Last updated: February 26, 2011 9:56 am

New world disorder

The Unfinished Global Revolution: The Limits of Nations and the Pursuit of a New Politics, by Mark Malloch Brown, Allen Lane, RRP£25, 272 pages

How to Run the World: Charting a Course to the Next Renaissance, by Parag Khanna, Random House, RRP$26, 272 pages

How the West was Lost: Fifty Years of Economic Folly – And the Stark Choices Ahead, by Dambisa Moyo, Allen Lane, RRP£14.99, 240 pages

The earth’s atmosphere is warming; the global economy lurches between imbalance and crisis; peacekeepers and humanitarian aid workers struggle to restrain bloody civil wars; killer diseases remain rampant; the liberal trading order is under threat. These are times that try men’s souls yet put wolfish smiles of profitable anticipation upon the lips of non-fiction publishers.

New world disorder

The latest of a crop of books trying to make sense of the new global order, or absence thereof, start from a similar point: that the world’s leading governments, particularly in the rich parts of the planet, have struggled to cope with problems of growth, the environment and public health.

Their solutions vary. Take your pick: better governments and wiser international co-operation; bypassing national authorities altogether; or urging everyone to be more like China. To my mind the “make the system work better” camp, articulated by the veteran policymaker Mark Malloch Brown, is by far the most constructive. But the plaintive tone of even this perennial cheerleader for multilateralism underlines the size of the task.

Lord Malloch Brown’s book The Unfinished Global Revolution is a distillation of thoughts about the need for international institutions and politics to rise to meet global challenges. His views have been gathered during a varied career in the United Nations interspersed with his work for the international political consultancy Sawyer Miller and a rather bruising period in the steel-cage wrestling match of British politics as a cabinet minister in Gordon Brown’s government.

What is attractive about Malloch Brown’s book is the combination of detail, authority and humility derived from decades of trying to make international co-operation work. His credibility in discussing humanitarian aid and peacekeeping is hugely enhanced by his time extemporising refugee camps on the Thai border for Cambodians fleeing the civil war in 1979, in the course of which, he endearingly reveals, he wrote the definitive UN handbook on camp rations and emergency latrine sanitation.

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Malloch Brown has also worked as a journalist at The Economist, and it shows. The book reveals an eye for illuminating detail, such as his description of the candlelit press conference in a Manila church in 1986 by Filipino vote-counters denouncing Ferdinand Marcos’s theft of an election, and the story of Fred Cuny, a 6ft 3in Texan of the get-it-done school of philosophy running relief operations during the 1990s Bosnian civil war.

Tiring of government bureaucracy, Cuny installed a smuggled water system in Sarajevo on his own initiative and flew a Texan rather than a US flag over his house to underline the point.

 

What emerges is a nuanced and largely realistic picture, showing that building effective institutions involves political nous as well as multilateral pieties, Texas stubbornness as much as Washington suavity. Malloch Brown’s pride at helping to create the International Crisis Group, the non-government conflict resolution organisation, contrasts with his frustration at the sclerotic nature of the UN, a place in which, he says, “process reigned”.

Yet the book ends not with a dirge of nihilistic despair but with the plaintive aria of a frustrated global revolutionary. The burst of postwar multilateralist sentiment that created intergovernmental institutions of peacekeeping, development aid and an open trading system needs to be renewed, not reminisced about. That Malloch Brown does not pretend to have a definitive plan for doing so is entirely to his credit.

More quixotic solutions are proffered by Parag Khanna of Washington’s New America Foundation think-tank, in his modestly titled How to Run the World. Khanna’s thesis is that we are in a new Middle Ages, where a collection of stable nation-states has given way to a shifting landscape of rising and falling empires and autonomous cities. Multilateral official institutions are being replaced by ad hoc partnerships of individual governments, non-governmental organisations (NGOs), companies and citizen activists, often assembled in corridor conversations at the World Economic Forum in Davos.

