Conflict in Myanmar: War, Politics, Religion


September 18, 2017

Book Review:

Conflict in Myanmar: War, Politics, Religion

Nick Cheesman and Nicholas Farrelly (editors) (ISEAS Publishing)

by Jonathan Liljeblad*

Jonathan Liljeblad is a senior lecturer at the Swinburne Law School, Swinburn University of Technology.

Image result for Conflict in Myanmar: War, Politics, Religion

Conflict in Myanmar: War, Politics, Religion (Nick Cheesman and Nicholas Farrelly, eds.) is the most recent output of the continuing Myanmar Update (formerly Burma Update) conference series run by Australian National University. The volume offers seventeen chapters written by native Myanmar and non-Myanmar scholars selected from the participants at Myanmar Update 2015. Centered around the nature of conflict in Myanmar, the book organizes its chapters into three themes of “War and Order” dealing with ethnic tensions in the country, “Elections and After” highlighting institutional politics, and “Us and Them” centering around communal and religious divisions.

Image result for Conflict in Myanmar: War, Politics, Religion

Conflict in Myanmar: War, Politics, Religion joins a array of edited volumes that have appeared in the past few years. Within the Myanmar Update series, it is preceded by Debating Democratisation in Myanmar (Nick Cheeseman, Nicholas Farrelly, and Trevor Wilson, eds.) tied to Myanmar Update 2013 and the earlier Ruling Myanmar: From Cyclone Nargis to National Elections (Nick Cheesman, Monica Skidmore, and Trevor Wilson, eds.) resulting from the Myanmar Update 2011. Beyond the Myanmar Update series, however, there are also other recent edited volumes, including titles such as Constitutionalism and Legal Change in Myanmar (Andrew Harding and Khin Khin Oo, eds.) from 2017; Islam and the State in Myanmar (Melissa Crouch, ed.) from 2016; Metamorphosis: Studies in Social and Political Change in Myanmar (Renee Egreteau and Francois Robinne, eds.) from 2015; and Myanmar: The Dynamics of an Evolving Polity (David Steinberg, ed.) and Burma/Myanmar: Where Now? (Mikaela Gravers and Flemming Ytzen, eds.), both from 2014. Such a supply of edited works reflects a burgeoning academic literature on Myanmar that has grown in the wake of the country’s re-engagement with the larger international community that arguably began with the country’s democratic general election in 2010 and accelerated with the lifting of economic sanctions in 2012-2013.

Edited volumes are useful in terms of providing readers a survey of perspectives on a topic that exemplify the state of scholarship at a particular moment in time. In addition, they allow audiences to note issues deemed to be significant by experts in the field. Conflict in Myanmar: War, Politics, Religion fulfils both these functions, with the chapters serving as a representation of empirical research on major Myanmar conflicts. As a result, it offers appeal to Myanmar scholars intent on staying abreast of events in the country as well as broader audiences seeking to learn more about the forces affecting Myanmar government and society.

Image result for Conflict in Myanmar: War, Politics, Religion

Edited volumes are not without challenges. Projects involving multiple authors are vulnerable to two major issues: 1) in hosting multiple perspectives they risk presenting an array of views that can appear incoherent, and 2) in recruiting multiple contributions they are dependent upon authors to write with scholarly quality. In responding to the issue of incoherence, Conflict in Myanmar: War, Politics, Religion follows the approach of other edited volumes by applying a thematic focus that ties its chapters to a common concern. This provides a framework that places the chapters as differing perspectives on the topic of conflict in Myanmar.

It is with respect to the issue of quality, however, that Conflict in Myanmar: War, Politics, Religion is perhaps distinguished from other edited works covering Myanmar. As an outcome of Myanmar Update, the book ties to an ongoing series of conferences that follow an underlying strategy of nurturing scholarship, both for Myanmar as an academic field of inquiry and for Myanmar academics as scholars of standing in global academia. As a consequence, since its origin in 1999 Myanmar Update has accumulated a body of work spanning scholars inside and outside the country able to conduct research of increasing rigor and insight. Conflict in Myanmar: War, Politics, Religion carries the Myanmar Update tradition, with its assembly of contributions constituting a body of empirical studies informed by field work, such that the chapters display an in-depth understanding arising from the immersive experiences of their authors in Myanmar. Most notable in this regard are Ricky Yue’s chapter on the Pa’O Self-Administered Zone and Gerard McCarthy’s chapter on provincial politics in Taungoo, both of which denote immersion into areas not generally frequented or understood by foreigners.

Image result for ethnic cleansing in myanmar against the rohingya

There are possible areas of improvement that should be observed for similar compilations on Myanmar in the future. First, there is a question of internal consistency, in that Myanmar Update ostensibly has a goal of encouraging native Myanmar scholars as a means of capacity-building for an endemic scholarly community seeking to connect to international academia. Conflict in Myanmar: War, Politics, Religion contains four chapters that were authored or co-authored by native Myanmar scholars. This compares with six chapters involving Myanmar scholars in the 2014 Myanmar Update volume, Debating Democratisation in Myanmar, and two in the 2012 Ruling Myanmar: From Cyclone Nargis to National Elections. While author numbers are perhaps only partial indicators of capacity-building, they do provide a continuing reminder of the need to maintain diligence for Myanmar Update’s ulterior goal of promoting native Myanmar research. The insights, for example, by Su Mon Thazin Aung on the ethnic peace process, Chaw Chaw Sein on the 2015 general elections, Than Tun on Buddhist nationalism in Rakhine’s 2015 election results, and Chit Win on the Hluttaw all indicate an intimate knowledge that is made possible by their positions as Myanmar natives residing in the country. These degrees of familiarity offer a nuanced understanding that deserve to be publicized, and signal the value of Myanmar Update’s efforts to support native Myanmar scholarship.

Second, empirical studies by their nature are tied to observations and interpretations of real-world phenomenon. This is useful for identifying and understanding what is happening in a place like Myanmar, but it risks placement of Myanmar scholarship within the confines of descriptive studies. The growth of research on Myanmar into a dedicated field of Myanmar Studies calls for an enrichment in perspectives that can be facilitated by greater engagement with theory. More connection with theory would provide greater integration for Myanmar scholarship into concurrent work in international and comparative studies being done in the law and social sciences, both in terms of potentially deepening analysis of the country as well as offering opportunities for interventions into existing theoretical literature in law and social sciences. The integration of empirical and theoretical approaches require lengthier exposition than possible within the confines of a chapter in Conflict in Myanmar: War, Politics, Religion, but there are chapters—most notably Jenny Hedström’s feminist political economy study of Kachin State and Tamas Wells’ exploration of narratives in communal violence—that present ways to further this in the future.

In sum, Conflict in Myanmar: War, Politics, Religion is a useful ensemble of works that can inform readers and enrich other studies of Myanmar. It serves as a model for other edited volumes on Myanmar in terms of empirical research, thematic organization, and scholarly quality. As such, it should be seen as a necessary addition in any library seeking to promote Myanmar Studies as a field, and as a valuable addition to anyone seeking to improve their understanding of a country still in the process of re-engaging with the world.

 

Aung San Suu Kyi, the Ignoble Laureate


September 17, 2017

Aung San Suu Kyi, the Ignoble Laureate

“I am just a politician. I am not quite like Margaret Thatcher, no. But on the other hand, I am no Mother Teresa, either.”–Aung San Suu  Kyi

During her fifteen years under house arrest, Aung San Suu Kyi—now the de-facto leader of Myanmar—found solace in the poetry and novels of authors such as George Eliot, Victor Hugo, John le Carré, and Anna Akhmatova. Another favorite, she has said, was Rebecca West’s “Black Lamb and Grey Falcon,” an epic travelogue about Yugoslavia written on the eve of the Second World War. West described a country that Aung San Suu Kyi would have recognized as being much like her own: a fragile mosaic of ethnicities, languages, historical backgrounds, and cultural traditions.

