Globalization — the Economics Work, the Politics Do Not

Us vs. Them, Ian Bremmer
Us vs. Them: The Failure of Globalism by Ian Bremmer. Photo credit: Portfolio and TEDxNewYork, NYC / Flickr (CC BY-NC 2.0)

Globalization has created a true global middle class, brought millions out of poverty, reduced the price of goods, and created remarkable economic benefits. As an economic system, it has worked exactly as promised. On the other hand, globalism, as a political idea, has been a dismal failure. This is according to Eurasian Group CEO and global analyst Ian Bremmer.

In his conversation with WhoWhatWhy’s Jeff Schechtman about what connects so many of the global problems we face today, Bremmer makes the case that democracy, plus technology, plus political globalism simply can’t work. The West’s existing institutions cannot cope with huge amounts of wealth concentration, technology, big data, and artificial intelligence. According to Bremmer we need look no further than Trump, Brexit, and recent European elections for proof.  

As counterexamples, he cites Japan and Israel. Each has, in different ways, walled itself off, maintained homogeneity, and either rejected or blocked immigrants. As a result, each has been far more successful than Western democracies in negotiating the perils of the global age. Japan, he points out, made a conscious decision to trade slower growth for more “us” and no “them.”

Adding to the global unease is the rise of China. An authoritarian capitalist state, China is thriving in the global age — so much so that its leaders are offering its economic success as a model to the world. Bremmer notes that with all these challenges, the US could not have picked a worse time to precipitate an “America First” crisis of confidence.

Ian Bremmer is the author of Us vs. Them: The Failure of Globalization (Penguin Audio, April 24, 2018);  Superpower: Three Choices for America’s Role in the World (Penguin Audio,  May 19, 2015); Every Nation for Itself: Winners and Losers in a G-Zero World (Co-authored with Willis Sparks) (Gildan Media, LLC, May 1, 2012).

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Jeff Schechtman: Welcome to Radio WhoWhatWhy, I’m Jeff Schechtman. As we’ve discussed here many times before, Trump, Brexit, and the worldwide populist revolution are not causes, but symptoms, symptoms of a wider systemic plague of fear of change, anxiety, and a feeling by people of being part of a world they no longer can control or even understand. Technology today, rather than being a cause, is merely the host that carries the fear. Not unlike the Industrial Revolution a century ago, disruptive change takes its toll. The difference now is that it all happens at hyper speed, and in full view 24/7. How we deal with it, whether we put those that have been left behind in Hillary Clinton’s basket of deplorables, or find leadership that will lift up entire countries may very well determine the fate of the world.
We’re going to talk about this today with my guest Ian Bremmer. He is the president and founder of Eurasia Group. He’s the author of ten previous books and lectures widely, and writes a weekly foreign affairs column. It is my pleasure to welcome Ian Bremmer to Radio WhoWhatWhy to talk about Us vs. Them: The Failure of Globalism. Ian, thanks so much for joining us.
Ian Bremmer: Ah, delighted to be with you sir.
Jeff Schechtman: Is it a failure of globalism or is it a failure of leaders to sell the benefits and the reality of globalism?
Ian Bremmer: Well, you could argue it’s both, right? I mean it’s not the failure of globalization, I mean the economic process works, you’ve created an enormous amount of wealth, you’ve brought a global middle class into being, and you’ve reduced the price of goods. So globalization does, works as promised. But globalism is a political failure. It is the failure of leaders and their institutions, the failure of the structure. I don’t want to give it just to leaders because you have to recognize that when you have a system where it’s taking 18 months to run an election, and it costs billions of dollars, and you have massive private interest and special interest lobbies that are able to ensure that big changes in policies just can’t happen. The AARP and big pharma makes big changes in healthcare and affordability of drugs just not on the agenda, right, is that a failure just of leaders? I’d like to have more courageous and strong leaders but I think it’s broader than that.
Jeff Schechtman: Is it a systemic failure in that the kind of democracy that we have been operating under, the kind of system we’ve been operating under, simply is inconsistent with, doesn’t work with, a globalized structure?
