Too much, perhaps, has been written about the riots last week that interrupted the World Trade Organisation (WTO) in Seattle. Rather dim-witted anarchists, who buy laptops with Microsoft software and access the Internet in order to organise the insurrection, then fly private-sector airlines to Seattle to fight “international capitalism”, should really be denied the oxygen of publicity.
Similarly, commentators who make comparisons with the anti-Vietnam war demonstrators of the Sixties or the Boston Tea Party of the Eighteenth century shouldn’t have the embers of simplistic interpretation fanned by further commentary here.
Shouldn’t have, but OK, I can’t resist. To nail those comparisons: the Vietnam protests were a single-issue phenomenon, while the Seattle demonstrations last week were as multimotivational as a London “countryside” march. The Boston Tea Party was not a courageous blow by early “Americans” against socially-oppressive trade tariffs, but a bunch of expat spivs sabotaging the East India Company to protect their own smuggling activities. This was an act of early trade protectionism that the WTO, had it existed, would have sought to prevent.
Herein lies my point. The Seattle demonstrations were symptomatic not of post-modern youth’s idealism or even re-emergent anticapitalism, but of growing frustration at the lack of control – or call it regulation – that can be exercised over the globalisation of trade.
That’s a sweet irony. If I’m right, today’s “hippies” don’t want us to “make love, not war”, or to dismantle bread-head capitalism. Far from it – they’re control freaks and closet regulators. These are not freedom-fighters as their parents’ generation professed to be – they don’t like free trade precisely because it’s free. And that is a far more dangerous attitude for the preservation of peace into the next century.
This is an attitude partly driven by the politics of envy. Animal Farm shows how the liberated begin to emulate their former masters. The Internet now functions like that, moving from a means of liberation to an exploitative tool for the new rich. It started its ascent into mainstream commercial life less than a decade ago, and was imbued with the kind of global bonding values that Lord Reith had in mind for the BBC with his biblical invocation that “nation shall speak unto nation”.
Instead, the Internet is fast developing into a wealth-creator for a new financial superclass. The speed and size of the fortunes being earned make old dynasties such as the Rothschilds or the Rockerfellers look like stick-in-the-muds. I heard at the weekend of a financial Internet portal that received an offer from the US on the day of its launch. In Silicon Fen – Cambridge to you and me – they talk of going “post-economic” by the age of 30 with ten-figure fortunes.
A German Internet service provider called Freenet.de floated its shares last week and they rocketed to a 240 per cent premium in the first hours of trading. In the UK, Freeserve’s astonishing rise continued with a 70 per cent increase in its market capitalisation over 48 hours last week. While we celebrate the wealth being created, let’s not make the mistake of thinking that, just because these are nerds with technical degrees, they are not fomenting a different kind of them-and-us attitude to that of their forbears who created fortunes in railroads, oil or cotton-mills.
Then there is the related phenomenon of globalisation. Information technology has enabled the global revolution in trade. Truly global companies (Microsoft, McDonald’s, Sony) operate truly global brands and are advised by truly global advisers (Goldman Sachs, KPMG, Omnicom). But, far from bonding the planet’s traders, the process is dangerously divisive in two respects (which I suspect the WTO recognises).
First, stripped of the need to behave in a geocentric manner by the info-tech explosion, the cultural differences between multinationals are laid bare. For example, there can be no excuse, at the conclusion of this century, for there not to be a fully integrated US/European defence industry – yet ask Raytheon or Lockheed Martin whether a fortress Europe mentality persists, or BAe or GEC Marconi whether there is a fortress US equivalent, and they’ll tell you how protectionist their rival market is.
Second, the flexibility of sourcing not only product, but labour, is both an opportunity for multinationals and a threat to social order. If that sounds alarmist, look at the differing employment characteristics in the euro-zone between, say, Stuttgart and Salerno.
The only conclusion is that globalisation must be burdened with regulation. They may not know it, but that’s what the Seattle demonstrators want. We can’t as yet effectively regulate the Net, but we can regulate transnational employment flexibility.
The question is whether we want to. As the WTO knows, there are 60 per cent more jobs in the US than in 1970 and 2 per cent fewer in Europe. Part of the cause of that is the deregulatory employment climate in the US. But to deregulate on a global scale (and our Government’s acceptance of European Union directives would imply that we are not deregulating), is to encourage more of the scenes that we have witnessed in Seattle.
Politicians won’t sort out this conundrum. That task falls to global traders, whether represented by the WTO or not. Otherwise, we’re in for big trouble in the next century.
George Pitcher is a partner of issue management consultancy Luther Pendragon