"Experience is that marvelous thing that enables you to recognize a mistake when you make it again." - Franklin P. Jones

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[Ed: The following is late due to a personal tragedy and my laptop breaking down]


Shifting Patterns of Global Power (Part 1)
Chris Patten
30th October 2008
Hosted by: Lee Kuan Yew School of Public Policy, NUS

For easier transcription, the following is written in First Person narrative (i.e. from the perspective of the speaker). Personal comments are clearly noted.

Professor Tommy Koh, introducing Chris Patten:
I admire him because he's the son of Irish immigrants to Britain and he's the first member of his family to go to university, so I see him as the poster boy of British meritocracy

[Ed:

Meritocracy - used, misused and abused chaos

"Michael Young "invented" [the word] in 1958 in his book "The Rise of the Meritocracy," according to Quinion. Young had pointed out in an article in the Guardian newspaper last month that he had intended a prophetic satire on what might happen if we placed gaining formal educational qualifications over all other considerations. "This, he had argued, would lead to the permanent rejection of anybody who was unable to jump through the educational hoops, including many otherwise able working-class men and women," wrote Quinion. It would also result in the rise of a new exclusive social class as discriminatory as the older ones. "So the word as he used it," claims the British wordsmith, "was not a positive one, but deeply negative in its implications for the future of society.""]

He lost his Parliamentary seat in the 1992 elections because he worked too hard for his party. "He's the best Prime Minister Great Britain never had", was how one newspaper described him.

Many of us would remember him for being the last governor of Hong Kong, and he left Hong Kong with a good legacy. There are only 2 cities in Asia with the prospect of becoming the global city of Asia - Hong Kong and Singapore.

The lecture is based on his fourth and latest book - "What's next", which I recommend.

Contrary to many Political Scientists' theories, we still live in a world of nation states, and Asian thinkers don't disagree. However, the concept of sovereignty needs to be re-examined - not the narrow minded conception of the past, but one based pooled sovereignty like the EU and working together to respond to global challenges, since many problems cant be solved by any one country, no matter how powerful. Patten is a hard-headed internationalist - a narrow-minded conception of sovereignty is not the way to go. Like Obama, he is a critic of the Bush administration.


Talk proper by Chris Patten:

The introduction was one my father would've much enjoyed and my mother would've believed.

My ambition for Oxford is that one day it will have a School of Public Policy. It's absurd we don't.

3 of the best-known young Asian or African-American politicians in the US are in their 30s - and were alumni of Oxford.

It is partly to find our way around our past that we have found it convenient in past years to divide history into suitable chunks. In Europe, the Hellenic age, Roman Empire, Dark Ages, Medieval, Renaissance, Enlightenment and Industrial Revolution.

When does modern history begin? I read modern history at Oxford in 1962. In Oxford then it started at 410 AD. This was considered daring because it was 410 AD and not 410 BC. In 410 AD, Alaric pillaged Rome, and the Roman legions were withdrawn from Britain.

1962 is now part of the historic era, as much so as the Holy Roman Empire.

In the 1960s, in my first term in Oxford we had the Cuban missile crisis. It was one of the moments in global history when it seemed possible we'd blow ourselves up. We had years of peace secured by the certainty of MAD (Mutually Assured Destruction).

Today, when I'm told the world is more dangerous than in the past I can't help but think of the days when the prospect of nuclear holocaust haunted us all.

My parents weren't great readers. They had a few Readers Digest issues and novels lying about. One novel was about the survival of people on a beach in New Zealand while there were mushroom clouds in the north.

That world seemed to have ended at the end of the 80s.

A friend of mine was Thatcher's Minister of Eerope - not a happy appointment. He was visiting Berlin and on the first day of his visit a young East German was shot climbing the Berlin Wall. He wanted to protest publicly, but the diplomats advised he not do so - they would handle it quietly because they knew how to deal with the East Germans.

6 months later, there was no Wall and no East Berlin or East Germany. They were swept into the ashcan of history with the End of Cold War.

So was it then that the modern world began?

Was it when Deng Xiaoping took over and unleashed the energy and enterprise of 1.25 billion people?

In the early 90s, Fukuyama wrote "The End of History". He bragged that Liberal economic and political values had won the day. There would be no more wars between states or serious political argument.

Huntington wrote against that. He posited battles between civilisations, not states. Religions, civilisations and ethnicities would be fighting.

Was it on 9/11 that the modern world began? Was this the Clash of Civilizations which Huntington had warned about?

Or was it this autumn with the extraordinary events, for example Alan Greenspan admitting to a flaw in his thinking and the humilitation of the Masters of the Universe?

The 1st law of economics of Herb Stein is that things that can't go on forever don't. In the US in the last 30 years there've been flat average earnings, with domestic consumers being unable to face up to Galbraith's "inability to accept the concept of reasonable sufficiency".

