LSE Events | Stephen D. King | The End of Globalisation, the Return of History

well good evening everyone and welcome to the LSE for this evening my name is Nick Olson and I'm at the Center for macro economics at the London School of Economics and political science and I'll be chairing the session I'm very pleased to be here to welcome Stephen King to the LSE today Stephen King is senior economic advisor at HSBC which used to stand for Hong Hank Hong Kong and Shanghai Bank I don't know whether it still does all of its like BP that's just BP but Kerry BP is BP but I could not be people so yes okay he has senior economic advisor there and previously he was HSBC is group chief economist he also serves as an adviser to the House of Commons Treasury Committee and he is the author of three books the latest is entitled grave new world the end of globalization the return of history and it is this latest book that he will be discussing with us tonight and I guess the modern era of globalization began with the movement to liberalize trade in the years after World War two there was a parallel process of regional integration as with the north american free trade area nafta and with the European Economic Community AEC which morphed into the European Union globalization deepened with the liberalisation of capital markets in the 1980s and after recent decades also seen the emergence of China as the world's largest economy heavily engaged in international trade and investment and as well as flows of capital we've also seen large flows of people I'm thinking here of economic migrants rather than refugees into North America and Europe in theory the process of globalization still has a long way to go for example you might say that the end state will be when wage rates are the same across the world for comparable types of job and also when the rates of return to capital are equalized across the world well obviously we're not there yet on the one hand if we think about what we think about globalization I know Stephen will be talking about this we can view globalization as a largely benign process which has raised the living standards of hundreds of millions of people across the world so if it came to an end that will be worrying prospect on the other hand the globalization is critically placing great strain on the already developed societies of the West Stephen will argue tonight I think that in fact globalization is now coming to an end for reasons which he will explain to us and he will discuss with us the consequences for living standards and he did for peace and security of a world of rival nation states each pursuing incompatible aims just a couple of housekeeping notes before I asked Stephen to deliver his lecture for those Twitter users in the audience for hashtag for today's event is hashtag LSE King I would ask you to please put your phones on silent so as not to disrupt the event and this evening the event is being recorded will hopefully be made available as a podcast subject to no technical difficulties so as usual after the lecture there will be the chance for you to put your questions to Stephen and there will also be a book signing taking place following the event copies of his book brave new world are on sale outside the venue just just outside those doors there and if you wish to buy a book and you wish to have it signed then you can bring it back up here on stage and Stephen will sign it so the format of this evening's lecture that Stephen will speak for 30 to 40 minutes then there will be 30 minutes for questions but now woody please join with me in welcoming Stephen King to LSE to deliver his lecture entitled the end of globalization or return of well thank you very much indeed for those kind words and good evening ladies and gentlemen first of all I wanted to start with an apology for those of you hoping to see the other Stephen King I'm not him I do have a kind of specialized in writing books with scary titles this one is called brave new world the last one was called and when the money runs out the first one was called losing control which is the title of my book it also turned out I discovered as only in hindsight at the title also of a pornographic DVD which was also there with a purchase on Amazon a very strange thing although my book was out saying the DVD which I was quite pleased about in many ways and I also want to make a point about great new world because it is the sort of idea of global that are going to reverse and people said well you're only writing that because of what's happened with breakfast and what's happened with Donald Trump and if it hadn't been for these things and you wouldn't have bothered writing the book so I wanted to point out that I actually started writing the book in 2015 and as I was writing the book on the basis that I thought something was beginning to go wrong I wasn't quite sure what it was and only in hindsight and breakfast and Trump came along because I reason you say well there's some evidence that I was talking along with the right line so in a peculiar way I'm a normally thankful to Donald Trump to making my book more relevant that might otherwise have been the case and I wanted to kick off early with what I call a kind of straw man because the book subtitle is the end of globalization and the return of history and the return of history course is a resonance of something that famous dude written back in 1989 the Francis Fukuyama paper which of course was called the the end of history and in the the Fujiyama paper back in 1989 he basically argued that Western liberal democracy had triumphed at the free market capitalism had triumph that authoritarianism was in retreat and basically that the West had won and fukuyama's timing was absolutely impeccable because of course that was year that the Berlin Wall came down so there was a sense that he was absolutely talking along the right lines and and in the hindsight of Takayama's paper people I think in the West politicians in particular began to believe that he absolutely was right and there was stuff that they could do now that that's was unthinkable during the Cold War but stuff that they could do that would make the world as a whole a better place it's quite striking how these values came through over the years that followed so I wanted to kick off with a with a quote and this is from a famous American politician specifically george w bush and this is something he said quite a few years after Fukuyama had spoken but it is very consistent with the cookie i'm a message he said that this is a speech in in 2003 he said the failure of Iraqi democracy would embolden terrorists around the world increased dangers to the American people and extinguished the hopes of millions in the region and Iraqi democracy will succeed and that success will send forth the news from Damascus to Tehran that freedom can be the future of every nation the establishment of a free Iraq at the heart of the Middle East will be a watershed event in the global democratic revolution now back in 2003 a few years after cookie AMA I've written his paper about the end of history and some people clearly believe that that might actually be correct that this might actually be the true story as it turns out of course that hasn't really worked out very well at all um and the other thing that came through in the year that followed for qiyamah was the idea that globalization would take off and preservation was a story about borders coming down the ability of humans to contact each other and be connected with each other in a way that were unimaginable during the Cold War so you'd end up with a story whereby you have freedom of movements of goods and services capital and people pretty much the sort of the four freedoms we think of within the European Union but rather than being rich into the European Union alone somehow these freedoms would spread to the rest of the world and therefore we'd end up with a greater efficiency which was also to be allocated would end up particularly with the idea that growth would spread not just from the West but to places like China and India and as these countries got richer so the West also that would become a lot richer because of course the great thing about this story is that as China an engine of growing it would boost world trade growth or therefore anyone who's an exporter from the States or from Europe themselves would do well that would lift incomes in those countries and therefore globalization basically make everyone significantly better off than had been the case previously and it was a really powerful story of course many people believe that story it seems to work extremely well over many many years it's worth stressing that if you look at the changes in living standards in the years that follow a country like China went through a truly epic transformation and we often forget the degree to which China has transformed over the last 20 or 30 years so just to give you some numbers on this if you go back to 1980 when Deng Xiaoping was supposed thinking about his reforms in China per capita incomes in China were the equivalent of those in the US in around about 1780 or 1790 so effectively they were that roughly speaking the income level that you saw just after the American independence by 2010 the cabbage' incomes in China had risen to the equivalent of those in the u.s. in around about the 1930s so as a rough rule of thumb china has delivered every ten years every decade since 1980 and increasing living standards the equipment of what the US took 50 years to achieve so we've been through this truly epic transformation and you think about globalization from a proper sort of global perspective you can really point to the way in which living standards are being transformed in various parts of the world and that is all true then you think well what's gone wrong if it's such a great story if it works so perfectly why would anyone be saying that globalization might be in trouble that's possibly going into reverse that people are rejecting some of the values of globalization and the answer in many ways is it is very simple and that a series of the predictions that the cooking are made didn't really quite work out in a way that had been expected to come back to China first of all the idea that Okayama have was that liberal democracy and free market capitalism went hand in hand and without those two things operating together you couldn't really see big increases in income again China was not a liberal democracy yet had seen as tremendous transformation in living standards in the relatively short space of time a second big thing that happened was that we had this belief that somehow capitalism would make people better off but even before the global financial crisis there were parts of the world where financial instability was becoming a greater and greater risk and thinking in particular of the Mexican crisis back in 94 the Asian crisis that followed shortly thereafter the Russian debt default the latin-american crisis that happened at the end of that particular decade so you had a series of events that took place that were worrisome from