Yet the yearning for freedom is no more peculiar to the West than the yearning for prosperity. Other parts of the world have been quieter on the subject not because their peoples are wedded to collectivism but because their rulers have been less fussy about the methods they have used to hold on to power. Singaporeans bitterly resent the fact that their government gives them a superb education but then proceeds to treat them like children. The students who were brutally crushed at Tiananmen Square constructed replicas of the Statue of Liberty.
An Empire without End
Look around the world, and it is not hard to find examples of people for whom this message may seem a little empty. What does Reginaldo Gobetti care about the freedom to create his own identity; he just wants a job. Our argument is not that globalization is delivering the liberal dream, with billions of people gradually becoming the wired (or wireless) equivalent of Jefferson’s yeoman farmers. Our argument is merely that globalization is delivering enough of that dream to make it worth pressing forward and to make it worth defending on more than just narrow economic grounds.
In fact, the two arguments should run in tandem. Globalization is helping to give birth to an economy that is closer to the classic theoretical model of capitalism, under which rational individuals pursue their interests in the light of perfect information, relatively free from government and geographical obstacles. It is also helping to create a society that is closer to the model that liberal political theorists once imagined, in which power lies increasp. 338ingly in the hands of individuals rather than governments, and in which people are free, within reasonable bounds, to pursue the good life wherever they find it.
It would be nice if we could end on that optimistic, perhaps even slightly Utopian, note. Yet we have also stressed the importance of vigilance and the need for not just politicians but also those who have prospered from globalization—particularly the cosmocrats—to help those who have done less well.
The trouble is that the devil has all the best tunes. One reason why globalization’s enemies are so much more persuasive than its friends is that they are more visible: The victims are usually concentrated in particular places, whereas its beneficiaries are spread out all over the place. But supporters have also done a lousy job of making their case. We have already lamented the shortage of Peels and Rockefellers. But consider once again whether any modern leader would stand up and argue that “by encouraging freedom of intercourse between the nations of the world we are promoting the separate welfare of each and are fulfilling the beneficent designs of an all-seeing Creator” or invite his audience to celebrate “commerce, the happy instrument of promoting civilization, of abating national jealousies and prejudices and of encouraging the maintenance of general peace by every consideration as well as every obligation of Christian duty.”
It is not just the passion that sets Sir Robert Peel apart from his modern peers. It is the fact that he bothered to make the case in what then amounted to the language of the streets—and made it, moreover, to the people rather than just to a group of bigwigs. When Peel died, tens of thousands of people contributed their pennies to construct memorials to the man who had masterminded the repeal of the corn laws. Naturally, it would be nice if, say, the IMF made more of an effort to explain its ways; but you need only spend half an hour with any of its denizens to realize that you are more likely to get Ciceronian oratory from your typewriter. Kofi Annan has tried to make his voice heard, but his need to please all the UN’s members has simultaneously blunted his message. The proper place for the trumpets of globalization to sound is from national political figures. George Bush the elder ushered in his new world order. Bill Clinton, a far more agile communicator, failed to come up with one memorable phrase on the subject.
The time when such leadership will be needed could be close at hand. As we said at the beginning of this book, Osama bin Laden exploited globalization. So far George W. Bush’s response has been brave on the military front, but too often he has taken a unilateral course, exaggerating the transatlantic rift. He has also needlessly stirred up the fires of protectionism. A sep. 339rious downturn in the economy could be disastrous. Meanwhile, despite the terrible evidence of the Asian contagion, there are still plenty of countries around the world that are continuing to try to have it both ways, sucking in Western capital while refusing to open their economies. Given its penchant for funneling money into favored firms and concealing corporate and government activities from the prying eyes of outsiders, China could yet produce a disaster that would make the Asian crisis look like a tea party.
Highgate Man
Which brings us back to Highgate. It might seem perverse to end a book on globalization by returning to a hypothetically reincarnated German—particularly given that Karl Marx was a sworn enemy of the liberalism that we admire. Yet one of the things that Marx would recognize immediately about this particular global era is a paradox that he spotted in the last one: The more successful globalization becomes, the more it seems to whip up its own backlash. The process is not unlike waves sweeping up on a shore: Each one that rushes forward also creates its undertow.