Image result for stop rohingya genocide

In a short essay called “Let’s Visit Burma,” published in 1985, Aung San Suu Kyi described the “colourful and diverse origins and customs” of her compatriots. Rakhine state, in the west of Myanmar, was something of a “mystery” in this respect, she wrote. Its population had originated from “Mongolian and Aryan peoples who had come over from India.” Owing to its geographical position, Bengal had also “played a major part” in its history and culture. Among the state’s numerous ethnic groups —Arakanese, Thek, Dainet, Myo, Mramagyi, and Kaman—others displayed “the influence of Bengali.” But she assured readers that while there are “more people of the Islamic faith to be found in [Rakhine] than anywhere else in Burma,” it had been “predominately Buddhist” for centuries.

By groups that “displayed the influence of Bengali”, Aung San Suu Kyi certainly meant the Rohingya, a stateless minority in northern Rakhine that most Myanmar people consider to be Bangladeshi immigrants. Since August 25, when militants from the Arakan Rohingya Salvation Army attacked police posts and an Army base, as many as a thousand Rohingya have been killed and over three hundred and seventy thousand (more than third of the Rohingya population) have been forced into neighboring Bangladesh, human-rights groups estimate. Aung San Suu Kyi’s champions are now contemplating her fall from grace, appalled that the Nobel Peace Prize winner remains silent about and unmoved by a crisis described this week by the U.N.’s human-rights chief as “a textbook example of ethnic cleansing.” There have been widespread calls for the Nobel Committee to strip her of the prize. But there is no statutory procedure for doing so, nor is it clear how this would end the murder, rape, and mass exodus of the Rohingya at the hands of Myanmar’s Army.

The most urgent and powerful appeals to Aung San Suu Kyi have come from her fellow Nobel laureates. The Pakistani activist Malala Yousafzai, who won the prize for her advocacy of girls’ education, condemned the “tragic and shameful treatment” of the Rohingya. “I am still waiting for my fellow Nobel Laureate Aung San Suu Kyi to do the same.” Addressing a letter to his “dear sister,” the anti-apartheid activist Desmond Tutu wrote of his “profound sadness” and called on Aung San Suu Kyi to end the military-led operations. “If the political price of your ascension to the highest office in Myanmar is your silence, the price is surely too steep,” he wrote. The Dalai Lama subsequently urged her to find a peaceful solution to the humanitarian crisis, saying that Buddha would have “definitely helped those poor Muslims.”

This is not the first time that laureates have spoken of their displeasure with Aung San Suu Kyi. In December last year, when the military conducted another brutal offensive against the Rohingya, thirteen Nobel winners, including Muhammad Yunus, Shirin Ebadi, and Leymah Gbowee, signed an open letter deploring the Army’s use of helicopter gunships, arbitrary arrests, and the rape of women. “Despite repeated appeals to Daw Aung San Suu Kyi,” they concluded, using her honorific, “we are frustrated that she has not taken any initiative to ensure full and equal citizenship rights of the Rohingyas. Daw Suu Kyi is the leader and is the one with primary responsibility to lead, and lead with courage, humanity and compassion.”

When Aung San Suu Kyi accepted her own prize, in Oslo, in June, 2012, she said that, under house arrest, “it felt as though I were no longer a part of the real world. . . . What the Nobel Peace Prize did was to draw me once again into the world of other human beings outside the isolated area in which I lived, to restore a sense of reality to me. . . . I began to understand the significance of the Nobel Prize.” Since becoming State Counsellor, in 2016, however, she has retreated into the solitude of her former life. Her husband, Michael Aris, died, of cancer, in 1999—she was prevented by the military regime from saying goodbye to him—and she rarely sees her sons. People close to her describe a life of morbid isolation, living alone in the administrative capital, Naypyidaw—arguably the dreariest city on earth—pouring over state documents late into the night. She rarely gives interviews, and is reluctant to delegate responsibilities (there is no obvious successor to lead her party when she’s gone).

There’s no evidence that the laureates’ chorus of indignation has any bearing on Aung San Suu Kyi, or whether their declarations can break the spell of isolation and bring her back to the outside world. The only response she has made to the present crisis in Rakhine was a Facebook post, detailing a phone conversation she had with Turkey’s President Recep Tayyip Erdoğan. In it, she criticized the “huge iceberg of misinformation calculated to create a lot of problems between different communities and with the aim of promoting the interest of the terrorists.” While Aung San Suu Kyi has remained silent, the offices and ministries under her charge have not, describing the Rohingya as Bengalis and publicly advocating the use of force in certain situations. “If they are going to harm you, you can shoot them,” Aung San Suu Kyi’s spokesman, U Zaw Htay, said. The most egregious case of the recklessness of Aung San Suu Kyi’s government came last month, when it accused international aid workers of supporting terrorists, prompting fears for the safety of thousands of people in Myanmar employed by charities and N.G.O.s. There have been demands that the U.S. government stop using the name “Rohingya”, and when a Rohingya women gave details of an alleged gang rape, Aung San Suu Kyi’s office dismissed it as “fake rape.”

Aung San Suu Kyi’s biographer, Peter Popham, writes in “The Lady and the Generals: Aung San Suu Kyi and Burma’s Struggle for Democracy” that she “has become an object lesson in the slipperiness of the concept of heroism, and the folly of hero-worship.” Indeed, the tenor of the denunciations suggests that Aung San Suu Kyi’s critics are angered as much by a sense of personal betrayal as they are by her silence. She has exposed the artlessness with which many in the West reduced a complex personality into a Rapunzel of the East, emptied of her more illiberal traits, such as an authoritarian leadership style, and some potentially unsavory views on Muslims. The BBC correspondent, Fergal Keane, who probably knows Aung San Suu Kyi better than any other foreign journalist, has admitted that “we knew too little of Myanmar and its complex narratives of ethnic rivalries. . . . And we knew too little of Aung San Suu Kyi herself.” In a rare interview with Keane in April, she denied ethnic cleansing was taking place in Rakhine, and resisted the cruder perceptions of her persona: “I am just a politician. I am not quite like Margaret Thatcher, no. But on the other hand, I am no Mother Teresa, either.”

Image result for Malala Yousafzai

Unlike Thatcher, a consummate political operator, many have commented upon Aung San Suu Kyi’s weakness as a politician. Her failure to act against the military operation in Rakhine, so the argument goes, is not a result of her bigotry but because she is unable to outmaneuver the generals in Myanmar’s very own game of thrones.

Few can blame Aung San Suu Kyi for her political impotence. The constitutional arrangements of Myanmar would foil the shrewdest operative. Designed by the military, in 2008, the constitution gives the armed forces control of three ministries—the interior, borders, and defense—that are beyond the oversight of the civilian government. It bars Aung San Suu Kyi from becoming President, and allows the Army to veto any attempt at constitutional reform. The irony, then, is that if Aung San Suu Kyi once represented the power of the powerless, she is now powerless in power, taking the flak for the Army’s unrelenting inhumanity in its fight against ethnic rebels on the borderlands, and the Rohingya.

Aung San Suu Kyi’s powerlessness hardly matters on this issue, anyway: hatred of the Rohingya is one thing that unites Myanmar. Despite their political differences, Aung San Suu Kyi’s party, the National League for Democracy, and the military are in lockstep when it comes to the problem of northern Rakhine. Years of xenophobic, anti-Rohingya propaganda, pushed from the late nineteen-seventies by the military government, endures in the nation’s collective memory, and is stoked by the hate sermons of Buddhist monks like Ashin Wirathu. By speaking up for the Rohingya, Aung San Suu Kyi imperils her standing in the eyes of her fellow-citizens.

