"Technology and Globalization; Seattle: A Collision Between Two Worlds"
Thank you very much. I'm quite pleased to be here today in Washington, and I am certainly very grateful to the organizers to have invited me to be your luncheon speaker today. You have certainly assembled a very impressive group of people and I commend the organizers for such a super job. I'm very impressed as well with the list of people you have invited here to address you.
Today, I want to share my views regarding this relatively new era of globalization. I say "new era of globalization" because, to me, globalization started only 10 to 15 years ago. It should not be confused with internationalization. To me, these are two very different phenomenons.
To me, globalization has had two births. Globalization was born economically the day in the mid-80s that we connected electronically the three major stock exchanges of the world. When the Tokyo, London, and New York stock exchanges were connected, that was the economic birth of the phenomenon. Its political birth came a few years on the day that the Berlin Wall fell, in November 1989.
So globalization is a new phenomenon. It is a recent one. And I believe that it is radically different and even contradictory to the more traditional phenomenon of internationalization that is much, much older.
And even though the so-called "Battle of Seattle", as the media dubbed it, was all rhetorically about globalization, the failure to launch a new round by trade ministers at that particular meeting was all related to tensions and even conflict in the most traditional world of internationalization, not the one of globalization. Indeed, I would even say this: even if there had not been one demonstrator, not one single demonstrator against globalization in Seattle, we would have failed to launch a ninth round of trade talks last December. We failed for the most traditional reasons -- that is, clashes between North and South, and East and West.
The developed and the developing countries could not agree on what kind of a launch we wanted; we could not agree on implementation of earlier agreements. And we could not agree on significant issues between trade ministers within the hall of the conference. And that was to me, the first condition between North and South.
There was also plenty of evidence to suggest that we need to do a lot of work in terms of capacity-building in the South. And, we absolutely must make a concerted effort to bring about more coherence between the different international organizations, with the International Monetary Fund, the International Labour Organization, the World Bank and the WTO. Much effort has to be made to ensure greater coherence and complementarity between the goals and actions of these various institutions.
We also failed in Seattle to launch a new round due to the traditional East-West clash on agriculture. The European Union and the United States, both with their allies -- the European Union supported by Japan, the United States supported by the Cairns Group on agriculture -- did not agree, and could not agree, and spent a lot of time trying to agree but, in the end, did not find enough common ground.
So we failed in Seattle to launch that trade round for the most ordinary tensions and conflicts in the international order, North-South, European Union and the United States. We failed, as we had in 1982 in Geneva, to launch a new round of trade talks. We ended up launching the round in 1986. We had also failed in Montreal to conclude the same Uruguay Round talks, but we ended up concluding it a couple of years later.
So, to me, that perspective is a rather textbook tradition of the WTO, and there is nothing very significant in it. It has very little to do with globalization, which is the main focus of your reflection these days at this hall. There is a confusion between internationalization and globalization, as I was saying. To me, internationalization is this earlier phenomenon that has lasted for millenniums of course, but that really was accentuated by the Bretton Woods institutions.
The statespeople, the statesmen and -women, after the war, decided that internationalization should be accentuated first of all, with a political objective of assuring peace between countries. These statesmen after the war, decided that by making countries more interdependent, we had more chance of making sure that peace would go on. Economic growth and economic development were also part of the plan of internationalization.
But internationalization is that phenomenon of governments' deciding to get together and negotiate between themselves some facilitation between them. But "internationalization," the very word says it, it is "inter nation," between nations, between countries. It recognizes that there are borders. It recognizes the legitimate authority of the government to undertake those negotiations.
Globalization is qualitatively of a totally different order. Whereas internationalization is a very vertical form of management, the state over the given territory has a vertical authority on it, and internationalization recognizes the role of the state, the economic and political borders, even if to facilitate the closings, globalization is about the elimination of borders. Globalization ignores those political and economic borders as technology allows it do so. It is a far more recent phenomenon; as I said, it's "birth" was just 10 or 15 years ago.
Globalization challenges the role of the government. It challenges the role of the state. It questions whether the state has any role in it. And globalization is the result of technological advances, mostly in the technologies of information, trade liberalization and deregulation. So, globalization ignores not only economic but political borders. Corporations integrate functions from one space to the other independently of borders, as if they did not exist. To me, globalization is the triumph of horizontal management, horizontal power against the vertical power of the state on a given territory, and these are very, very different forces.
