Has Globalization Backfired? Live Debate Video

[Music] thank you hi everybody I'm John Don band welcome to Intelligence Squared and a debate we are putting on in partnership with YPO Edge in New York City a gathering of CEOs and organization leaders who certainly understand well this statement that I now put before you sometimes an idea that is meant to make things better actually works out really well and sometimes not so much and there can even be unintended bad consequences so how has it gone with the idea known as globalization the promise was that globalization by removing barriers to trade between nations and letting technology and people and ideas move freely across borders was going to benefit Everyone by producing greater efficiencies and more Innovation that was the promise the reality after some 30 to 40 Years of an Ever more globalizing world is at least debatable so that's what we're going to do we're going to debate it by having two Debaters get up on this stage and each answer yes or no to this question has globalization backfired let's please meet our Debaters first she is global business columnist for the financial times and author of homecoming the path to prosperity in a post-global world please welcome Rana farohar and he is founder and CEO of climate Alpha and founder of managing partner of future mapper please welcome parag Khanna Serana and Prague thanks so much for joining us and uh we want to find out first which side each of you is on on the question I'll go to you first Prague on the question has globalization backfired are you going to say yes or no I'm going to say no all right Rana that tells us that you are the yes I am 100 yes you all set to go I'm all ready all right take it okay I'm gonna stand if that's all right because I like to walk and talk globalization as we have known it for the last half century has failed why has it failed neoliberal globalization which was predicated on the Washington consensus ideas that capital goods and people could always travel seamlessly across borders and crucially would always land where it was most productive for them to do so and would lift all votes in the process is simply wrong if we look at the last half century in particular the Apex of what I would call this last round of globalization between 2003 and 2007 you had more wealth created at a global level than ever before but in almost every country you had a dramatic increase in inequality why is that because there was a flaw in this current system of neoliberal globalization and that's the capital can always travel faster than either Goods or people and I'm going to argue as I do in my new book homecoming that that Gulf has led not only to stagnating economies but it has led to dramatic political polarization in much of the developed world and parts of the developing world you know we're going to talk a lot about data points we're going to talk a lot about ideas but let me tell you quickly one story that I think encapsulates why globalization has backfired in the course of my book research I did an interview with the late labor leader Richard trumka he used to be the head of the AFL-CIO I went to him to talk about what the conversations were like in the 90s and the naughties when our current system of global trade and globalization was being developed what were people telling him about the result for labor in the U.S and Europe and other developed countries and he said at that time a policy maker from the Clinton administration had come to him and he'd said you know some of these deals are going to kill us what are we going to do we want to be part of global markets but how is this going to affect labor working people at home and the policy maker said we know it's going to kill you we know it's going to be hard but there's going to be a leveling up remember that term leveling up wages are going to rise everywhere and eventually everything's going to be good all boats are going to rise economies are going to grow politics will be stable and Trump has said okay but how long is that going to take and the policy maker said three to five generations three to five generations that's a hundred years in the communities in question and that is at the core of why globalization has backfired thank you Rana okay you are arguing the opposite side no it has not backfired you are here to defend globalization I'm ready to do it go for it thank you John I never refused an intelligent Square debate I've always enjoyed these and I would certainly never pass up a chance to share the stage even if on opposite sides from Rana Arana is uh undoubtedly the anglo-american world's most I think credible uh pragmatic and balanced voice on economic Affairs so I'm very honored to be joining you today I do fear however that you've gone a bit native uh and that happens to immigrants immigrant families like like ours now despite our Perpetual youthfulness uh the two of us here three of us here on the stage are actually can probably well remember four instances in just the last 20 years when pundits have proclaimed the death of globalization so let's list all four really quickly there was the 911 terrorist attacks we were told trust across the globe has collapsed it was a time of invasions and War foreign investment would be uninsurable remember that just 20 years ago a few years later Global financial crisis we were told interbank lending had Frozen we had a global demand shock trade finance and Supply chains were disrupted forever we were told a few years after that the twin shocks of trump and brexit in 2016. that was meant to Auger nationalism protectionism xenophobia as a wave sweeping the planet and now fourth instance actually many things at once covid Ukraine China take your pick we're told we were told nobody will ever travel again U.S China tensions and near Shoring reverse will reverse trade and World War III looms and just like 1914 that will definitively end globalization time and again the globalization cynics say this time is different and yet here we are the rate of trade to GDP is holding strong everyone talks about U.S China decoupling but guess what U.S China trade is up this year 10 percent and that's and just because two Powers want to decouple from each other what about the rest did you know that the largest Trade Agreement in history was signed this year the regional comprehensive economic partnership actually went into effect among about 40 countries trillions of dollars of global assets allocating pension savings and Sovereign wealth all over the world ever more countries are having their stock exchanges connected to Global markets and floating their local currency debt as well digital connectivity is a blankening the world petabytes of data are flowing through