The analogy is striking. But quite apart from the grating Thomas Friedman-style neologisms (“Cosmopolitan – or cause-mopolitan – ‘citizens of the world’ aspire towards a global consciousness”) both diagnosis and solution overstretch in a search for impact.

Khanna systematically overstates both the power and legitimacy of non-governmental entities. He disappointingly repeats the old leftist canard about half of the world’s largest economic entities being companies rather than countries, a highly misleading comparison between gross corporate revenues and value-added national income.

 

Modern industrialist families such as the Indian Tatas are compared with the medieval Italian house of Medici. Yet the Medicis provided Rome with several popes, and their fiefdom of Florence was an independent economic powerhouse that bestrode European banking and trade. Tata is an impressive conglomerate, but it runs only a few steel company towns. And it is hard to imagine a modern-day Indian Medici being forced, as was Tata, to move its flagship Nano car factory from West Bengal to Gujurat to placate an aggrieved gaggle of dispossessed farmers.

Khanna’s argument is also far too trusting of the good faith of NGOs, claiming that “their legitimacy derives from their authority of expertise, impartiality, representativeness and transparency of operations”. But as NGO trade and development activists privately admit, at least to me, their campaigns are shaped to fit an ideological template, forever blaming rich country trade tariffs and subsidies and western corporations for poverty in poor nations and ignoring huge divisions of interest within the developing world.

Running aid programmes often compromises their independence rather than bestowing it. Khanna singles out NGOs such as Save the Children as “truly independent global players”. In reality the US wing of Save the Children depends for nearly a third of its income on US government contracts, and fell out spectacularly with its British counterpart during the Iraq invasion in 2003 when Save the Children UK criticised Washington’s conduct of the war.

The book consistently overstates the role of the private and voluntary sectors. It lauds the Gates Foundation for its ability to bypass donor governments and deal directly with poor countries and researchers in combating killer diseases. Gates does excellent work, but the Foundation is the first to say that its $1.8bn annual public health budget plays a relatively small supporting role, less than 5 per cent of the total spent by aid donors in that sector. Nor is this a new phenomenon: it was the private Rockefeller and Ford Foundations that funded the research underpinning the developing world’s agricultural “Green Revolution” in the 1960s.

There are big gaps in global governance, but Khanna is too optimistic that private foundations and corporations have the motivation, expertise and authority to fill more than a small part of them. Many challenges involve externalities and co-ordination problems that cry out for government action. Private research into wind turbines and solar panels is fine, but when it comes to reversing global warming, the evidence suggests that technological solutions are a complement, not a substitute, for carbon taxes to discourage emissions. This book has an eye-catching thesis, but tries too hard to compress a set of recalcitrant facts inside it.

 

Its exaggerations, however, pale into insignificance next to those of How the West was Lost, the second book from Dambisa Moyo. A former Goldman Sachs banker, Moyo became famous for her first book, Dead Aid, a trenchant attack on development assistance. The book’s runaway success baffled many with prior knowledge of the issues, even those broadly sympathetic to its sceptical tone, consisting as it did of a tendentious one-sided account of tired and inconclusive old academic literature about aid effectiveness.

How the West was Lost contrives to lower these standards yet further. It addresses some familiar problems in rich countries – unfunded pension liabilities, an unstable financial system, underperforming educational systems – and through gross exaggeration and straight-line extrapolation argues that the west is in “freefall” and is being swamped by the likes of China.

The challenges it identifies are for the most part real, if not original. But the huge flaws of the emerging economies are ignored. Never mind unfunded western welfare states: China has its own massive demographic problem in the form of a rapidly ageing population, worsened by the official “one-child” policy that Moyo seems to think is a good thing. Familiar arguments are trotted out about China focusing on manufacturing, in contrast to the west’s effete obsession with the service sector. (And this from a former Goldman Sachs employee.) In truth, it is hardly surprising that a much poorer (per head) economy is still dominated by industrial production, as was the US at a similar stage of economic development.