Now, when I said that Seattle failed within the conference hall, between the walls of the ministerial conference of the WTO, I meant that it would have failed even if there had not been one single demonstrator in the streets of Seattle. But, I did not mean to belittle the importance of what happened in Seattle. Quite the contrary. Among many other things, many of the concerns that were expressed in Seattle were very legitimate. Many interesting questions were put to us. So when I called my remarks today "a collision between two worlds," I did not mean a collision between North and South, I did not mean a collision between East and West of every culture, I really meant a collision between two worlds that are now juxtaposed on the global scene around the world.
There is the world of the international order that was reflected by 135 trade ministers, well-dressed, with nice ties and suits -- that is, at least before they were gassed and had to scale walls to go and deliver their remarks. That is the traditional international order, the international order of a finite number of actors, 135 ministers. And they have a very, very predictable, very codified way of doing things -- so much so that we usually know one another's speech ahead of time.
And there was another world that we saw for the first time in Seattle. It was a very bizarre sort of world, a world of an infinite number of participants, not at all well codified, not at all predictable, going in all kinds of directions. So there is the international order meeting in the halls of the conference and this other world that I would call the "global disorder", without wanting to be pejorative about it -- it is global, by nature, and it ignores borders. The global world is characterized by – and was represented in Seattle by -- a large number of horizontal organizations.
I know we had Canadian representatives. Charlene Barshefsky kept mentioning to me the number of Canadian representatives we had on the streets of Seattle -- our contribution to the New World Order. And indeed, these people belong to transnational organizations; I mean, you know, that these organizations are gaining a lot of power. So, we have the international order and the multi-centric world that has a lot of different centres and then goes in all kinds of directions. But that is indeed the real world of globalization.
With globalization, we begin to experience the excesses of what markets can do. Whereas we have known in the first part of this century the excessively political state, the too excessively political state. We all know that in the communist countries in particular, those states, those countries, that have been unable to listen to the signals of the market, have come to make very big blunders -- to the environment, to the freedom of individuals, to the very level of development and growth.
We are now seeing that the too excessively economic markets, unable to listen to the signals of the state, are also making a number of mistakes.
Meanwhile, the world of globalization has created, or at least greatly empowered, the very players who would decline globalization. And they emerged in Seattle for the first time in a very forceful way. The irony is that they came to decry the very movement that brought them there.
The juxtaposition of these two worlds yielded very complex consideration of allegiances. The world of the state is based on the exclusivity of its citizens' allegiances, and depends on its capacity to act while fully engaging a given number of individuals. The multi-centric world is based, on the contrary, on a network of allegiances that are not at all well codified, whose nature and intensity depends on the free will of the players concerned.
So to put it bluntly, these two worlds met in Seattle, and they didn't like one another very much. The predictable outcome was and remains considerable tension, which we will be living with well into the next century. And though governments will have to deal with it, this tension is not exclusively between governments; it also involves competing sectors of society, industries, and entire socio-political, cultural, ethnic, and economic blocs, as well as traditional nation-states.
We previously had this wonderful, predictable international system, so predictable that we knew everyone's speech ahead of time, because it had been repeated so very often, and in any case, everyone checked in advance with everyone else to make sure that no one will be offended. And then comes this new world, quite anonymous, quite bizarre, absolutely unpredictable, because of the number of participants, and it sometimes real, often virtual. So these two worlds met in Seattle, and they both felt -- quite rightly -- that they represented something valid and credible.
When I met with the so-called civil society and the Canadian representatives of these NGOs, I had this discussion. They said to me, "We hate globalization." And I looked at them, and I said, "But I'm a member of the government. I am here with a mandate from my Cabinet. It is far more difficult for me to accept globalization, because globalization is threatening me and threatening the governments and the states. I mean, you know, we are affected in a much more different way than you. This phenomenon has little or no respect for the legitimacy of government." I said, "You ARE globalization. You, the NGOs, who can now in 48 hours gather through the 'net, at very low cost, thousands of people to demonstrate -- you ARE a demonstration that globalization is very effective and is changing the name of the game." And, to be honest, I think that most of them did not quite understand what I was talking about.
They did not understand, because most people do not fully understand what globalization is about. Too many people think globalization is a policy that governments have dreamed up, and they don't understand that this is something that we, too, are confronted with, and it is not something that is being imposed by corporations or big business, because many of them are finding it very, very tough and challenging to deal with.
We all know many multinationals that were very comfortable as multinationals in the international order -- they were very big and comfortable then. The multinational had to repeat heavily all the functions in every country with big, heavy corporations. They are being replaced now by global corporations, which integrate functions, independently of the political leader, where they find it most interesting to develop. So, the multinational, too, is being challenged by globalization. It is being replaced by the far-more flexible global company. The multinational si starting to look like a dinosaur now. So that's the different kind of world in which we are living.