When she was thrust into the public eye, in 1988, it was her lineage, rather than her politics, that was the driving force. As the daughter of General Aung San, the nationally revered founder of modern Burma, Aung San Suu Kyi was at the mercy of activists who recognized the dynastic force that her name, and looks (she is the spitting image of her father), lent to their struggle against the generals. Responsible for negotiating Burma’s independence from the British Empire, Aung San was assassinated by paramilitary forces of the former Prime Minister U Saw, in 1947, six months before its official declaration. Aung San Suu Kyi was just two years old at the time, but there’s no doubting her love and admiration for him. In a 2013 radio interview with the BBC, she described her father as “my first love and my best love.” This filial piety is perhaps the key to understanding Aung San Suu Kyi as saint and sinner.

Her father was an extraordinarily tenacious, even ruthless, man who navigated between the British and Japanese empires in order to achieve his objective—a unified, independent Burma. He was also a Burmese nationalist who cared little for the nation’s ethnic minorities. Today, he is universally venerated in Myanmar, while few outside the country know who he is. This has almost certainly influenced Aung San Suu Kyi, who mimics his leadership style, moral code, and political priorities. The Rohingya are a distraction from her overriding ambition: to complete her father’s dream of unifying the country and ending a civil war that has raged between ethnic rebel forces and the Myanmar government since 1948. As Rebecca West wrote in “Black Lamb and Grey Falcon,” in a passage that Aung San Suu Kyi likely associated with her father when reading the book under house arrest, “it is the habit of the people, whenever an old man mismanages his business so that it falls to pieces as soon as he dies, to say, ‘Ah, So-and-so was a marvel! He kept things together so long as he was alive, and look what happens now he has gone!’ ”

 

The Guardian view on the Rohingya in Myanmar


September 9, 2017

THE GUARDIAN

The Guardian view on the Rohingya in Myanmar: the Lady’s failings, the military’s crimes

The Guardian view on the Rohingya in Myanmar: the Lady’s failings, the military’s crimes

Editorial

“When the safety of one’s country is at  stake,there must be no scruple of justice or mercy or blame;on the contrary, one should wholly pursue that policy that saves the life of the state and preserves its liberty,regardless of any other consideration.”–Niccolo Machiavelli, Discourses, Book 1, Chapter 9. Does this apply to Aung Sun Suu Kyi re The Rohingyas?

Image result for The Rohingya's of Myanmar

The killing and abuse of civilians is a crime against humanity. Aung San Suu Kyi must speak out – but this violence is the army’s

Aung San Suu Kyi’s long silence over the desperate plight of the Rohingya in Myanmar has been shameful. With tens of thousands now fleeing atrocities in Rakhine state, the Nobel peace prize winner’s aura of moral sanctity lies in tatters. The Muslim minority are denied citizenship by a government which claims, against the evidence, that they are illegal immigrants from Bangladesh. After decades of discrimination, matters got much worse. Since 2012 the Rohingya have endured not just immiseration and the denial of basic rights and services – many live in internment camps – but three major waves of violence by government forces and Buddhist Burman nationalists. Myanmar’s de facto leader has turned a blind eye.

Speak up, people have urged her. Do something. So far her words and actions have been as bad as her reticence. The government has blocked access to United Nations human rights investigators and aid workers. A post on her Facebook page blamed “terrorists” for “a huge iceberg of misinformation” about the current violence. Whether she shares the widespread prejudice towards the Rohingya is a moot question: she does not challenge it. Perhaps the populist Islamophobic forces thriving elsewhere encourage such indifference. On Wednesday, shortly after she met Narendra Modi – no stranger to condoning and exploiting vicious Islamophobia – India’s Prime Minister said his country shared Myanmar’s concerns about “extremist violence” in Rakhine state.

Image result for Aung San suu kyi quotes

Elegantly said, Madam, but meaningless. Your long silence over the desperate plight of the Rohingya in Myanmar has been shameful. 

The Rohingya were already described as the most persecuted people in the world and hundreds of thousands had escaped to Bangladesh, where their conditions are dire. Many have warned of the dangers of radicalisation and attacks on police by a new militant group late last month sparked a wave of violence by government forces. In less than a fortnight, more than 160,000 – from a population of something over 1 million – have fled. Officials say the hundreds who have died in this “clearance operation” are mostly insurgents who have torched Rohingya villages themselves. But there is widespread evidence that the death toll is far higher and most are civilians. Survivors of one massacre told the Guardian of infants and the elderly shot or thrown into the water to drown. Others have spoken of entire families burned alive in their homes. A UN report earlier this year accused security forces of similar crimes. But this violence is on an immense, unprecedented scale.

The UN Secretary-General, António Guterres, is pushing hard for concerted action and warns of the risk of ethnic cleansing (several Nobel peace prize laureates say that point has already been reached). But Myanmar has said openly that it is working with China and Russia to prevent a security council rebuke.

Image result for The Plight of the Rohingyas

Aung San Suu Kyi cannot halt the atrocities at a command. Despite her landslide electoral victory, the military controls key government functions and apparatus on paper as well as in reality – notably security. But a leader who rose to power armed with only her words and moral authority can and should use them in a cause – human rights – which she purported to champion. She is able to shape Burmese public opinion, and to channel it towards curbing the military. A leader who embraced and exploited the support of the international community cannot dismiss its concerns so casually. She is able to press foreign backers to exert more pressure on the armed forces.

Her cloak of virtue has helped to shield them from scrutiny and accountability. The danger is that now her shortcomings will divert attention. The military’s head, Min Aung Hlaing, has no pedestal to topple from. Few even know his name. But they should; he is the man who calls the shots. Finding ways to exert pressure on the military is essential. Suspending the UK’s training of Myanmar’s army would be a good start.

Aung San Suu Kyi has a moral duty to protect the Rohingya. She has ducked it. But she is only a small part of the problem, and of a solution that remains all too distant.

 

Trump and the Truth About Climate Change


July 22, 2017

Trump and the Truth About Climate Change

by Joseph E. Stiglitz

http://www.project-syndicate.com

Image result for trump and climate change cartoon

Under President Donald Trump’s leadership, the United States took another major step toward establishing itself as a rogue state on June 1, when it withdrew from the Paris climate agreement. For years, Trump has indulged the strange conspiracy theory that, as he put it in 2012, “The concept of global warming was created by and for the Chinese in order to make US manufacturing non-competitive.” But this was not the reason Trump advanced for withdrawing the US from the Paris accord. Rather, the agreement, he alleged, was bad for the US and implicitly unfair to it.

While fairness, like beauty, is in the eye of the beholder, Trump’s claim is difficult to justify. On the contrary, the Paris accord is very good for America, and it is the US that continues to impose an unfair burden on others.

Historically, the US has added disproportionately to the rising concentration of greenhouse gases in the atmosphere, and among large countries it remains the biggest per capita emitter of carbon dioxide by far – more than twice China’s rate and nearly 2.5 times more than Europe in 2013 (the latest year for which the World Bank has reported complete data). With its high income, the US is in a far better position to adapt to the challenges of climate change than poor countries like India and China, let alone a low-income country in Africa.

Image result for trump and climate change

After 6 months in office, Trump has shown that he is incapable of getting his agenda going. He cannot get at the issues which require his leadership.

