuals take precedence over society is nothing more than Western cultural imperialism. Wee Kim Wee, the former president of Singapore, argues that “placing society above the self” is one of his country’s “core values.” It is all very well for the egomaniacs of Manhattan and Los Angeles to abandon their gods in pursuit of self-fulfillment. But everybody else knows that such selfishness leads inexorably to the wasteland.