Ian Bremmer: It certainly doesn’t work with a globalized structure when technology is added to the mix, right? That’s the piece that I think really frightens me, because in the last five years, we’ve seen that the media no longer functions for civic democracy, it’s become something that’s really dividing people because it’s all about advertising to people, only the information they like. And far more people are going to get displaced by technology, big data, automation, artificial intelligence, then were ever displaced by globalization and jobs moving to China. So I worry that our existing political institutions are not quite up to the task of what we need to do to make it work for the average American, European, Canadian, Australian, you name it.
Jeff Schechtman: Right, I was going to say it’s not just our political institutions, but really it’s the political institutions of the West, of liberal democracy.
Ian Bremmer: That’s right, because I think Americans seem to think there’s something about the United States that’s particularly toxic and that’s why we got Trump, just not true. I mean we got Brexit in the UK with exactly the same kind of voter base, people that didn’t want to hear facts from their political leaders, their business leaders, their media because they felt like they’d been lied to for decades and so they just didn’t trust those institutions anymore. That’s exactly why you got the German elections against Merkel, that’s why the Italians just voted all the establishment out, by far the most antiestablishment vote since World War II, it’s why Macron almost lost in the first round and had to get rid of his established parties to be able to win as president.
The only advanced industrial democracy in the world that is not having this problem is Japan, and it’s really interesting. The population is shrinking, right, which means that the average Japanese, even though the economy’s not growing, is doing much better per capita, they don’t accept any immigrants, and their military is constitutionally forbidden from actually fighting abroad. So in other words, the one country that doesn’t have a problem with globalism, is the one country that rejected globalism.
Jeff Schechtman: Well it’s also in part with Japan that the population is such a homogeneous population, and that it’s really hard to find some other quote unquote to blame.
Ian Bremmer: What I said, no immigrants! Right? I mean you can’t be upset with immigration if there ain’t no immigrants. I mean, people have been telling the Japanese for decades, “You’re not growing, you need to bring in cheaper labor from Southeast Asia,” and the Japanese have consistently said, “No, we won’t do it. We’ll accept lower growth, but we’re going to maintain our homogeneity.” And you know you’ve seen in Scandinavia, these are countries that everyone thought were the paragons of social democracy, liberal democracy, suddenly they bring in huge numbers of migrants from places like Iraq, and then they start voting for political parties that feel like the National Front in France, and that’s not social democracy.
Jeff Schechtman: The argument that globalization both as an economic and a political institution has been good for the world, that it has brought down crime, that it has created huge middle classes in many parts of the world including China and India, most notably, is there any value to people understanding that argument?
Ian Bremmer: Yeah, of course there is, but you can’t give them that argument in the abstract when they’re suffering from an unprecedented opioid crisis, or when their education system isn’t good enough to get them a functional job, and when their factories have closed down, it just doesn’t work. I grew up in the projects, and my mother read the National Inquirer every week, brought it home, she’s a smart woman. She wasn’t an educated woman, she dropped out of high school, but she understood a much more fundamental truth than globalization is creating a lot of cash, which is, “Screw all this globalization, what about my kids? And no one’s going to take care of my kids unless I get something done, I need to lie, cheat, and steal, but I’ll do that to get an opportunity for my kids.” And I think that, if she were alive today she would have voted for Trump. My brother did. And I didn’t grow up with any capitalists because no one in the projects had any capital. And I just don’t think that you can convince people in my community that globalization is something they should vote for unless the people that are making all the money off globalization start actually caring about them.
Jeff Schechtman: How is this different? I mean other than the obvious ways, but in terms of some of the broader issues, how is it different from the upheaval that we experienced, that the world experienced, during the Industrial Revolution?