You know we've seen another little mini "Seattle" in Washington not too long ago, around the meetings of the IMF and the World Bank. I regard what I witnessed in Seattle as a development in the sense that one talks of a photograph being developed. And the photo revealed what everyone could feel to some point, albeit some with more understanding than others: One, the strength of horizontal associations, which have no use for the vertical power of the state. Second, the intuition, often ominous, of artistic circles that sense the advent of changes with weighty consequences for culture and for differentiated humankind. And thirdly, the eruption of an ethical concern which can no longer be satisfied by the standards of justice that are usually applied.
In short, far from representing the final collapse of a trade negotiating process, which will continue no matter what everyone says, Seattle is probably the starting point in the form of a manifestation of discontent for a process of political renewal.
Who can deny that the intention at Seattle was to remind us of the human purpose of economic activity?
Who can deny that the political leaders there were sent back to do their homework with instructions to be true to the humanistic values that the West so strives to promote?
Who can deny that what we saw at work was another way of doing things whose effectiveness is now beyond question?
Who can deny that we saw the differences in reaction time -- we're slow, they're fast -- and spheres of influence of the official, national and international public authorities, on the one hand, and of the informal international group on the other.
Who can deny the claims and concerns of those preoccupied with accountability, who maintain that this new era of globalization has brought a "democratic deficit", with governments losing power and influence while horizontal and non-democratic bodies of all types see their power and influence grow? This is the collision of the two worlds that happened in Seattle.
In short, who can deny that a new model came to light in Seattle?
And the big challenge is that states and NGOs and markets operate in different times and in different spaces. Governments are more and more slow, or slower and slower, because we have charters of human rights, we have to consult with regional groups in every country, we have to consult with ethnic communities, we have to see what the judges will think. It takes us an eternity. They are very fast. It takes them a few hours, and they turn around and they're there, and they can organize themselves very, very quickly. So we will have to reinvent ourselves if we want to be effective, and to use technology to do politics and political consultation.
So, we're moving from industrial capitalism to financial capitalism. That's the basic thrust of globalization. It took us generations to tame the beast of industrial capitalism. Industrial capitalism, we will all agree, has certainly brought humanity to the highest level of economic, social, cultural development we've ever seen. It brought a lot of prosperity which we learned to redistribute in some very nice ways.
Industrial capitalism 200 years ago also brought about the phenomenon of exploitation. Politically, we learned to tame industrial capitalism, to make sure that people would stop being exploited. But, at least when you're exploited, you exist in a social relationship. You can organize, clamour for your rights, get a union to fight for you, get better labour laws by voting for this or that party. And indeed, that is the story of industrial capitalism.
We are the first generation of the era of financial capitalism, where we create wealth very, very differently. Now the victims are not only exploited, they're excluded, because in financial capitalism, you can be excluded. You may be in a situation where you are not needed to create that wealth. And that is far more radical -- the phenomenon of exclusion -- than the phenomenon of exploitation.
I think this is the biggest challenge facing governments in the next years -- fighting exclusion within our societies and fighting exclusion at the international level, because full societies are sometimes excluded, and this is something which is very, very bad.
I believe that in such contexts, where we will learn to reinvent politics and the way we do politics, I believe that education, which is the basis of all human development and at the foundation of the battle against exclusion, becomes of paramount importance. Fortunately, today's advanced technologies make it possible to substantially enhance the power of education and bring it to more people than ever before in history. In other words, for all that the new technologies can generate exclusion, they can also combat it. This is a happy paradox whose full potential must be tapped by the political level.
In many contexts I have been saying that women would be crucial and the key to a lot of the solutions that we will find to deal with the new phenomenon of globalization. I was reading in the Washington Post this morning that more women go to college than men now in this country; this is reflected in Canada, as well. And I think it is part of the intuition that I've been developing for a while, and that I do develop in my book, about the contribution of women to find the solutions to deal with globalization.
Now, in conclusion, I talked about three collisions between the two worlds; the first two within the traditional international order -- North-South and East-West collisions. We can find solutions, we can find compromises; whether it will take one, two, three years, I don't know, but there will be another round of negotiations, like there was one in '86 following the 1982 failure. We will continue to have a rules-based system that continues to evolve.
I think it will even be improved as time goes on. China will become a member of it.
I hope very much that the PNTR vote goes well next week here, and that China will become a member of the WTO. That will certainly be a very significant part of the beginning of the 21st century.