the perspective that somehow global capital would work for everyone it wasn't working for many and the abolition of capital controls and exchange controls which was a way of opening up countries to the rest of the world proves in many cases to be a source of tremendous instability but in the book I make the rather obvious point really that for all these areas of instability elsewhere in the world the thing that really changed attitudes towards globalization was the global financial crisis because the global financial crisis were other great deal of things about the West that hitherto had been sort of kind of ignored and we began to realize that things haven't quite worked out for the West the way that people had claimed in the years prior to that story and the global financial crisis was extraordinary for a variety of reasons but it was in the aftermath of what was a true revolution in global capital flows and I wanted to give you a sense of how things have changed just over the last 20 or 30 years because we have one big story which is the rise of China another big story which is the huge increase in capital flowing across borders and being invested in different parts of the world so I have some numbers here and numbers of tons is quite boring but these numbers I think are quite important so you go back to remember 1900 so just before the first world war and look at foreign holdings of international capital as a share of the world's activity with the world's output the figure was around about 20% basic he says that most of the capital it was owned was owned within countries the big chunk as was owned across countries but of that 20% figure at 10% was owed half bit was owned by the British of course the reason for that was the British Empire which basically controlled about a quarter of the world's surface at the time and had created sort of capital market work within the confines of their empire itself two world wars later 1945 that figure of 20 percent drops to just 5% you've got basically all turkey with regard to capital markets there's no connection from one country in the world through to other countries the whole thing is completely broken down thanks to two world wars by 1980 the figures back up to actually over 25 percent so a much higher number even surpassing what we saw back in 1900 but the numbers that follow that are really quite remarkable the extent to which global capital markets grew at a fantastic rate of not so just to give you the numbers and in in 2000 as figures it's 110 percent and by 2007 this is a really gobsmacking number the figures up to over 200 percent so you got this massive increase in the holdings of capital holdings of assets around the world associated with this massive integration of capital markets and then after the financial crisis numbers have come down which is hardly surprising but the figure in 24 teams of 80 members we have it's still around 190 percent so we've been through a revolution in terms of capital markets but they'd like to argue that this revolution has been a particularly awkward one because it also betrays something about how we believed the world was operating which is a change in my view from how things had been in the 1950s 1960s and 1970s and to understand it if you go back a little bit in history so at the end of the Second World War the Allied countries specifically the US and the UK either ones of the key parking story these countries decided we couldn't have another Treaty of Versailles the Treaty of Versailles was a disaster you had to move instead towards a much more integrated world you wanted to move away from empires well least the Americans wants to be away from empires most of the British they were still quite king of their empire but nevertheless at the Americans were very keen to move away from Empire and they wanted to create a series of institutions international which kind of set the rules of the game which would allow countries to understand how they would relate to each other and would provide certain assurances if things went wrong from time to time and these international institutions include most obviously the International Monetary Fund the World Bank you might even have the UN to this perhaps but certainly the International Monetary Fund the World Bank GATT the general agreement on tariffs and trade which is the forerunner of the World Trade Organization and from a European perspective you also had the sort of seed capital through the Marshall Plan which is a federal act of generosity from the Americans arsenal Second World War so the seed capital which eventually led to the creation of the European Coal and Steel community which of course was the forerunner of the European Union itself so you have these institutions these international institutions being created which set the rules of the game and it once it's allowed globalization to take off and you can see the evidence for this you could see that for example GATT led to massive reductions in tariffs around the world that trade became a more and more important part of the global story that countries became ever more integrated and the growth of exports in the 1950s in 1960 was absolutely stellar it's an extraordinary story you can think about the imf's role before it became a kind of sort of a blame story but back in the 50s 60s and 70s the IMF increasingly supported countries that tan themselves and temporary balance of payments difficulties sometimes imposed some pretty tough love on them but nevertheless it provided some degree of support and effectively it seems as the world worked according to a series of rules but the problem that it's huge increasing capital is actually no institution in the world that can really cope with that volume of cross-border capital flows and what happens really around about the 1990s and Beyond partly an influence of Thatcher and Reagan somewhat the senses markets themselves who always worked markets would never fail and therefore it doesn't matter the institutions weren't there it doesn't matter there was no governance of capital flows because all that really matters was the idea that markets themselves could efficiently allocate their capital in ways that would ensure that no one could possibly lose and just to emphasize the point prior to the global financial crisis there was a tremendous sense of optimism that nothing really could go wrong indeed that policymakers has master the big challenges of the global economy there was something called at the Great Moderation the Great Moderation was the idea that as long as inflation came down and stabilized over a period of time and low stable inflation went stable activity stable activity meant no recessions no recessions meant we could all be very happy and Gordon Brown you may recall concluded that he could avoid boom and bust because effectively the Great Moderation would guarantee that and it wasn't just Gordon Brown Ben Bernanke at the time and chair of the Federal Reserve talked about the idea that with low inflation you were reducing the risk of some kind of economic crisis Olivia Blunt Shar the chief economist of the IMF at the time talked again enthusiastic about the idea of the Great Moderation being something that would use the chances of financial crises so in a sense in the run-up to the financial crisis there was this almost universal belief that markets themselves without institutional underpinnings could give you the right result nothing could possibly go wrong and when things did go wrong it kind of revealed there was a tremendous crisis at the heart of financial capitalism but when things went wrong no one quite knew who should pick up the bill or what shares of the bill should go to for example creditor nations detonations banks shareholders on holders taxpayers all incredibly uncertain because these things weren't supposed to go wrong but once they did go wrong it also revealed something else that is a problem for the Fukuyama thesis and that is that if you look at the post crisis conditions in the West we've ended up with a series of difficulties a series of challenges but I don't think anyone really anticipated before the crisis happened the first challenge is that growth in the West is much lower than it used to be and it's low not just compared with the experience of China India which is happily carrying on growing at a rapid rate it is also incredibly low compared with the West's own economic history the last 10 to 15 years have been absolutely pathetic from the point of view of rising living standards and you might say you can compare I think the UK being worse than France or Germany or the u.s. doing worse than which other country want to mention but across the whole area the numbers have been disappointing we have not been transforming our lives in the pace that we saw in previous decades and this politically is a huge problem because in the West we've become very good at making promises to ourselves based on the continuation of the pace of increases in living standards that we saw in previous decades and to make promises on pensions and healthcare and education and defence and whatever it is those promises are there and of course it's easy to make them so long as you have continuous growth rising tax revenues everything straight forward but the problem today is that in the absence of this kind of continued growth the revenues don't come in and then you end up with a battle over resources it's try can actually think about just the general election last week you think about the campaign's fault by the Tories and by Labour in one says they were peculiar rather similar so they're all talking about how they're going to allocate and divide up the cake rather than talk about how we're going to grow the cake it's almost if people have run out of ideas that how to get back to the kinds of growth rates of old and that's a problem politically because if you haven't got the growth rates at old you can't deliver every promise you've made and the broken promises make you particularly increasingly unpopular and the other big challenge has been revealed and and it's partly because of in the US and particularly the the sort of unwinding of the housing bubble which has been so powerful for so many years is that people began to recognize that there's a kind of them and us within societies there was the increase in income and equality in the u.s. has been absolutely vast over the course of the last two or three decades it's not quite so true in the UK and Europe although the issues still exist in a slightly different format so in the UK the problem is not so much that income and equality across the country is going a long way but it has gone up regionally so you're living Greater London we've done pretty well if you live in Wales you don't fairly poorly average Welsh incomes today at only 40% of those in Greater London which is extraordinary divided within the country and striking actually that the parts of the country which tends you less well over the last few decades are precisely those that on balance voted for brexit rather than four remain so I think there's a connection political