Ian Bremmer: Look, I think that what they called the Gilded Age, right, pre-Depression, is very similar to what we’re experiencing right now. I would say there are two big differences. The first big difference is we in the next ten years are going to be surpassed, the United States by China, that will become the world’s largest economy. And unlike during the Great Depression, China is a competitor that does not agree with us in our fundamental outlook towards the world. China is not a liberal democracy, they’re an authoritarian political system, they are not a free market economy, they are a state capitalist economy run by the state. And so therefore, the potential timing for us to go through this sort of crisis of identity in the west is really bad, because it’s happening when China has Xi Jinping as president for life. They’ve got the China dream, and they’re about to become the largest economy, that … And they’re writing victory, they’re doing a Marshall Plan right now, it’s called One Belt, One Road, they’re writing really big checks for other countries to align more with Beijing while we couldn’t even be bothered thinking about that, so that’s one big difference.
The second big difference is that our … The speed of technology in displacing workers is happening so much faster than what we’ve seen in previous industrial revolutions and we just don’t know if at the end of this new Industrial Revolution we’re going to have so many more jobs that’ll be higher end, and the only problem will be making sure that people are trained to take them, or will AI simply mean we don’t need as much work? Because we had, in previous industrial revolutions human beings were fine, but horses weren’t, right? We ended up with only one tenth the horse population that we had before the Industrial Revolution because you didn’t need them to drive electricity and steam engine anymore, right? So instead, horses were suddenly useful only for entertainment and food. And I mean if that happens to human beings, I mean, I’m pretty entertaining, I don’t know about you, but for the average human that’s not an attractive outcome.
Jeff Schechtman: Given all the inherent problems, economic and political that we’ve been talking about in globalization, to what extent do you see it all being exacerbated in really fundamental ways by this populist revolution and by Trump, Brexit, et al?
Ian Bremmer: It is exacerbated because the solutions being offered by Trump and Brexit are not ultimately going to make life better for the western economies. And by the way, if Jeremy Corbyn becomes Prime Minister in the UK, that’s going to be much more damaging than anything that happens through Brexit. I mean he’s not a good version of Tony Blair. He’s kind of like a good version of Trotsky, right? And so a lot of damage to the British economy in the long term and if you don’t have the money, your ability to take care of the poor people is a hell of a lot more challenging than if you do have the money. But, having Brexit and having Trump should serve as the beginning of a wake-up call.
I’m not sure I write this book if it isn’t for Trump and Brexit, right? I mean if Brexit had gone the other way, it was a pretty close vote. if Hillary had won, you’d have a whole bunch of people pretending things were all fine, and so even if I wrote the book, everyone would say, ” Eh, don’t pay attention to that.” So, I think more people are willing to think about this. And you’re seeing, not just about books, but you’re seeing more CEOs saying, “We need to really invest in the future of our workers that otherwise won’t have a shot.” We’re seeing Steve Case, the former AOL CEO who is now investing in venture capital for entrepreneurs in flyover states that otherwise never got the cash from sort of the big investors. That wouldn’t have happened, I think, if it wasn’t for Trump and Brexit. So I’m glad that we’re starting to see some local level experiments, and I’m hoping, if my book does anything, it’ll be to create a lot more people that want to start experimenting. Because we’re not going to get the solution until we have a lot more people trying things like gig economies locally, and universal basic income locally, and better training, universal, lifetime, and seeing what’s too expensive, what works, what doesn’t work. We’ve got to start addressing this problem in small ways before we can do it in big ways.
Jeff Schechtman: It’s interesting that you talk about those potential solutions and I agree with you that those potential solutions are going to come from the bottom up in some cases, they’re going to be local in terms of the experimental nature of it, and they’re going to come from the business community, which seems to have a clearer, or certainly sharper eye about all of this than Washington does.
Ian Bremmer: Oh, no question, because Washington’s just broken around this stuff, right? The idea, given how incredibly divided Congress presently is, how incredibly captured the political process is by special interests, no one out there really believes that big government is going to move the needle in the near term. Maybe we can avoid making some big mistakes, maybe we won’t do an Afghanistan or Iraq war the next time around because people will be gun shy, and I think that’s the lesson that was learned to degrees by both Obama and by Trump, right? Because let’s face it, it’s not the wealthy people that are fighting those wars, it’s the enlisted men and women and their families, and those people didn’t vote for Hillary. Trump is one of the least patriotic leaders I’ve ever seen in this country. He dodged the draft seven times, bone spurs, said McCain wasn’t a war hero because he got caught, I mean… But people, but the enlisted men and women, not the officers, the enlisted men and women voted for Trump anyway. And they voted for him because they thought, “Well, he’s not, maybe he’s not the one that’s going to keep sending us to these failed wars.” That’s interesting.