The undoing of globalization, in Marx’s view, would come not just from losers resenting the success of the winners but also from the winners themselves losing their appetite for the battle. Globalization’s power, and much of its efficiency, is founded on its ability to keep on exposing weaknesses and imperfections. This is good for us all in the long run, but it makes it difficult for even the winners to enjoy the quiet life. The more relentless economic integration seems, the greater the short-term appeal of politicians who seek to resist it.
There is even a suspicion that globalization’s psychic energy—the uncertainty it creates that forces companies, governments, and people to perform better—may have a natural stall point, a moment when people can take no more. As Marx put it in The Communist Manifesto:
Uninterrupted disturbance of all social conditions, everlasting uncertainty and agitation distinguish the bourgeois epoch from all earlier ones. . . . All that is solid melts into air, all that is holy is profaned, and man is at last compelled to face with sober senses his real conditions of life and his relations with his kind.[7]
Overcoming this paradox—the seeming invincibility of globalization and its underlying fragility—is the central challenge of the new century.
Acknowledgments
p. 341 In our authors’ note we mentioned our gratitude both to our immediate families and to the editor of The Economist, Bill Emmott. In truth, both represent the tips of large icebergs on which we have floated for some time. Our families—not just our wives and children but our parents, siblings, aunts, uncles, and in-laws—have been bullied, harassed, bored, used, and generally let down in such a way that the words your book, even when not punctuated by expletives, have become bywords for inadequate behavior.
At The Economist, we have also leaned on the kindness and expertise of others. Ann Wroe, Barbara Smith, Barbara Beck, John Peet, Edward Carr, David Manasian, Oliver Morton, and Johnny Grimond either commissioned or edited some of the work that has found its way into this book. Other colleagues, including Iain Carson, Matthew Symonds, Carol Howard, and Nick Valery, pulled us up on particular points, while Gideon Rachman always provided us with a powerful reason to keep going whenever we thought of giving up. However, perhaps our biggest debt goes to those luckless souls who have had the misfortune of sharing offices with us: Zanny Minton Beddoes, John Parker, Matthew Bishop, Sameena Ahmad, Louise Katsiaouni, Tina Davis, Fiona Haynes, and especially Rachel Horwood and Rosemarie Ward.
We would like to thank the wide variety of people who let us into their homes while we were researching this book, from Marcus de Ferranti in London to John Rhodes and the Bruderhof at Rifton and the Gobettis in Sào Paulo. There is also a long list of people who helped us research the book: Michael Reid and Thiery Ogier in Brazil; Elizabeth Pisani and Robert Guest in Africa; Joel Kotkin, Kevin Starr, Gregory Rodriguez, and Allison Silver in Lo
s p. 342 Angeles; Ali and William Mackesy in Hong Kong; Tessa Wheeler in Morocco; Jane Millington and Vladimir Kovalyov in Saint Petersburg; and Peter Bergen in Washington, D.C., who gave us a peek at his researches on Osama bin Laden. Similarly, there can be few more unpleasant things than a phone call from a writer announcing that he would like to come and stay with you: Lionel and Lidija Wigram in Los Angeles, Nick and Kim Hurd in Brazil, Percy and Clara Weatherall in Hong Kong, Andrew and Arianne Cowley in Moscow, Robert and Grania Read in London, and Charlotte and John Duthie, also in London, all somehow managed to sound pleased when that call came—even when it was for the second time.
A wide number of people took the time to read all or parts of this book when they surely had better things to do: Edward Carr, Anthony Gottlieb, Chris Anderson, Zanny Minton-Beddoes, John Parker, Matthew Bishop, Rosemarie Ward, Peter David, and John Heilemann. Mark Doyle and Rachel Horwood have patiently helped us update this version of the book. We would like to thank Aldon James and the National Arts Club in Manhattan for lending us a room in which to write; and Amanda Fellows for designing our website.
We have been extremely lucky in having Jon Karp as our editor. He has proved an excellent critic, in the better sense of that word. Even when we have been convinced that he was wrong about a particular phrase or point, we have, sooner or later, had to admit he was right. We would also like to thank Carie Freimuth, Timothy Mennel, and Will Weisser at Random House. Finally, we owe an immense debt to the Wylie Agency—to Sarah Chalfant, Liza Walworth, Georgia Garrett, and particularly Andrew Wylie. Right from the start, Andrew grasped what this book should be about and kept us from wandering too far from that vision. If we have let him—and, indeed, you—down, then the fault is entirely our own.
