At the end, no new beginning… so there must be
31 December, 2016
As appeared in The Star Online
THE descent from globalism to nativism is the defining story of 2016, but the analysis of its cause and projection of the world into 2017 by intellectual custodians of the liberal order are flawed and offer no guide on how to break the fall.
The Brexit vote in Britain in June, the election of Donald Trump in November and the threatening reactionary outcome of elections in France and Germany next year all point to the end of a certain system by which the world has operated, even if what exactly would replace it is less than clear. If the great Western nations of the world change direction, then the rest must.
A broader perspective, however, would recognise the troubles and decisions of 2016 and what might come in 2017 had a gestation period that began at least from the Western financial crisis of 2008, too often called and accepted as the global financial crisis.
What the West continues to grapple with is how to live beyond its means. There was the criminal excess of the banks leading to the 2008 crisis, of course, but underlying it was the ethic of expectation of a certain standard of living, whether or not one worked for it or was productive enough to deserve it.
If you do not have the means to get what you want you have to borrow to get it, unless of course you stole and pillaged. So Western states and individuals kept on borrowing, or the central banks printed money to keep the economy going, which it always did not as the money kept going out where it could be more productively used.
Not a single Western political leader has had the guts to tell their people they had to accept a lower standard of living, that it was time for a great reset. Build up productivity and capacity again. Meanwhile, if you go to the pub, go only once a month. If you shampoo your hair once a week, do it fortnightly. Taking holidays abroad in countries whose people you come to hate when you get home will have to take a rest. If you work only 35 hours a week, as in France, what do you expect?
Did any of this happen? People may lose jobs as they could not compete, but they get state support and they blame others like the migrant European workers who could work, who took jobs they did not want to do.
Immigration becomes the issue. And when refugees pour in who also bring with them the threat, and execution, of terror, an inflection point is reached. Sociologists now analyse this as a threat to identity, which certainly is used in rousing emotions during political campaigns, but there was at least equally a revolt against the economic and social condition those not doing so well in life were in.
They are now so widely called the under-served. In the case of Brexit, there was no doubt the uprising of the Little Englander, but there was also the let-us-just-bloody-well-get-out-and-see-what-happens attitude.
While some in the shires thought like this, I also know of a few non-white working class Brits who voted to get out just on this basis. When I asked one such person in London, who is a chauffeur to an unbearable boss, why he did such an irresponsible act, he tried to justify it by associating himself with the workers in Sunderland of whom he knows absolutely nothing.
The thing is, who speaks to such people? The academics and intellectuals only talk among themselves in an idiom only they can understand. Even after Trump, when they pronounced there has been a great failure to address the under-served – which the President-elect on the other hand did so well – they are still talking to and being clever with one another.
My friend Francois Heisbourg, chairman of the International Institute for Strategic Studies, beautifully describes Marine Le Pen’s appeal to the French: “Donald Trump makes Marine Le Pen sound reasonable…..Everyone knows she’s not Trump – she knows how to use a noun and a verb and is intellectually coherent about what she wants and doesn’t want.”
What, for God’s sake, are the arguments that can be used effectively with the ordinary Frenchman that they can understand and appreciate in favour of the liberal order? Paul Krugman likens what is happening to America to how the Roman Republic was destroyed by individuals disloyal to it serving only their own selfish cause. Pray, how many among the Americans who voted for Trump know, or care, anything about the history of Rome?
The Economist, that great citadel of the liberal order, makes a clarion call for its defence and for liberals not to lose heart. How and what to do? Certainly not by talking to one another. Or by communicating in a language and idiom a lower order would not understand.
With perfect Eurocentrism an English commentator fears the Syrian conflict may turn out to be like the Thirty Years’ War (1618-1648). Has he not heard of the Palestinian struggle which has spawned much of the bloodshed in the Middle East and beyond?
There are three gaping holes in the defence of the “global” liberal order. First there is a blind spot about having to have a lower standard of living unless you earn a higher one. Second, an inability among liberal intellectuals to communicate except among themselves. Third, a reflection on the threat through western eyes only.
The second weakness is endemic. It is a truly global malady.
Intellectuals, whether in the West or Malaysia or anywhere else, should not disdain populism, which is the bad word now in all the commentary on the threat to the global liberal order. They will not stoop so low – as Trump did – to gain support. Well, stoop less low or in a different way. Dirty your hands. Reach out.