In fact, the major flaw in Trump’s reasoning is that combating climate change would strengthen the US, not weaken it. Trump is looking toward the past – a past that, ironically, was not that great. His promise to restore coal-mining jobs (which now number 51,000, less than 0.04% of the country’s non-farm employment) overlooks the harsh conditions and health risks endemic in that industry, not to mention the technological advances that would continue to reduce employment in the industry even if coal production were revived.

In fact, far more jobs are being created in solar panel installation than are being lost in coal. More generally, moving to a green economy would increase US income today and economic growth in the future. In this, as in so many things, Trump is hopelessly mired in the past.

Just a few weeks before Trump’s decision to withdraw from the Paris accord, the global High-Level Commission on Carbon Prices, which I co-chaired with Nicholas Stern, highlighted the potential of a green transition. The Commission’s report, released at the end of May, argues that reducing CO2 emissions could result in an even stronger economy.

The logic is straightforward. A key problem holding back the global economy today is deficient aggregate demand. At the same time, many countries’ governments face revenue shortfalls. But we can address both issues simultaneously and reduce emissions by imposing a charge (a tax) for CO2 emissions.

It is always better to tax bad things than good things. By taxing CO2, firms and households would have an incentive to retrofit for the world of the future. The tax would also provide firms with incentives to innovate in ways that reduce energy usage and emissions – giving them a dynamic competitive advantage.

The Commission analyzed the level of carbon price that would be required to achieve the goals set forth in the Paris climate agreement – a far higher price than in most of Europe today, but still manageable. The commissioners pointed out that the appropriate price may differ across countries. In particular, they noted, a better regulatory system – one that restrains coal-fired power generation, for example – reduces the burden that must be placed on the tax system.

Interestingly, one of the world’s best-performing economies, Sweden, has already adopted a carbon tax at a rate substantially higher than that discussed in our report. And the Swedes have simultaneously sustained their strong growth without US-level emissions.

America under Trump has gone from being a world leader to an object of derision. In the aftermath of Trump’s withdrawal of the US from the Paris accord, a large sign was hung over Rome’s city hall: “The Planet First.” Likewise, France’s new president, Emmanuel Macron, poked fun at Trump’s campaign slogan, declaring “Make Our Planet Great Again.”

Image result for joseph e. stiglitz

But the consequences of Trump’s actions are no laughing matter. If the US continues to emit as it has, it will continue to impose enormous costs on the rest of the world, including on much poorer countries. Those who are being harmed by America’s recklessness are justifiably angry.

Fortunately, large parts of the US, including the most economically dynamic regions, have shown that Trump is, if not irrelevant, at least less relevant than he would like to believe. Large numbers of states and corporations have announced that they will proceed with their commitments – and perhaps go even further, offsetting the failures of other parts of the US.

In the meantime, the world must protect itself against rogue states. Climate change poses an existential threat to the planet that is no less dire than that posed by North Korea’s nuclear ambitions. In both cases, the world cannot escape the inevitable question: what is to be done about countries that refuse to do their part in preserving our planet?

Globalisation: The Rise and Fall of an Idea that swept the World


July 15, 2017

Globalisation: The Rise and Fall of an Idea that swept the World

It’s not just a populist backlash – many economists who once swore by free trade have changed their minds, too. How had they got it so wrong?

by Nikil Saval

https://www.theguardian.com

Image result for dani rodrik--the paradox of globalisation

The Annual January gathering of the World Economic Forum in Davos is usually a placid affair: a place for well-heeled participants to exchange notes on global business opportunities, or powder conditions on the local ski slopes, while cradling champagne and canapes. This January, the ultra-rich and the sparkling wine returned, but by all reports the mood was one of anxiety, defensiveness and self-reproach.

The future of economic globalisation, for which the Davos men and women see themselves as caretakers, had been shaken by a series of political earthquakes. “Globalisation” can mean many things, but what lay in particular doubt was the long-advanced project of increasing free trade in goods across borders. The previous summer, Britain had voted to leave the largest trading bloc in the world. In November, the unexpected victory of Donald Trump, who vowed to withdraw from major trade deals, appeared to jeopardise the trading relationships of the world’s richest country. Elections in France and Germany suddenly seemed to bear the possibility of anti-globalisation parties garnering better results than ever before. The barbarians weren’t at the gates to the ski-lifts yet – but they weren’t very far.

In a panel titled Governing Globalisation, economist Dambisa Moyo, otherwise a well-known supporter of free trade, forthrightly asked the audience to accept that “there have been significant losses” from globalisation. “It is not clear to me that we are going to be able to remedy them under the current infrastructure,” she added. Christine Lagarde, the head of the International Monetary Fund, called for a policy hitherto foreign to the World Economic Forum: “more redistribution”. After years of hedging or discounting the malign effects of free trade, it was time to face facts: globalisation caused job losses and depressed wages, and the usual Davos proposals – such as instructing affected populations to accept the new reality – weren’t going to work. Unless something changed, the political consequences were likely to get worse.

The backlash to globalisation has helped fuel the extraordinary political shifts of the past 18 months. During the close race to become the Democratic party candidate, Senator Bernie Sanders relentlessly attacked Hillary Clinton on her support for free trade. On the campaign trail, Donald Trump openly proposed tilting the terms of trade in favour of American industry. “Americanism, not globalism, shall be our creed,” he bellowed at the Republican national convention last July. The vote for Brexit was strongest in the regions of the UK devastated by the flight of manufacturing. At Davos in January, British Prime Minister Theresa May, the leader of the party of capital and inherited wealth, improbably picked up the theme, warning that, for many, “talk of greater globalisation … means their jobs being outsourced and wages undercut.” Meanwhile, the European far right has been warning against free movement of people as well as goods. Following her qualifying victory in the first round of France’s presidential election, Marine Le Pen warned darkly that “the main thing at stake in this election is the rampant globalisation that is endangering our civilisation.”

It was only a few decades ago that globalisation was held by many, even by some critics, to be an inevitable, unstoppable force. “Rejecting globalisation,” the American journalist George Packer has written, “was like rejecting the sunrise.” Globalisation could take place in services, capital and ideas, making it a notoriously imprecise term; but what it meant most often was making it cheaper to trade across borders – something that seemed to many at the time to be an unquestionable good.

In practice, this often meant that industry would move from rich countries, where labour was expensive, to poor countries, where labour was cheaper. People in the rich countries would either have to accept lower wages to compete, or lose their jobs. But no matter what, the goods they formerly produced would now be imported, and be even cheaper. And the unemployed could get new, higher-skilled jobs (if they got the requisite training). Mainstream economists and politicians upheld the consensus about the merits of globalisation, with little concern that there might be political consequences.

Back then, economists could calmly chalk up anti-globalisation sentiment to a marginal group of delusional protesters, or disgruntled stragglers still toiling uselessly in “sunset industries”. These days, as sizable constituencies have voted in country after country for anti-free-trade policies, or candidates that promise to limit them, the old self-assurance is gone. Millions have rejected, with uncertain results, the punishing logic that globalisation could not be stopped. The backlash has swelled a wave of soul-searching among economists, one that had already begun to roll ashore with the financial crisis. How did they fail to foresee the repercussions?

Anti-Globalisation protesters in Seattle, 1999. Photograph: Eric Draper/AP

In the heyday of the globalisation consensus, few economists questioned its merits in public. But in 1997, the Harvard economist Dani Rodrik published a slim book that created a stir. Appearing just as the US was about to enter a historic economic boom, Rodrik’s book, Has Globalization Gone Too Far?, sounded an unusual note of alarm.

