A Future Perfect: The Challenge and Promise of Globalization Read online

  Also by John Micklethwait and Adrian Wooldridge

  THE WITCH DOCTORS: MAKING SENSE OF THE MANAGEMENT GURUS

  THE COMPANY: A SHORT HISTORY OF A REVOLUTIONARY IDEA

  A Future Perfect

  A Future

  Perfect

  The Challenge and Promise

  of Globalization

  John Micklethwait

  and

  Adrian Wooldridge

  RANDOM HOUSE TRADE PAPERBACKS

  NEW YORK

  To Ella, Tom, Guy, and Edward

  For I dipt into the future, far as human eye can see,

  Saw the Vision of the world, and all the wonder that would be;

  Saw the heavens fill with commerce, argosies of magic sails,

  Pilots of the purple twilight, dropping down with costly bales;

  Heard the heavens fill with shouting, and there rain’d a ghastly dew

  From the nations’ airy navies grappling in the central blue;

  Far along the world-wide whisper of the south-wind rushing warm,

  With the standards of the peoples plunging thro’ the thunder-storm;

  Till the war-drum throbb’d no longer, and the battle-flags were furl’d.

  In the Parliament of man, the Federation of the world.

  —ALFRED, LORD TENNYSON, “Locksley Hall”

  Authors’ Note

  p. xi THIS NOTE is being written somewhere between Los Angeles and New York City—on an American computer in an American aircraft flown by an American airline—at the behest of an American publisher. But in fact, Random House is now owned by Germany’s Bertelsmann; the IBM laptop was made in Mexico; the Boeing 757 includes parts from nearly forty countries; and the future of Delta Air Lines seems to lie in its code-sharing agreements with a dozen foreign-based carriers.

  On the back of the seat in front is an “airfone” that allows a passenger to telephone anywhere in the world for five dollars per minute, a price that, though extortionate, would have seemed impossibly cheap twenty years ago. Were the author more technologically competent, he could also connect his computer to the airfone’s datapoint and reply to a colleague’s e-mail from Thailand, which he had picked up this morning as (rather pathetically in the eyes of his wife) he used the computer to listen to Leicester City—a soccer team whose squad includes a French goalkeeper, a Jamaican fullback, a Greek midfielder, and an Icelandic striker—uncharacteristically beat Aston Villa 3–1 in Birmingham, England.

  Look around you, wherever you are, and you will quickly find similar evidence that the world is becoming a smaller place. As we shall see, globalization is neither new nor complete—and it is certainly not inevitable. Listening to an obscure soccer match miles away is also evidence of how much local ties matter. At its heart, IBM is still an American company. In a truly global market, Delta would be able to take over its foreign partners p. xii rather than be forced to enter awkward alliances. But it is also clear that something fundamental has been happening to all of us.

  Globalization, we believe, is the most important phenomenon of our time. It is a contentious, complicated subject, and each particular element of it—from the alleged Americanization of world culture to the supposed end of the nation-state to the triumph of global companies—is itself at the heart of a huge debate. Yet people tend to shy away from seeing the subject in the round. Economists agonize over capital movements but ignore the social and cultural disruptions that globalization brings. Left-wingers summon up apocalyptic visions of capitalism run mad, while cyberprophets indulge in Utopian fantasies of a world unified by webs and wires. Businesspeople often know the meat and bones of the subject better than anyone else does—the companies and products that are drawing the world together—but they are too wrapped up in the struggle for profits to consider the wider picture.

  We have tried to strike two balances that are probably impossible to maintain. The first is to write a book that engages all the fundamental arguments of the subject yet does so through examples involving real people, companies, and even religious communities. The second is to write an opinionated book in which the authors are not the main characters. The subject, the arguments, and many of the characters are substantial enough by themselves without us tacking on breathless descriptions of the hotels that we have visited, the food we have eaten, or (henceforth) the soccer matches we have heard. So let us clear up all of that right now, so we can disappear.

  If nothing else, the topic of globalization offers variety for the writer. One moment you are in Paris, talking to Jeanne Moreau through a haze of cigarette smoke about the French film industry, and the next shivering on the bridge at Narva, shouting questions at embittered Russian women who think that you are an Estonian spy. One moment you are discussing global production with Jack Welch of General Electric; at the next, the same subject crops up with Steven Hirsch, the San Fernando Valley’s leading pornographer. In general, we have learned far more from talking to people such as Charlie Woo, a Chinese immigrant who has revitalized some of the nastiest bits of Los Angeles, or Jackson Thubela, a gold-toothed “phone-shop” owner (who rents out time on cellular phones) in Soweto, than from political bigwigs or International Monetary Fund reports. It has taught us how small the world has become (e-mail has made it relatively easy for two people who live several thousand miles apart to write a book together) and how awesomely large it can seem: Very few of the consultants who celebrate the global village seem to have flown economy-class over long distances.

  p. xiii There have been two pervading sadnesses in the writing of this book. The first is that we have been forced to exclude a large number of interesting, exciting stories that we have come across around the world, for the simple reason that they are not quite as germane to our argument as we had thought. The second is that many of the most decent, admirable, and enchanting people whom we depict in these pages—whether they are favela dwellers in São Paulo or General Motors workers in Flint, Michigan—are those who have done worst by the process that we are celebrating.