the internet uh through cables every minute of every day Global digital Commerce this year reaches 5.5 trillion dollars which is just shy of global Goods trade so catching up now not and let's talk about the globalization of people that matters too not 100 million not 200 million about 300 million people now live outside of their country of origin so more people more cities more countries more societies more of everything is more connected more globally than ever ever before so let me summarize this strident counter narrative defending globalization with this utterly irrefutable fact of human history globalization always wins feel free to repeat thank you thank you all right so now we're going to move into a part of the debate where it's more of a conversation that moves back and forth robustly but I just want to say what I think I've heard as two kinds of arguments being made here is the parag has made the argument that globalization has not backfired from the point of view of the fact that as he argues or he is arguing that its infrastructure remains in place that the connections that it was it set out to establish were established and continued to be made that the relationships the global relationships that it was meant to to build uh exist and are functioning and even thriving whereas I felt that Rana your argument is more that globalization came with a certain promise of benefits and that the promise has not been kept so talk a little bit about what the promise a little bit more in detail about what you would say to parag what the promise was and why you feel it has failed to be followed through on yeah thank you for that um for starters I think it's important to stay focused in these debates and perog and I have have both been in a number of them about the question at issue has globalization backfired we can talk till the cows come home about trade flows we can splice and dice the numbers differently I would actually if I was citing trade flows note that for the last several years even leading up to covid and the war in Ukraine trade in traditional goods and services had been flat or falling digital trade had in fact been rising I think that that's going to change and become much more regionalized for reasons that I'll get into but let's talk about the different kinds of globalizations that we've seen over the last several hundred years globalization Ebbs and falls it always has for hundreds of years and thousands of years and it comes in different forms the 18th century Mercantile mercantilism worked until it didn't then you saw a pivot to laissez faire that worked until it didn't then you saw the rise of keynesianism and then you saw the sort of transition starting in the 30s but then really taking off with the Reagan Thatcher Revolution into this hardcore neoliberal idea that connecting Global capital and Global business across borders was going to be the way to tampon down the nation-state but more particularly nationalism and I I think that that's really important historical context here if you look at the word neoliberal right neoliberal globalization is what we're really talking about here the Washington consensus this last half century that word was first used in the 1930s and it was used in Europe for understandable reasons um continent was between two great Wars um political philosophers and economists were coming together and trying to figure out how can we make sure that these countries don't go to war with one another again how can we really tampon down not just the power of the nation-state but the opportunities for nationalists and even fascists to rise and they came up with the ideas of connecting Global capital in business in the ways that eventually gave birth to organizations like the World Bank the IMF the Gap that later became the WTO and those ideas were great for a period of time they worked until the pendulum as it always does in economic paradigms swung too far in the direction of capital and I would argue that that started to happen in the 1990s and in particular in the in the in the naughties um that's when you started to see real wages for all uh folks living in the developed world for example uh really stagnating you started to see widespread inequality and according to un research you started to see the benefits of all that Global wealth being created really going into two different Pockets multinational corporations and China the Chinese State I would say Chinese labor but as we all know beijing's has suppressed wages and basically funneled a lot of worker savings into state run institutions so I would say the state and that dichotomy that sense that wait a minute we have a global market system that is working for basically I could say the one percent I could say the point zero zero one percent but here's what I'll say I'll say the top 10 percent of the population that owns 85 percent of the stock in those multinational companies and for the Chinese state it was working mainly for those two groups everybody else in between was getting less of their share of the pie Rhonda can I can I you've said so much I want to let sure Prague respond to some of it so thank you for letting me interrupt um so you can take the your response wherever you would like but I found compelling um rana's argument that there was kind of a promise that globalization would lead to Greater understanding less tension perhaps less negative competition and that that has not been fulfilled and that things like brexit uh come about because of the breaking or the lack of fulfillment of that promise so can you take that on sure I think there are a couple of things John in your introduction you define the globalization correctly is the worldwide spread of an exchange of people of capital technology trade goods ideas and so forth you coupled it with saying it brought this promise of an ever-expanding Universe of prosperity those two do not necessarily go hand in hand globalization is primarily the former part of what you said it is a material measurable fact in terms of the extensity of Connections in exchange among people the velocity uh and so forth that is globalization it is in many ways neutral you can choose to imbue it with certain hopes and expectations and you may be disappointed depending on where in the world can I can I stop in then break in then what what was the the goal then you as you say it the the functioning is neutral but it there must have been an objective for bringing it it's so interesting you're you're uh both in a way ascribing an agency to globalization rather than to the agents who actually drive globalization because for one thing it is driven by everyone it is the sum total of all of these interactions even if some slice of the American