Jeff Schechtman: What role is China going to play as this situation continues to evolve? What ways in which China, and you touched on it before, is really operating on a global stage now, how will they find ways to exploit this?
Ian Bremmer: They are the big winner, globally, from Trump, and from Brexit, and from everything that’s happening with us versus them right now, because they have an alternative model, and for decades we’ve been saying that they were going to become more like us, that as they became a consumer-driven middle-income economy, they would need to politically reform or they’d fail. Turns out that’s not true. So first of all, it gives more legitimacy to their own system. No one is pushing China for democratization and bigger human rights right now on the global stage. the Americans can’t credibly say that, and you know, beggars can’t be choosers if other countries want their money, and they’re the only ones building infrastructure, then you’re going to accept whatever the Chinese say. So that’s one way they take advantage.
The second way they take advantage is if the Americans don’t want to lead if it’s America first, and if we’re saying we don’t want to put the money into NATO, we don’t want to support the Transpacific Partnership, we’re not interested in all these multilateral alliances where other countries take advantage of us, suddenly the Chinese look more like a real alternative, and a lot of countries around the world are hedging towards China. That’s not as true militarily, militarily the Chinese are only a regional power, Taiwan, Hong Kong, the southeast Asians, they understand that. But economically and technologically, the Chinese are increasingly setting alternative standards, competing standards, to those of the United States and our allies. And that will ultimately mean that more economies will shift to those standards and they’ll shift to the Chinese currency, that’ll undermine American growth.
Jeff Schechtman: Given the nature of the divide today, and the way in which technology accentuates that as you talked about before, how does all this turn out?
Ian Bremmer: You know, the technology piece is by far the most troubling because I think that for the last … 25 years ago, you may remember a little, there was a cartoon in the New Yorker Magazine with a dog that was on a computer and he talked to his other friend, another dog, that wasn’t on a computer, on the internet, no one knows if you’re a dog. Right? I don’t know if you remember that one. And it was the idea being that technology really empowers people, you can be whoever you want, you can be anonymous, you can get all this information, it’s a communications revolution, it’s going to undermine authoritarian states, that’s why we have the Arab Spring, the Tunisia Revolution, the Egypt Revolution.
Today, if you’re on the internet, everyone knows if you’re a dog. Right? Today, it’s not the communications revolution, it’s the data revolution, the information revolution. It empowers states, and it empowers corporations. It does not empower individuals, and it undermines liberal democracy. Technology used to strengthen liberal democracy 25 years ago, the data revolution undermines liberal democracy and that’s a really dramatic change that’s happened in just five years. And that worries me that our ability to maintain civic nationalism, open communities where we want to lead by example and we want to reach out to other countries as opposed to putting up walls, becomes a lot harder with the role that technology plays in our societies today.
Jeff Schechtman: Maybe that means, and you touched on this before, that local government, local control, local experimentation, local issues, really becomes the focal point of future governance?
Ian Bremmer: It’s possible. I mean, there’s no question that as we talked about in Japan, local communities can be more homogeneous, individuals have a better sense of who their leaders are, they have more ability to engage in relationships with them, they trust them more, so decentralization is really helpful. The problem is that technology is advantaging those that can aggregate and use data effectively, and so if we thought China was going to fall apart and itself become more decentralized … Actually China’s consolidated a great deal of power under Xi Jinping, and a big part of that is big data.
A big part of that is social credit, and the fact that people do and don’t get benefits from the state like the ability to travel or the ability to sort of get nice housing or whatnot on the basis of how they behave, and the data that’s been collected on them from their government. So maybe that the west is becoming more decentralized, while authoritarian states are becoming more centralized. Maybe North Koreans can now more effectively open up to other governments and not threaten the efficacy and the stability of their regime because they can control everything that people are actually watching, where ten years ago if they had allowed in investment, people see the way life is going to be, that would be a revolt, a revolution in North Korea. Maybe authoritarian states don’t need to worry about that as much anymore.