Meanwhile, some of Moyo’s solutions verge on the surreal, for example that the wasteful effort of youngsters in the west trying and failing to become successful sportspeople should be deterred by imposing a supertax on those sporting stars who do make it. (Intense and widespread hothousing of athletes to produce a tiny elite never happens in China, of course.)

Bizarrely, the book also flirts with the idea of the US escaping its problems through voluntarily defaulting on its government debt.

The carelessness with fact and interpretation evident in Dead Aid, such as the baffling contention that fewer than 10 per cent of Africans lived in extreme poverty in the early 1970s, reaches critical proportions here. A few examples: Iceland did not default on its sovereign debt in 2008, and nor did the UK do so “in all but name” in 1976. Fiat bought a stake in Chrysler, not GM. Former Fed chairman Alan Greenspan, whatever his faults, never predicted “a world without inflation”. It is laughable to suggest that western companies dependent on intellectual property, such as pharmaceutical businesses, have not made strenuous attempts to protect their technologies: they controversially got World Trade Organisation law rewritten to do so. And so on, and on.

The pattern of Moyo’s books is becoming clear. They start with an extreme contention – aid is rubbish! the west is collapsing! – and assemble a variety of distortions and inventions to justify it, the quality of which suggests too much time spent with Google and too little in a library. They then toss out solutions with little concern for logic – or even for internal consistency, since Moyo’s severe criticisms of credit ratings agencies for encouraging the financial bubble sit at stark odds with her contention in Dead Aid that African governments should acquire credit ratings and borrow on the international capital markets.

For the sake of the quality of public discourse, it would be best all round if this particular production line were to stop here.

Perhaps it is not surprising that by far the most impressive of these three attempts to make sense of governing the world is by the author who has actually tried doing it: been there, done that, written the latrine sanitation handbook. As legacies go, that is a pretty good one. Neither wild pessimism about western governments nor bright-eyed optimism about the possibilities of bypassing them is a constructive response to the great global challenges of war, famine and pestilence.

Governments are an inevitable part of most solutions to global problems. They are not succeeding particularly well, and nor are the multilateral institutions that co-ordinate them. But that is an argument for driving forward the slow and halting process of trying to make them work better. These are difficult times, but they are neither a new Middle Ages nor the end of western civilisation.

Alan Beattie is the FT’s international economy editor

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Civilization: The West and the Rest, by Niall Ferguson, Allen Lane, RRP£25, 432 pages

Niall Ferguson made his name as a historian who understood the numbers, so let us start with some. The federal debt of the US is projected to be 66 per cent of GDP this year, writes Andrew Marr. According to one Morgan Stanley estimate, including medical, state and pension liabilities, the real debt-to-ratio of the US in 2009 was 358 per cent. What do these figures really mean? Is the west now in fast, inevitable decline as the east rises? Are we talking Habsburg Spain in the 1580s (65 per cent of revenues spent on debt) and Ottoman Turkey (50 per cent in 1877) and Bourbon France (62 per cent by 1788)? Are we a civilisation of sick old fellows, fat heads lolling?

It is the purpose of Ferguson’s Civilization: The West and the Rest to answer the question. Allied to the Cassandra-Conservatism school, which includes Correlli Barnett and (less successfully) Samuel Huntingdon, he accumulates an arsenal of compelling information about the swing up and the vertigo-inducing look down. Here is the academy arriving to stiffen the sinews and summon the blood of a civilisation which has lost its way.

Ferguson is too sensible to be hyper-literal. Historical comparisons are always “up to a point, Lord Copper”. Financial stability depends on perception; the most that can be said about US debt is that it opens the world’s leading power to a further crisis if sentiment flips, leading to “a kind of death spiral of falling confidence, rising yields and rising deficits”. We are teetering. I suppose we know that.

