About John Kay
An Interview with John Kay
More About John Kay
John Kay is a Fellow of St John’s College, Oxford and a Visiting Professor of Economics at the London School of Economics. He has been Professor of Economics at the London Business School and Professor of Management at the University of Oxford. He has been director of a fiercely independent think tank, set up and sold a highly successful economic consultancy business and has been a director of several public companies. He now writes a weekly column for the Financial Times and divides his time between London, Oxfordshire and the South of France.
You can visit John Kay's own website at www.johnkay.com.
We hear John Kay's thoughts on the various meanings of globalisation, the real effects of the protests against it and the future for developing countries.
Globalisation means different things to different people. For some, it simply describes the technological developments in communications and transport which have made the world a smaller place. For others, it describes the free market oriented reforms which have swept across the world in the last two decades. For others, it is a portmanteau term for the things they dislike about the modern world, from climate change to McDonald’s hamburgers. For some, globalisation is ‘as inevitable as the dawn’ – the words of Thomas Friedman, who chronicles globalisation for the New York Times. For others, it is a reversible trend.
On another May Day, the fundamental incoherence of much of the protest reveals itself again – ‘Capitalism should be replaced by something nicer’. It is much clearer what the protesters are against than what they are for. And it is for this reason that the principal achievements of the anti-globalisation movement so far are negative – the planned multilateral agreement on investment collapsed, the Doha round of talks on trade liberalisation has stalled.
If these are indeed the achievements of anti-globalisation protesters, then they do more harm than good to the causes they espouse.
Perhaps poor countries would have been better off without globalisation — without modern technology and without exposure to modern consumer goods, and without knowledge of the extraordinary material standards of living which have been achieved in western economies. But that hypothesis requires a misty-eyed view of the idylls of peasant life. It is believed mostly by those whose own everyday experiences are very different. The argument that we were happier when ignorant of other countries should be dismissed, not because it is necessarily wrong, but because it is no longer relevant.
Countries which have tried more recently to reject outside influences – like Burma, Cambodia, and Afghanistan – are countries with the most unpleasantly repressive regimes anywhere. They have to be, to maintain ideological zeal in the face of the impossibility of their policies, and to continue to suppress the aspirations of most of their citizens.
The development models of South Korea and Taiwan are not particularly admirable. Their extraordinary growth happened under despotic governments, through corrupt and nepotistic business sectors, and transformed rural environments into grubby industrial landscapes. And, although most of the population of these states is now materially much better off, they demonstrate gross inequalities of income and wealth.
One would like there to be nicer models of economic development. But there do not seem to be any. The governments of South Korea and Taiwan have been content to allow their citizens to be victims of globalisation. And, taken as a whole, they have not done badly out of it.
The best we can do in a hugely imperfect world is to encourage western firms to operate in poor countries, and require them to operate, not to the standards we would ourselves expect, but to the best standards that exist locally. And use our economic pressure as consumers and political pressure as voters to impose our will.
But the opponents of globalisation cannot be defeated by the police or by lectures on the theme that you cannot buck the market. If capitalism’s presentation of itself is so hectoring and unappealing that only economists, investment bankers and well-paid executives subscribe to it, public opinion will buck the market however uncomfortable the results may be for everyone concerned.
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