Jeff Schechtman: One of the other things that happens from that kind of decentralized government or decentralized control or local is a greater reliance on tribalism. You stay in communities and in neighborhoods with people that are just like you, and only just like you.
Ian Bremmer: I think that’s absolutely right, and I think this is where Trump is very effective, is he is by far the best us-versus-them president you’ve ever seen, right? I mean Trump’s ability to say, “We need to build a wall because Mexicans are going to come here and rape our women and criminalize our population,” that Haitians are going to bring AIDS, that Nigerians are never going to go back to their huts if we allow them in the US, that even inside the United States, black athletes who we let make tens of millions of dollars and then they — how dare they — they kneel during our national anthem! That’s a very effective message to promote tribalism, and it may not be the kind of country that we want to live in, but for a lot of people that feel like they have been forgotten, that their communities, no one is looking out for them, suddenly you have a president, all of whose rhetoric and many of whose policies is actually oriented towards that.
Jeff Schechtman: It’s interesting because the rhetoric and the policies don’t sync up at all, and one wonders, putting all the other scandal and all the other stuff aside for the moment, that disconnect between rhetoric and policy arguably has to catch up at some point.
Ian Bremmer: Well, some of it is real disconnect and some of it isn’t, right? So, I mean definitely on the economic side it will catch up, because Trump’s tax plan and his budget is a bunch of candy. Everyone benefited, everyone had prizes, right? The rich got tax cuts, the poor got tax cuts, businesses got tax cuts, in a low interest rate environment. Now interest rates are going to go up, deficits are going to spiral like crazy when eventually we see some deficit cuts, who’s going to take the hit? You know it’s going to be on benefits for the poor, right? And so, that’s going to catch up to him.
But Trump’s desire to pull 2,000 troops out of Syria and not expand the war in Afghanistan, that actually really is aligned with the interest of the average American. Trump’s desire to not allow in refugees and Trump’s desire to have a Muslim ban, that’s a policy that’s really kind of widely supported among his base. And you can argue that the economy’s going to get hurt because now no international students, you got 25% reduction of international students coming to American universities, that’s certainly going to undermine our competitiveness long-term, but the average worker’s been taking it on the chin anyway over the last 40 years, they feel like they’re getting what they want under Trump as a consequence.
Jeff Schechtman: I mean it has broader economic consequence just in terms of what those students that are coming in spend here. And the impact on colleges and universities.
Ian Bremmer: No, it’s true! You’re absolutely right, and if this was only about the economy, you’d have a really good argument. But again, if you’ve got large communities in the United States that have said, “The economy’s done really well, the markets are growing like crazy, what’s in it for me? Why should I support this, why should I as a working-class, either from my community in Chelsea, Massachusetts, or from Appalachia, or from some other rural community, why should I support the Transpacific Partnership? Why should I support NAFTA? I have gotten nothing, my family has gotten nothing.”
I don’t know what to say to those people. I don’t have a really good argument. I mean if I were honestly telling them, I’d say, “Yeah, you probably shouldn’t. Because until you protest and people take you seriously, you’re like a Palestinian throwing a rock.” Why did the Palestinians, why are they throwing themselves at the Gaza wall even though they know the Israeli Defense Forces can use, and will use, lethal force? And it’s because they’ve been lied to for decades. Their own government, the Israeli government, the Americans, the Europeans, the UN, everyone has said, “We’re going to make things right for the Palestinians,” and ultimately no one has cared. While the Israelis are doing incredibly well. And if you’re Palestinian, you’re really damn frustrated there, and I think that the fact that I can say, “Yeah, we should still do free trade,” of course I should say that! I’ve benefited tremendously from free trade! In my townhouse in the West Village in Manhattan, with my company that I started 20 years ago. But my brother doesn’t feel that way, and that’s not okay.
