Earthquakes, Aftershocks and Tremors
In the wake of both the British and French elections, the turmoil in US politics since the Presidential Debate between Joe Biden and Donald Trump, as well as the unsettled nature of politics in Canada – both federally and provincially (i.e. British Columbia), I’ve struggled to summarize my thoughts into a piece that would cover as many bases as it could.
And so I revisited the first chapter of the 2018 edition of my book ‘The Case for Commonwealth Free Trade,’ which I titled “The Earthquake.” While the subject matter is tied specifically to Commonwealth (including CANZUK) trade and its changed prospects from 2006 to 2017, one could argue that the basic hypothesis holds.
For those who ascribe to the TLDR school of thought, I can offer the following summation – events like the 2008 financial meltdown and COVID exposed the stress fractures and flaws in current western liberal systems and institutions. Rather than address these fractures and flaws with meaningful repairs and remediation, the structural engineers in charge – otherwise known as elites – have decided to ignore them, patch them with duct tape and glue, or - failing that – resort to name calling and ad hominem attacks. And true to form, just like one of those Irwin Allen blockbuster disaster movies where a building burns, a dam bursts, or a ship sinks, people are left to improvise their own rescue in the midst of panic. And because improvisation is always done on the fly and is never elegant, a mess ensues.
The following should be interpreted in the spirit of same.
THE EARTHQUAKE
“All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.”
- Arthur Schopenhauer (1788-1860)
In early October of 2008, I was sitting in a hotel room at a resort in the Caribbean. The trip was a ninth wedding anniversary excursion. Beautiful scenery and a warm tropical sun, and yet I sat on the end of the bed watching television.
The set was tuned to CNN, and the images on the screen were akin to an accident occurring in slow motion. On the left side were an agglomeration of senior politicians and officials at the US Capitol, explaining that after a couple of miscues, that a vote to approve a bailout package was imminent. To the right of the image was a display of the current values of the Dow Jones Industrial Average and the NASDAQ – each showing drops of historical proportions.
A little more than two years earlier, I was in London for meetings and a presentation on my book The Case for Commonwealth Free Trade. It was a good trip and I made some lasting friendships from it. I also felt that I got my idea – admittedly a provocative one – on the radar screen for a great number of people. As positive as the experience was, I left with the impression that my ideas were unlikely to become a reality in the near future – at least not without some major change.
I was struck with the following observations: First, that support for Commonwealth Free Trade was much stronger than I had originally thought; and second, that Britons hoped that senior members such as Australia, Canada, and New Zealand would take up the mantle in the absence of the UK. EU membership precluded their participation, but they wished the rest of us well. Unfortunately, I also understood another reality – that without British participation, none of those countries – including my own - would ever take the initiative. Regardless of nationality, it is not generally in the DNA of a politician to take a bold move.
Sitting on that bed and watching the financial turmoil unfolding, I did not have a full appreciation of what it all meant, and how it would transform our world. I viewed it much like others did – like observing a car accident. Politicians, bankers and reporters were like first responders, setting off road flares and placing caution signs, waiving people past as they slowly turned their heads to look in morbid curiosity.
It has since been described as an ‘earthquake’ that had hit the global economic system, and nearly a decade beyond the first tremor and we can still see – and feel – the aftershocks. I certainly had no idea what it might do for the ideas expressed in the book. Today, I realize that what I seeing were the seismic changes that would give the idea more of a hearing.
The earthquake analogy is a propos. In the initial hit, buildings are reduced to rubble, and chaos and tragedy ensue. Over time, wreckage is cleared, people are rescued, and losses are mourned. By all external appearances, all is made safe and secure. People attempt to go about what passes for a normal routine.
In the coming weeks and months, people who were initially relieved to have been spared from the tragedy learn the truth. While their home did not collapse in a pile of rubble and broken boards, the foundation had been compromised during the quake. The extent of damage was significant enough as to render the structure unsafe. Although sturdy enough to have remained standing during the force of the quake, it has been nonetheless weakened, and must be significantly re-engineered or demolished.
The European Union’s political project, to a great extent, had been like the building left standing in the initial quake, but whose foundation was so compromised as to render it vulnerable to subsequent tremors. Bailouts to institutional lenders and Eurozone governments were the equivalent of installing structural supports in order to preserve the façade of the edifice.
For Britain, support for the European Union in many quarters had been built on a faith and confidence that steady progress would continue. The political project was never as popular among its citizens as it had been among some of the elites. British reluctance to participate in various aspects of the ‘project’, including the single currency, had been rationalized as transient opinions that would fade over time. As the EU would grow, develop, strengthen and integrate, they reasoned that these opinions would gradually dissipate.