electorate or British populace professes to be upset with globalization of course that too is a bit of a sideshow because they're politicians much like the ones here in the United States always need to blame an external party for their own flaws we can come back to that in a moment but globalization emerges from all of those voluntary very often voluntary interactions now we can go back to previous eras of globalization that were colonial and Mercantile in which of course there was a lot of forced exploitation involved in creating the global World economy of the 17th 18th 19th centuries but that's not the globalization that we're talking about right now nor does the globalization objectively neutrally in terms of measurement have to be synonymous with neoliberalism and integration globalization is a lot more than that one particular period of time that Rana is focusing on because it is the immediate contemporary or recent past but that doesn't mean that that is all globalization because there's a lot going on that drives the globalization of goods Services exchange that has nothing thing to do necessarily with that Paradigm ideologically when China expands its capital outflow and investment when it does the belt and Road initiative when it pursues its dual circulation policy and signs lots of trade agreements it is the largest trade partner of more than 120 countries so just FYI nothing that we discuss here today is going to change that fact so you can retrench as much as you want and recalibrate your own position on globalization as America is welcome to do it doesn't mean that globalization has died all right right can I yeah can I jump in you know um Prague is in some ways making my argument for me because he mentioned the word dual circulation how many people actually I'm curious the audience know what dual circulation means or have heard it used it's a pretty it's a pretty wonky term but it's an important term because that's essentially official state Chinese language for decoupling dual circulation means we are not going to have one single global economy anymore the Chinese have said and I think rightfully so that they want to have a much more regionalized economy they see themselves again I think rightly kind of like the World War uh the US and the World War II period where there's a big single language Market with room to grow and to Loop Nations around it into its orbit in a much more regionalized ecosystem they want to produce and consume more locally why do they want to do that for all kinds of reasons because of fuel because of emission standards because of the fact that they're now richer and want to keep more of their own production at home if globalization is about the free flow of capital goods and people and you have official Chinese policy that says we want to keep more of that regionalized I think it's really hard to argue that there hasn't been a significant change in globalization as we've known it however you might Define it let me come back on this there's a very crucial word that Rana used that I did not and that word is free and you may have used it as well John but in fact that's not necessarily inherent in the definition of globalization which as I said is fundamentally something of a measurement exercise of the volume of exchange and the geographic extensity of that exchange it can be morally much more neutral than both of you seem to want it to be or certainly we're honest point about the word free because globalization has been around literally for thousands of years as she mentioned and even just the last several hundred years and the better part of that last several hundred years globalization has been an imperial Enterprise we have more globalization today because we have more geopolitical and more geopolitically ambitious Powers not just one or two but three or four and they are all reaching outward to project their own model to project their own exports and so forth so dual circulation is interesting case because it is actually a old wine and new bottle as you might even say because it's fundamentally about import substitution well how did the European Mercantile Powers become the global Colonial Masters that they became import substitution how did the United States through Hamilton doctrines of its founding years become one of the one of the world's leading economy import substitution and what China has been doing for 40 years and accelerating in many ways right now as it climbs up the technology ladder is this accelerated import substitution in every way it can but does that mean that it's de-globalized not at all it's pushing outward as much as possible it wants to massively enhance its exports even as its labor force declines it's using industrial robotics which is built and imports to expand its volume of exports and it so the Dual part of dual circulation is the word dual suggests is not either or not either we are self-sufficient or we are interdependent with the rest of the world it's both and it's how can we continue to expand our presence and our global economic footprint and that's what they're doing all right I feel we're getting a little bit off the topic of whether globalization has backfired so I want you to come in and bring it back around to that well I'm glad that you said that because it's actually a nice transition the question is has globalization backfired and I'm defining this latest round of globalization as the last 50 years or so of the neoliberal Washington consensus to me it's important because you could argue very differently in the many eons of globalization what what happened but this is the period I'm looking at I I want to say I think that's also our sense that we're talking about the current the current phase of globalization I think that's it even then you'd be incorrect but that's okay that's totally okay maybe we'll do we'll come back and we'll do a three-hour debate and I'll take frog on for like the Millennia but um but just for now let's think about that last half century it's about values and you know it's interesting and I wonder Prague if you would say the same I've been going to China for um for many years the first time I went there I thought wow this is an amazing Rich uh old incredible country why does anyone think that they are going to seamlessly come into the structures that have been put into place by the U.S and Europe like what what why are we pretending why are we all sort of you know have the blinders on well the reason we had the blinders on is that globalization in its structures had been largely driven forward by big American and to a certain extent European multinational companies that wanted to try and make money in China but China always had its own goals its own political economy and