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Last Updated: Monday, 16 June, 2003, 13:25 GMT 14:25 UK
Is globalisation Americanisation?
Will Hutton (left) and Michael Elliott exchange views on globalisation
Will Hutton, author and chief executive of The Work Foundation, and Michael Elliott, an editor for Time magazine in New York, exchange views on whether globalisation is simply exporting the American business model and if that benefits the world, or not.

Dear Michael,

Good to see you in New York the other day. I am in favour of globalisation, of opening up, of more trade and of all the pressure for the acceptance of human rights and rule of law that globalisation brings in its wake.

Without globalisation, Asia could not have bootstrapped itself out of poverty, life expectancy would not have risen around the world and living conditions for many women outside Islamic countries would not have improved.

My objection is to none of the above. Rather it is to the way globalisation has increasingly become a cloak for the export of the American business model as the benchmark besides which all other countries must judge the success of their approach to capitalism and society.

Globalisation needs to be de-Americanised - and genuinely globalised

It is perfectly possible to believe in the wealth-generating powers of entrepreneurship and markets, and also to believe that societies need strong social contracts and a powerful expression of the public interest.

The international common sense - created by the rise of the new American conservatism in the US which has become the so-called Washington consensus policed by the financial markets - believes in the first set of propositions, but not in the latter.

Thus the pressure not to introduce universal health care systems and to have minimal social safety nets; thus the pressure to live with high levels of inequality; thus the pressure to put the interests of business before those of society which reflects itself in myriads of ways in both the developed and less developed world.

My concern is two-fold. First, that this approach will de-legitimise and may ultimately derail the globalisation process. And secondly, it is wrong in its refusal to countenance a diversity of approaches to capitalism and organising society.

Globalisation needs to be de-Americanised - and genuinely globalised!


Dear Will

It was good to see you too and I hope the new book's going well.

There's a lot in your first message that I agree with, of course, your points on the role that globalisation has played in raising living standards around the world are right on the money.

But I think we have differences in three respects:

First, it's surely a little out of date to imagine that there is some iron-clad "Washington consensus" of neo-liberal policies imposed upon developing countries (and non-American developed ones) by financial markets and international financial institutions.

For one thing, there's always been less consensus in the consensus than its opponents like to believe.

There are plenty of people who buy into the broad outlines of a market-led programme, for example, without signing on to either financial market liberalisation or the free flow of capital.

John Williamson, who invented the phrase "Washington consensus", never intended it to include capital flows, and Jagdish Bhagwati - a fundamentalist when it comes to free trade in goods and services - has long argued that capital flows raise different issues.

Why have the Europeans (say) been so pathetic at convincing the world that their model is the right one to follow?

Moreover, not just the World Bank and the IMF but private financial institutions now appreciate - as perhaps they did not 10 years ago - that non-economic matters like healthcare, access to education (especially for women), democracy, transparency and old-fashioned infrastructure projects, are all vital to development.

I don't hear the simon-pure, market-and-nothing-but-market voices raised as loudly as I did in Washington in the late 1980s.

Second, accepting your point that safety nets and universal health care systems are human goods, isn't there a genuine question of sequencing?

The Bismarckian (or Lloyd-Georgian) social welfare reforms that Europeans are (very rightly) proud of came after the development of domestic markets, and there is surely a reason for that.

Social welfare projects are expensive; an economy needs to have developed to a certain degree before they can be afforded.

My third point is of a different nature. Let's say that you are right, and that by some strange process (that I don't really understand) the American version of globalisation has swept all before it.

And let's say that you're also right in your implication that there is a "better," more humane version of globalisation out there.

My question is: Why have the Europeans (say) been so pathetic at convincing the world that their model is the right one to follow? Why have the Americans swept all before them? Or am I wrong in thinking that you think they have?

All best as ever,

Dear Michael,

Good reply - as I expected. I took short cuts in 200 words but my answers are these:

Firstly, the Washington consensus has become more sophisticated, I grant you, but the same themes remain at its core.

There is a manic distrust of the public sector, a celebration of the private and a belief that countries industrialise through market-led policies alone.

Taxation to pay for education and health is abhorred.

Aid budgets have fallen, reversed only partially by 11 September, access to western markets remains difficult and we invite developing countries to grow as if they were developed countries.

Globalisation has been primarily shaped by American conservatism

The IMF remains unreconstructed - essentially an arm of the US Treasury. Telecoms liberalisation for example (the precondition for the bubble), was forced on the rest of the world by US trade diplomacy.

Globalisation has been primarily shaped by American conservatism.

Secondly, I infer from this that you are for sweated labour, no child protection and a Hobbesian world of all against all.

Welfare states and minimum standards will vary according to wealth - but the principle must stand, surely?

Thirdly, Europeans have a crisis of confidence, wrongly in my view.

The American model has seemed charismatic, job-generating and all-conquering.

It certainly has advantages, but the US is not so strong as widely believed. Control of most of the main avenues of communication and near idealisation by the financial markets are helluva advantages!

I rest my case - in 200 words!

All the best

Dear Will,

You make me sound like a Gradgrind stamping on the face of the poor of Coketown! You know I'm not, but in any event, here are my thoughts on your latest.

First, we're not going to agree on the extent to which the US is gripped by a rabidly conservative, devil-take-the-hindmost mindset.

I don't think that's the country I live in, though I admit that I sometimes have doubts.

Whenever I think that the US has gone completely selfish and inward-looking, all I have to do is to speak at a church or school or college where people are more engaged in the rest of the world, more sensitive to global issues, and more generous with their time and money in trying to ameliorate them, than I have ever known before.

And I've been living in the US on and off for nearly 30 years.

Whenever I'm in Paris or Hamburg, I don't look around and think "Hmmm; what a failed model"

Second, no, of course I'm not for sweated labour and the rest. But I do think that it behoves us all to have a sensible set of expectations about what degree of social expenditure and social protection can reasonably be afforded at any particular stage of development.

Third, you're the expert on Europe's lack of self-confidence.

It beats me. Whenever I'm in Paris or Hamburg, I don't look around and think "Hmmm; what a failed model."

The world would be a better place if Europeans (and Canadians, actually) were "noisier" about the successes of their economic and social institutions, but, somehow, they leave it all to the US.

We're all - and I include those of us who live in the US - worse off as a result.

All best, as ever

What The World Thinks of America was broadcast in the UK on BBC Two on Tuesday, 17 June, 2003 at 2100 BST.

You can also watch the programme again from this website.

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