But the real collision that will make Seattle an event of historic dimensions is not the ones that caused us to fail in our effort to launch a round; it is, paradoxically, this collision, that very one that will leave the deepest effect historically. It did not make us fail, but it will make us think a great deal and have to get a lot more creative. And it is the one of these people, the very fruit of globalization, coming to tell us to stop globalization, of which they are themselves a result -- that is the paradox for the next century.
Thank you very much.
CLYDE PRESTOWITZ: Minister Pettigrew, thank you very much for what certainly is not only a passionate but a provocative presentation. I'm sorry you don't have much time, but there is time for one or two questions. I think we have our roving mikes, and so the floor is open. Please state your name, affiliation, and keep your question short.
Q: Thank you. Jeff Steinberg with (ERI ?) magazine. About two weekends ago in Chiang Mai, Thailand, the finance ministers of the ASEAN countries, plus China, Japan, and South Korea, got together and basically established a kind of a defence fund to be able to combat the kinds of things that happened in 1997, when the speculative attacks against a number of Asian currencies created an economic turmoil that has continued and has spread to other parts of the world. Would you consider that development to be one of the first indications of, in a sense, ‘the nation states strike back’? Because it's going to require these kinds of mechanisms, probably, to combat the tremendous power accrued in the hands of fast-moving global capital.
MIN. PETTIGREW: You know, markets are a very effective and extraordinary place for individual self-fulfillment. But markets are smart enough to know that they're very short-sighted and limited. I mean, markets answer more immediate needs. And whereas they are a wonderful place for individual self-fulfilment, they lack the vision, they lack the horizon, they lack the perspective that the state, which is more legitimate because it represents the whole of society, can do.
And my conviction is that markets themselves now are -- have come to the conclusion that they need the intervention of the state, which -- for a long time they said, "No, no, no, no, we hate the governments" and "leave us alone." The Asia crisis of August '97 really brought to terms the idea that there needs to be a balance between state and market. After all, if markets exist today and if capitalism exists, it is because of the evolution of the last 400 years, in which the state took control of a certain territory and guaranteed some economic rights -- and a territory larger than the city, but that -- and therefore capitalism could be born on that, on the national market, which it couldn't on the city, a small city market. And empires were too vast and loose for having any real economic rights. So capitalism was born because of the nation state. And therefore, their wanting the elimination of the political element has been -- they're coming to terms with that, and they realize that we need to have both, to have communities that are developing and happy.
Q: Thank you.
Q: Joe Paslese (sp) -- (Endo ?) -- Success 2000. One of the questions that come up when you talk about the tension between the states and the people is that -- it will always exist. The State will never just go away. But I think the interesting relationship, as a result of globalization, is that the people will be more empowered to shape the State. I'd like for you to comment on that, please.
MIN. PETTIGREW: Well, I think we will have to reinvent the way we do politics. I mean, the political activity, which is absolutely essential, will have to keep up with the new technologies. And though -- I mean, why is it so long for us to react, and why is it so complex to do the consultations, when these means of technology exist?
I believe, however -- and that is certainly what I am arguing in my book -- that the next century will be the century of the empowerment of women -- I have said it; I think it is going to be the century of the empowerment of women, and they are doing it already through education, and it is a good thing -- and the empowerment of the individual.
I mean, technologies empower the individual. We will become, all of us, each of us, far more responsible, for instance, for our health.
There will be technologies soon -- I mean, you know, I was visiting, not too long ago, centres at the MIT, where I was very impressed to see that you will soon have a shirt that will inform you exactly of your condition because of the way you sweat in it. And it will be electronic. And at the end of the day, you will know that you have eaten too much protein, not enough -- glucosides -- or whatever, you know. And you will be responsible for your health because you will have the information. I mean, you know that in any case -- I use that example about health -- it will be the same thing about everything. I think this is going to be the empowerment of the individual, absolutely.
But politics can reflect that because, when I say the empowerment of
individuals, I am talking about a sense of responsibility that will have
to go with the better ethics. We will have to move beyond the ethics of
justice and move to what, in feminist literature, they call ethics of care,
which you know, we for a long time saw the ethics of justice as the end
of the world; you know, enlightenment that brought us to think in that
term. I think we will be moving toward an ethic of care because the sense
of individual responsibility and power that we will have, will allow us,
as well, to think in terms -- I mean, you know, if you look at that, the
decisions that we make today are of an unprecedented scope, both in terms
of space and in terms of time. The decisions we make today involve, not
only relations between states, societies and individuals, but also the
relations of the human being with the rest of the universe and future generations.
That is unparalleled, and that will change the individual.
MIN. PETTIGREW: Thank you. Merci.
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