Rodrik pointed to a series of dramatic recent events that challenged the idea that growing free trade would be peacefully accepted. In 1995, France had adopted a programme of fiscal austerity in order to prepare for entry into the eurozone; trade unions responded with the largest wave of strikes since 1968. In 1996, only five years after the end of the Soviet Union – with Russia’s once-protected markets having been forcibly opened, leading to a sudden decline in living standards – a communist won 40% of the vote in Russia’s presidential elections. That same year, two years after the passing of the North American Free Trade Agreement (NAFTA), one of the most ambitious multinational deals ever accomplished, a white nationalist running on an “America first” programme of economic protectionism did surprisingly well in the presidential primaries of the Republican party.

What was the pathology of which all of these disturbing events were symptoms? For Rodrik, it was “the process that has come to be called ‘globalisation’”. Since the 1980s, and especially following the collapse of the Soviet Union, lowering barriers to international trade had become the axiom of countries everywhere. Tariffs had to be slashed and regulations spiked. Trade unions, which kept wages high and made it harder to fire people, had to be crushed. Governments vied with each other to make their country more hospitable – more “competitive” – for businesses. That meant making labour cheaper and regulations looser, often in countries that had once tried their hand at socialism, or had spent years protecting “homegrown” industries with tariffs.

These moves were generally applauded by economists. After all, their profession had long embraced the principle of comparative advantage – simply put, the idea countries will trade with each other in order to gain what each lacks, thereby benefiting both. In theory, then, the globalisation of trade in goods and services would benefit consumers in rich countries by giving them access to inexpensive goods produced by cheaper labour in poorer countries, and this demand, in turn, would help grow the economies of those poorer countries.

Construction workers in Beijing, China. Photograph: Ng Han Guan/AP

But the social cost, in Rodrik’s dissenting view, was high – and consistently underestimated by economists. He noted that since the 1970s, lower-skilled European and American workers had endured a major fall in the real value of their wages, which dropped by more than 20%. Workers were suffering more spells of unemployment, more volatility in the hours they were expected to work.

While many economists attributed much of the insecurity to technological change – sophisticated new machines displacing low-skilled workers – Rodrik suggested that the process of globalisation should shoulder more of the blame. It was, in particular, the competition between workers in developing and developed countries that helped drive down wages and job security for workers in developed countries. Over and over, they would be held hostage to the possibility that their business would up and leave, in order to find cheap labour in other parts of the world; they had to accept restraints on their salaries – or else. Opinion polls registered their strong levels of anxiety and insecurity, and the political effects were becoming more visible. Rodrik foresaw that the cost of greater “economic integration” would be greater “social disintegration”. The inevitable result would be a huge political backlash.

As Rodrik would later recall, other economists tended to dismiss his arguments – or fear them. Paul Krugman, who would win the Nobel prize in 2008 for his earlier work in trade theory and economic geography, privately warned Rodrik that his work would give “ammunition to the barbarians”.

It was a tacit acknowledgment that pro-globalisation economists, journalists and politicians had come under growing pressure from a new movement on the left, who were raising concerns very similar to Rodrik’s. Over the course of the 1990s, an unwieldy international coalition had begun to contest the notion that globalisation was good. Called “anti-globalisation” by the media, and the “alter-globalisation” or “global justice” movement by its participants, it tried to draw attention to the devastating effect that free trade policies were having, especially in the developing world, where globalisation was supposed to be having its most beneficial effect. This was a time when figures such as the New York Times columnist Thomas Friedman had given the topic a glitzy prominence by documenting his time among what he gratingly called “globalutionaries”: chatting amiably with the CEO of Monsanto one day, gawking at lingerie manufacturers in Sri Lanka the next. Activists were intent on showing a much darker picture, revealing how the record of globalisation consisted mostly of farmers pushed off their land and the rampant proliferation of sweatshops. They also implicated the highest world bodies in their critique: the G7, World Bank and IMF. In 1999, the movement reached a high point when a unique coalition of trade unions and environmentalists managed to shut down the meeting of the World Trade Organization in Seattle.

In a state of panic, economists responded with a flood of columns and books that defended the necessity of a more open global market economy, in tones ranging from grandiose to sarcastic. In January 2000, Krugman used his first piece as a New York Times columnist to denounce the “trashing” of the WTO, calling it “a sad irony that the cause that has finally awakened the long-dormant American left is that of – yes! – denying opportunity to third-world workers”.

Where Krugman was derisive, others were solemn, putting the contemporary fight against the “anti-globalisation” left in a continuum of struggles for liberty. “Liberals, social democrats and moderate conservatives are on the same side in the great battles against religious fanatics, obscurantists, extreme environmentalists, fascists, Marxists and, of course, contemporary anti-globalisers,” wrote the Financial Times columnist and former World Bank economist Martin Wolf in his book Why Globalization Works. Language like this lent the fight for globalisation the air of an epochal struggle. More common was the rhetoric of figures such as Friedman, who in his book The World is Flat mocked the “pampered American college kids” who, “wearing their branded clothing, began to get interested in sweatshops as a way of expiating their guilt”.

Arguments against the global justice movement rested on the idea that the ultimate benefits of a more open and integrated economy would outweigh the downsides. “Freer trade is associated with higher growth and … higher growth is associated with reduced poverty,” wrote the Columbia University economist Jagdish Bhagwati in his book In Defense of Globalization. “Hence, growth reduces poverty.” No matter how troubling some of the local effects, the implication went, globalisation promised a greater good.

Image result for Jagdish Bhagwati in his book In Defense of Globalization.

 

The fact that proponents of globalisation now felt compelled to spend much of their time defending it indicates how much visibility the global justice movement had achieved by the early 2000s. Still, over time, the movement lost ground, as a policy consensus settled in favour of globalisation. The proponents of globalisation were determined never to let another gathering be interrupted. They stopped meeting in major cities, and security everywhere was tightened. By the time of the invasion of Iraq, the world’s attention had turned from free trade to George Bush and the “war on terror,” leaving the globalisation consensus intact.

Image result for dani rodrik--the paradox of globalisation

Above all, there was a widespread perception that globalisation was working as it was supposed to. The local adverse effects that activists pointed to – sweatshop labour, starving farmers – were increasingly obscured by the staggering GDP numbers and fantastical images of gleaming skylines coming out of China. With some lonely exceptions – such as Rodrik and the former World Bank chief and Columbia University Professor Joseph Stiglitz – the pursuit of freer trade became a consensus position for economists, commentators and the vast majority of mainstream politicians, to the point where the benefits of free trade seemed to command blind adherence. In a 2006 TV interview, Thomas Friedman was asked whether there was any free trade deal he would not support. He replied that there wasn’t, admitting, “I wrote a column supporting the CAFTA, the Caribbean Free Trade initiative. I didn’t even know what was in it. I just knew two words: free trade.”

In the wake of the financial crisis, the cracks began to show in the consensus on globalisation, to the point that, today, there may no longer be a consensus. Economists who were once ardent proponents of globalisation have become some of its most prominent critics. Erstwhile supporters now concede, at least in part, that it has produced inequality, unemployment and downward pressure on wages. Nuances and criticisms that economists only used to raise in private seminars are finally coming out in the open.
Advertisement

A few months before the financial crisis hit, Krugman was already confessing to a “guilty conscience”. In the 1990s, he had been very influential in arguing that global trade with poor countries had only a small effect on workers’ wages in rich countries. By 2008, he was having doubts: the data seemed to suggest that the effect was much larger than he had suspected.

In the years that followed, the crash, the crisis of the eurozone and the worldwide drop in the price of oil and other commodities combined to put a huge dent in global trade. Since 2012, the IMF reported in its World Economic Outlook for October 2016, trade was growing at 3% a year – less than half the average of the previous three decades. That month, Martin Wolf argued in a column that globalisation had “lost dynamism”, due to a slackening of the world economy, the “exhaustion” of new markets to exploit and a rise in protectionist policies around the world.

