The Breakdown of Globalization
Featuring Ian Bremmer
Published on: August 14th, 2019 • Duration: 9 minutesIan Bremmer, president and founder of GZERO Media and the Eurasia Group, joins Vincent Catalano to talk about the fracturing of the global geopolitical system. Bremmer points to the splintering of technological networks, the expansion of trade wars, and the rise of nationalism as evidence of this phenomenon. This clip is excerpted from a video published on Real Vision on July 24, 2019 entitled, “A Geopolitical Recession.”
IAN BREMMER: I actually see some level of trajectory momentum away from further globalization. But the most important point is the most advanced part of our economy, which is technology- chips, 5G, big data, the cloud. And there, we actually see globalization literally falling apart.
Certainly, people are moving and ideas are moving and capitals moving around the world faster and faster. That's certainly true. And if you want to talk about early stage industrialization- oil, gas, commodities, rare earths- I don't see deglobalization happening there. I actually see markets continuing to become more integrated. But if you start talking about manufactured goods and services, there, I see labor becoming less important to supply chain and I see supply chains becoming shorter. Especially, after the next economic downturn and given the fact that the Chinese are becoming more competitive and they don't have rule of law, I actually see some level of trajectory momentum away from further globalization.
But the most important point is the most advanced part of our economy, which is technology- chips, 5G, big data, the cloud. And there, we actually see globalization literally falling apart. We see two completely different competitive systems- one being driven by the Chinese, the other largely being driven by the Americans, and they don't interact. Everyone's complaining right now in China that the Americans are trying to get rid of Huawei, which is their major technology company driving 5G. But if you're Amazon or Google, which are functionally American monopolies in their space, they don't even have access in the world's largest internet market, China.
That's not globalization. That's not the world wide web. That's a splinter net and it's completely different from what advocates of globalization and the free market were hoping was going to happen in the 21st century.
VINCENT CATALANO: Trade wars figuring into all of this, interconnected with this, wouldn't you say?
IAN BREMMER: Well, trade wars are a part of this but the Americans and the Chinese fundamentally need each other in trade. We want to buy Chinese goods. They want to sell them to us. And one of the reasons why Trump, despite talking about putting tariffs on the remaining $325 billion of Chinese exports to the US, has been reluctant to do so because those are products that American consumers actually buy. It's clothing, it's toys, it's your iPhone. And if he does that, American voters are going to feel it.
So, he's very reluctant. And that's why despite the fact that there's no breakthrough deal as of yet between Americans and the Chinese, he's actually put a ceiling on further escalation. So yes, the populism and nationalism that we see not just in the US but in many democracies around the world, developed and developing, is leading to some more protectionism. But the fact is that the interconnection of international trade is still a driving force in the economy.
VINCENT CATALANO: It's still a driving force. Yes, they are. Multilateral agreements are part of the picture here, too. Disintegrating into bilateral agreements. Where do you see the trends in that happening as it ties in with everything that you're describing?
IAN BREMMER: It's very hard for leaders of advanced industrial economies to convince their populations that more free trade is good for them. So, the average member of the working class and the middle class may see that the markets are doing really well and may see that the top 10%, 1%, 0.1% have done really well. But to the extent that their wages have been flat for decades now, telling them that NAFTA or the trans-pacific partnership is good for them doesn't really cut the mustard. That's true in the US.
Bernie Sanders would have opposed the TPP. Hillary Clinton was an architect but said she'd have to change it before she pushed it through Congress. Trump, of course, famously said I'm ripping it up and Obama couldn't get it done. That's also true in Europe. It's true in lots of wealthy democracies. Interestingly, you've got a lot of populism and nationalism in countries like Mexico and Brazil, but they're working and middle classes have benefited from globalization and they see it.
Those are the ones that got the jobs that left the United States and Europe. So, even though they are voting in anti-establishment, anti-corruption figures, there's no problem promoting free trade. And in Mexico, the new US-Mexico-Canada trade agreement, which is a little bit like NAFTA prime, is very popular among pretty much the entire population.
VINCENT CATALANO: You mentioned corruption. To shift gears a little bit, what about the rise of illiberal democracies? You have many governments now emerging where you have autocrats at the core benefiting from what appears to be superficially a democracy. I think you can think of Russia in that regard, and other countries, too. They vote. The people vote for so-and-so. And there's an operation that seems to be happening within those countries having to do with perhaps illicit funds, and money, and kleptocrats, and things of that sort. Thoughts on that.
IAN BREMMER: Well, it's interesting. First of all, I would not consider Russian illiberal democracy. I would consider them a functional authoritarian regime. There are no meaningful opposition parties in Russia. The Russian government controls all the media that matters. And as a consequence, if the Russian people wanted to potentially vote for someone other than Putin, they really don't have the opportunity to.
In the case of Turkey, you have a democracy with relatively weak democratic institutions and a would- be autocrat, former prime minister now President Erdogan, trying to dismantle that system so that he can run it, and his family. That's really interesting.
But he's tried really hard. And Lord knows there's a lot of corruption around his family and around his sort of business network. And yet, there was an attempted coup against him. It failed. And yet, he couldn't get his own guy as the mayor of Istanbul despite two tries, two bites at the apple in their elections. And some of his most important former supporters now leaving his AK Party and they're developing alternative political movements in the same space, the center right, to go against him. In other words, I think we're seeing the tipping point away from Erdogan. I don't think he's going to be running that country in another 5 to 10 years.
VINCENT CATALANO: But we're not seeing that tipping point of autocrats, are we?
IAN BREMMER: No, no, no. Autocrats are becoming stronger in many of their countries because, number one, you don't have this cohesive free world order that's actively promoting human rights and democracy. They're not leading by example. Number two, technology is increasingly empowering autocrats to surveil their populations and nudge their behavior into ways that are more stabilizing for that political regime.
But my point on Turkey is that for those in the United States that believe, oh my God, if Trump gets a second term, we're no longer going to be a democracy. The facts belie that. When Trump says I want to change the way we think about the census, he fails, he has to back away. When Trump says, I don't like the way the Fed is behaving. I don't want an independent central bank. Jay Powell says if he tells me to quit, I'm not leaving. So far, 2 and 1/2 years of Trump, he's divided the country an awful lot. He's caused a lot of internal angst and even some real anger. But he's not actually done anything to the institutions, and I think that's really important.