so the idea of the one world two systems Paradigm was always there and it was always ready to explode now I would argue that that process started to happen in 2015 when China put forward its made in China 2025 strategy when it said explicitly we want to decouple from Western technology apology by 2025 you then get president Trump coming into office he had no coherent strategy I would argue about pretty much anything particularly globalization but his ustr Robert lighthizer did take the decision I think a Courageous one in saying you know what the current Paradigm is just it's pretend the WTO is not working we all know that China is not playing by the rules of the WTO understandably because it has its own political economy that is essentially state run and always will be and U.S multinationals are complaining behind the scene But Not Having the courage to stand up and actually you know name names when it comes to what's going on so trade tariffs come into place you then get Biden coming in postcovid post Ukraine war when it is very clear that the three things on which globalization has been predicated cheap Capital cheap labor and cheap energy are all falling apart cheap capital is ending because 40 Years of low rates are being rolled back and we're now seeing what's happening with that cheap labor is Shifting because China wants to be more Regional and by the way labor rates in Asia had risen to an extent that companies were already deglobalizing then covet hits you see problems with Supply chains and you begin to understand that maybe it's not a great idea to get your gas from an autocrat so you start to see a tripolar world the U.S China and Asia and Europe going in somewhat different directions there will be overlap in certain at certain times and places but in a fundamentally different way than what you've seen the last 40 years and so is that are you arguing that that represents a failure of globalization it's a backfiring because there are politics that were being ignored be it the fact that China has a different political economy be it the fact that we didn't look after Labor in the rich World there were value systems that were being ignored here and they have backfired politically you know at the outset I said there were these four instances where we've declared the death of globalization and we've been wrong every time part of it if you remember the anti-globalization movement had its Heyday about 20 years ago as well Iran and I would well remember everything from the Battle of Seattle the World Trade Organization ministerial in 1999 the protests swarm the protesters swarming the IMF and World Bank meetings in Washington or elsewhere and water cannons at Davos and so forth and what happened to all of that it fizzled right it died globalization was still alive and well but that movement more or less fell apart and the parochial narrow interests that it claimed that that it represented even as it claimed to be representative of a global underclass really weren't that representative and this is the reason this is important is to remember that even if we agree that there is supposed to be some common set of norms and rules driving globalization from a legal standpoint or an Institutional standpoint you have to bear in mind that the vast majority of the human population is still more or less globalizing in rough accordance to those rules look at the trans-pacific partnership Trade Agreement something that the United States government designed and incubated but ultimately didn't sign and actually expected that the other countries would pull out of it when the U.S did lo and behold every other country did join the trans-pacific partnership trade agreement that does not to me signal the end of globalization or a backfiring globalization Canada Mexico Colombia Chile Australia New Zealand Japan modern societies Western hemispheric and Wealthy Asian societies decide to continue with the globalization and one other thing ultimately whether or not the rules were born here in the United States or the brettonwood system post 1945 or not the the United States is the least trade dependent if we were to reduce globalization to just trade which we should never do but for the purposes of massive oversimplification we're doing that's fine even if just we were only talking about trade the United States only has 14 percent uh represents only 14 percent of global trade this is the most self-sufficient already even it tries as it tries to do more consonant in the world but Europe and Asia continue to expand trade with each other and they each represent close to 40 percent each of global trade so that globalization according rules that we more or less know and recognize very well continues to expand among just about every other region of the world and every other human in the world and would use is your point then Prague not only this you've said it at the outset that the the plumbing of globalization continues to function but that the uh the the clogs that might be represented by some of the negative consequences like inequality and the impact on labor are not sufficiently serious and or onerous to have caused a rollback of globalization a reaction I think meaningful reaction against these are very very serious concerns and consequence offenses and therefore we should place the blame where they lie which is with our own political class and leaders who have failed to moderate globalization and manage globalization you cannot simultaneously argue that globalization is backfired without specifying the geography in which it is backfired because a as if can that case be made that it has backfired in some places you can say that in some electorates at some moments in time in some elections but not in others there may be a backlash but I wouldn't even say that the bogeyman is globalization you'd be buying into trumpian mythology of blame the globalist blame the globalist because the fact is that if you take heavily dependent trading nations like Germany or South Korea and others again around the world they don't have the same kind of backlash in their political systems the way we have well what's the difference between them those countries will spend three to four percent of their discretionary budget on worker retraining and upskilling and retooling their workers to continue to engage in convene in globalization and the United States did not let me let me take that too Rhonda so so Prague is saying that that policy choices made regionally in in within National borders are the reason that globalization's backfiring as opposed to the country wait are you now arguing that it has backfired I'm no I'm I'm arguing that the blame for the those who blame globalization are actually blaming the wrong culprit