Articles- La Stampa
- Nikkei Business
- Financial Times
- Project Syndicate
- The Times
- Corriere della Sera
- The Economist
- Voice series
|A long goodbye|
The Economist - April 2006
A long goodbye
Bill Emmott, who stands down as editor on March 31st, offers his parting thoughts
WITH April Fool´s Day as the publication date on my final issue as editor, it is tempting to pretend that my resignation was just a joke, such is the privilege of presiding over The Economist. But after 13 years in the most interesting and satisfying job in journalism it really is time for a change, both for me and for this paper. Departing editors are allowed, however, to give themselves one final consolation: a signed, valedictory editorial as an occasion for some reflection, some explanation, much self-indulgence and usually a little ancestor-worship. The first thought of a departing editor is to abolish this ancient tradition. The second is to leave that decision to his successor.
It seems fitting to begin with the ancestors. One of the exceptional characteristics of this newspaper is the degree to which it still follows the principles and methods begun 163 years ago by its founder, James Wilson, and perfected by his son-in-law, Walter Bagehot. The Economist was launched to campaign for free trade and all forms of liberty, what proponents and detractors alike today call globalisation, blended with what George Bush likes to call "the freedom agenda". It did so with a formula that was three parts factual description and one part strongly held opinion or argumentative analysis. That is what we continue to attempt today.
We do not do so merely out of loyalty to our founders: if those principles had turned out to be wrong, they would have been ditched long ago. And their application must always evolve. I, for one, had Bagehot grumbling in his grave when, in 1994, we declared the British monarchy to be "an idea whose time has passed", in flat contradiction to his great 1867 book, "The English Constitution". But in general what is striking about the past 13 years is how strongly this period has fitted Wilson´s original view, how it made his principles feel more relevant than ever, and how in some respects our world is one whose issues he would have recognised.
To a degree, it is hard even now, in 2006, to recognise the world of 1993: a time when the Soviet Union was fresh in the memory, when China´s development remained in the shadow of Tiananmen, when America was thought militarily powerful but economically passé, when few had mobile phones, e-mail was in its infancy and the internet was strictly for nerds. Yet the potential was there for the spread of economic development to what were newly known as "emerging markets", emerging from communism, autarky, war or hyperinflation, and also for the spread of democracy to those same benighted lands. It was there too for a wave of technological innovation analogous to that brought by the railway boom, the electric telegraph and the steamship in the early decades of Wilson´s Economist. The phrase "irrational exuberance" may not have been familiar to him, but the word "bubble" assuredly was. Just as early editors devoted thousands of words to a 19th-century version of Arthur C. Clarke´s famous observation that the effects of technological innovations are typically overrated in the short run but underestimated in the long run, so did we.
The economic and political impact of the liberalisation of domestic and international markets for goods, services, technology and capital—globalisation, in short—is only just beginning. But it would already bring delight to Wilson´s eyes. In 1993 overall growth in real world GDP was 1.2% and annual inflation was running at almost 35%. Things looked glum in the rich world and decidedly difficult in the poor world. Yet over the whole 13 years of wider competition and spreading liberalisation, the annual average rate of real GDP growth was 3.0%, and total growth over the period was about 45%; the figures rise to 3.9% and 65% respectively if you weight national GDPs to account for purchasing power differences between countries (known as PPP). Inflation, measured for the globe as a whole, slowed dramatically to reach 3.7% in 2005. World population increased by more than 18% during the period, but world GDP per head—a proxy for living standards—rose by nearly 40% on a PPP basis, at an annual average rate of 2.5%.
Economic statistics bemuse and baffle in equal measure. What matters is the human effect, and in that regard nothing matters more than the reduction of poverty. On that, there has been progress but far from enough. According to the World Bank, the proportion of the world´s population living on $1 a day or less was 22% in 1993, or 1.2 billion people. By 2001, the proportion had fallen to 17.8%, or just over a billion people. Detractors wave even this aside by saying it is "just Asia". Well, it is true that Africa is the continent that has tragically had regress, not progress, because of war, the ravages of disease, and decisions by too many governing elites to stick to kleptocracy. But given that "just Asia" takes in half the world´s population, we should still be encouraged by what has happened. Martin Ravallion, a poverty expert at the World Bank, estimates that if present trends persist the number living on less than $1 a day will have dropped to a little over 620m by 2015, or about 9% of world population.
But will they persist? Plenty of people would like to stop them, even some who think they care about poverty. In much of the rich world, globalisation is seen as a threat, to jobs, incomes and the environment. On jobs at least, the facts suggest the opposite: unemployment in the OECD countries in 1993 was 7.8% of the workforce; on the latest figures it is 6.3%. What has occurred, though, is an increase in inequality within the rich countries. The huge expansion of the global labour force represented by the liberalisation of China and India has held down the incomes of the unskilled in all countries; the spread of information technology has had the same effect. The politics of that inequality is finding expression in the rise of economic nationalism in Europe and America.
Protectionism is always a danger and always will be: those who lose out from competition make louder noises about it than the more dispersed, albeit larger groups who gain. It will feature strongly in America´s congressional elections in November, it already lies behind the roadblocks being laid in Europe and America against foreign takeovers, and is even being expressed in China itself (see article). Deplorable though all such protectionist lobbying is, however, it does not currently pose a serious threat to globalisation. The economic forces in favour of liberalisation remain strong. The most serious threats lie in the murkier world of international politics.