Notes
Introduction
p. 343 1. John Maynard Keynes, The Economic Consequences of the Peace (London: Macmillan, 1919), p. xx
2. Peter Bergen subsequently published Holy War, Inc. (New York: Free Press, 2001).
3. John Helliwell, How Much Do National Borders Matter? (Washington, D.C.: Brookings Institution Press, 1997).
4. Joe Sharkey, “On the Road,” The New York Times, June 11, 2002.
5. John Gray, “The Era of Globalisation Is Over,” The New Statesman, September 24, 2002.
6. Adam Smith, The Theory of Moral Sentiments (1759), part III, chapter III. This is available online at www.adamsmith.org.
7. “Globalization, Growth and Poverty,” World Bank policy research report, December 2001.
8. “The Prosperity League,” The Economist, June 22, 2002.
9. Ibid.
10. Clive Crook, “A Survey of Globalization,” The Economist, September 27, 2001.
11. Ibid.
12. These statistics all come from “How Big Are Multinational Companies?,” a paper released in January 2002 by Paul de Grauwe of the University of Leuven and Filip Camerman of the Belgian Senate.
13. Crook, “A Survey of Globalization.”
14. Hernando de Soto, The Mystery of Capital: Why Capitalism Triumphs in the West and Fails Everywhere Else (New York: Basic Books, 2000).
Chapter 1
p. 344 1. Robert Skidelsky, John Maynard Keynes: Hopes Betrayed, 1883-1920 (London: Macmillan, 1983), p. 170.
2. Quoted in Douglas Irwin, Against the Tide: An Intellectual History of Free Trade (Princeton: Princeton University Press, 1996), p. 188.
3. These examples are from the excellent “Schools Brief on Trade,” The Economist, November 8, 1997.
4. In August 1843, James Wilson published the preliminary number and prospectus of The Economist: or, The Political, Commercial, Agricultural, and Free-Trade Journal.
5. Michael Bordo, Barry Eichengreen, and Douglas Irwin, “Is Globalization Really Different Than Globalization a Hundred Years Ago?” National Bureau of Economic Research, Working Paper 7195, June 1999.
6. United Nations, World Investment Report 1994: Transnational Corporations, Employment and the Workplace (New York and Geneva, 1994), p. 121.
7. Ibid., p. 120.
8. Skidelsky, John Maynard Keynes: Hopes Betrayed, pp. 121-22.
9. John Maynard Keynes, The Economic Consequences of the Peace (London: Macmillan, 1919), p. xx.
10. For an account and summary of the lecture, see Robert Skidelsky, John Maynard Keynes: The Economist as Savior, 1920-1937 (London: Macmillan, 1992), pp. 476-80.
11. Skidelsky, John Maynard Keynes: Hopes Betrayed, p. 227.
12. Charles Kindleberger, The World in Depression, 1929-1939, rev. ed. (Berkeley and Los Angeles: University of California Press, 1986), pp. 63-64.
13. Quoted in Irwin, Against the Tide, p. 195.
14. Skidelsky, John Maynard Keynes: The Economist as Savior, p. 490.
15. E. J. Hobsbawm, The Age of Extremes: A History of the World, 1914-1991 (New York: Vintage, 1994), p. 88.
16. Kindleberger, World in Depression, p. 278.
17. For more information, see www.wto.org.
18. The best history of the relationship between governments and markets is Daniel Yergin and Joseph Stanislaw, The Commanding Heights: The Battle Between Government and the Marketplace That Is Remaking the Modern World (New York: Simon and Schuster, 1998). This book has been most useful in the preparation of this chapter.
19. Bertrand Russell. Autobiography, 1872-1914, vol. 1 (London, 1967), p. 107.
20. Norman MacKenzie and Jeanne MacKenzie, eds., The Diary of Beatrice Webb, vol. 2, 1895-1905 (London: Virago, 1983), p. 63.