Image result for Wolf Why Globalization Works

In an interview earlier this year, Wolf suggested to me that, though he remained convinced globalisation had not been the decisive factor in rising inequality, he had nonetheless not fully foreseen when he was writing Why Globalization Works how “radical the implications” of worsening inequality “might be for the US, and therefore the world”. Among these implications appears to be a rising distrust of the establishment that is blamed for the inequality. “We have a very big political problem in many of our countries,” he said. “The elites – the policy making business and financial elites – are increasingly disliked. You need to make policy which brings people to think again that their societies are run in a decent and civilised way.”

That distrust of the establishment has had highly visible political consequences: Farage, Trump, and Le Pen on the right; but also in new parties on the left, such as Spain’s Podemos, and curious populist hybrids, such as Italy’s Five Star Movement. As in 1997, but to an even greater degree, the volatile political scene reflects public anxiety over “the process that has come to be called ‘globalisation’”. If the critics of globalisation could be dismissed before because of their lack of economics training, or ignored because they were in distant countries, or kept out of sight by a wall of police, their sudden political ascendancy in the rich countries of the west cannot be so easily discounted today.

Over the past year, the opinion pages of prestigious newspapers have been filled with belated, rueful comments from the high priests of globalisation – the men who appeared to have defeated the anti-globalisers two decades earlier. Perhaps the most surprising such transformation has been that of Larry Summers. Possessed of a panoply of elite titles – former Chief Economist of the World Bank, former Treasury Secretary, President emeritus of Harvard, former Economic Adviser to President Barack Obama – Summers was renowned in the 1990s and 2000s for being a blustery proponent of globalisation. For Summers, it seemed, market logic was so inexorable that its dictates prevailed over every social concern. In an infamous World Bank memo from 1991, he held that the cheapest way to dispose of toxic waste in rich countries was to dump it in poor countries, since it was financially cheaper for them to manage it. “The laws of economics, it’s often forgotten, are like the laws of engineering,” he said in a speech that year at a World Bank-IMF meeting in Bangkok. “There’s only one set of laws and they work everywhere. One of the things I’ve learned in my short time at the World Bank is that whenever anybody says, ‘But economics works differently here,’ they’re about to say something dumb.”

Over the last two years, a different, in some ways unrecognizable Larry Summers has been appearing in newspaper editorial pages. More circumspect in tone, this humbler Summers has been arguing that economic opportunities in the developing world are slowing, and that the already rich economies are finding it hard to get out of the crisis. Barring some kind of breakthrough, Summers says, an era of slow growth is here to stay.

In Summers’s recent writings, this sombre conclusion has often been paired with a surprising political goal: advocating for a “responsible nationalism”. Now he argues that politicians must recognise that “the basic responsibility of government is to maximise the welfare of citizens, not to pursue some abstract concept of the global good”.

One curious thing about the pro-globalisation consensus of the 1990s and 2000s, and its collapse in recent years, is how closely the cycle resembles a previous era. Pursuing free trade has always produced displacement and inequality – and political chaos, populism and retrenchment to go with it. Every time the social consequences of free trade are overlooked, political backlash follows. But free trade is only one of many forms that economic integration can take. History seems to suggest, however, that it might be the most destabilising one.

Nearly all economists and scholars of globalisation like to point to the fact that the economy was rather globalised by the early 20th century. As European countries colonised Asia and sub-Saharan Africa, they turned their colonies into suppliers of raw materials for European manufacturers, as well as markets for European goods. Meanwhile, the economies of the colonisers were also becoming free-trade zones for each other. “The opening years of the 20th century were the closest thing the world had ever seen to a free world market for goods, capital and labour,” writes the Harvard Professor of Government Jeffry Frieden in his standard account, Global Capitalism: Its Fall and Rise in the 20th Century. “It would be a hundred years before the world returned to that level of globalisation.”

Image result for Jeffry Frieden Global Capitalism: Its Fall and Rise in the 20th Century.

 

In addition to military force, what underpinned this convenient arrangement for imperial nations was the gold standard. Under this system, each national currency had an established gold value: the British pound sterling was backed by 113 grains of pure gold; the US dollar by 23.22 grains, and so on. This entailed that exchange rates were also fixed: a British pound was always equal to 4.87 dollars. The stability of exchange rates meant that the cost of doing business across borders was predictable. Just like the eurozone today, you could count on the value of the currency staying the same, so long as the storehouse of gold remained more or less the same.

When there were gold shortages – as there were in the 1870s – the system stopped working. To protect the sanctity of the standard under conditions of stress, central bankers across the Europe and the US tightened access to credit and deflated prices. This left financiers in a decent position, but crushed farmers and the rural poor, for whom falling prices meant starvation. Then as now, economists and mainstream politicians largely overlooked the darker side of the economic picture.

In the US, this fuelled one of the world’s first self-described “populist” revolts, leading to the nomination of William Jennings Bryan as the Democratic party candidate in 1896. At his nominating convention, he gave a famous speech lambasting gold backers: “You shall not press down upon the brow of labour this crown of thorns, you shall not crucify mankind upon a cross of gold.” Then as now, financial elites and their supporters in the press were horrified. “There has been an upheaval of the political crust,” the Times of London reported, “and strange creatures have come forth.”

Businessmen were so distressed by Bryan that they backed the Republican candidate, William McKinley, who won partly by outspending Bryan five to one. Meanwhile, gold was bolstered by the discovery of new reserves in colonial South Africa. But the gold standard could not survive the first world war and the Great Depression. By the 1930s, unionisation had spread to more industries and there was a growing worldwide socialist movement. Protecting gold would mean mass unemployment and social unrest. Britain went off the gold standard in 1931, while Franklin Roosevelt took the US off it in 1933; France and several other countries would follow in 1936.

The prioritisation of finance and trade over the welfare of people had come momentarily to an end. But this wasn’t the end of the global economic system.

The trade system that followed was global, too, with high levels of trade – but it took place on terms that often allowed developing countries to protect their industries. Because, from the perspective of free traders, protectionism is always seen as bad, the success of this postwar system has been largely under-recognised.

Over the course of the 1930s and 40s, liberals – John Maynard Keynes among them – who had previously regarded departures from free trade as “an imbecility and an outrage” began to lose their religion. “The decadent international but individualistic capitalism, in the hands of which we found ourselves after the war, is not a success,” Keynes found himself writing in 1933. “It is not intelligent, it is not beautiful, it is not just, it is not virtuous – and it doesn’t deliver the goods. In short, we dislike it, and we are beginning to despise it.” He claimed sympathies “with those who would minimise, rather than with those who would maximise, economic entanglement among nations,” and argued that goods “be homespun whenever it is reasonably and conveniently possible”.

The international systems that chastened figures such as Keynes helped produce in the next few years – especially the Bretton Woods agreement and the General Agreement on Tariffs and Trade (GATT) – set the terms under which the new wave of globalisation would take place.

The key to the system’s viability, in Rodrik’s view, was its flexibility – something absent from contemporary globalisation, with its one-size-fits-all model of capitalism. Bretton Woods stabilised exchange rates by pegging the dollar loosely to gold, and other currencies to the dollar. GATT consisted of rules governing free trade – negotiated by participating countries in a series of multinational “rounds” – that left many areas of the world economy, such as agriculture, untouched or unaddressed. “GATT’s purpose was never to maximise free trade,” Rodrik writes. “It was to achieve the maximum amount of trade compatible with different nations doing their own thing. In that respect, the institution proved spectacularly successful.”

