A Capital Writing interview with the author of Global Discord.
A Capital Writing interview with the author of Global Discord.
As part of a project for Capital Matters, called Capital Writing, I’ll be interviewing authors of economics books for the National Review Institute’s YouTube channel. This time, I talked to Sir Paul Tucker, a former deputy governor of the Bank of England, about his book, Global Discord: Values and Power in a Fractured World Order. Below you will find an edited transcript of a few key parts of our conversation as well as the full video of our interview.
Dominic Pino: The title of the book is Global Discord. “Discord” is a slightly frightening word, but it is not a terrifying word. You could think of nastier words you could have used, maybe “global disintegration” or “global annihilation.” Why “discord”? Why did you choose that, and how does it match your read on the situation in world affairs right now?
Paul Tucker: I think you’ve almost described perfectly why that word works. I think we’re embarking on a period, or are already in a period, which is going to be uncomfortable or discordant between the great power of the East, the People’s Republic of China, and the West, led by Washington, but by no means only Washington. I don’t think war is inevitable. I think conflict of some kind, any conflict, is possible. I think it could go on for a long century. I think people will be repeatedly surprised by that. I think there will be periods when it looks okay and feels okay, but I think there will be this underlying discord for a long time, essentially based on very different ideologies, views about how states should be governed, and how international society and the world will work.
DP: As we’re going forward in world affairs in the near future, you see there being the possibility of four different outcomes, four different scenarios that you lay out in the book. You don’t have the arrogance to say, “It’s only going to turn out one way.” You leave open the possibility of four different options. Can you briefly describe what those four are and how they relate to each other?
PT: I will, and it’s important to say that I think people who say, “It’s all going to turn out like X” — I mean, these are foolish claims when people say they know how the world is going to be, because no one knows how the world is going to be. We only know what the world looks like in the backward-looking mirror.
The four scenarios I try and set out are a lingering status quo, a world where the U.S. remains the top dog with its acolytes and supporters in Europe and the constitutional democracies in East Asia. The second is a superpower struggle, between the United States and China. The third is a new cold war, where we return to a kind of fractured, autarkic world where there are two or three blocs. And the fourth is a restructured world order, with a new top table. Let’s put aside the fourth for a second. I don’t think that’s realistic, until and unless other great states rise, which might be India or Indonesia or others. Basically, those current emerging markets have vast populations, and so if they grow at a fast rate for a couple of decades, they will be very large alongside the U.S. and China.
When I started writing the book about three or four years ago, we were somewhere between lingering status quo and superpower struggle. By the time I finished the book, I thought we were in a lingering status quo in monetary and financial affairs, because the inertial value of incumbency of the role of the dollar in the world is hard to dislodge, which doesn’t mean that people won’t try. Whereas in virtually everything else, I think we are positioned between superpower struggle and new cold war. I think it’s impossible to predict whether we will tip into a new cold war.
Meanwhile, there is a superpower struggle going on. We can see it in the semiconductor stuff that’s happening, I think quite sensibly from the West’s point of view. We can see it in a competition for friends and alliances from both Washington and Beijing, on a scale and intensity that would have surprised people 20 years ago. For a while, to be frank, I think Washington forgot the need for friends and allies. There was a giveaway, this was when the Obama administration talked about the “pivot.” I understood what was conveyed by that, which was giving greater emphasis to Asia. But the metaphor was unfortunate. The hegemon — my country understood this in the 19th century — the hegemon can’t afford to say, “We’re going to be more present in Asia and less present in Europe.” I’m afraid the hegemon has to have their eyes on absolutely everything. It’s not easy being the hegemon.
DP: One of the things that’s been talked about a lot in business circles recently is about decoupling from China, and voluntary efforts to do that, putting aside the government efforts like you mentioned with semiconductors. Apple is talking about moving more production away from China. You have Indonesia trying to capitalize on a lot of this, trying to invest in making their country a manufacturing center as an alternative to China. Which of these scenarios is going to have more decoupling in it, and what is the difference between the new cold-war scenario and the superpower-struggle scenario in terms of decoupling from China?
PT: The first thing to say is that, I don’t want to get into particular companies, but some of the companies that you’ve mentioned rely so much on manufacturing capacity in the People’s Republic that it’s not easy for them. So you can imagine things where it would just become much more difficult for Western capitals. This happened in the First World War and the Second World War. There were at least some German companies that were split. Before the First World War, there was great integration between German finance and British finance, so much so that people thought that would be a reason why there wouldn’t be a war, but there was. I think commercial society does bring people together — I think David Hume and Adam Smith are right about that. I think it does, as Hume might have put it, broaden our sense of “we,” in a really healthy way. But there’s no guarantee. It doesn’t prevent conflict. It makes it less likely and perhaps it heals lots of things in the very long run, but in the short run there can still be conflict.
DP: China’s mercantilist strategy is very familiar in world history. It’s something that economists have said for a long time at a macroeconomic level doesn’t work. That is true, but you make a point in the book that “mercantilism works for the mercantilists.” Can you explain what you mean by that phrase?