and actually I got that from your book because in your new book you blame everyone from the Democratic party to Republicans to protectionists for not investing sufficiently in education in working training in building American industry the industrial base that doesn't sound like the fault of China that American politicians didn't invest in education and workers way too in any way to tell us again the name of your book homecoming the path to prosperity in a post-global world thank you John for that um subsidized exceptional moment um listen we you know we need to focus again on the question at hand has globalization backfired I a hundred percent don't blame China for that I think China and I've written this in any number of columns has a system that works well for China I have my issues with the hardening of of the Xi Jinping regime but in my book I say quite clearly that globalization has backfired and I would look at the rise of populists in the U.S the rise of populists on both sides of the aisle in Europe I would look at the rise of nationalists and many developing markets and say and also look at frankly the collapse of the Bretton Woods institutions you know which are operating in many cases in in name only not as problem solvers at this stage and say Yes globalization has backfired because we had a system that prioritized Global markets well beyond the ability of nation states everywhere to cope and you know this is true not just for rich countries but in many developing countries as well one of my intellectual rabbis Joseph stiglitz the Nobel Laureate Economist professor at Columbia has said for years and wrote in his book globalization and its discontents that the Washington consensus and frankly Western Elites by and large the developed that neoliberal Elites had a one-size-fits-all prescription for how development was supposed to occur but we have an opportunity right now and I'm actually really optimistic my book is an optimistic one we know the world isn't flat and it's particularly bumpy right now but for all kinds of reasons I think we're going to get to a better place where the balances of the global markets and the nation states are going to be able to be conjoined not only because more regionalized economic blocks will make that division between interests less Stark but because there are all kinds of new technologies that are pushing production local you've got uh you know Paradigm shifts going on in everything from work from home to you know I could go on and on uh about what's happening in business that are changing this and making local and Global possible together so is that is that a globalization that works or is that a deglobalization I would say it's more of an you know we what I would say it's more of an International System I think when you use the word International you buy proxy acknowledge the fact that decisions about Economic Policy I believe should still be taken by vote voters at the level of the nation state to my mind and I'll speak just about this country but I could talk about France Germany turkey South Africa any number of other countries in this country I believe the reason that you got extreme Politics on both sides of the aisle be it Trump be it Bernie Sanders is that you had an electorate that felt that listen I'm voting I'm paying taxes and yet the policies that are affecting my life are floating way above the nation state you have to have a little bit more local to save the good parts of global I think that the definition that we've now converged upon at least from your perspective is far too narrow because if we're looking at globalization according to that conventional uh very bricks and mortar kind of way it's almost pre-technological it's almost pre-financial and yet as Rana is saying well part of what went wrong according to her is this hyper financialization so how can suddenly when we talk about globalization we ignore Finance we ignore money which is as hyper Global in many ways as ever so we can't say that globalization is backfired when you have more Capital flowing around borders and being invested all over the world where I live in Asia every week a new Western a European or Canadian Sovereign wealth fund or pension fund expands their offices to invest more billions of dollars on the other side of the planet to say nothing of digitization which as I cited is almost equal in value to Goods trade and that there the word internationalization would not even begin to capture it because when you think about the wear of a global digital supply chain it is quite literally everywhere think about um you're sort of where game the gaming industry right where is a computer game made well the value of the computer games which is has a larger GDP as a economic sector than all of Hollywood and music combined is coded by people in the cloud who have never met no atom has crossed a border and yet that's very much globalization all the time and that's just one little vertical of that I need to just so we can't say that globalization is backfired when if if you only reduce its internationalization and ignore the things that are truly Global that are actually expanding we're I actually completely disagree with that and let me explain why we're talking about nothing if not Capital that's the whole point globalization backfired because Capital was able to travel so much more freely than either Goods or people and that created inequality which had a backlash now interestingly capital is balkanizing capital has been balkanizing regionally for some time actually that started after the financial crisis but think about the digital RMB digital you want China is doing far more trade now increasing amounts of trade in its own digital currency it wants to have an A system that is totally separate from the dollar the sanctions the dollar-based sanctions that were placed uh on Russia while I completely agree with them also pushed a number of Emerging Markets to start scratching their head and thinking gosh Maybe we need a more multi-polar currency system because the dollar can be weaponized this is Catching Fire because of the digital aspects that that Prague is talking about almost every country in the world is looking at having its own digital Sovereign currency which it can use in much more localized ways that's going to be a good thing because you know what that goes back to what Keynes always wanted which was a much more multi-polar currency system again a multi-polar world is fundamentally a world that is going to be more Global not less it's not going to be driven by there's not going to be just one driver but multiple drivers and that's the way globalization has always been it is not uncommon for people to argue that a more Regional world is