The events of 2008 created currency and debt issues that undermined the steady progress of the European political project. For a great number of Britons, an ‘ever closer Union’ no longer seemed inevitable. That is what made Brexit possible.
The referendum of June 23, 2016 also proved certain assumptions made in the book. It proved that if Britain were to choose to leave Europe’s political project that it would immediately seek partnerships within the Commonwealth. It also proved that under those conditions, the larger economies of the Commonwealth – including Canada, Australia, New Zealand and India – would show their support.
Prior to the Brexit vote, I had been told by some people that it was foolish to believe that Britons would vote to leave, and if they did, it was equally foolish to believe that any of the Commonwealth members would have anything to do with them.
As I write this, every major Commonwealth member state has indicated their desire for a free trade agreement with the UK. Indeed, on March 9th, 2017 trade ministers from 30 of those nations gathered in London to discuss this very same idea. In the case of Australia and New Zealand, an offer to lend Britain their own civil servants to work on behalf of the UK has been made. Surely a scenario whereby paid employees of the Government of Australia are working as part of a British trade negotiating team must force the critics to reassess their positions. Given recent events, it would seem that the ‘Case’ I wrote about has been made – or at least is close to being so.
Too often, however, things taken for granted do not materialize. The writer Nassim Nicholas Taleb explores this more fully in his work ‘Fooled by Randomness,’ but the simple fact is that we often default to an assumption that events will unfold in an uninterrupted pattern, and are woefully unprepared when the pattern does not hold.
The current situation – that of Brexit and a rapprochement with Commonwealth allies - was judged by many elites in Britain and beyond to be impossible. Indeed, right up to the June 23rd, 2016 referendum, it was considered a pipe dream, a flight of fancy. The inertia of conventional thought has been great enough to have created its own gravitational force, where the amount of energy needed to break its pull was substantive. One must not only argue the merits of their ideas in the public square, but they must also fight the entrenched attitudes of large swaths of the commentariat – people who may oppose the ideas not necessarily because of their validity, but because they represent a threat to their preconceived notions or to their position. Someone who has made a name and a career for themselves promoting British participation in the European project can hardly see the derailing of said project as a positive.
In the end, the pull was broken, and Britain finds itself in a different position – one far more amenable to pursuing a ‘Commonwealth project.’
In the absence of a ratified free trade treaty between significant Commonwealth economies, however, the ‘case’ must continue to be made. Given the current state of affairs in Britain and in the global economy, it needs to be both strengthened and reiterated more assertively. Until an agreement is reached, approved, and is in place, work remains. Recent progress should serve as an affirmation and an encouragement, but the job remains incomplete.
This second edition provides an opportunity to reflect on how far things have progressed in the fourteen years since I started writing the original book. Experience is a great teacher, and the passage of time affords a clearer, more focused, argument. The underlying case remains solid, but the supporting evidence is far greater.
At a time when we enter a period of great uncertainty and populist upheaval, we look for answers. We look for calm in stormy weather. We look to those who championed globalization for the past three decades, those who led multilateral organizations, large corporations, NGO’s and the like. We ask ‘what comes next?’ More than a year after the UK referendum, and the election of Donald Trump, and in the midst of fractious economic and political conditions across the industrialized West, there is relative silence, save for a multitude of lamentations.
The cover of the January 2017 issue of Foreign Affairs magazine has a picture of a worker on a ladder, bent over and leaning into a globe through a United States-shaped trap door, captioned with the words ‘Out of Order: The Future of the International System’. Perusing the index, you discover such article and essay titles as ‘Liberalism in Retreat,’ and ‘Will the Liberal Order Survive?’ as well as a review of the most recent book by Richard Haass, titled ‘A World in Disarray: American Foreign Policy and the Crisis of the Old Order’.
The articles in question are not simply hackneyed ‘cri de coeurs’ penned by obscure individuals with a penchant for conspiracy theories and doomsday scenarios. The authors are accomplished people who have walked the grounds of Oxford and Cambridge, Harvard and Yale. They have published essays and books. They have advised Presidents and Prime Ministers. They have supervised the Masters and Doctoral dissertations of people who have joined the ranks of diplomatic services, large multinational organizations, and the like. When news gathering organizations such as the BBC, CBC, CNN or MSNBC require an expert to make sense of the unfolding world, they are among those who appear on your television screen or computer monitor. In short, they are the people who built their careers and reputations on being the smartest people in the room, the people who do not break into a panic or cold sweat in challenging times. And yet, if the tone and tenor of the issue is to be believed, they are seized with the inability to either repair the existing system or offer a plausible alternative. The relative paucity of guidance and advice from such quarters is disappointing, to say the least.