“West versus China” history has become a busy highway. Ian Morris had a wonderful book on long-term civilisational history out last year, Why the West Rules – For Now. Stanford University has a superb project comparing ancient Rome and Han China. The stories of China’s tragic inner turn after her fleets had reached Africa (in the early 15th century) are now understood by schoolchildren. Numerous analysts, from left and right, including David Landes, Martin Jacques and Will Hutton have studied more recent history.

Because Ferguson is considered “a bit too much” – too successful, too rich, too good-looking, too many top roosts – and because this book accompanies a television series (smelling salts, professor!) he may not be welcomed aboard the bandwagon.

He ought to be. This is sharp. It feels urgent. Ferguson, with a properly financially literate mind, twists his knife with great literary brio. Seeking the causes for western supremacy he focuses on competition, science, property laws, medical advances, mass consumption and the work ethic. He brings in some unexpected actors, from Simon Bolivar to an English gunnery pioneer. He rummages through medical records and comparative wage rates, measured by silver.

Parts of the argument remain unresolved, and he admits it. Max Weber’s equals sign between “the Protestant ethic” and “the spirit of capitalism” has been fairly comprehensively scrubbed out by later historians. There were higher growth rates in Protestant countries after the Reformation but this may be because southern Europe was under the thumb of dynasties that were anti-industrialist as well as Catholic. And what are we then to make of such throbbing hives of capitalist success as Catholic northern Italy, or indeed Catholic southern Germany? As to the work ethic, post-Communist and Confucian Chinese seem able to teach the bairns of Knox and Luther a thing or two.

Cross-currents repeatedly disturb the story of a simple flow to success on the back of Adam Smith’s principles: protectionist tariffs helped the British cotton manufacturers and the infant industries of the US; today’s Protestant churches are more get-rich-quick than defer-it. Or take Japan: her first great leap into modernity was enforced by the imperial state, stealing from the west with reckless enthusiasm; and had little to do with common law or competition.

So this is a complicated story. Some of the best passages concern the history of consumerism, which has been less studied by mainstream historians than, say, inflation, trade policy or capital accumulation. There are excellent points about the Nazis’ failure to create a consumer society and about the modern paradox that standardisation (jeans, Coke) went alongside rampant individualism. His research throws up enjoyably unfamiliar quotes, such as Khrushchev’s warning that it was just a small step “from saxophones to switchblades” and a Soviet critic’s hilarious warning that “every ounce of energy used on the dance floor” was energy which “could and should have been invested in building a hydroelectric plant”.

As we would expect, Ferguson is robust in defence of imperialism, homing in particularly on the impact of western science on death-rates inside European empires. And we have spent long enough, perhaps, flagellating ourselves for our familiar crimes: how many of us knew that the Taiping rebellion against the Qing killed 20m people in the middle of the 19th century?

Ferguson shows that no ideological or material reductionism quite works for the rise of the west, and therefore as an explanation for its possible fall; not geography, trade winds, inheritance law, or even the experimental continent America gave Europe. As to the future, he is not a defeatist; Western civilisation’s pluralism, freedom of thought, property rights and democracy remain huge strengths.

This reviewer’s main niggle is that we could have done with more politics. Looking back in a century’s time at the west today, and particularly at Europe, won’t historians express amazement at the poor quality of our decision-making elite – the lack of training, information, support, follow-through, hard analysis and proper policy debate? Too many clever people in financial services, too few serving the state? Too little long-termism, too few unpalatable shifts in direction confronted? And might they not decide that here China, for all her repressive and centralised structure, took a lead, at least for a while, as she stretched out for new agricultural and mineral land?

Ferguson ends by suggesting the biggest threat is not China but ourselves – our cowardice, drawn from ignorance, even stupidity, about our past. He is right. But as he shows himself, that can be fixed.

Andrew Marr is a BBC presenter and author of ‘The Making of Modern Britain’ (Pan Macmillan). Niall Ferguson’s ‘Civilization: Is the West History?’ begins on March 6 on Channel 4

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