a deglobalized and fragmented world or that a new cold war or a rift between Regional systems means a de-globalized world and yet how is it that the very globalization system that we are talking about and have is our main subject today emerged during the Cold War right and it is a fact that as Regional systems integrate they actually push outward to expand their production chains and expand their exports globally and one last point is just the idea of near Shoring right you know bringing back Industries is very often including in the present a lot more hype than reality every time we read about an American Automobile Company that's decided that it's going to make an additional investment in Michigan or something like that that will be page A1 news on page a26 you will actually also read that that same company has decided to quintuple its investments in Asia and produce more automobiles there and that's also of course globalization thriving so you can have both at the same time and part of the reason why trade continues to grow across the Pacific including between the United States and China is that even as you near shore in order to make more iPhones for example the United States guess what where did the screens the cameras the chips and a whole bunch of other things actually come from they came from Asia so you actually increase your trade deficit in order to near shore so I don't deny that we should have more localization I would wholeheartedly endorse the proposition that we should not unstrategically and unsustainably dependent be dependent on International or Global Supply chains when we can more sustainably and more strategically fulfill those functions here at home and that's a very logical proposition but it doesn't it works much more easily in theory than it does in practice I'd like to go to audience questions if you could just tell us your name and hi um I'm bana I'm from Australia and my question is really how do we um you know the discussion has globalization backfired is about poverty uh from the 1950s until now global poverty's been reduced substantially and has increased well it's slowing down more recently is that because of globalization or some other Factor the point of your question is that in the last 20 to 30 years Global poverty has been dramatically reduced and you are asking does the credit go to globalization for that yeah listen that's a great question um and yeah I would have to say I would have to say yes because it goes back most of the poverty that you're talking about was alleviated in Emerging Markets but particularly in Asia and particularly in China so it goes back to this point anktad research showing that the biggest single beneficiaries were the multinational corporations and the Chinese state so yes you now have um a number of people that are not living at the poverty line but the question of the debate is has globalization backfired and I would argue that the outsized increase in in-country inequality has created so much economic trouble in various nation states that yes the decoupling and the political fractiousness that we're seeing now is evidence that it's backfired it's certainly true uh what Rana pointed out factually yes of course globalization is is a had a very very strong role in poverty reduction around the world particularly in Asia and now though domestic economic growth the consumer economy digitization financialization urbanization in those countries has also picked up the torch now again those countries are so connected to International Supply chains look at India look at Indonesia Vietnam these places from which American companies are now relocating Supply chains remember that just because they decide to no longer and if they don't invest in China anymore they're just relocating that supply chain activity to Vietnam or other Asian countries that's very much still a globalization so there is still cheap labor out there and even if the labor were not cheap you still want to sell into those fast-growing consumer markets the majority of the world population the majority of the world is middle class is Shifting towards Asia on the other side of the world from us if those multinational corporations have any hope of maintaining their market cap they're going to want to continue to export now again the backlash against the mismanagement of globalization in our by our politicians is very welcome I wholeheartedly endorse that backlash against the mismanagement of globalization but once that process is complete of voting out governments that have failed and passing new regulations that are more Equitable and pushing for inclusive capitalism once that process is complete guess what we will be back to where we've been all along which is embracing globalization and comparative advantage one quick stat 92 percent of multinational companies according to McKinsey Global Institute are regionalizing and localizing production for all kinds of reasons here's another question can you tell us your name please Charlie Rose uh from YPO Pasadena many would argue that the defining challenge of this era is climate change which is a uniquely Global issue how has globalization impacted the trajectory of climate change so the question is how has globalization impacted the issue of climate change love that question and I would take it in two pieces a lot of times people ask this question and they say well how can we possibly get a solution to climate change unless the conversation is happening at a global level and of course it has to happen at a global level but the solutions will be highly localized and let me give you a couple of reasons for that um the U.S Europe and China Asia all are approaching this issue in different ways and by different means ultimately fixing climate change is going to mean hyper localized Supply chains does anybody know what the single most polluting thing in really any large country is in terms of an industry it's it's not the fossil fuel industry itself it's Supply chains going into complex Industries like housing for example there are seven separate Supply chains that go into building a house materials are being toted from all over the world that has an emissions cost this is something contrary to what Prague was saying that is now actually becoming a revolution in manufacturing additive manufacturing which is basically making parts and making entire cars or in the case of houses homes now being done all over the world it's done in Austin Texas California India you can do things locally the technology is there and that is what is going to stop a large part of climate change likewise localization of things like food food production the number one cash crop in this in terms of produce in this country is iceberg lettuce