Mike Moore: Progress, process and co-operation

Opinion

Globalisation has produced more wealth in the past 60 years than the rest of history put together.

Hundreds of millions of people have been lifted out of extreme poverty. A recession, even a depression, means de-globalisation and that will cost millions of people hope and opportunity. De-globalisation is a real threat to security, peace and development.

My new book coming out this month, Saving Globalisation, makes the case that globalisation is not a policy but a process and has been with us ever since man stood upright and looked over the horizon. This process cannot be stopped any more than man will stop thinking.

However, it can be slowed - it was in August 1914 and with the disastrous Fascist and Marxist detours that cost millions of people their lives. Both these ideologies, the twin tyrannies of last century, were tribal, protectionist and anti-democratic. They grew legs out of the Great Depression which was made deeper, more lethal and prolonged because of trade protectionism and competitive devaluations.

Those countries that have done the best are those that have adopted democracy, freedom of religion and freedom from religion, a professional public service, independent courts, property rights, an active civil society, and open trade. Open societies always deliver better results than closed societies.

History tells us that progress is hard won, and that the more you empower the people, expand the franchise and increase social mobility, then you have better results. Social justice is also good economics. Tolerance and equality widen the economic base from which all win.

The book examines history from the Greeks to the Geeks, a story of progress.

Ten years ago China had no banks in the top 50 banks, now it has five including the top three. Twenty years ago people joked that the only thing that didn't make a noise in an Indian car was the horn. Now India owns Range Rover and Jaguar and has launched a low-cost people car that will sweep the developing world. China registers 1000 new cars, trucks or bus every hour.

People once feared that a rampant, dynamic, exporting China would threaten the world. Now they fear what happens if China's growth slowed.

The current global economic crisis has emboldened reactionaries and dangerous "dreamers" everywhere. Globalisation faces new threats and if there is not social confidence, workers in rich countries will be seduced by reactionaries of the left and right. Tribalism and populist, protectionist instincts still lurk out there.

Those who support globalisation the most are people in the most marginalised places, Africa and the ex-Soviet colonies.

One of most under-reported advantages of trade is that competition is a cleansing agent that pushes aside crony phoney capitalists who, with politicians and bureaucrats, plunder the public purse.

These people prosper because of their privileges and contacts. New entries into business find it more difficult, corruption corrodes hope and opportunity.

Democracy - the ability of the people to change their leadership peacefully - is a huge economic "plus" as well as being morally right. The book pays tribute to those who have advanced such ideals, and examines why some nations fail and others succeed.

If wealth is man-made, so is poverty. Progress has new and old enemies, those who resent modernity and the lessons of the enlightenment. At the extreme are those who manipulate religion and feed on people's fears and desperate conditions. We must manage our affairs by reason and evidence or we are reduced to witchcraft and populist manipulation.

Careful domestic policies are necessary for progress to continue. In rich countries it's hard to get many kids to come to school, in poor countries the kids get it, it's the teachers who often don't come to school. Education has always been the way out of poverty. This is even more so now. Too often schools are destiny for children. The cost of failing to develop human capital is now much higher than it was. In the US the wage premium associated with a college degree has jumped to 70 per cent in recent years, from around 30 per cent in 1980; the graduate degree premium has soared to over 100 per cent from 50 per cent.

Dropping out of school now all but guarantees socio-economic failure. The lessons are everywhere on what works and what doesn't.

When I first came into politics I thought that people didn't expect much, they wanted someone to love, somewhere to live, somewhere to work, something to believe in, and something to hope for. I still believe this but I now believe that people need something to lose, something to leave behind.

If people have nothing to lose they are vulnerable to the hymns of hate, diversions and divisions of the populists. The true nationalist is also an internationalist, no nation or individual can prosper without the co-operation of others.

A world without walls is not a world without rules, standards and values. No country can have a clean environment, combat Aids, run an airline or manage a tax system without the co-operation of others.

It's healthy that each of us now rely on the success of others to prosper. Perhaps we will move from an earlier age of coercion to a better age of co-operation.

Saving Globalisation will be released in the US on October 8 and here on October 15.

* Mike Moore is a former Prime Minister of New Zealand and a former director general of the World Trade Organisation.