American consumers bridged the gulf between flat earnings and the American Dream by borrowing spectacular amounts ofmoney. Household debt at the beginning of the period was $680 billion. Now it's $14 trillion. On average there're 13 credit cards/household. 40% of these carry debt. The American national debt was $10 trillion, and it has doubled since the beginning of the century.

This mountain of debt (the UK is also guilty) came about by 'leveraging' - it was sustained by financial instruments which were not only incomprehensible to us but to the people who traded them as well.

18 months ago, a young man explained how the mortgage of an unemployed single parent in Alabama could be sliced, diced and morphed into an investment vehicle which could be traded in Shanghai, Singapore, Hong Kong and Frankfurt.

I didn't have the faintest idea what he was talking about. Unfortunately as it turned out, neither did he.

He worked for Lehman Brothers, as it turned out.

Debt and the failure to regulate incomprehensible instruments plus greed and fear have led to the biggest financial crisis in our lifetimes with economic and political consequences which will reverberate.

This is not the death of capitalism. It is not time to relearn the words of the Socialist Internationale. But as Barney Franks points out, it will be some time before someone tells Reagan's favourite joke: "The nine most terrifying words in the English language are: 'I'm from the government and I'm here to help.'"

[Ed: He forgot about the libertarians.]

There has been a lot of discussion about global financial architecture. It is easier to talk about that than to run decent conservative fiscal policy.

Some things need to be done. The G8 is an absurdity. We need IMF, WB to give places at the table to emerging economies, especially Brazil, India and China. In the coming months they will have an agreement to strengthen the surveillance of the IMF of international economics, but the IMF has been pointing out for years that the US UK etc have been borrowing too much money, but the governments did nothing.

One thing we can be sure about is the truth of Flaubert's remark at the start of the Franco-Prussian war: "When this is over, we shall still be stupid". In the meantime it is impossible for America, the EU etc - financial deregulation to piggyback on the opening of tradeable markets [Ed: My notes are unclear about how the two parts of last sentence are linked]

I hope we won't see America and Europe turning in a protectionist direction, to throw out the good of globalisation with what's bad.

This is the main thrust of my argument of the "modern world". I hope nothing in the coming months will oblige me to change these paragraphs. How is the Modern World shaped and by who?

Despite the incontinent draining away of treasure and blood in the 'Thankless deserts of Mesopotamia' (Churchill), what's happened to Wall Street and the moral authority lost at Abu Ghraib, the US is still the global superpower. The only country which matters everywhere.

Open a newspaper from Bangkok to Bogota - there will be something abt the US on almost every page. My own view: if you want to see your own country disappear, you go to America and open an American newspaper.

America matters absolutely everywhere. It has dominance of the global commons:

Militarily (it spends as much on military technology as everyone else combined) whether space, air, land or sea.

America also still has extraordinary eonomic vitality. The US will probably recover more rapidly than, say, the UK.

The US still has a lot of soft power - it won't be long before a, say, President Obama can reestablish the US as a global leader with excellence.

I hope the US will be the principal agent dealing with the problems I'll talk about. We need America to lead, because no one else will.

With the first 4 years of unilateralism of the Bush administration, there has been 4 years of drift, and nothing has gotten easier to solve.

President Obama will have a large agenda. I hope it won't be distorted by protectionism in Congress. It would be a tragedy for America to be multilateralist in foreign security policy, but unilateralist in economic policy.

Europe will play a role in shaping it too. It has substantial civilian power, not military. It is not going to be a military superpower. Those like Robert Kegan criticise Europe for being Venus, not Mars, but we tried Mars, and the consequences were pretty horrendous.

One reason we are not, and will not be a military superpower is that we don't spend enough on defence. Maybe not for the UK and France but certainly for the Germans. Our grandparents and parents worried the Germans spent too much on armaments. I think it's better to worry they are not spending enough. It's a step in the right direction.

Europe still has huge potential for global leadership, on economic issues. Trade, development policy and environmental issues. The victims of this financial crisis are the poorest African countries - their aid is slashed.

Europe has a big demographic challenge which it has not confronted sufficiently. There will be a 20% fall in the population between now and the middle of the century, especially in the countries with the most traditional Catholic social values: Poland, Italy and Spain.

Besides the fall in population there will be aging also. If Europe is to avoid having a falling share of world trade, population and output, it needs to have a fundamental change to increase its rate of economic growth.

But there are problems. Europeans have a standard of living and quality of life rightly identified as the best in the world, and they are nervous about doing anything that might change it, so they are resistant to reform.

The greatest political novel written by a european, in my view, was Lampedusa's "The Leopard". "Things have to change in order to remain the same". There is a reluctance in Europe to accept that.

(Continued in a future post)