choice and the relative performance by region and then in the euro zone it's not much by region not as much as it rising income inequality within countries it is rising income inequality between countries and one of the striking examples here is Germany versus Italy back in 1999 when the euro was first created Italian living standards were about ninety percent of those in Germany today that only 75 percent of those in Germany and actually Italy seemed barely any change in living standards over the last 18 years it's a pretty catastrophic result for a country that the gains being used to rising living standards ear by year decade by decade something basically has gone wrong now here's a big political challenge because as an economist I come to the point to lots of things that might have gone wrong that might have had an impact on income distribution that might have been happening with nothing whatsoever to do with globalization so most obvious one is technology we know in the u.s. that a lot of jobs have been hollowed out as a consequence of robotics or computerization of clerical jobs people who might have in the past thought they had a job for life something discover their job has gone and many of those people not all but many of them are often forced to compete for jobs which are kind of lower down the pay scale which of course put some even more downward pressure on those who've already got those kinds of jobs there's a technology stories not directly connected with globalization although two obviously are linked in significant ways because of capital mobility in recent times you might talk about problems with education you might say that in the UK to me to go to university rather than other forms of tertiary education people aren't learning enough skills or engineering skills or whether it might be all these things perhaps constraints in the UK you might talk about the fact that you look at the internationally comparable Pisa test results across different countries you will find that if you live in say China or parts of China Hong Kong Singapore South Korea Taiwan if you're 15 years old you'd like to be highly numerous highly literate with tremendous scientific knowledge they make the similar comparison across 15 year-olds in the States or in the UK you find their form significantly behind on average you might point to that as an issue you might point to social mobility as an issue say that people in the u.s. back in the 50s who are born into poverty could escape from poverty very easily for us today it's not quite so easy it's not so straightforward so again new things have changed compared to what happened and in the past but the problem with each of these is that although they might be true they're quite difficult to sort out politically because to fix them can actually take a very long time or indeed you can't fix them at all the technology is a really puzzling one because actually it's moving so quickly that even you want to never fix you might discover the fix is too late when it comes to education it might be a 20 or 30 year reform it's just too long for the electoral cycle and in the West there comes to social mobility difficult again to wave a magic wand and so on that particular problem so what do you do what do you offer instead of the particular message you say I know actually the problem isn't what's going on internally it's because of those people over there all those people over there all those people over there it's basically people elsewhere in the world or maybe the stranger within who's causing the difficulties that this particular country or this region has you begin to effectively blame other people other countries you begin to blame globalization for the difficulties that opened up in the West and in one sense it's a relatively easy political message to sell and I wanted to think about this just from the example of a I don't know an American worker let's say in the Midwest who's trying to work out whether their own individual situation is better or worse as a consequence of globalization this is a story about changes in different kinds of prices so first of all this worker is in a manufacturing company worried about the possibility of being outsourced to China or India therefore their wages and downward pressure so they were loser from globalization on the other hand they're also paid not just in wages but also in terms of some kind of Share Option scheme and because the company threatening to move some of its activities to China actually more profitable therefore the Share Option schemes worth more so it's a share owner in that company the person's doing quite well on the other hand the person drives to work and a gas-guzzling SUV and discovers it because of China rapid growth oil prices are higher than they once were and Navarrete cost more than to get to work and therefore there are loser from globalization but then this person also happens to be someone who loves watching TV and has loads of flat-screen TVs all around the house and of course the price of those has collapsed thanks to outsourcing to China so it's as personal a winner or a loser from globalization the answer there was no idea in aggregate I might say people win but in terms of the individual story it's really difficult to work out I think economists in general most forgotten their sense of the individual experience as opposed to the collective experience something was really matters in terms of as in fact Donald Trump put it one of the only things he got right as far as I can see talk about the Forgotten men and women of America and then one says he was right that people had been forgotten about because there are lots of people who in a net terms and aggregate terms had somehow lost out weren't quite sure why they lost out but the globalization story was one that was relatively easy and to defend so what you end up with in the story is it's effectively a kind of a new narrative that begins to emerge a narrative that basically says we should retreat from the arrangements over the last two decades we should retreat from the rules of the game that were established by the IMF or the World Bank or the EU we should in one sense instead retreat into the safety the sanctity the security of the nation state and throughout the 20th century and the being 21st century there's always been a conflict between the two prior to the 20th century nation-states weren't really a big issue because most nation-states were buried with empires and arrangements we had on 19th centure was very much Imperial rather than the idea of 200 plus nation-states it exists within the UN today so things that we've done a long way but globalization and nation-states in one Center unhappy bedfellows the idea that you have sovereignty at national level but at the same time want the benefits of globalization is a tricky one to pull off and the more globalization you want the more sacrifices you have to make in terms of your individual nations sovereignty and getting that balance right it could be difficult and it's also pretty to be a source of increasing friction it comes back to the idea the nation states over time are not just purely mark economies there economies that also provide a huge number of public services providing a large amount of public services often pre at the point of delivery you have to decide who's entitled to get those public services and once you have that debate you're having a debate about immigration you can debate all the kinds of things that are difficult but never trade-off between the benefits of public services to all and the restriction you simply can't afford to pay it but every single person exists on the planet therefore there has to be some decision as to who gets it who doesn't and that's a retreat into the nation-state in one sense is it kind of a way of saying we're not so sure about the benefits of globalization anymore we want to make sure we preserve our benefits for our people which of course immediately says but who are your people who are not your people and that goes back to that debate about immigration now if you're feeling a little bit depressed at this stage I wanted to move on to a couple of new challenges bigger challenges of globalization in the years ahead the first of these is technology and the second is demographics now with technology a lot of people have argued that it's obviously the key driver of globalization that whatever happens in terms of institutions and ideas governance and so on it's technology that inevitably joins us up closer and closer together and if in a whole series of articles and analyses of this I think the McKinsey report a year or two years ago which is pointing out that if you look at the the volume of digital flows across countries over the last two or three years even though trade itself physical trainers dying away digital trade is expanding an extrordinary race is not the question though is whether that trade is valuable or otherwise I'm a little cynic with this and I certainly look at the kind of digital technology that's transferring from border to border all of its video cat videos pornography whatever it is it may be all very entertaining but not stuff that necessarily guarantees of the world becomes more productive place as a consequence of this kind of of integration but also I want to make the point that that technology is often seen as something which is by definition something makes us better or valuable and over time and that again is not entirely obvious so I wanted to quote something actually which comes from from Davos because Dallas of course is the the great home of the global elites and and those people who believe that technology always makes the world a better place no surprises at all status for the people who make technology so they would say that wouldn't they but some so this is the quote from dad offs and it gives you a sense of why we should be sometimes I'd look at skeptical about whether technology really does create more in the way of globalization so this person is talking about technology he's in Davos he says the following says a technology brought nature increasingly under its control by creating new lines of communication and by triumphing over climatic conditions it was also proven to be the most dependable means by which to bring nations closer together furthering their knowledge of one another paving the way for people to people exchanges destroying prejudices and leading at last to the universal brotherhood of Nations you think that's truly expected inspiring it's just a wonderful statement of the benefits of technology until I point out to you that those words appeared in Thomas Mann's Magic Mountain towards a certain Davos at published in the 1920s but set specifically in the Year 1913 and the person I'm referring to there is a guy called with the Vico set in Breen II who is the Italian rational optimist of his day and of course Thomas Mann's having a huge amount of funds were pointing out that this person who believed in technology in the units of brotherhood nations didn't quite spot what was going to happen the year after 1913 so things can