Partly because GATT was not always dogmatic about free trade, it allowed most countries to figure out their own economic objectives, within a somewhat international ambit. When nations contravened the agreement’s terms on specific areas of national interest, they found that it “contained loopholes wide enough for an elephant to pass”, in Rodrik’s words. If a nation wanted to protect its steel industry, for example, it could claim “injury” under the rules of GATT and raise tariffs to discourage steel imports: “an abomination from the standpoint of free trade”. These were useful for countries that were recovering from the war and needed to build up their own industries via tariffs – duties imposed on particular imports. Meanwhile, from 1948 to 1990, world trade grew at an annual average of nearly 7% – faster than the post-communist years, which we think of as the high point of globalisation. “If there was a golden era of globalisation,” Rodrik has written, “this was it.”

GATT, however, failed to cover many of the countries in the developing world. These countries eventually created their own system, the United Nations conference on trade and development (UNCTAD). Under this rubric, many countries – especially in Latin America, the Middle East, Africa and Asia – adopted a policy of protecting homegrown industries by replacing imports with domestically produced goods. It worked poorly in some places – India and Argentina, for example, where the trade barriers were too high, resulting in factories that cost more to set up than the value of the goods they produced – but remarkably well in others, such as east Asia, much of Latin America and parts of sub-Saharan Africa, where homegrown industries did spring up. Though many later economists and commentators would dismiss the achievements of this model, it theoretically fit Larry Summers’s recent rubric on globalisation: “the basic responsibility of government is to maximise the welfare of citizens, not to pursue some abstract concept of the global good.”

The critical turning point – away from this system of trade balanced against national protections – came in the 1980s. Flagging growth and high inflation in the west, along with growing competition from Japan, opened the way for a political transformation. The elections of Margaret Thatcher and Ronald Reagan were seminal, putting free-market radicals in charge of two of the world’s five biggest economies and ushering in an era of “hyperglobalisation”. In the new political climate, economies with large public sectors and strong governments within the global capitalist system were no longer seen as aids to the system’s functioning, but impediments to it.

Not only did these ideologies take hold in the US and the UK; they seized international institutions as well. GATT renamed itself as the World Trade Organization (WTO), and the new rules the body negotiated began to cut more deeply into national policies. Its international trade rules sometimes undermined national legislation. The WTO’s appellate court intervened relentlessly in member nations’ tax, environmental and regulatory policies, including those of the United States: the US’s fuel emissions standards were judged to discriminate against imported gasoline, and its ban on imported shrimp caught without turtle-excluding devices was overturned. If national health and safety regulations were stricter than WTO rules necessitated, they could only remain in place if they were shown to have “scientific justification”.

The purest version of hyper-globalisation was tried out in Latin America in the 1980s. Known as the “Washington Consensus”, this model usually involved loans from the IMF that were contingent on those countries lowering trade barriers and privatising many of their nationally held industries. Well into the 1990s, economists were proclaiming the indisputable benefits of openness. In an influential 1995 paper, Jeffrey Sachs and Andrew Warner wrote: “We find no cases to support the frequent worry that a country might open and yet fail to grow.”

But the Washington consensus was bad for business: most countries did worse than before. Growth faltered, and citizens across Latin America revolted against attempted privatisations of water and gas. In Argentina, which followed the Washington Consensus to the letter, a grave crisis resulted in 2002, precipitating an economic collapse and massive street protests that forced out the government that had pursued privatising reforms. Argentina’s revolt presaged a left-populist upsurge across the continent: from 1999 to 2007, left wing leaders and parties took power in Brazil, Venezuela, Bolivia and Ecuador, all of them campaigning against the Washington consensus on globalisation. These revolts were a preview of the backlash of today.

Rodrik – perhaps the contemporary economist whose views have been most amply vindicated by recent events – was himself a beneficiary of protectionism in Turkey. His father’s ballpoint pen company was sheltered under tariffs, and achieved enough success to allow Rodrik to attend Harvard in the 1970s as an undergraduate. This personal understanding of the mixed nature of economic success may be one of the reasons why his work runs against the broad consensus of mainstream economics writing on globalisation.

“I never felt that my ideas were out of the mainstream,” Rodrik told me recently. Instead, it was that the mainstream had lost touch with the diversity of opinions and methods that already existed within economics. “The economics profession is strange in that the more you move away from the seminar room to the public domain, the more the nuances get lost, especially on issues of trade.” He lamented the fact that while, in the classroom, the models of trade discuss losers and winners, and, as a result, the necessity of policies of redistribution, in practice, an “arrogance and hubris” had led many economists to ignore these implications. “Rather than speaking truth to power, so to speak, many economists became cheerleaders for globalisation.”

In his 2011 book The Globalization Paradox, Rodrik concluded that “we cannot simultaneously pursue democracy, national determination, and economic globalisation.” The results of the 2016 elections and referendums provide ample testimony of the justness of the thesis, with millions voting to push back, for better or for worse, against the campaigns and institutions that promised more globalisation. “I’m not at all surprised by the backlash,” Rodrik told me. “Really, nobody should have been surprised.”

But what, in any case, would “more globalisation” look like? For the same economists and writers who have started to rethink their commitments to greater integration, it doesn’t mean quite what it did in the early 2000s. It’s not only the discourse that’s changed: globalisation itself has changed, developing into a more chaotic and unequal system than many economists predicted. The benefits of globalisation have been largely concentrated in a handful of Asian countries. And even in those countries, the good times may be running out.

Statistics from Global Inequality, a 2016 book by the development economist Branko Milanović, indicate that in relative terms the greatest benefits of globalisation have accrued to a rising “emerging middle class”, based preponderantly in China. But the cons are there, too: in absolute terms, the largest gains have gone to what is commonly called “the 1%” – half of whom are based in the US. Economist Richard Baldwin has shown in his recent book, The Great Convergence, that nearly all of the gains from globalisation have been concentrated in six countries.

Barring some political catastrophe, in which right wing populism continued to gain, and in which globalisation would be the least of our problems – Wolf admitted that he was “not at all sure” that this could be ruled out – globalisation was always going to slow; in fact, it already has. One reason, says Wolf, was that “a very, very large proportion of the gains from globalisation – by no means all – have been exploited. We have a more open world economy to trade than we’ve ever had before.” Citing The Great Convergence, Wolf noted that supply chains have already expanded, and that future developments, such as automation and the use of robots, looked to undermine the promise of a growing industrial workforce. Today, the political priorities were less about trade and more about the challenge of retraining workers, as technology renders old jobs obsolete and transforms the world of work.

Rodrik, too, believes that globalisation, whether reduced or increased, is unlikely to produce the kind of economic effects it once did. For him, this slowdown has something to do with what he calls “premature deindustrialisation”. In the past, the simplest model of globalisation suggested that rich countries would gradually become “service economies”, while emerging economies picked up the industrial burden. Yet recent statistics show the world as a whole is deindustrialising. Countries that one would have expected to have more industrial potential are going through the stages of automation more quickly than previously developed countries did, and thereby failing to develop the broad industrial workforce seen as a key to shared prosperity.

For both Rodrik and Wolf, the political reaction to globalisation bore possibilities of deep uncertainty. “I really have found it very difficult to decide whether what we’re living through is a blip, or a fundamental and profound transformation of the world – at least as significant as that one brought about the first world war and the Russian revolution,” Wolf told me. He cited his agreement with economists such as Summers that shifting away from the earlier emphasis on globalisation had now become a political priority; that to pursue still greater liberalisation was like showing “a red rag to a bull” in terms of what it might do to the already compromised political stability of the western world.