Jeff Schechtman: It’s really interesting, you talked about the Palestinians. Israel is an interesting case in point, and you say talk about them doing really well, are they doing really well in part because they’ve walled themselves off, because they’ve built that Trumpian wall?
Ian Bremmer: That’s right. That’s right. You want to talk about extreme vetting? I’ve experienced that. I’ve gone to Tel Aviv, I’ve flown into that airport, that’s extreme vetting. Right? They have incredible surveillance, electronic surveillance, human intelligence on everyone that’s a potential sort of object of suspicion in their country. They don’t need Palestinian labor anymore, they’ve walled themselves off, they’ve built walls under the border with sensors so you can’t tunnel in anymore. And Israel today has one of the most effective and vibrant democracies of any country in the world. And it works as long as you don’t think of the Palestinians as people. That’s all you have to do. If you dehumanize the Palestinians, it works. Because I mean, you know, they have no economic opportunities, no educational opportunities, their security situation is horrible. But the average Israeli doesn’t think about that anymore because the Palestinians can no longer effectively threaten a third Intifada against Israel.
Jeff Schechtman: As you look around the world, and this is what you do in terms of really analyzing the state of play and the state of countries around the world, where are the models? Where are the places that there’s either leadership or systems in place that might work within the context of all of this change?
Ian Bremmer: Well. You know, unfortunately Israel is a model. Right? The fact is that if you don’t fix the social contract, the ability to wall people off is becoming stronger and more attractive to a lot of governments. China is increasingly a model. It’s not one that you and I may like, but it is a model, and a lot of countries will follow it. For a long time India, we thought India was going to do better because they were more democratic. Now the Indians are thinking, “Wow, the way that the Chinese handle big data with our new universal ID in biometrics that is not voluntary, everyone has to do it, we can start growing faster than we did before, if we’re more like China, less like the United States, less democratic.”
So, first of all my concern is that a lot of the models out there are models that are more authoritarian. The models that are more top-down, the models that involve more us versus them. The models that are not like that, right now tend to be either really rich and small, and globalist, like Singapore and the Emirates, who are providing incredible training and great metrics on how everyone in government’s working, and they can because they’ve only got a few million people, 9,000,000 in the Emirates, 6,000,000 in Singapore, and they’re all really rich. When you’re really rich and you’re small, you can do this stuff. Japan, much bigger, completely homogeneous. If you’re not so homogeneous, the models have been pretty small. They’ve been pretty local so far.
Jeff Schechtman: And where have those models been? Even the small ones?
Ian Bremmer: Well, I mean you can point to certain communities in the United States. I like what Baltimore is doing right now, with Johns Hopkins Universities and a bunch of their, and their business community together, public-private partnerships to reach out so you don’t have the town gown divide that you did before, and I think other cities in the United States are starting to do that. I like that San Francisco, very wealthy place right now, is, they’ve decided to provide free education, community college education to everyone that lives there that wants it, and I think that’s a great thing to do and I’d like to see more of that. But, because right now people aren’t addressing the problem, so we’re not close.
I mean Bhutan is a great model, it’s got 2,000,000 people, they’re not very globalized, they’ve all got a king, and they’re Buddhist animists. I mean it’s great, but we’re not going to become Bhutan in the United States anytime soon, right? So I mean, you know, you could certainly say that Canada is doing this more effectively than the United States. Their social safety net works more effectively. The social inequality is not as great, but even Canada’s experiencing a lot of the challenges that we are right now in the United States.
Jeff Schechtman: Ian Bremmer, his book is Us vs. Them: The Failure of Globalism. Ian, thanks so much for spending time with us here on Radio WhoWhatWhy.
Ian Bremmer: My pleasure.
Jeff Schechtman: Thank you.
And thank you for listening and for joining us here on Radio WhoWhatWhy. I hope you join us next week for another Radio WhoWhatWhy podcast, I’m Jeff Schechtman. If you liked this podcast, please feel free to share and help others find it, by rating and reviewing it on iTunes. You can also support this podcast, and all the work we do, by going to

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