why because you can tote it for six months in a car and it you know it it'll still be good does anybody really want to eat like iceberg lettuce no that's why there are now vertical Farms that are being developed that are growing produce up the side of uh of buildings and on roofs that kind of hyper localization is going to be a really important part of fixing the emissions problem that is at the core of climate change I want to give Prague a shot at Savannah has walked into two of my favorite traps okay the first is the point I feel like I want to tell you to choose one right well the thing about most you know western or American multinationals saying they're going to regionalize part of the reason is because by Manufacturing in Mexico you can then more easily export to preferential markets that Mexico has for your trade agreements with in Asia than the United States does and why is China expanding its manufacturing presence in Mexico as well is in order to access the United States more readily through the usmca trade agreement so again all of the trade liberalization that continues to go on in the spirit of the globalization definition that we are using is alive and well and American firms and Chinese firms and all firms continue to exploit it so globalization again thriving now on the climate change question this is the the real trap is this idea that we are engaging in this hyper localization process and everything is domestically produced and consumed and nothing comes from anywhere else anymore well I want to ask you something that um 3D printer right that beautiful device that sits on our countertop and is meant to make anything we want any solid or liquid object and print it out for us and somehow there's no International supply chain that that depends on well I want to ask you where that was built where did you you get that 3D printer that is making your stuff for you oh yeah you imported it from Korea I think globalization is doing okay how about that vertical farm right automated the ones I'm talking about were all made locally but many of them are made locally the seeds what's which country is the largest exporter of uh seeds in the world it's the Netherlands right as we bake all these vertical Farms we're probably importing seeds from the Netherlands and from Brazil and a whole bunch of other countries so the moral of a story with all of these examples is that even when we don't realize it because Supply chains are to some degree systems of transactions that we don't even observe is that even the supply chain has a supply chain and that supply chain is almost always International and by the way again reducing entered fossil fuel consumption solar panels the largest exporter of solar panels so yes China so do you feel trapped no not at all I feel actually Justified and and kind of validated because when we talk about Supply chains what's really clear is that for the planet for labor for Innovation they have to become much more regionalized and localized they can't be so long and complex that was a one-size-fits-all global model that no longer works toting cheap stuff through the South China Seas having 92 percent of all the world's high-end semiconductors in one very contentious Island getting most of Europe's gas from one place that's the global model that's the efficiency model what I'm saying is that we've now seen that backfiring that globalized financialized highly efficient model has been proven to not work well when the world gets bumpy as it is now and so we're going to something that is going to be more regionalized localized and resilient more questions from Bangalore India the question is what about demographics right so I mean you have an aging population in the U.S 14 million people are going to go off and you have a country like India where 47 more million people are going to come into the equation how's that going to play out the question is what will be the impact of demographic changes globally including in the United States including in China including in India to the globalization question that were my favorite topic subject of my my newest book which is another trap human geography not a trout uh an invitation so remember that the original globalization I know we're not meant to be talking about the last hundred thousand years but happens to be the movement of people and we're entering For Better or Worse an age of mass migrations the likes of which we've never seen let's bear in mind that if we just look at the globalization of people of the last centuries we've moved from Millions to tens of millions to hundreds of millions of people crossing borders with each successive era and in this Century it could well be over a billion people not least due to climate change or labor shortages and you may have seen the news just yesterday Canada has announced that it wants to uh you know bring in one and a half or increase its population by more than one percent every single year so they're bringing in uh roughly 500 000 people every single year and the number keeps on growing the United States is returning to high migration this year the entire oecd world of wealthy developed industrialized countries is increasingly opening its borders despite what you hear about population populism xenophobia uh racism and so forth the United States Canada Britain Germany Japan Australia all have higher foreign-born percentages of their population and are so desperate for talent that they've made it easier to come into the country than at even the most populous moments that that I'm than even prior to those moments than any time I'm aware of and uh if you think about the most populous regions of the world like Asia particularly South Asia there's an enormous propensity for people to expatriate to leave their countries and to fill those labor shortages which is why um uh if you look at a country like Germany they've introduced an opportunity card which is their version of a green card previously it was a blue card uh in fact since from before covet to today about a hundred countries have launched Nomad Visa schemes golden Visa schemes Talent recruitment schemes residency or citizenship by investment schemes all at a time when we were supposed to be having this backlash against the movement of people and covet preventing the movement of people and yet here we are mass migrations respond to that um boy I really hate golden passports because that's the global Elite of which I am admittedly part buying their way around the system listen I am the daughter of a Turkish immigrant my mother was the daughter of a Swedish and an English immigrant I hope and I pray actually for the sake of our country that migration continues but two things that I would ask you to think about on