We don’t communicate simply, when there are simple terms that convey meaning. We think we are so high and mighty.
Actually if you think about it – and this is especially for the blinkered Western intellectuals – the exemplar of populism, and darned effective with it, is Umno. You may wince at the kris-wielding antics and other forms of political theatre, and you may not agree with some or most of the policies propounded, but you have to admit they rabble rouse their way to considerable support.
Yucks… but that was the yucks that caused Donald Trump to win. You have to get popular support. You do not do so talking to one another from university pulpits, in the parlours of Georgetown in Washington DC, in Hampstead or indeed at the Royal Selangor Golf Club.
Now, why do Western intellectuals particularly not talk about having to accept a lower standard of living? Well, they too will have to do so. The levels of income of the journalists and professors and consultants actually are very high, and they do a lot of talking outside their paid job for which they are paid more. Can they look the lowly worker in the eye and say you have to be paid less?
There has been an historic transfer of savings from countries with a lower standard of living to those higher so they stay there. As these poorer countries need and want rich country currency – particularly the dollar – for their economic life in their global liberal order, the rich not only get the savings from the poor to sustain their economic life in that global liberal order. They also are able to print money for the extras they might want.
Just imagine if the poor countries started their own so-called quantitative easing (creating more money) as America and the European Union have done. Their currencies would have collapsed and the countries would have been bankrupted. Those at the top of the heap in the West enjoying this privilege of the global liberal order are not likely to want to pull the plug on this cushy arrangement.
They would be risking their own interest if they began to start talking to underserved workers in their domestic economy about income levels that can be sustained by actual production – which is what developing countries have to live by, global liberal order or not.
Now the most important main benefit poorer countries obtain from that order is being threatened – their ability and success in producing goods and services which can reach any consumer in open global competition.
Donald Trump is breaking the rules for America because the US cannot otherwise compete. So he wants to protect the American market against better able, more efficient and cheaper producers – the developing countries.
While enjoyment – and denial – of these goods and services is one thing, and while undoubtedly there will in the immediate-term be a rebound of the US economy, who in the medium- and long-term is going to hold Western debt so that the high standard of living in rich countries can continue? They do not save to finance the economy. They do not efficiently produce many of the goods and services they enjoy. They need also to take advantage, through trade and investment, of the real growth in developing regions such as in East and South-East Asia.
Therefore on this score alone – the need for an open and competitive global trading system – there is true convergence of interest in the world. The poorer countries will have to take it, warts and all. And the rich Western nations, with their proponents of the global liberal order, will certainly want to keep it all.
The skewered balance in the global liberal order is sustained by an intellectual convention which is Eurocentric but commanding across the globe. Leaders in politics and thought in non-Western countries only have themselves to blame for this.
They accept almost carte blanche what Western liberals submit. Don’t get me wrong. There are so many good things about western liberals and the liberal order.
I don’t think there has ever been in history such a constituency of liberals as there are in the West who would fight for the rights of the victimized and the downtrodden, like refugees, non-whites and Muslims, as there is in the western world today. Even as extreme and violent Muslims blow them up. The adherence to the value of love against hate, and of tolerance against incitement, is of the highest human order.
The other thing developing countries could imbibe from the Western liberal order is the rule of law. This is the strongest defence and guarantee of individual rights there has ever been in human history.
When the laws are applied and enforced without fear or favour, there is faith in the social contract that underlies the polity. This is the main failing of most developing countries, which they would do well to learn from the West, beyond the purely utilitarian benefit of the rule of law that drove Lee Kuan Yew to make Singapore economically successful.
But, despite all this truly profound contribution of liberals and the liberal order of the West, it does not mean we must accept everything from them hook, line and sinker, especially every bit of the analysis of what has gone or is going wrong with the world.
Or the selling of expertise on how to get things right. Their record on that score is poor. We have too many such offerings, in Malaysia for instance, of how to develop our financial system and to train our financial practitioners. We must not be stupid to give money for old rope.
As we go into the new year, we should not be overwhelmed by analyses of what happened in 2016 and why. We must have a clarity and sense of perspective of the causes leading to it. And we must look forward to 2017 without the colonial mentality which makes us slaves to Western thought.
Tan Sri Dr Munir Majid, chairman of Bank Muamalat and visiting senior fellow at LSE Ideas (Centre for International Affairs, Diplomacy and Strategy), is also chairman of CIMB Asean Research Institute.