KM: We are looking at the G8 becoming the G20, it appears. Do you see that as a positive move or something worrisome?
JM: I think that is enormously positive. I think that if you looked at the challenges that Barack Obama faced when he came into office, I think the long-term ones were two. One is, does he save capitalism in some recognizable shape from what he actually got when he came in? That is the first one.
The second one is that, by the time that he leaves office, and let us give him the benefit of the doubt and assume that it is 2017, by the time that he leaves office, then whichever way you look at it, whatever numbers you run in whatever programs, there are countries like Brazil, India, China, Indonesia - these are going to account for a massively bigger amount of the world economy. If he has not somehow brought them into a broadly Western way, a broadly Western framework of running the world, then he will have failed. I think that it is literally that big. That will be held against Obama if he fails to do it.
It is partly a matter of institutions, it is partly a matter of G20 rather than of G8, UN security councils and all of those sorts of things, but it is also, I think, a matter of ideology, a matter of reselling something, because at the moment I think that many of those countries, when they think about American justice, they think about Guantanamo Bay, and when they think about American finance, they think about Lehman Brothers. There needs to be a twist to take it away from that. I do think that the G20 rather than the G8 is a big step forward.
KM: Brilliant. This has been Karl Moore, talking management for The Globe and Mail. Today, I have been speaking to the editor-in-chief of The Economist.
AFTERTHOUGHT: This week, I am continuing an experiment where I have asked two McGill MBAs to join me in reflecting on what was said during the course of the interview. This week, I would like to thank Jean-Pierre Croteau and Eric Lefebvre for their input as I prepared the following comments.
The definition of globalization offered by Mr. Micklethwait might be simple in words - globalization is the way ideas, people, goods and services cross borders - but this simplicity hides intricacies that challenge today's and tomorrow's leaders. The process is not new - some have traced the early beginnings of globalization back to the Roman Empire - and it has been the subject of intense scrutiny in the last three decades; however, the context in which globalization is happening has changed. In my experience, globalization seems to morph off in different directions on a fairly regular basis; this is partly why it fun to study it, because it never stands still. Mr. Micklethwait's belief is that globalization will ultimately result in more than just economic benefits, that it is a driver of human happiness. While we don't challenge the positives of globalization, it is the associated costs and externalities that need to be given greater thought.
What he is underlining are the changes that globalization has brought already, and the structural issues that leaders need to address in defining a new politico-economic framework; whether it is the emergent Washington-Beijing G2 or the more representative but difficult to navigate G20. He mentions the Westernization of emerging economies such as Brazil, India, China and Indonesia as the best option for the future, as well as a daunting trial that awaits the Obama administration. He correctly identifies two areas that Obama needs to address: American justice and finance. These must be addressed if Washington and its supporters want to convince and not coerce these emerging economies to join their ranks. This association between emerging and established economies will probably be achieved under new terms; otherwise, globalization's perception will tend toward neocolonialism. Emerging economies need to open up their markets if they desire foreign direct investment, but the successive crises of the last 20 years have found many of them to be selective in their openness, to protect their national economies, to try to remain self-sufficient and to disarm the superspecialization trap.
Whether they believe globalization fosters convergence or divergence, business and political leaders need to remain aware of the existing and coming changes that come with it. Globalization might be referred to as a concept or idea, but its effects are real and they offer incredible opportunities and potential global problems for savvy leaders, here and abroad.