  But celebrate it we do. For the underlying message of this book is that globalization needs not merely to be understood but to be defended stoutly. Globalization is a subject in which the devil has tended to have all the best tunes. While supporters tend to produce ponderous examinations of trade flows, assaults on it often summon up savage, searing images of broken homes and closed factories. We do not deny these casualties. But we believe that many of them should be laid at the feet of villains other than globalization. Globalization is a savage process, but it is also a beneficial one, in which the winners far outnumber the losers.

  One of the aims of this book, however, is to drag the debate about globalization away from a dire catalog of winners and losers and toward a fundamental appraisal of modern liberty. Writing this book has been a little like stepping into a time machine. Even as we have reported “forward,” trying to articulate the sort of society that globalization is creating, we have read “back” to the last great global age in the nineteenth century and then back further still to the origins of modern liberal thought. It may seem odd to pick up a book that purports to be about a Future Perfect that returns often to the past tense—to Locke, Jefferson, and Macaulay, to Herder, Hegel, and Marx, to Peel, Carnegie, and Rockefeller—but we do so because they are still relevant. And the consistent message from history chimes with that from our travels and even from those IMF reports: Globalization is not an inevitable process but an all-too-human one, in which success has to be fought for rather than simply assumed.

  Our acknowl
edgments at the other end of this book detail the many hapless, generous people on whose backs this edifice has been constructed. We cannot begin, however, without singling out two victims of our monomania. The first is The Economist. It would be hard to devise a better training for writing a book on globalization than the quarter century we have between us spent under its auspices. We are extremely grateful to the editor, Bill Emmott, for giving us time to research this book and for giving us permission to use some of our work for him in these pages.

  p. xiv The other (perhaps less tolerant) group of victims has been imposed upon even more. There are two outrageous fictions observed in the acknowledgments of books about big subjects since time immemorial. The first is that wives lovingly look forward to each fresh chapter and cheer each new trip abroad. We will simply say that we are deeply grateful—and even slightly surprised—that Fevronia and Amelia are still with us. The second fiction is that authors applaud the contribution of their children—the little tots, like the young John Stuart Mill, helpfully editing chapters about capital flows whilst nestling on their parents’ knees. Ella, Tom, Guy, and Edward have, it has to be said, done everything possible to slow production of this book. On the other hand, they are all under six; they all claim that they have been shamefully neglected; and it will be their Future, perfect or not. So this book is dedicated to them.

  Contents

  Authors’ Note

  Introduction – From Sarajevo to September 11

  A Definition of Globalization

  The Bin Laden Effect

  A Call to Arms

  Liberty, Fraternity, Globality

  The Lesson of a Terrible Century

  Part One – The Remaking of a Borderless World

  1 – The Fall and Rise of Globalization

  Three Voices

  Let Goods Be Homespun

  For He’s a Jolly Good Fellow

  The Curse of the Fabians

  Bidets and Jackboots

  The Road from Serfdom

  Hope Floats

  Part Two – The Three Engines of Globalization

  2 – Technology as Freedom

  The Bolton Wanderer

  On the Waterfront

  The Holy Trinity

  The Inevitability of Gradualness

  The Conquest of Location

  Let Them Eat Wireless

  Wireless Is Tireless

  3 – The Dirty Dollar

  Some Like It Hot

  An Investor’s Dream

  The Freedom of Mutual Funds

  A Capital Democracy

  In Defense of the Gunslinger

  Sweet Seoul Music

  4 – The Visible Hand

  The Third Force

  The Four Horsemen

  Worth the Wait

  Wang’s World

  The Sun Also Rises

  5 – Sex, Death, and the Welfare State

  The Van Nuys Experience

  Porn sans Frontiers

  The Global Way of Death

  Globalizing Compassion

  Reading, Writing, and Enrichment

  Schoolmasters of the Universe

  The Half Monty

  Part Three – One World: The Business of Globalization

  6 – The Five Myths of Globalization

  The Myth Factory

  The First Myth: That Size Trumps All

  The Second Myth: The Triumph of Universal Products

  The Third Myth: That Economics Needs to Be Rewritten

  The Fourth Myth: Globalization as a Zero-Sum Game

  The Fifth Myth: The Disappearance of Geography

  Woo’s World

  7 – Managing in a Global Age

  The Six Principles of Global Management

  From Cortés to Rue Sabou

  To the Finland (Base) Station

  The House That Jack Built

  Jack Be Nimble

  Hard Days’ Night

  Part Four – The Politics of Interdependence

  8 – The Strange Survival of the Nation-State

  The Wounded King of the Jungle

  The Great Debate

  The Running Dogs of Capitalism

  Remember Sherman McCoy?