that score climate disruption is real and that may provoke um forced migration that's going to be bumpy look at what happened in Germany when Anglo American quite rightly welcomed immigrants in from from Syria and etria it basically was the beginning of the end of of her government these things are very politically contentious and need to be well managed by the nation-state but here's the other thing I would say my dad came to came from Turkey was you know from a from a peasant community on the Black Sea my grandmother didn't even speak English came to this country in the 1960s to be educated and to start a business but he was the last of his group of scholarship kids you know bright kids that could go anywhere to say yes my prospects are better in the U.S so much better in the U.S and I'm willing to leave my country to leave my community to leave my culture now I would argue that there are actually so many opportunities locally for so many more people that you may see less of that kind of migration and that's not a bad thing I think it's wonderful if you're a young smart Turkish kid if you want to you know be educated wherever and then go and return to your community and build that's a great thing Chinese sea turtles that's you know the the immigrants that go back to China because they feel they have more prospects there that's happening so this is this is a an evolution and I hope we get some migration but I don't think it's going to be beyond what we've seen in the last few years all right we have to go down the home stretch now and go to each of our Debaters for closing remarks it's again the question to remind you is has globalization backfired and perago let you go first to make 90 seconds to make one more pitch for your side of the story sure thank you well first is a political Paradox because Rana pointed out earlier that you know politics should only take place at the level of the nation-state and globalization is in Retreat well we should be careful what we ask for because in a world where we don't have any International political influence through partially through that commercial interconnectivity that results from globalization how do we ever expect to spread Norms whether those Norms are norms of free markets or democracy and so forth so we should be very careful about that the fundamental point though is that globalization is a spider web with so many connections that A disruption in one place be it due to a backlash politically in that country against the elites of that country for their mismanagement of globalization does not mean that the web has somehow collapsed far from it because they're continued there continues to be an ever expanding set of Pathways for supply AI to meet demand and fundamentally in a neutral way not in a limited to the neoliberal ideology that prevailed at a particular point in time view is most fundamentally what globalization is it's about Supply meeting demand across geography the movement of people the movement of goods the movement of Technology movement ideas uh capital and so forth and that's actually what makes globalization so anti-fragile it might well be alongside the internet itself the most anti-fragile thing that's what Nasim Talib himself describes it as being in his book by the same name and it will continue to evolve as I said at the top it's going to outlast any backlash any backfiring movement against it because those always prove to be far more narrow and parochial than they purport to be and in the end people realize that globalization remains much more in their own interest than the opposite thank you and Ronald you get the last word okay well thank you first of all I just want to say thank you to parag and thank you to everybody for listening really great questions and great debate I always learned so much from these things so I'm really happy to be here um I'll go back to really where I started which is that if you look at the promises of the Washington consensus of neoliberal globalization it was that capital goods and people were going to be able to go where it was most productive and that it would benefit all but the truth of the matter is it benefited two groups of people and in particular the wealthiest of us way more than anybody else we have seen in this country stagnating wages for all since the early 1990s we have seen for work a lot of working people stagnant wages since the 70s that's roughly true in most oecd economies um at the end of the day we need Global institutions but you have to have buy-in from the people that are voting for The politicians that enact liberal democracy otherwise you're going to get not only a backlash against globalization which is already happening but a backlash against liberal democracy that to me is where we are politically right now and it's because this economic pendulum has swung a bit too far towards Global and needs to swing a little bit further back to local thank you and I would like to ask you to thank both of our Debaters for what they brought here today thanks and and one other thing I want to say is for this to work we need to have uh Arana and a parag who are willing to come up and debate and to do this in a way that you did and exemplified so fantastically well the thing that we aim for which is to disagree with Civility and intelligence and respect so for the way that you did this I just want to say thank you so much so again we we like to keep track of uh audience shifts on this so I'm going to share with you with the polling so before the debate began on the question of has globalization backfired 35 said yes and 42 said no and 23 were undecided in the second poll 37 percent said yes 55 said no and eight percent were now undecided so cumulatively 34 of you changed your minds we really find that quite impressive that you were willing to listen and to shift and I'm sure that your shifting your thinking on this will evolve as the arguments continue but uh it's exactly uh everything that's just happened here is exactly uh why why we do these debates and uh I'm just so pleased uh to have had all of you here so I want to say that this concludes our debate and I want to thank again our debaters and our partners at YPO including Kenny rosenblatt from the New York YPO chapter thanks also to our founder and chairman and YPO Alum Robert Rosencrantz and to you our audience for keeping such an open mind when listening to this insightful debate I'm John donman from Intelligence Squared we will see you next time [Music]

Channel: Open to Debate

Views: 8,958

Keywords: Intelligence Squared, IQ2, IQ2US, Intelligence Squared U.S., debate, live debate, I2, nyc, politics, conservative, liberal

Id: SEvJdfkJsjQ

Length: 56min 55sec (3415 seconds)

Published: Fri Jan 13 2023