Philip Stephens: Uncomfortable truths for a new world of them and us

Posted by Kendall Harmon

Globalisation belonged to us; financial crises happened to them.

The world has been turned on its head. Consumers in the wealthiest nations are struggling with the consequences of the credit crunch and with the soaring cost of energy and food. In China, retail sales have been rising at an annual 15 per cent. I cannot think of a better description of the emerging global order.

The trouble is that the politics of globalisation lags ever further behind the economics. For all its tacit recognition that power has been flowing eastwards, the west still wants to imagine things as they used to be. In this world of them and us, “they” are accused by Democratic contenders in the US presidential contest of stealing “our” jobs. Now, you hear Europeans say, “they” are driving up international commodity prices by burning “our” fuel and eating “our” food.

The other day I listened to an eminent central banker offer a lucid explanation of the collapse of confidence that last summer paralysed international credit markets. I say lucid because he kept it simple, skipping the indecipherable stuff about algorithms, bundled securities and mark-to-market accounting rules.

Read it all.

Filed under: * Culture-WatchGlobalization* Economics, PoliticsEconomy

4 Comments
Posted May 30, 2008 at 1:29 pm [Printer Friendly] [Print w/ comments]



1. Terry Tee wrote:

I was struck by this:  How do you tell your electorates that all the old assumptions about welfare capitalism must be rethought?
  I picked up my car from the garage today where the owner told me that he regularly works a 70-hour week.  He also said that hardly a month goes by without some government flunky appearing unannounced (eg health and safety, environmental health, vehicle standards agency etc etc) to check on his work.  They cannot find anything of any real significance, he said, but because they have to write something on their report to justify their job they will say something like ‘have you thought of this?’ and come up with something else that is not strictly required but gives them something to write about.  ‘I have come to the conclusion’ he said ‘that we all all working to pay taxes to keep these people in none-jobs.’  This is how I would fund the welfare state:  trim the government rolls of this unnecessary salariat.  And by ‘welfare state’ I mean what it was originally intended for:  to help the chronically ill; to help the retired who have not been able to provide for themselves;  to help tide people over periods of unemployment.

May 30, 2:35 pm | [comment link]
2. Loren+ wrote:

I was in Singapore when Malaysia rejected the IMF & World Bank medicine for the financial crisis there in 1997.  The west scoffed.  Within five years, the same organizations were quietly praising Malaysia, observing that their “invest locally” scheme out-performed the IMF schemes in Indonesia and Thailand.

The financial socio-political dynamics discussed in the article parallel the dynamics within the Anglican Communion.  The Global South is taking charge of their own future, not relying on the West.  TEC’s claim that they were bought off with roast chicken etc was offensive in 98 and clearly misses the new globalization of the Communion.  Our Western leaders, in my estimation, are completely blind to the changes happening—wanting to lead internationally, but unaware of the developments around the Globe.  But even here, I rejoice to know that God has these exciting times safely in his hands.

May 30, 2:52 pm | [comment link]
3. Jeremy Bonner wrote:

#1 Sounds fair enough, but how does one discriminate between the necessary and unnecessary salariat? Can one assume that, if one withdrew all such inspectors, businesses would uniformly comply with codes? I imagine that most executives are sinners like ourselves and therefore susceptible to pressures to cut “needless” costs. In light of the second crane to come down in New York this year (and the first accident, at least, was caused by corners being cut in inspection procedures), do we really only want to address such problems retroactively?

All this doesn’t mean, of course, that there aren’t plenty of bureaucrats out there trying to justify their existence.

May 30, 2:53 pm | [comment link]
4. Terry Tee wrote:

# 2 that is a fascinating parallel and # 3 your point is well made.  I have in mind, though, many recent examples here in the UK of health and safety gone mad eg the borough council that cut down trees in case the nuts from the trees fell on people’s heads ... seriously!  Apart from safety, I also have in mind the vast number of people who monitor compliance eg with ethnic minority quotas etc.  Quite an industry.  As a school governor I can also tell you that the spate of paperwork flowing from a vast salariat increases each year and is actually counter-productive:  teachers have to take time off from teaching, just as nurses from nursing, to compile ever more detailed and demanding reports.  To return to the article, it amounts to transferring resources from the productive to the non-productive sector, in fact rewarding the latter.  I wonder how China, famously autocratic, controlling and repressive, manages to achieve its economic growth without strangling its producers in red (!) tape.  I always thought that truth and accountability were prerequisites for economic growth.  The article might suggest otherwise.

May 30, 4:04 pm | [comment link]
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