PT: The way the thought came to me, this was years ago arguing with Bank of England staff who say China’s mercantilism is crazy, and I said, “Just drive around England and you’ll see some of the great houses of the mercantilists.” They did okay out of mercantilism, and their families still live there, in some cases. Look, my country was mercantilist until it wasn’t, and then of course it was the great promoter of free trade. I think the high point of British power is what it did to promote and legitimize free trade. Hamilton was a mercantilist. I’m with the economists on the normative conclusion of what would be best in the very long run, but as a policy-maker, you wouldn’t want to inhale that. You’d say, but actually, if I look back over history, it’s quite hard to find great states that haven’t been mercantilist for a while, France for example. So we’ve already named the three greatest states in Western history, and they were all mercantilist for a while. I’m not sure I would have wanted to draft a treaty that was putting all my chips on a new rising state not going through a mercantilist phase. I don’t think the architects did a great job designing the WTO treaty. It wasn’t a moment so much of over-optimism as of wishful thinking. If there’s one bit of realism that I really do completely subscribe to, it’s avoiding wishful thinking. The bit of realism that I don’t subscribe to at all is that norms and values don’t matter.
DP: As it relates to China’s approach to international organizations, you talk about how Xi Jinping will give speeches and talk about how international organizations are part of the world order and something that China wants to participate in and have more influence in. But then you contrast that with some comments from Yan Xuetong, who is a Chinese political scientist, who essentially is saying that there is no world order, there’s just states pursuing their interests. What are we supposed to make of that in terms of China’s approach to these organizations? Is it the leadership making these comments or the theorists that we should be taking more seriously?
PT: The most modest comment to make is that, unsurprisingly, Chinese thinking isn’t monolithic. At the moment they have a very, very powerful leader, so it can look monolithic, but there is a strain of thinking there that is, if you like, nationalist and realist, that cooperation is always slightly phony, and people just pursue their own interests. Yan is a very interesting theorist and also constantly emphasizes that Beijing will lead allies and friends. I’ve read things that convey the feeling that he’s kind of worried about Chinese policy over the past decade in that respect. I think the more striking thing about Leader Xi himself is that although he gave that famous Davos speech where all the Davos people clapped, only a year after he became head of the party, there was a leaked document from the central committee, Document Nine, that has the Seven Nos in it. Five of the Seven Nos are basically a complete rejection of the things that are central to any kind of “Western” view of constitutional democracy. When I first came across Document Nine, my first thought was, I wonder how many of the people applauding Leader Xi in Davos even knew about this document’s existence. I would conjecture very few. This is one of many reasons why we shouldn’t take our political leadership from businesspeople. Businesspeople are good at doing business, and China is a vast market that’s been growing very fast, and so they’re very keen on China. Well, you know, I don’t think we should take instruction from that about the organization of the world.
The point isn’t that I think it’s inevitable that China will grow to be bigger or more powerful than the West. I don’t think it is inevitable. But I think the robust assumption for the U.S. and for the West is that China will continue to grow rapidly over the next 20 years. And I think the robust assumption in Beijing would be that they won’t. Each state, while trying to avoid making conflict more likely, should not assume that the “rival” is going to be a failure. In fact, Beijing has made some mistakes in that respect. After the financial crisis, the message coming out of Beijing was that the West is over, it’s the past. While it was good PR locally, it was quite poor planning for Beijing.
DP: You talk about where you want to see things go, and you say, “a liberal, commercial society without wishful thinking.” Why should we want that, and how do we avoid the wishful thinking?
PT: We should want it because of freedom and fear. Avoiding fear, and promoting freedom, and allowing peoples to find their own way. One of the things I am leery about is a kind of liberal internationalism — what I’m espousing could be called liberal internationalism, but this has become a term of art — where there’s a script, and everybody everywhere must sign up to it because somehow we know the answer. I’m against that, actually, and I’m against it for the reasons that political leaders in Britain were against it in the middle of the 19th century. Our Prime Minister Peel was a great reforming prime minister in the middle of the 19th century and said something like, “Peoples have to find their own way to liberty.” Not because one doesn’t wish other people to have liberty, but because one wants liberty to be achieved and sustained, and that’s an organic process locally. It’s not something where you can send a to-do manual.
The other element is that we must do what we can to preserve our way of life and what we have managed to become. Here I mean the whole Western world and the East Asian constitutional democracies. There are big differences between those countries, there are big differences between my country and yours. But what we have in common is some kind of basic institutional values that help to protect us from fear locally. And where people are in trouble locally, they can find a voice in our system. This is very good. So I’m motivated by avoiding fear and enabling freedom, without pushing it down other people’s throats, in the precise way that we’ve achieved it up to a point for ourselves. Of course, this requires us to fix our own problems in the United States, the United Kingdom, France, Germany. Those problems are a bit more intense now than perhaps they were over recent decades.