often go very badly wrong and when you look at technology I think there's something which is emerge recently which partly explains why Trump has done so well connected directly with certain aspects of technology and in particular the idea of social media now use social media myself from time to time I'm weaving the active on Twitter I quite like it in many ways but there's something very odd about social media which is that when the internet first came through people I think began to believe this would be a way of searching for the truth you couldn't hide behind four thirties you couldn't hide behind untrue beliefs of one sort or another but I put to you that I think increasingly social media is a way of finding other people quickly who believe what you already believe and therefore encourages herding it actually encourages breakdowns in relationships rather than improves communication it creates a world where by actually differences linger rather than go away and it creates these because in one sense technology itself creates information which is curated in a way to benefit what you already believe and I was interesting study done by The Wall Street Journal just before the presidential election they created two separate Facebook accounts one was a read account for the Republicans one the blue account for the Democrats and they collected these accounts I wanted to find out what kind of news information was being sent to these two accounts to find out whether there was some difference in the news feed that people got and the news stories but remarkably different totally different so if you were a Republican you never challenged in your views and if you're a Democrat you were never challenged in your views they might say that people who read the Daily Mail telegraph or the Guardian and they're challenged in their views but there is a big difference between having an editor that has to answer to some kind of Press Council or whatever and having an algorithm which in one sense is blind and just provides you what you all would you want to hear and so I think one of the dangers with social media is that although it's got many benefits it doesn't necessary be a process that searches for truth and as a consequence technology doesn't necessarily create if you like a sort of common belief system around the world that actually allows globalization itself to grow it can do exactly the opposite at times if you think about Donald Trump he succeeds partly through social media he's hardly a great spokesman for globalization he's someone who wants to break the u.s. away from the rest of what about America first or maybe eventually America laughs whatever is going to be it certainly isn't America joined together with everybody else are quite a significant shift as taken place in recent times and the other big change mentions demographics and demographics is is something which again is is quite extraordinary and it's a numbers game and it's a really important numbers game for the decades ahead it raises other big questions about the institutions that allow a global governance that they would so I want to use the example of two countries the first Italy the second is Nigeria and the reason for doing that is that in 1950 Italy's population was about 47 million people and Nigeria's is about 38 million people so there's a difference but they're kind of quite close in terms of the relative size of the populations today the Italian population is up to 60 million and Nigerian population is up to around 180 million the United Nations as projections for population going through to the end of the 21st century and these are truly remarkably might have some doubts about the calculations that are made but never see give you a sense of what is what is likely to be changing there based on very simple assumptions about infant mortality rates fertility rates life expectancy when you reach adulthood all these kinds of things you plump it into a little spreadsheet they look at the experiences of other countries over the course of the last few decades and you collect some really staggering numbers so by 2050 there's only 33 years away from where we are currently Nigeria has a population of around that 400 million and by 2100 it has a population of around about just over 700 million these are fantastically large numbers and you think that applies not just in Nigeria but almost the entirety of sub-saharan Africa and according to the UN sub-saharan Africa will come it will account for a roughly speaking 40% of the world's population by 2100 compared with about 10 or 16 percent currently so it's a huge transformation partly because of the growth of population Africa and partly because of the shrinkage of population elsewhere which about population ageing in Europe but the really big changes that coming through are in China South Korea Taiwan these are countries aging very quickly indeed Japan of course as well and as they shrink Africa will expand raising the big question Africa is a very poor part of the world through pockets that are growing very quickly that's still pretty poor living sounds amongst the lowest in the world if you have this kind of population growth and a modest rise in incomes we know from history roughly speaking what tends to happen people move they want to have a better life elsewhere and in the book I talk about a nine internment experience because we often think of globalization fact afraid but the 19th century a lot of it was that movement of people in particular of course from Europe to North America and initially say in the 1850s law of the movement was associated with the u.s. reaching out the highly-skilled workers particularly from England than from Germany which are going through the Industrial Revolution already there was the US as a little bit behind compared with what was happening in Europe but of course there were also other people going across to the US at the same time largely the Irish of course was suffering terribly from the potato famine at the 1840s and 1850s the Irish made the journey not because they had opportunity in the US but because they were trying to escape from desperate circumstances at home and the numbers were very very large roughly speaking between one and two million people from Ireland made the journey across the Atlantic they made the journey what was known as coffin ships for an obvious reason which is that 20% of the people would be the journey died on the way it was a hideous experience I mentioned this because we look at what's happening in the Mediterranean recently you get the same kinds of images being crated they think we're going to see a bigger and bigger set of numbers coming through in the years ahead and I would argue that Europe in particular is ill-prepared to even contemplate the consequences of this Europe having enough difficulties trying to cope with refugees in Syria or Afghanistan at local and the large number that I think are likely to make the journey and in the years ahead which raises some really big questions again about global governance do you stop that migration moving and if you do how do you improve the lot of people in Africa and elsewhere and actually I can link the technology and demographic stories together because another feature of technology which is potentially worrisome from this perspective is that technology with robotics may increasingly encourage so called reshoring the global supply chains at the last 50 or 60 years part of the globalization story have created wealth not just in the West but also increasingly in other parts of the world notably in Asia it's been a real transformation and of course it's partly because capital is mobile can go to invest in places where labor is a little bit cheaper but if it turns out that robots are even cheaper than the cheapest labor under those circumstances you have reassuring you'll create the sort of equivalent of gated communities gated Nations and then you've got a really big difficulty working out how to look after the people who are not part of those gated nations will they make the journey if they do how they get into those gated nations how do the patient patients cope with these people it's a big big moving question I think for the decades ahead so these are all problems what are the potential solutions to all of this and in the West I think there are a couple of things that could be done and he's partly come back to the issues associated with the global financial crisis because when we have the crisis and all the losses that came through there were no rules of the game as to exactly who should take the losses how should they be divided between different parts of the world between different countries and I want to think about it again from point of view of institutions and it's what I call my Massachusetts and Mississippi story so imagine that tonight Washington DC is abolished just goes the only federal institution that remains and is the Federal Reserve and the u.s. becomes a series of independent nation states but with a common currency other words very similar to what we see in the euro zone today each of these nation states has its own economic data knows how it relates to the other nation states and the people in Massachusetts which is a very rich state in the u.s. realize that some of their tax dollars have being transferred continuously year after year after year to the poor people in Mississippi the people of Massachusetts say well hang on a minute we're no longer part of the US we're on our own now we don't have to pay these tax laws at all the people of Mississippi we're going to stop doing this we're going to keep them for ourselves it's our endeavor it's a reward for our endeavor there's no particularly when we have to get the mind people in Mississippi so the transfers stopped and Mississippi ends up going into a large balance of payments deficit can't fund it and suddenly is faced with the need to impose austerity year after year after year and so in the story Massachusetts becomes a lot richer and Mississippi becomes a lot poorer but the kind of transfer that used to happen within the u.s. stop happening now I'll give it example because it turns out the distance between Boston the capital of Massachusetts and Jackson the capital of Mississippi is virtually identical to this Nassim Berlin and Athens and of course point I'm making is that we look at the eurozone as an economist I can tell you exactly what's wrong with it which is it has a monetary union but doesn't really have any kind of fiscal Union there's no commitment transferring tax dollars tax euros in this case from the richer parts of the euro zone to the poorer parts there's no way of of supporting the the system as a whole so what you need to have in the euro zone very simply is a euro zone finance minister a euro zone finance ministry all the sorts of things that macron interesting is pushing for but it's hugely difficult because if you do it today it basically means the Germans are on the hook for what happens in other parts of Europe so why would the Germans never agree to it so you can see that institutions matter because they