  Globalization Is Good for Governments

  Power Goes Up . . .

  . . . and Power Goes Down

  Lines That Matter

  The Continuation of History

  9 – The Failure of Global Government

  The Road So Far

  The Multilateral Paradox

  Back to the Drawing Board

  UN-bearable

  I’M Fired

  Beyond the Report Card

  A Better Way to Do Things?

  Dollarizing the World

  The Parliament of Man

  10 – The Closing of the Global Mind

  Je Ne Voudrais Pas Mon MTV

  Less Than Total Recall

  Is This America?

  Outside the Door

  Waiting for the Ratings

  Wrong Diagnosis, Terrible Remedy

  Moreau’s Way

  Part Five – Winners and Losers

  11 – Silicon Valley and the Winner-Take-All Economy

  Do You Know the Way to San Jose?

  What a Long, Strange Trip It’s Been

  The Ten Habits of Highly Successful Clusters

  Make Me Anywhere

  The Not-So-Visible Threat

  The Digital Divide

  Do They Care?

  Future Not Quite Perfect

  12 – The Cosmocrats: An Anxious Elite

  Today Belongs to Us

  A Different Sort of Elite

  The Anxious Elite

  The Perils of Placelessness

  But Will You Love Me Tomorrow?

  13 – Outside the Red Lacquered Gates: The Losers from Globalization

  The Deer Hunter

  Storm Damage

  Hope Is the Last Thing That Dies

  The Wrong Man in the Dock

  Swings and Roundabouts

  Smoke Gets in Your Eyes

  The Buck Is Passed

  Part Six – A Call to Arms

  14 – The Enemies Gather: The Backlash Against Globalization

  Rage Against the Machine

  Sympathy for the Devil

  Gray’s Elegy

  All along the Watchtower

  The Enemy Within

  You Say “Tomato”

  Block Against Block

  15 – Membership Has Its Responsibilities

  A Place in History

  The Three Great Leaps

  Regulation or Research?

  Brains in the Balance

  The Gospel of Wealth

  Reasons to Hope

  16 – The Ant and the Silversword: Working and Investing in the Twenty-first Century

  The Law of Unintended Consequences

  The Global Wallet

  A Heretical Idea about America and Europe

  How Flexible Is Flexible?

  Has It Really Changed?

  Whistle While You Work

  A Tale of Two Women

  Back to the Future

  Conclusion – The Hidden Promise: Liberty Renewed

  The Priority of Liberty

  The Open Society

  The Individual’s Prayer

  An Empire without End

  Highgate Man

  Acknowledgments

  Notes

  Bibliography

  Index

  Publication Information

  About A Future Perfect

  Copyright Notice

  eBook Version Notes

  Introduction – From Sarajevo to September 11

  p. xvii ON THE MORNING of June 28, 1914, the world could rejoice in sixty years of extraordinary peace and progress. The first great age of globalization had made the world seem an infinitely smaller place. So great were the twin powers of technology (in the shape of the telephone, the telegram, the train, the car, electricity, the camera) and ideolog
y (the gospel of free trade, guaranteed by the world’s hegemonic power, Britain) that Edwardian intellectuals prophesized the end of all wars. Yet on that summer’s day, one act of terrorism in Sarajevo—the assassination of the Archduke Ferdinand and his wife by a Serbian fanatic called Gavrilo Princip—set off a sickening train of events. The world plunged into the most horrific war in history. And even after the killing had stopped, countries everywhere renounced their previous openness, fortifying their borders to limit the movement of goods, people, and even ideas.

  It would be absurd to blame all the miseries of the first half of the twentieth century on a single act of terrorism: The causes of world war and protectionist folly had been germinating for years. But those causes only became clear in retrospect. John Maynard Keynes nicely describes the typical middle-class Londoner in 1914, “sipping his morning tea in bed” while ordering goods from around the world and planning his global investments. For such a man, “the projects and politics of militarism and imperialism, of racial and cultural rivalries, of monopolies, restrictions, and exclusion, which were to play the serpent to this paradise, were little more than the amusements of his daily newspaper.”[1] For such a man, and millions of others, Gavrilo Princip’s two shots marked a turning point.

  p. xviii In the first edition of this book, published in 2000, one of the figures we chose to illustrate the backlash against the current age of globalization was another terrorist: Osama bin Laden. Drawing on research by a friend, who had interviewed bin Laden in Afghanistan, we quoted his fury against the “New World Order” that “haughty” America was imposing on the world.[2] We noted that bin Laden, like so many other opponents of globalization, had been remarkably sophisticated about exploiting the process he professed to hate, using the latest technology to promote his medieval message. And we argued that, for all its other merits, lowering borders had made the West much more vulnerable to attack. We raised the possibility of al-Qaeda using a primitive nuclear bomb to blow up the World Trade Center.

  At the time, this seemed a little far-fetched. We debated shortening the section on bin Laden, lest people think we were paying too much attention to the ramblings of a marginal crank. People were far more interested in the promise of open markets and technological innovation than they were in terrorism.