Time to let loose – Temps de lâcher prise

I think the time has come to come clean and admit it publicly: the time of this blog is over. I have come a long way since this blog started in November 2006. These were the glorious times of the electoral campaign opposing Sarko and Segolene in France, the times of the global economic boom, and the rise of the oil-price powers. Sarko has turned out to be what I feared: a shallow and pusillanimous reformer. The boom is over. And the oil-price powers (Russia, Venezuela, Iran) are becoming nastier.

 I wanted to explain to my friends why globalisation, although it’s problematic, is good. And why a government’s meddling in the production process of an economy (not the absence of government, or of social services for that matter, that’s different!) brings so much misfortune. To some extent, I have managed to stir some thoughts here and there. And I think I have been proven right, when one sees where countries like Russia are now, where capitalist oligarchs and bureaucrats usurp the show and cash in. (In the beginning I was too optimistic about the fact that globalising would open Russia’s polity more.) Yet mostly people who don’t want to change their minds won’t. One preaches only to the converted. It’s the effort of personal thought, the courage to be curious and let one’s own views be challenged, and experience, that changes one’s outlook. But the real failure if this blog is… to make globalization sexy enough for Cosmopolitan (see here)…:)

I have evolved as well. In fact I have deepened my experience with this thing called “globalisation”. Not least through my current job at ECIPE where I am steeped in the day-to-day policy grindings of business (and, at times, people) crossing borders, or not, depending on whether they’re allowed to or not. And what does one do when plunging in these matters? One goes old-fashioned: it’s about tariffs, monetary policy, competition policy, law, institutions,….boring, dry, dull stuff… One goes always further back in time, starts with a Martin Wolf (see below), and ends up somewhere with Montaigne, while falling in love with Friedrich von Hayek and other Austrians, Brits and Indians on the way. What a development!

It’s strange I feel very old-fashioned, but fitting perfectly into something now dubbed post-modernity. Yes, to some extent I adhere to that Thing called “post-modernism” as a phenomenon of globalisation – but rather in the sense that it has references that transcend what modernity has been since the late 19^th century: a cultural bubble founded on political systems centered on the nation. I very much welcome this relativisation! In a book entitled “On Revolution” the great 20^th century philosopher Hannah Arendt told us that a great tragedy of many political revolutions since the French Revolution has been that these have not been able to emancipate themselves from the “absolute”, a metaphysical system adopted in the West with the Roman Empire turning Christian. She said, about these revolutions :

 “the cheapest and most dangerous disguise of the absolute ever assumed in the political realm, [adopted by these revolutions is] the disguise of the nation”.

 In that sense, yes, globalisation how it goes currently, is absolutely about relativising the nation-state! One understands that it is destabilising. Be it on the right or on the left of the political spectrum. Because both social democrats and social conservatives think and act as if the world were to be compartmentalised among nation states for ever.

Only few welcome globalisation as a liberating phenomenon. How good it is that we are now freed from the single straightjacket of one nation, and can choose different locations, identities, languages, partners, job locations, than the ones on offer in the one happened to be born with! How good the Chinese, Indians, Brazilians, Mexicans, Chileans, are becoming more prosperous while producing those ipods and laptops we use to socialize on twitter, facebook, or to use for work, and academic research!. How good all that jobless French talent can cross the channel on the Eurostar and work in London! Probably France would have had a new revolution if it hadn’t had that kind of outlet….. But back to emerging markets: they are the proof that the colonial-era Wretched-of-the Earth can save themselves. And this because they joined the world. In fact, it’s human interaction under “mild government”, as Hannah Arendt stressed in On Revolution, that creates this prosperity. And good that the national compartments and absolutes are now down. Let’s now talk to each other as people, as humans, across borders.

 This blog has been suffering for a while from two things:

 1) Lack of time. Producing rather shallow conferences for the FT, which as what I was doing in November 2006 when the blog started, just isn’t as intense as doing research for a serious trade policy think tank in Brussels, which is what I am doing now!

 2) A natural development away from its original concept. This blog is becoming a bit too abstract and esoteric for its original followers. And not good enough for real specialists. So I’ll leave it there and see what happens in the future. The trade professional in me will now be blogging over at ECIPE’s Trade Matters blog .

Final note on the current financial and economic crisis: a warning of sorts. With all that Keynesian interventionism going on, one fears a return to that sealed-off nation-state era we had until the, say 1970s-early 1980s. How morally reprehensible, I find, what’s been going on in the EU with the relaxation and politicisation of state aid!. Germans saving Opel jobs at the expense of Belgians and Brits…. Das stinkt, das sage ich Euch.

This blog started with a quote by Martin Wolf. I announced a discussion about globalisation how he defined it in his 2004 book “Why Globalization Works”. It will end with a quote by Martin Wolf. I found his last column this week really stimulating. Walled for subscribers. But abstracts here:

“What entered the crisis was, we now know, an ill-managed, irresponsible, highly concentrated and undercapitalised financial sector, riddled with conflicts of interest and benefiting from implicit state guarantees. What is emerging is a slightly better capitalised financial sector, but one even more concentrated and benefiting from explicit state guarantees. This is not progress: it has to mean still more and bigger crises in the years ahead. (…)”

“Suppose someone came up with the following design for the core institutions of our financial system: they would be mainly financed by deposits, redeemable on demand; they would invest in a wide range of often illiquid and opaque assets; they would engage in complex trading activities; but they would have a wafer-thin equity cushion. Surely, people would conclude, this is fraudulent. They would be right. Such a structure can only endure because central banks act as lenders of last resort. The government’s ability to create money is put at the disposal of private interests. Right at the moment, the ability to borrow from the government at zero interest is a licence to print money.

In practice, however, we have gone much further than this. We have also explicitly guaranteed many deposits and implicitly guaranteed many more liabilities. Indeed, in the crisis, policymakers guaranteed all the liabilities of institutions deemed systemically significant. Today, the core financial institutions are, beyond doubt, a part of the state.”

Conclusion: we are not yet out of the zone of turbulence….

In the meantime: many thanks and warm good-bye to the little but astonishingly loyal group of followers from across the world that I have had. I have learned a lot with you!

Un grand merci surtout à mes amis blogueurs français, qui ont probablement été parmi les plus nombreux fidèles au poste, malgré ma tendance a écrire en anglais et mes idées excentriques! Notre belle et diverse France est plus moderne et ouverte que ses institutions. Bonne suite !

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