set the rules of the game for engagement of people in different parts of the world and when you shrink those institutions go back to the nation-state rather to a bigger federal arrangement you'd begin to discover that people's behavior actually changes the second session I want to make is the creation of a new type of Bretton Woods institution and this new institution is what I call the goth the global organisation for financial flows and this is directly in response to the global financial crisis and this sense that somehow the crisis left us with uncertainty as to precisely who pays and the problem here really is a kind of creditor-debtor problem and it's rather similar in many ways to what used to see in the 19th century in Victorian Britain where debtors went to prison went to the Marshall seat prison because they were naughty people who borrowed too much even though the lenders had lent to them in the first place and what I want to try to do is to get away from the idea that borrowers are naughty and lenders are good this sort of idea of original sin or something that applies to borrowers but not to lend us so I proposes this at the Guf the global organization for financial flows will be an organization whereby a country that ends up with a huge balance of payments difficulty like say Greece over the last few years is able to go to the Goff and say look we can no longer fund the balance of payments private investors that pull the money out of our country we face is massive austere we need your help and the goth which is has seed capital from all countries that participate provides that help it provides an injection of funds internet country for a year maybe two years and during that period the goth investigates the causes of the imbalance whether the debtors borrowing too much or was it the creditors lending too much who was the foolish person who took the risk who should be paying for the mistakes they made and I would suggest that if you have the goth which can rule an affectionate way you might occasionally say actually the Greek crisis wasn't just about Greece itself it was about Germans who lent to loosely too easily to the Greeks the basic historic said the creditors were at least at fault at the desert you could pull banks angela's you can talk financial institutions say they're at fault a new mechanism that actually means you can actually apportion blame and ensure that the creditors in future would think much more carefully about lending realizing they could under certain circumstances lose their money and we're a long way we're that firm that currently that something that again I would suggest it's not such a stupid idea however whether I think about the European finance minister whether I think about the Gulf or whatever I recognized an instantaneous problem which is that if our politics are moving increasingly towards reclaiming the nation-state and away from these slightly technocratic global organisations then what I can propose as an economist it's not actually likely to happen in terms of the actual polity to live by each individual country as the blame game begins to spread it becomes increasingly difficult to see how these kinds of organizations in one sense extensions the Bretton Woods organizations could really play a significant role in the years ahead now something that globalization is coming to an end and possibly we could end up with a really chaotic story but I think also it's important to recognize that as the westwood draws as it falls out of love with globalization and it begins to think we're better off as a nation of states doing our separate things other parts of the world are thinking something slightly different and the example I want to give and is the trans-pacific partnership the fact the Americans are pulled out of it which I have to say what happened I think not just under Donald Trump but also in the Hillary Clinton as well and to recognize that the trans-pacific partnership was again a kind of Bretton Woods institution much later on as a way of connecting North America parts of Latin America with the Asian Pacific Rim to end up with a new trade arrangement with rules of the game some of what we established at the end of the Second World War but rules the games that would encourage integration between countries rule that would actually allow trade to grow make countries broadly better off but almost sort of level playing field that was what was an offer but the Americans rejected it and it's created a vacuum and the vacuum is one that other countries will seek to sell and China of course is the most obvious when you go back to Davos in January lots much traveled in 1913 but this is Davos in 2017 and look at the speech the president she gave he talked about the fact that China was willing to pick up the baton of economic globalization and interestingly as we walk away from our international institutions the Chinese on 21st century are creating their own international institutions the first one is what's called the regional comprehensive economic partnership it's a series of trade connections across Asia doesn't include the Americas that include lots of countries in Asia so it sets the rules of the game for Asian trade set by the Chinese not by the Americans then you have the Asian infrastructure investment bank which is basically the kind of equivalent of the World Bank designed to fund China's belt and Road initiative which China needs because it needs to expand its trade with the rest of Asia to carry on growing so those elections are very very important all the infrastructure that comes on the stream in one sense it's sort of it conjures up images of the Marshall Plan the idea of money being poured into these cross-border projects but the gain is establishing more and more strength to China and in the years ahead and then thirdly you have the Shanghai Cooperation Organization which effectively is an energy and security relationship between China Russia the Central Asian Republics I think I saw at the weekend that India and Pakistan has just recently signed up as well so a series of institutions being questioned for the 21st century which rival the 20th century institutions that which are China led rather than the u.s. Bronwen us-led and that leaves me with a couple of thoughts the first one is that the Chinese story and the American story actually create the beginnings of I think a series of conflicting versions of globalization for the 21st century which in part are based on different countries history and experiences now in the book I talk at all about different regions of the world and how they would interpret globalization in very different ways so if you're in sub-saharan Africa your experience of globalization being pretty awful over hundreds of years because of slavery if you're in China you might look back to the Silk Roads over thousands of years if you're Iran you might look back to the Persian Empire is greatness a thousand two thousand three thousand years ago all these things offer different images of how the world works and offer different ways of thinking about how the world might connect in the years ahead I suggest the following though which is that if you were looking at a map of the world dominated not so much by the Bretton Woods institutions but instead by a Shanghai Cooperation Organization or by the regional comprehensive economic partnership or the a IIb in look at that world and say well who would that well be familiar to and I think you'd have to go back prior to Columbus to see who that will be familiar to because to go back to pre Columbus and think about how the world works it was basically a Eurasian world well we were power economic power political power was centered in Asia and Eurasia and anyone says Europe wasn't interesting and slightly boring Peninsula connected to the rest of it as only a weary with Columbus this massive change it takes place at that point in time that things begin to move on from a Western point of view but what that also tells you is that globalization may Evan flow because it also come to a grinding halt I wanted to finish on on the final observation which comes from my holiday in southern Spain de year or two years ago I was staying in in Seville and Cordoba and it was a wonderful opportunity to think about globalization from two entirely different perspectives and in particular two entire different historical perspectives because you know the quarter Burns's oh of course you're looking at not just Christians baby looking at Moorish Spain Islamic Spain as well and the extraordinary about Cordoba is that you look at the Cathedral or the mesquita that's cool in Cordoba and you realize it's a mosque and someone dumped a church in the middle of it it's a very odd experience when you visit the building something really extraordinary has changed over the years I look at Seville Cathedral which happens still to be the biggest Cathedral in the world but something very odd about Seville Cathedral as well which is it most of its just err yeah a big but both standard Cathedral but the bell tower isn't a bell tower at all it's a minaret with the bell stuck on top of it and when you look at think about the history of this you realize that there was a previous version of globalization in southern Spain it ran from 700 to 1200 AD 500 years 500 years of Moorish Spain 500 years of tremendous technological and economic intellectual advance that seemed to be continuing indefinitely and it had been living in caliber or Seville is a 1150 or 1200 ad you'd surely have believed that Islamic globalization would have continued forevermore why wouldn't you yet with the relatively shaped short space of time things change dramatically and they changed through a series of accidents really which is at the Caliph's the ruling caliphs in southern Spain died he left behind his ten year old son to run the place which didn't work out very well understandably and there was a whole bunch of arguments amongst the grown-ups back exactly how things should work out and ten years later the ten year old son now 20 also dies it doesn't leave a Sun or air and certainly the ruling conventions of southern Spain break down incredibly quickly the Christian kings of northern Spain think there's too good an opportunity to miss and with a very short period of time Seville and Cordoba conquered the mosque in Seville is is demolished apart from the bell tower the Giralda and of course the cathedral was actually built in the 1400s but the final irony of the story that is why it matters for Western globalization rather than motivation elsewhere in the world that Seville Cathedral isn't just on the site of the mosque it also houses the remains of Christopher Columbus and when you think about what Columbus did almost by accident by sending crossly to the Americans and creating the beginnings of a whole series of new trade in silver and sugar and slavery suddenly Europe became a much more powerful the dynamic part of the world and every aspect of history since then from a European perspective expansion of European power through to other parts of the world and what I would