that's Shanghai (Shanghai), March 2007

judgment day: John Ralston Saul on the rise and imminent fall of globalism

- in conversation with Chad Bagley

John Ralston Saul is arguably one of North America's most important intellectuals. He's the author of numerous novels including The Paradise Eater, as well as non-fiction works such as The Unconscious Civilization, On Equilibrium and Voltaire's Bastards. The latter is Saul's seminal attack on the rational system of thinking which has, among other things, produced an army of technocrats and second rate managers, kept the United States in a wartime economy for 50 years and transformed language from a means of communication into what he calls a "shield for those who master it." As Jim Hoagland so aptly put in his Washington Post review, "Voltaire's Bastards is a hand grenade disguised as a book."

In a phone interview wit Saul (he spoke from his beach chair in the Caribbean, while my posterior was affixed to a cold metal chair in wintry Beijing) the author, essayist and philosopher talked about his latest work, The Collapse of Globalism, the rise of India and China, and what the book The Lives of the Saint and Milton Friedman have in common .

that's: Many Chinese view globalism as the next best thing to ice cream. Yet in your latest book you say that it has been a failure for the past 25 years, and that the concept is fundamentally undemocratic.

JRS: Well, that's not exactly what I said. It's had its successes and failures. I think that the real point of the book is that it's (globalism's) at an end and that's what most people find surprising. Back in the 60s and 70s, people were talking about what globalism was supposed to be, and by the 90s it was reigning triumphant. You had bankers, government officials, economists, intellectuals, Nobel laureates, the courtiers at Davos and the IMF all talking about it. But when you look at it today you can clearly see that we are moving away from that idea toward something else. Its supporters think it's going to go on forever, but nothing goes on forever. Look at those expats in Shanghai in the 20s and 30s; they thought that (their world) was going to go on forever.

What I am really trying to say in this book is that the whole project is winding down. The logic - the big logic - is gone. One of the points I try to make is that looking after the needs of a nation state is the exact opposite of trading yourself in the marketplace. Globalism was supposed to be about breaking down borders, but what we're seeing is the very opposite.

that's: You have a short chapter in the book about Indian and China, both of which are said to be poster children for globalism. But you argue that their success stems not from playing by the globalism rule book, but from looking after national interests.

JRS: China had a notion of what a nation state was while Europeans were still living in caves. As for India, we see so much of India through the eyes of the British; some even credit their success to the British and that's just garbage.

that's: That's true. I've heard people say that India's competitive advantage owes a lot to the gift of British infrastructure, but India had a vibrant economy long before the British came.

JRS: Exactly. They were still vibrant when the British arrived, but they were weaker militarily. If you look at the statistics on world trade up until 1817 or so (I forget when), China represented a far larger percentage of trade than Europe or North America. But we kind of got control of the shop because we had stronger cards to play militarily. The point is that China never decided to engage in what the West decided was globalism. They are doing it their own way. We have to remember that the concept of the market economy that we have is something that the Chinese were doing long before we were.

China and India are two major old civilizations and they are not necessarily looking to the West for inspiration. They have their own inspiration, for better or worse, and they are trying to find their way on this rough road - which is an economy that is not really as global as it appears to be.

What I don't make clear in the book and I've been thinking a lot about lately is that we were told that if we took down barriers we would get more competition. But in fact in area after area we are seeing a trend of mergers and acquisitions, which is a shrinking of competition. You look at energy, steel, pharmaceuticals, and what you see basically is oligopolies.

that's: A few years ago there were almost 30 major media companies in the US, but just six or seven today.

JRS: Right, and these oligopolies are basically a return to mercantilism. Mercantilism is what came before capitalism and the whole idea behind it is horizontal integration. That means that from the silk worm, across the border to the ships, to the docks, to the manufacturing, right up to the lady in the silk dress was done by a single company or a single structure.

that's: In your book you say that what might look like trade is really just movement within a single company.

JRS: Half of what we think is trade is just movement that does not involve buying or selling. It does not involve real profits or real wealth creation. This explains the rather mediocre growth in real wealth around the world. When we look back on this experiment I think we will see that globalism was the predictable and unexciting last act of the capitalist era.

that's: Writer and journalist Thomas Friedman (The World is Flat) is a big booster of globalism but he doesn't seem to have a real grasp of economics; he makes a lot of very simplistic arguments in his book. And yet Amazon.com lists 911 reviews for his book - compared to eight for yours. People are taking this guy seriously. In Shanghai, you see advertisements for The World is Flat in all the bookshops.

JRS: In the late 19th-century, the most popular book, probably in the world, was The Lives of the Saints. The role of The Lives of the Saints was to help instill in the common folk the established wisdom of the day. It was to give reassurance. And the more that people's lives didn't live up to those of the saints, the more reassuring the book becomes. I think the Economist and Friedman play that role; they take yesterday's clichés and try to play them out as the truth.

When I wrote Voltaire's Bastards 12 years ago it was considered to be far out on the edge. Now it's taught in universities around the world and it's almost (considered) mainstream. I knew when I wrote that book that I was running ahead of the wave and that it would take a little time for people to say, "What does this mean?" (The book) was disconcerting for those who were part of this elite structure; those middle managers who made their careers inside the so-called 'truth' of globalism. They built their lives on the inevitability of globalism and they just don't know how to get around the corner.

There will not be one candidate in the upcoming US election that will believe in globalization. You look at the leaders of Europe, country after country and you ask: 'Where are the believers in globalism?' There isn't one in Denmark. There isn't one in Holland or Norway - and even Britain is starting to slip. Now you have countries championing not selling off companies, which back in the 70's was supposed to be a dead notion.

If you were to go from country to country and talk off the record to the smart ministers, they are talking very different from the Economist and the Friedmans of the world. The other Friedman, who just died (Nobel Laureate Milton Friedman), in the last ten years of his life changed his tune radically and said he was wrong. He came to the conclusion the rule of law is more important than the marketplace. He started to see how dangerous the situation was.

that's: You'll be speaking at the Shanghai International Literary Festival in March, so I would be remiss not to ask what you're reading these days.

JRS: I just finished reading The Inheritance of Loss by Kiram Desai, which won the Booker. It's a fun and interesting novel but a bit depressing in the end. Now I'm about to start a very large book, the definitive book on Germany in the 1930s, called German: The Long Road West by Winkler and Sager.

that's: Do you devote more time to fiction or nonfiction?

.JRS: It depends; I actually woke up about a year ago and realized that I hadn't been reading enough fiction. You get deformed if you don't read fiction. I now make it a rule to alternate (my reading habits): a novel, an essay, a novel and essay, etc.

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