There, too, the facts reassure. By the reckoning of Freedom House, a think-tank, 20% of the world´s population in 1993 lived in countries that were fully free, in terms of political rights and civil liberties, and a further 40% in countries that were partly free. By last year the fully free had risen to 46% of global population. Full democracy has thus been spreading quite rapidly, even if it has sadly not yet reached China.
Other things spread too, during the past 13 years, and they were not nearly as reassuring. As my editorship began, war raged in the former Yugoslavia: whether it was civil, or regional, or ethnic, or religious hardly mattered to the hundred thousand or more who died. The question that hung over editorial after editorial was whether, or when, the outside world should intervene with military force. We argued that western intervention would not end the conflict, certainly not unless ground troops were sent in, and that it might make things worse. When NATO´s second bombing campaign began, in 1999, our cover headline was "Stumbling into war". Things turned out much better than we expected. That intervention cost some civilian lives but saved many more, as did the earlier one in 1995. The aftermath has shown how difficult it is for outside powers to rebuild the institutions of other countries and to repair the psychological wounds that war leaves behind. But that does not mean it should never be attempted.
1993 was also the year of the first attempt by al-Qaeda to blow up the World Trade Centre in New York, a failure that was followed by murderous successes in East Africa, Yemen and elsewhere, culminating in the atrocity of September 11th 2001. The West left Afghanistan alone in the misery of its sovereignty, which provided a home for Osama bin Laden and his training camps. Meanwhile it dealt with the legacy of the first Gulf war against Saddam Hussein by trying to use sanctions and no-fly zones to contain him, and UN inspectors to police his weapons ambitions. That process led to alarming discoveries, to bombing raids that killed Iraqi civilians, to the deaths of perhaps half a million Iraqi children, to the maintenance of America´s air bases in Saudi Arabia, to a deterioration of the West´s reputation in the Muslim world—and to Saddam and his sons remaining comfortably in power.
All of which is the background to the most controversial decision of this editorship: the decision to support the American-led invasion of Iraq in March 2003. Our reasoning began with the fact that the status quo was terrible: doing nothing, whether about Iraq or about the Israeli-Palestinian conflict, was itself a deadly decision. It went on to the risk that Saddam still had a stock of weapons of mass destruction that if left in power he might wish to use or to sell. In the light of September 11th and the dismal results from 13 years of sanctions, we argued that wishful thinking about Saddam would be reckless. The West should invade, remove him from power, and throw its considerable resources behind the rebuilding of a free Iraq.
The ensuing three years, I hardly need to say, have seen a debacle. His WMDs turned out to be a bluff, fooling even his own generals. Elections have been held, a constitution has been written, but no government is in place. Institutions remain in tatters. Whether or not a civil war is under way is largely a semantic issue. Dozens of Iraqis are dying every day, killed by other Iraqis. So does this prove our decision wrong, just as the good outcome in ex-Yugoslavia put our "stumbling" warning in the shade?
This will outrage some readers, but I still think the decision was correct—based on the situation at that time, which is all it could have been based on. The risk of leaving Saddam in power was too high. Outside intervention in other countries´ affairs is difficult, practically, legally and morally. It should be done only in exceptional circumstances, and backed by exceptional efforts. Iraq qualified on the former. George Bush let us—and America—down on the latter. So, however, did other rich countries: whatever they thought of the invasion, they had a powerful interest in sorting out the aftermath. Most shirked it.
The only argument against our decision that seems to me to have force is that a paper whose scepticism about government drips from every issue should have been sceptical about Mr Bush´s government and its ability to do things properly in Iraq. This is correct: we should have been, and we were. But when the choice is between bad options and worse ones, a choice must still be made. Great enterprises can fail—but they fail twice over if they take away our moral courage and prevent us from rising to the next challenge.
The incompetence of the state-building exercise in Iraq since 2003 does, however, leave not only Iraq in a dangerous state but also the world. Its failure so far to provide either security or legitimacy has turned Iraq into a cause célèbre and a training ground for violence. Worse, it has made the world´s only available policeman look weak, which encourages other troublemakers, and has undermined the cause of international engagement in both America and Europe. And the very principles that Mr Bush says he is fighting for—democracy, human rights—have been undermined by the appalling injustice of Guantánamo Bay and other extra-judicial detentions.
The juxtaposition described in this editorial, of economic progress with political fractiousness and conflict, could lead to a sanguine conclusion. Even the war in Iraq, even oil at $60-70 a barrel, cannot halt the march of globalisation. But that would be wrong. Globalisation, and the progress against poverty that it brings, will be halted if politicians decide that the costs of openness exceed the costs of isolation. A failure in Iraq, and with it the spread of conflict elsewhere in the Middle East, could tip that balance. An even more decisive tipping would come from the use by terrorists of some form of WMD, supplied by someone emboldened by Iraqi chaos. Another candidate could be a miscalculation by a bigger country elsewhere—China, say, over Taiwan—of the opportunities provided by American weakness and transatlantic divisions.
Are these thoughts more apocalyptic than realistic? History suggests not. In the early 20th century, embryonic globalisation was suffocated not by economics but by politics; and the consequence was the bloodiest century the world has ever known. That´s why this departing editor wishes fervently that his successor´s time will see a redoubled American effort in Iraq, a revival of help from other countries in dealing with that conflict and with others, and a firm acknowledgment by politicians everywhere that the case for international engagement and openness needs to be made continually. It will certainly be made by The Economist.