suggest is that what we're witnessing currently is an erosion of that power almost a withdrawal of that power because of the attitude towards globalization in the West but equally rival versions of liberalization begin to show their heads again because the vaccine is being created and the opportunity is there and so I finish the book with a reference to not so much brave new world with Huxley with all these chemical experiments and so on but rather 1984 just to lift up the lose even more and this is a specific aspect of 1984 we're all well describes at these sort of three warring factions in the world these three warring empires and the quote in the book he refers to Oceania Eurasia and Eastasia if you simply change those names to the US Russia and China you have something which is other familiar to what we see today with China looking to rival the u.s. from globalization and Russian once it's looking to go back to its imperial opportunities and imperial ambitions of the 19th century and what you'll notice there is that I mentioned those three areas and I haven't mentioned in Europe because Europe I think will struggle in a story it's not quite sure whether its future lies to its west or whether it lies to its east and for all the internal difficulties the Europe had I think it finds itself in a very difficult position geographically to work out what it's going to do in the decades ahead so on that reflexive note thank you very much indeed thank but thank you very much indeed even for that most stimulating lecture we're now open the floor to questions from the audience if you get picked to ask a question please could you say your name and affiliation and please also wait for the stewards to bring around a microphone okay so can we have the first question can I have a CFP ahem yes thank you James Barr current student you talk about the issues of gang Germany silent a fiscal Union Massachusetts to spread if the you know Washington disappears why would those same issues not be raised in your Gulf idea why would the creditor countries that currently have the power in those international disputes why would then in general those more powerful ones when it comes to the economic power why would they then agree to set up your proper proposed institution oh I should stress that although I think the goth would work I'm not convinced that we'll get off the ground I'd like it to work but I think that's exactly what the reasons you say there's a imbalance in terms of who pays the bills but this debate actually goes back a long way if you go back to the Bretton Woods and debate about Bretton Woods John Maynard Keynes was pushing heavily for this idea of it's like a symmetry between creditors and debtors interesting at the time the major creditor nation of course opposed the US was going to sign up to it but it may just be the case now that with the u.s. itself being a destination it could in theory put pressure on other countries more so than it did back then it's still a pretty powerful country it could push for that kind of thing problem again is that if the u.s. itself is withdrawing from its responsibilities globally then the one country that could push for it is not likely to do so which is why once as my book ends with a there's a rather gloomy to their thoughts because I think I know in a very kind of way what the answers are I just don't see politically how we'll get to those answers which is why the world looks slightly discomforting place okay next yes please my Robin hello alumnus of this institution on one country we didn't mention but I think you very loved like India now what's happened here at independent India later on baton the pilot last Viceroy there was an area of 316 million Indian people there's not a 1.2 billion Indians and I think the population is growing far in China in a few years time it'll be the most populous country in the world and there's an over England from the 18th century so um when it comes to globalization and international relations could you say something about the role of India which were obviously very important for the future yes so first of all I agree your numbers that obviously right and that India will have the the biggest population in the world within a handful of years its demographics are or basic he's populations much younger than China's partly because of the one-child policy in China so trying to haven't had that maybe trying to be a lot bigger than it is that they're less that's where we are and I think that there are a couple of interesting issues in India the first one is that compared with China you bump into this kind of silky armor problem which is that India has a democracy but there's growth at only half the pace overall that China has done over the last 20 or 30 years this is an interesting conflict that but the other thing actually in relation to China is is what their relationship will be in the years ahead because we know that their leadership has been difficult over a number of decades about 62 in the West we think about 62 is the Cuban Missile Crisis but if you're in your Indian or Chinese you might think about the that the border conflict in the two countries I personally think that if India and China could sort out their relationship which is part of the kind of Belton Road Shanghai Cooperation Organization type of stuff if their relationship will be sorted out then the potential for trade flows between the two countries could be very very large indeed and I think that both countries to date have missed the opportunity to become more closely economically integrated with one another what it would mean and also that if India could connect not just with China but with other countries particular and South South bases so from Asia into Africa into Latin America then there would not just be the biggest populated country in the world that becoming richer quicker than perhaps others but I don't think we're quite there yet yes sir the black vertices yeah hi my name is Lucas I'm studying here at the European Institute one topic that in my opinion relates to global governance to economics to migration that you haven't spoke about at all is climate change how do we bring that one in I'm pleased to say that actually is in the book if I've missed it out I think I would have not done my appropriate sort of due diligence or whatever other call this um the book is not about climate change if it was it would be a whole book or possibly a series of volumes of books but what I do know and this is particularly on the demographic story is that demographic movement is often associated but migration movement is often associated with natural events including climate check what may be the change is not natural you know what I mean but but but events that change the environment and such ways that make it impossible for people to stay in that particular environment for as long as they might otherwise have done so and again there's a connection here with the Irish potato famine because obviously that was initially caused by a fungus which destroyed most of the area crop they were then subsequently huge distribution of problems because although food actually did get to Ireland getting it from the east coast of Ireland to the west coast of Ireland proved to be incredibly difficult and the famine was as much a problem of distribution as it was about the initial fungus but nevertheless you could treat the fungus problem of the 1840s as the equivalent of a climate change problem today and certainly in parts of Strictly Africa maybe parts of low-lying parts of Asia you could easily imagine a situation people feel it's just not worth staying where they currently are they will have to move so again these things are all hugely connected I mentioned the connection between technology and demographics I think the connections in demography is in climate change is also enormous ly important and will play a very big role in terms of driving migratory flows um in the in the years ahead okay at the top there I think there was a question yes okay thank you and the globalization is to say absent flows and I think when a time of financial distress it it was you call Em's and disclose otherwise I think it's a globalization the secular trend and it's not but you can do about it and what I think what you say what you talk of the it what is suggest as the end of globalization is simply the ebb of globalization because we are going through a period of financial distress and I think it is simple I should think it is temporary one so what do you think of is it this is the temporary phase they are just something at least a you think and so the issue here is it I certainly believe that globalization waxes and wanes or absent flows I thought that I have no problem at all my issue though is that prior to the financial crisis in particular there was a sense widely held that globalization was inevitable unstoppable and will continue forever the famous speeches by Tony Blair and others who said you just can't get in the way of this it's going to continue I get throughout history you find plenty of examples of where the reverses take place and can reverse not just for five years of ten years but for half a century maybe even a century you go back to you know the period from say 1903 to 1950 we wouldn't describe that really as a period of intense globalization quite the reverse everything began to break down over that period you talk about let's say I mentioned at the very beginning I think the the end of the Roman Empire and you wouldn't describe that as being at the beginning of a new set of integration for Europe I mean it was disaster for Europe for the next thousand years or so so my point is that if institutions themselves die or fail and things break down then even though technology might appear to be advancing it doesn't actually provide the guarantee that globalization really can continue so it comes back to the idea that that it's not so much technology that drives it forward its ideas and institutions and our willingness to be integrated as opposed to blaming each other for the problems that we have and history is replete with these examples of blame it's quite worrying in my view okay at the front please Thank You chairman Terrence bendixson University of Southampton first an observation I think I'm right here saying then it worked 1595 a Moroccan ambassador came to London to try and persuade Queen Elizabeth to join the North Africans in reconquering Spain which is a nice what if if you want to well you need consider a different scenario Villa I'm coming back to one of your final points about the United States and trumpery and that sort of thing and the need for new institutions isn't it just possible that Trump will be a very short story that some new American leader will come who we don't yet know but who will have some classic American International idealism and help to create the sort of institutions that you see as necessary yeah well I'm not gonna forecast how long Trump will last for I'm assuming assuming he'll last for four years minimum but I could be wrong about that you know things can happen I tell