Rodrik pointed to a belated emphasis, both among political figures and economists, on the necessity of compensating those displaced by globalisation with retraining and more robust welfare states. But pro-free-traders had a history of cutting compensation: Bill Clinton passed NAFTA, but failed to expand safety nets. “The issue is that the people are rightly not trusting the centrists who are now promising compensation,” Rodrik said. “One reason that Hillary Clinton didn’t get any traction with those people is that she didn’t have any credibility.”

Rodrik felt that economics commentary failed to register the gravity of the situation: that there were increasingly few avenues for global growth, and that much of the damage done by globalisation – economic and political – is irreversible. “There is a sense that we’re at a turning point,” he said. “There’s a lot more thinking about what can be done. There’s a renewed emphasis on compensation – which, you know, I think has come rather late.”

https://www.theguardian.com/world/2017/jul/14/globalisation-the-rise-and-fall-of-an-idea-that-swept-the-world

DJT is Making America a G-20 Pariah


July 11, 2017

Wake Up: DJT is Making America a G-20 Pariah

by John Cassidy

Australian journalist Chris Uhlmann demolishes Trump after G20: ‘biggest threat to the west’

Mr Trump is a man who craves power because it burnishes his celebrity. To be constantly talking and talked about is all that really matters. And there is no value placed on the meaning of words. So what is said one day can be discarded the next.

So what have we learned?

We learned Mr Trump has pressed fast forward on the decline of the US as a global leader. He managed to diminish his nation and to confuse and alienate his allies.He will cede that power to China and Russia — two authoritarian states that will forge a very different set of rules for the 21st century. Some will cheer the decline of America, but I think we’ll miss it when it is gone. And that is the biggest threat to the values of the West which he claims to hold so dear.– Chris Uhlmann

Image result for Trump is destroying America

Just when you think you’ve seen it all, out comes another Donald Trump tweet, or tweetstorm, to prove you wrong. On Sunday morning, America’s forty-fifth President, having just returned to Washington from the G-20 summit in Hamburg, Germany, pronounced his trip “a great success for the United States.”

It says something about Trump’s grip on reality that he could reach such a conclusion after a summit in which he and the rest of the U.S. delegation were utterly isolated on major issues such as climate change and international trade. In fact, the only way that German Chancellor Angela Merkel’s diplomatic sherpas were able to cobble together a communiqué that everyone could sign onto was to include a section that noted America’s decision to withdraw from the Paris climate accord, but which added, “Leaders of the other G20 members state that the Paris Agreement is irreversible.” The symbolism here was powerful: in a global forum that the U.S. government, especially the Treasury Department, helped to create during the late nineteen-nineties, Trump’s America stood alone.

Of course, the G-20 is far from perfect: the protesters assembled outside the Messehallen Convention Center, most of whom were peaceful, were right about that. The organization’s membership is arbitrary—Italy is a member, Spain isn’t; South Africa is in, Nigeria is out—and its pronouncements can reflect the sometimes hidebound thinking of finance ministers and central bankers. But the G-20 is also one of the few political forums for tackling global economic problems, such as financial contagion, tax evasion, and climate change (which is ultimately a market failure). And, until Trump’s election, U.S. leadership was widely recognized as an integral part of any G-20 get-together.

The message of Hamburg was that Trump’s “America First” rhetoric—and his inability to see international agreements as anything other than zero-sum deals—have changed that situation, at least temporarily. The rest of the world hasn’t turned its back on the U.S.; the country is still far too big and powerful for that to happen. And, in any case, many foreign leaders harbor respect for the values that the U.S. espouses and the global order that it has helped maintain for seven decades. At the moment, however, they are looking for ways to work around Washington and its rogue President.

Image result for Trump and Putin at G-20

Outplayed by Valdimir Putin of Russia?

Judging by his Twitter comments on Sunday, Trump is proud of having turned the U.S. into a G-20 pariah. But even more revealing, and disturbing, was the readout he delivered on his meeting last Friday with Russia’s Vladimir Putin. Here it is, not quite in its entirety (as, since we’ve heard Trump criticize Barack Obama and the “fake news” media many times before, I’ve left out those bits):

I strongly pressed President Putin twice about Russian meddling in our election, He vehemently denied it. I’ve already given my opinion. . . . We negotiated a ceasefire in parts of Syria which will save lives. Now it is time to move forward in working constructively with Russia! Putin & I discussed forming an impenetrable Cyber Security unit so that election hacking, & many other negative things, will be guarded . . . and safe. Questions were asked about why the CIA & FBI had to ask the DNC 13 times for their SERVER, and were rejected, still don’t . . . have it. . . . Sanctions were not discussed at my meeting with President Putin. Nothing will be done until the Ukrainian & Syrian problems are solved!

In the spirit of generosity, it should be acknowledged that the final sentence here was a welcome one. And Moscow’s many critics in Congress will surely remind Trump of it if he decides, during the coming months, to relax the restrictions that the Obama Administration imposed on Russia following its annexation of Crimea.

But the rest of what the President wrote on Sunday was a mess of confusions and contradictions. Trump didn’t out-and-out confirm the claim made by Sergey Lavrov, Russia’s Foreign Minister, that he had accepted Putin’s denials of any Russian involvement in hacking during the election. But Trump made perfectly clear that he still rejects the view of the U.S. intelligence community that Russia was responsible for hacking and that, for policy purposes, he considers the matter to be closed. Any effort to get to the bottom of what happened—much less impose some real punishment on Moscow—will be subjugated to the imperative of “working constructively with Russia.”

Image result for cyber security unit

Sen. John McCain, R-Ariz.and Sen. Lindsey Graham, R-S.C., on Capitol Hill in Washington have criticised the Trump-Putin proposal to create a joint “Cyber Security unit” to safeguard future elections.

That brings us to the nuttiest part of the tweetstorm, perhaps the nuttiest thing an American President has said in decades: the proposal to create a joint “Cyber Security unit” with Moscow to safeguard future elections. Whether Trump himself came up with this ingenious proposal, or whether it was Putin’s idea, the Tweeter-in-Chief didn’t say. But it drew instant ridicule from both sides of the political divide.

“It’s not the dumbest idea I have ever heard but it’s pretty close,” the Republican senator Lindsey Graham told NBC’s “Meet the Press.” Representative Adam Schiff, the top Democrat on the House Intelligence Committee, said on CNN, “If that’s our best election defense, we might as well just mail our ballot boxes to Moscow.”

What was Trump thinking? As ever, we have to consider the possibility that he wasn’t thinking at all, and what he says doesn’t mean anything—not even when he is reporting on his dealings with the leader of a rival nuclear power. “Donald Trump is a man who craves power because it burnishes his celebrity: to be constantly talking and talked about is all that really matters,” Chris Uhlmann, the political editor of the Australian Broadcasting Corporation, said, in remarks about the G-20 summit that went viral. “And there is no value placed on the meaning of words, so what’s said one day can be discarded the next.”

The other reading is a darker one, and it involves taking Trump at his word. For whatever reason, he still appears to see Putin as a potential partner—maybe even one who can be trusted with some of America’s most sensitive secrets, such as the workings of its voting systems. If this is indeed the case, it matters little whether Trump is a Russian dupe or a Russian stooge: he needs to be stopped.

On Sunday night, Trump disavowed part of what he had said earlier in the day, writing in another tweet, “The fact that President Putin and I discussed a Cyber Security unit doesn’t mean I think it can happen. It can’t-but a ceasefire can,& did!” This message illustrated Uhlmann’s point about the half-life of Trump’s utterances, and also confirmed the truth of the Australian journalist’s over-all conclusion about the President’s trip to the G-20 meeting: “So what did we learn? We learned that Donald Trump has pressed fast forward on the decline of the United States as a global leader.”