21. David Landes, The Wealth and Poverty of Nations: Why Some Are So Rich and Others Are So Poor (New York: W. W. Norton, 1998).
p. 345 22. Yari Aharoni, The Evolution and Management of State-Owned Enterprises (Cambridge, Mass.: Ballinger Publishing, 1986), p. 2.
23. Ibid., p. 46.
24. Yergin and Stanislaw, Commanding Heights, p. 107.
25. Skidelsky, John Maynard Keynes: The Economist as Savior, pp. 457, 459.
26. “Delivering the Goods,” The Economist, November 15, 1997.
27. United Nations, World lnvestment Report 1999 (New York and Geneva, 1999), p. 131.
Chapter 2
1. Quoted in Richard Oliver, The Shape of Things to Come (New York: BusinessWeek Books, 1998), p. 24.
2. Quoted in “How We Live: Air Conditioning,” in “2000: The Power of Invention,” Newsweek, special issue, winter 1997-1998.
3. “The Most Influential Innovations of the Millennium,” The Wall Street Journal, January 11, 1999.
4. “Delivering the Goods,” The Economist, November 15, 1997.
5. David Kirkpatrick, “Grove in China,” Fortune, August 17, 1998.
6. Thomas Friedman, “The Internet Wars,” The New York Times, April 11, 1998.
7. The European Information Technology Observatory Report, 1998.
8. Keynote address by William Kennard, chairman of the Federal Communications Commission, All-Africa Telecoms Conference, September 9, 1998.
9. Frances Cairncross, The Death of Distance: How the Communications Revolution Will Change Our Lives (Boston: Harvard Business School Press, 1997), p. 233.
10. Bob Davis and David Wessel, Prosperity: The Coming Twenty-Year Boom and What It Means to You (New York: Times Books, 1998), pp. 34-38.
11. “All Lines Engaged,” Financial Times, August 7, 1998.
12. Quoted in Paul Taylor, “The Revolutionary Shape of Things to Come: Survey of Information Technology,” Financial Times, January 13, 1999.
Chapter 3
1. Richard Barnet and John Cavanagh, Global Dreams: Imperial Corporations and the New World Order (New York: Simon and Schuster, 1994), p. 362.
2. “Time to Turn Off the Tap?” The Economist, September 22, 1998.
3. See work by Alan Taylor of Northwestern University, cited in “Capital Goes Global,” The Economist, October 25, 1997.
4. Interview with author, September 16, 1998.
5. John Taglibue, “Selling Europe on the Stock Market,” The New York Times, March 1, 1998.
p. 346 6. Hearing of the House Banking and Financial Services Committee, September 15, 1998.
7. Glenn Yago and David Goldman, Milken Institute, “Capital Access Index: Emerging and Submerging Markets.”
8. One summary of their positions can be found in “Capital Controversies,” The Economist, May 23, 1998.
9. Gregory Millman, The Vandal’s Crown: How Rebel Currency Traders Overthrew the World’s Central Banks (New York: Free Press, 1995).
10. Examples taken from John Plender, “Revisiting a Deadly Disease,” Financial Times, September 21, 1998.
11. Paul Krugman, “A Letter to Malaysia’s Prime Minister,” Fortune, September 28, 1998.
12. Patrick Lyons, “A Global Vote for U.S. Style of Corporate Openness,” The New York Times, May 9, 1999.
Chapter 4
1. Wellford Wilms, Restoring Prosperity: How Workers and Managers Are Forging a New Culture of Cooperation (New York: Times Books, 1996), p. 203.
2. Keith Bradsher, “GM’s Efficient Brazil Plant Raises Fears Closer to Home,” The New York Times, June 15, 1998.
3. “American-Style Pay Moves Abroad,” The New York Times, September 3, 1998.
4. “Gates’ Law,” Context 1:1 (winter 1998).
5. John Micklethwait and Adrian Wooldridge, The Witch Doctors: Making Sense of the Management Gurus (New York: Times Books, 1996).
Chapter 5
1. Richard Morais, “Porn Goes Public,” Forbes, June 14, 1999.
2. Jeffrey Gettleman, “LA Economy’s Dirty Secret,” Los Angeles Times, September 1, 1999.
A Future Perfect: The Challenge and Promise of Globalization Page 48