you one thing I've been Washington last week actually and I saw a number of both Democrats and Republicans and one thing that was striking on the Democrat side was that having lost unexpectedly in the presidential election there has to be a tremendous if you like shortfall of ideas as to what to do next so you know many Democrats are international well you in favor of international institutions but they think well how do we support those and at the same time get elected and this is a huge difficulty if you take a digression leave you take the choice that we had in the UK last week everyone talked about the soft breakfast versus hard breakfast but what about the UK choice is that effectively neither left nor the right really offered the sort of choice that only in the centre would like to have as a sort of polarization which is actually silenced the votes of many who want something different but can't get it because it's just not an offer at the moment so I think there really is a profound problem here now an optimist will say look at France look at macaron and he's come in he's revolutionized people's expectations he's defeated the front nasiha now they're now collapsing in terms of their vote and if you can deliver over the next four or five years everything will be great the big question there of course as always with France's can you deliver in the optimism is very high it because a bit like when the bomber first came in with yes we can and it's great but then eight years after bombing it Trump so that also I think reveals some difficulties and just one final historical thing if I may I like your Moroccan story by I believe also that when Columbus sailed west he was hoping not to get to the Americas of course but to get to Asia and the one specific reason for this is hoping to do and deal with the great calm because Christian Europe was terrified about the ottomans who just conquered Constantinople so this was real so the global politics of work and of course it shouldn't be very different on people to expect it but never that it did give Europe more power than it ever would have anticipated hi my name's Ben Fisher I'm start-up founder in the twentieth century with the rise of globalization very much linked hand-in-hand with neoliberalism and the largest companies in the world at the time but very much multinational like big industry companies that kind of thing in the West that's very much changed to technology companies with Google Microsoft Apple which have much smoother overheads don't really employ the same kind of people where they would have gotten mass labor on a grand scale and there's not so much of an incentive to exploit keep market labor and keep market national resources do you think that could be one of the reasons why the West is stepping away from globalization just because the nature of their markets have changed yeah this is a really tricky one firstly that there's lots of data really interesting data looking at the market capitalization of companies and how many people they employ so you think about I didn't fool the General Motors back at 1920s a new market cap was big by the standards of the day employing huge numbers of people created communities effectively and you look at the equivalent of a Google log or whatever Apple and they employ very few even think about the subsidiaries they employ very few so what we have is almost like a winner-takes-all story whereby if you happen to be the early shareholder in that particular company you will become a millionaire maybe that even a billionaire without necessarily doing too much and often if you crazy as your killer app you will have not just killed other people and cents but you also killed all the other apps you've been lucky to your apps take off and others could easier done there's that containment thing there's a kind of lottery ticket aspect to this now one things we discussed of course is the idea well if this is the case and the money just goes to the limited owners of capital and we should have a basic income a universal basic income story which will help to compensate everyone for the possible concentration of wealth and I thought about this and I I have some difficulties with it and one difficulty is that we look at how people have voted in recent times it's not so much they're not being compensated in some cases rather that computation isn't enough to give some of the worthwhile life people want to achieve things they want to do things and simply being told well don't worry here's a here's a check each month you'll be okay you'll live comfortably it's not quite the same thing as actually having something that's that's meaningful but you're probably universal basic income goes back to my earlier issue about public services which was easy offer universal basic income in your country who you offering it to where you draw the line who counseled the citizen who doesn't now we've got a very gray area that moment in terms of who is and who isn't a citizen but once you have a universal basic income you absolutely have to decide who's in and who's out and I'm not sure that the world will quite Gellin the way one would like under those so I think there are some huge difficulties here I don't think so thought anyone got to my answer okay so yes that's the backward please yeah hi my name is Martin Lam I'm a town planner I noticed that you're talking before about the changes in technology and potential the potential issue of reassuring arm so you mentioned like you know the potential for manufacturing and jobs like that from Asian countries to go back to Western countries particularly ICANN America my question is do you think what how do you see the potential for a future of Asian carp particular like China Vietnam and things like that do you see the wealth in those countries deteriorating again or have they moved past that in terms of that are there standards of living and levels of education have increased to the point where they're now competitive enough to not need those I guess like cheaper chalk yeah cheaper jobs like that well first of all I should stress that my view on robotics is slightly different from for example we should Baldwinsville robotics in his book the white conversions he tends to argue that robotics will allow you well for spread to more parts of the world and that's a good thing but I would come back to the idea what who owns the robots who does well from this and is it really getting wealth to everyone or was it simply giving concentrations of wealth to individual people I also think from a sort of security point of view it's easier to imagine that robots will come back home if they can so I think it does create these these breakages and global supply chains personally I think the good news for China Vietnam possibly as well is that they probably have reached the stage where they are self-sustaining in some ways and I think that when it comes to China in particular the belt and road story is something that will allow trying to connect more and more closely with other countries within the region and those connections will allow more trade to bill which has not built hugely as yet but could expand usually it I mean in China's case that wealth would spread from the eastern coastal regions which are already pretty well off into the Western inland regions which are still facing tremendous poverty so I think there's there's certainly evidence in China that it could carry on growing my concern really is the parts of the world that aren't quite as yet engaged in the global supply chains and the danger with robotics we'll never get there and that's much more worrisome I think particularly again for Africa which is why this comes back to the issue of what we don't do it in terms of investment then rather than capital many thing will be people that lose in the years ahead but something I'm pretty optimistic about parts of Asia and part of it is because China's creating precisely institutions that would safeguard an expansion of economic activity in the years ahead in that region another question yes please yeah yeah the problem in asking for Asian hi I'm drumming from King's College I mean the original Fukuyama I say had a question mark at the end and I think you need a question more at the end of your title as well I mean you seem to suggest that globalization is in Reverse but the data shows that that's not the case the globalization is still growing but the pace of growth is slowing down and that may be you know well explained by the technological slowdown so maybe after all my point is that we shouldn't really panic and relate all this still slow down to the political factors on top maybe the slowdown of growth is maybe you know basically explained by technology no reason to panic I I hope you're right and I just said I'm not panicking not yet first of all to be fair to Phil qiyamah he has kind of disowned when he wrote back in 1989 and also he said something interesting it is paid for 1989 aquitted Nietzsche and he said that the obvious criticism of his view is that an S at the end of history and the last man was the last man having been some satiate ease of getting perfectly happy when no longer really have any ambition to better himself under those circumstances we've become into Nietzsche risk terms sort of slaves more than anything else slaves to our own sword lack of ambition and he pointed out those always a danger that authoritarians would come back and push the story in a different direction and probably not that's exactly what happens when you look around the world the growth of authoritarian regimes and popularity of authoritarian region increased has be fed to him he had got those points in there but my invasion really that many people believed genuinely in the end of history which is why I quoted the George W Bush quote at the beginning of the piece as for the slowing of globalization and I just read that my view that are not so much what's already happened it's what may happen in the future now I think there are all these evidence of evolution is slow not just in terms of slower growth but also the fact of the West itself was closed too much compared with the rest something really quite surprising that happened in terms of the pace of Western economic growth over the last ten to fifteen years I also would note that there's another potential measure of slowing of globalization is that well trade growth of the extremely weak over the last few years recovered a bit over the last year or so but compared what you'd normally expect it's been remarkably soft and you potentially could point to increased sort of non-tariff barriers and so I'm thinking to come back as a potential constraint and what's happening with Freight so there are already telltale signs there but my concern really is that the narrative the political narrative is changing now and that's the thing that work is worrisome over the next 10 to 20 years okay now there was somebody there who was I think we're trying to fix some time yes please yeah good evening thank you for joke firstly especially with regard to China so you mentioned the possibility of China