In a 2001 essay for the Royal Institute for International Affairs entitled ‘Is Britain European’, historian and Guardian columnist Timothy Garton Ash expressed the same clouded view as it related to the national ‘identity’:
“My conclusion? There is no conclusion. We are confused, but perhaps confused at a higher level. Why is there no conclusion? Partly because I myself have not reached an analytical conclusion; what I offer here is a first report on work in progress. There is no conclusion also because of the very nature of Identity Studies, which rarely arrive at any definite, clear finding. But it is also because of the particular nature of the identity that I have been discussing. Arguably, the statement ‘no conclusion’ about British identity is in fact a conclusion—even an important one.” [1]
While specific to the British context, and despite the passage of nearly two decades, Garton Ash’s admission could certainly apply to a myriad of current and emerging issues. The assertion is that we live in an age where ‘confusion’ has inflicted the body politic at every level and strata, and that with such confusion comes chaos.
But what if the ‘confusion’ that the cognoscenti alludes to is not as widespread as they think? What if the confusion is confined mostly to their ranks, and that the average person is not seized with bewilderment? What if the ‘confusion’ is among a group of people who, having seen their heavily invested ideas and theories falter, did not have an alternative – a Plan B? What if their hubris convinced them that no alternative was necessary, for to contemplate an alternative would be to admit their own fallibility?
Of course, an admission of fallibility is no longer needed. Our present circumstances are a testament to it. The world is replete with examples of the failings of those who were supposed to know better. Whether or not you hoped for either a Clinton or Trump presidency in the United States, one must acknowledge the near-unanimous declaration a week before that what did happen had only a 2-3 percent chance of doing so amounts to a major failure in the very type of analysis that people have staked their professional careers on.
Nearly a year into the Trump presidency, and more than a year since the Brexit vote, and the cognoscenti has yet to offer an alternative. Rather than constructing a more durable, more sustainable model of globalization, we are left with snide comments and bitter missives. We are told of the impending doom of our misbegotten choices, but nary a word on what could have been done differently.
Globalization itself is not going away. Individuals and nations will continue to interact with one another, to cooperate with one another, to trade with one another. It is still a desirable thing in this world, despite the current challenges. My late father, as with many of his generation who worked with their hands of a living, would often say that it was ‘a poor carpenter who blamed his tools.’ If globalization is undergoing a crisis of confidence, is it because the idea of it is fundamentally flawed, or is it because it has been implemented in a flawed fashion?
Nature abhors a vacuum. If proponents of the current system are unwilling – or unable – to synthetize a new approach for the world economy and international relations, it will not be a long wait before another system appears. If and when it does take hold, it may engender outcomes that make our current situation appear minor in comparison.
The rules of the game matter. It matters what they say, how they are implemented and how they are understood. When parties to any agreement do not share the same sense of responsibility, or the same commitment to the rules, things break down. To be more precise, if one party sees free trade as a means of growing economic ties and increasing volumes for both partners, while the other views it as a cynical device to generate unsustainable surpluses at their partner’s expense, you will be left with the kind of ‘crisis’ that has emboldened what people refer to as ‘anti-globalization populism.’
Suggesting that people are rejecting unequal and biased relationships because they ‘hate globalization’ is akin to arguing that a person hates the act of eating because they once refused a chicken salad sandwich. The rejection of a particular option is not the rejection of any option. It is intellectually dishonest to suggest that it is.
The full title of this book is ‘The Case For Commonwealth Free Trade: Options For a New Globalization.’ It is not a repudiation of globalization as an idea, but an argument that it can be done better, and for a greater benefit to a wider population. Those against the status quo are clamouring for a better way. Those invested in the current system may also seek a means of preserving the good in what we have, while reforming that which is clearly untenable in the long run.
The core idea of this book is that relationships between nations work best when all parties are in accord with what the rules are, how they should be interpreted, and what each signatory’s obligation is to the other. We need a new globalization that is a better one – a system where parties have a similar understanding of what they have agreed to. In short, we need a globalization where the prosperity of one partner is not gained to the detriment of the other.
If we build a system that places as much importance in the fairness of relationships as it does the volume of overall trade, we will have truly recovered from the quake and built a structure more immune to the aftershocks.
A system based on a Commonwealth platform can do just that.
[1] Garton Ash, Timothy, ‘Is Britain European?’ International Affairs (Royal Institute of International Affairs), Vol. 77, No. 1,(Jan., 2001), p. 12