sort of spearheading the next wave of globalization and stop taking the torch from the US but do you really think you'll be global as opposed to just regional given China's language barrier and the lack of its soft power as compared to what the US is was yeah so on the soft power question this is something which the u.s. believes in quite strongly although if you look at reputational measures the US doesn't score we highly despite its soft power of course the reason why that doesn't matter too much is because the u.s. got an awful lot of hard power as well and that still matters we shouldn't lose sight of the fact that the military budget for the u.s. is way ahead of anybody else's so soft power is part of it but I think it might New Jersey tonight over States the story - to a certain degree if I can just tell you a little anecdote here I was at an event last year and I had to moderate a session with Jim Baker the third that the former US Secretary of State it was a speaking speak for 20 minutes and then he was talking about soft power and the marvels of the US and the 21st century and how it would continue to keep going and he sat down later and said well imagine that you were in a time machine you've been transported back to only 1900 and he discovered that you were actually English rather than American wouldn't you've given exactly the same speech roughly speaking he looked at me laughs and said yeah probably my point is that that people have a strong sense that what they're doing is the right thing but doesn't necessarily mean that history will judge you kindly at some point in the future and I think what is striking at the book starts actually with the speech by Joseph Chamberlain who suddenly has become quite interesting because of course of Nick Timothy support for him before negative fighter falling soared over the weekend but some Joe Joe Chamberlain had was someone who clearly was influential and certain some parts of the Conservative Party recently but at the beginning of the book I quote the speech from him talking about the wonders of British imperialism has going to transform the lives of people in Africa and having a civilizing force and how you couldn't make an omelet without breaking eggs and you look at them think yeah this is pretty strange stuff but that's what people believe back there and I don't think changeling was an evil person I think it's just that that's how people saw the world and my concern really is that the u.s. may be in a similar situation where it might judge it's doing everything correctly but others will judge it differently in certain ways as for China itself well it's not much the regional aspect that matters to me is rather the limitations of its version of globalization if you go back to president speech in Davos in January something he says continuously through the speech he doesn't talk about globalization talks about economic globalization and here's the thing as a difference in China in the u.s. the US has a sense that it's values are universal that if other countries can get access to those values they will also embrace them this is he wants as part of the 50 Arbour thesis but again something for neo cons in particular would tend to embrace whereas China would say well whenever they make any judgments about country a country B country C we're happy to engage with them economically but we're not so happy to sort of make judgments about them and are we happy that they make judgments about us now that may place it place a restriction on globalization because what it means is that companies who've invested around the world expecting the same standards legal standards government standards to be applied everywhere may discover that in the Chinese version that isn't true and that might make a creative limitation as to how much capital can flow across the world okay we've got time for maybe one or two more questions yes white shirt please hi thank you and Jordan student question about the Britain of today particularly around brexit is depending on who you talk to views of brexit could be that Britain is pulling away and and disengaging but that's either from globalization or from regionalism yep and one view of breaks it could be the moving away from regionalism actually to repave it to other countries such as countries you've mentioned a lot today or you've mentioned a lot like China India percent even the state in a different format was wondering what your view on that was so one of the peculiarities of voting for brexit was that people voted for brexit for a whole bunch of different reasons and I would split those reasons into two this is far too simplistic but it's a help way of thinking about that there's the kind of 1950s 1960s nostalgia reason which is to sort of escape from all the uncertainties and globalization to sort of hide away within your donation stations and to cut down immigration and all these kinds of things and then the other version which is one you just described is well you might start at the global Britain version the idea that the common external tariff that the EU has within the single market is something that eventually protects you too much but prevents you from being productive and innovative and so on Nouriel and once you expose the rest of the world you can do much much better and there are certainly plenty people in the conservative right and believe that including in the cabinet now the question is is that right does it really work so some people would say look at Hong Kong look at Singapore we can be more like them it's very difficult to be more like them but for their city-state and not for any nation space certainly they're embedded into the most dynamic part of the world so neighbors really help them and thirdly they have a fundamentally different view in terms of the balance in education and social welfare little the way of Social Welfare a few Jen businessman education their results and Peter tests and way ahead of what we have in say the UK or the u.s. at the age of 15 which I mentioned only ROM so so those countries all cities don't really count so you have a think about something else and I'll tell you a little story I was speaking to someone who quite close to the government possibly in it but we're not gonna mention any names and I said well you know if you're if you're sort of thinking of countries to emulate around the world that Britain could be more like outside of the EU which would it be I said you're not allowed to use hong kong you're not allowed to use singapore this person for that for a while into what I'd really have to name a country it'll be Germany and I looked at it and said you sure it says yes Joey because it's really good export so he's really connecting the rest of the world hit you are aware that Germany is part of the EU and well apparently I didn't make any difference but my point is that and that there is this sort of sense that we can do better connection to the rest of the world but I'm really not convinced that whether you in or out of the EU makes a little difference that particular argument precisely because generally has connected very well to the rest of the rest of the world now one thing you might say in Britain favors a Germany does a lot of engineering goods a lot of manufacturing goods a lot of that is associated with infrastructure investment elsewhere in the world as these countries get richer neighbourhoods run more in the way of financial services professional services and so on it's stuff that allegedly Britain is quite good at and so it might turn another alley countries get richer and Britain will naturally see richer connections anyway but that's not the rightly connected with being in the EU at all okay we have time for one more of course anybody had their hand up for a long time absolute top bath okay yes please thank you I'm a doctor I'm a consultant cardiologist studying health economics here at the LSE you talked about China Russia sub-saharan Africa India after the so-called Middle East or Arab Spring how do you see the economy of countries like Egypt in the coming 30 years first of all I'm of a certain age that I only help in my heart afterwards that'd be much appreciated secondly um what's a positive story that one can tell for the Middle Eastern of Africa obvious positive story is demographics but equally it's obvious negative story because you've got lots and lots of young people in some cases without the opportunities to do very much for you but sometimes repressive regimes or whatever it can create circumstances where people want to do stuff but can't do stuff to reach the right level of education and it becomes a kind of unstable situation either in terms of people's relationships with the rest of the world or all relationships internally within those countries well I think it's striking about the Arab Spring though more than anything else is that when it happened it was a reflection in one sense of the gaining of the Fukuyama a neocon Western liberal belief of this wonderful thing but interesting when when the West discovered that the Muslim Brotherhood won in Egypt suddenly not so sure this was such a wonderful thing this democracy's a funny old game you can end up with results that you weren't necessarily expecting and of course ages itself then overthrows the Muslim Brotherhood and Morsi ends up in will possibly enter the death sentence commuted to a series of concurrent life sentences so I think what you can understand from that story is that the transformational process the belief the West has that liberal democracy will always be chosen inevitably happen he's actually a much more difficult process than the West typically itself imagines and so go back to my my commentary on that george w bush and you know the idea that you can transform Iraq into a successful democracy everyone else will follow like a house of cards life is just much more complicated than that and creating a good democracy isn't about voting it's about having an independent judiciary about having freedom of speech freedom of the press etc etc and lots of possible have really struggled to deliver all those things at the same time okay well I think we must draw to our clothes now it's been a great pleasure to have the opportunity to listen to Steven I want to thank you very much for that before I close our session though I'd like to remind you that the book is on sale outside just outside the old theater here you can buy it there and then bring it back onto the stage for Steven to sign should you so risk which should you so wish so can I close then by again thanking Steven very much we have extremely stimulating lecture [Applause]

Channel: LSE

Views: 18,103

Rating: 4.6792455 out of 5

Keywords: LSE, London School of Economics and Political Science, London School of Economics, Stephen D. King, Globalisation, The End of Globalisation, will globalisation end, is globalisation a good thing, lecture about globalisation, what is globalisation, economic prosperity, New World: The End of Globalization, lecture, talk, prosperity

Id: wnn9jpLNXF0

Length: 87min 16sec (5236 seconds)

Published: Tue Jun 13 2017