Mike Moore became director-general of the World Trade Organization just as the international trade group was entering a period of tumult. One of the first WTO events he presided over was the 1999 Ministerial Conference in Seattle, which was marred by large-scale rioting. But the talks behind closed doors were equally turbulent, as delegates from developing countries left resentful over agricultural trade tariffs with Western countries. Moore sought to make future WTO conferences more inclusive, and during his tenure the organization expanded its membership to include China. Moore was no stranger to tariff talks, having previously served as New Zealand’s overseas trade minister. The position was among a succession of posts in Moore’s nearly 40 years in New Zealand politics, culminating in his role as the country’s 34th prime minister. Moore is also the author of several books, the latest being Saving Globalization, a defense of liberal democracy and the integration of world economic and social policies. In an interview with Arabic Knowledge at Wharton, Moore said that the global order of countries is becoming more inclusive, and that as the world recovers from the latest economic downturn, democratic capitalism has proven it is not dead yet.
An edited transcript of the conversation follows.
Arabic Knowledge at Wharton: One of the big topics of conversation, which I believe you spoke about at the Festival of Thinkers in Abu Dhabi, is whether we are indeed being too optimistic about the economic recovery. We’ve seen some really positive headlines about increased production output and there’s been a lot of thought about seeing the initial signs of recovery, if we are not already in recovery. What are your thoughts about that?
Mike Moore: Well, there is a recovery underway. The figures don’t lie. The question is, ‘How sustained is it?’ But the world, I think, roughly did the right thing, if we accept the premise this was the greatest economic collapse, potential collapse since the 1930s; if you accept that, the world responded to it [in a way that was] almost the mirror opposite of the Great Depression.… Everyone said we have got to stimulate; some did it by tax cuts, some by government expenditures, some did it by borrowing. There will be people complaining that the water to put the fire out has hurt the furniture. But you know, it’s only a year ago people were writing predictions that this was the end of democratic capitalism and the model of democratic capitalism had failed, and lot of ya-de-dah-de-dah. Well, sorry, it hasn’t.
Arabic Knowledge at Wharton: So are we out of the woods yet?
Moore: No, of course not.
Arabic Knowledge at Wharton: And it is uniform, because there has been a sort of three-speed recovery, someone saying some countries are experiencing a U-shaped recovery, or a gradual rise, others are in a V-shaped recovery, which is more rapid.
Moore: And some are [in an] L [-shaped recovery], the "love" theory [in which an economy falls hard and then flatlines] …
Arabic Knowledge at Wharton: Exactly, exactly. You have heard about that?
Moore: Well, I think it’s probably true, but is that such a bad thing? I think it is a healthy thing. The world is not relying completely on America to pull us out of it again. And we have gone in 10 years from people seeing China as an economic threat, to worrying if China’s growth slows. This is healthy, not unhealthy.
Arabic Knowledge at Wharton: You have mentioned China, where there’s been a shift in thinking. Are we looking at a new world order or an economic order, with the G-20 rather than G-8, for example?
Moore: Well, I think these words are overblown. China has always been the world’s strongest economy, except for the last couple of hundred years. Their share of global merchandise is probably where it was 300 years ago. Politicians such as myself [overuse] words like "order" and "new world structures." The G-20 is obviously a more correct mechanism than the G-8, which is an embarrassment and has been for years.
Arabic Knowledge at Wharton: Why is that?
Moore: Because it didn’t represent the world as it is. I mean, some of our international structures are slightly embarrassing. I think it’s hard to justify Belgium having more votes at some of the international institutions than China. Give me a break, you know? And so they have to be rebalanced. The World Trade Organization is there. While there have been sporadic embarrassing and counterproductive protectionist measures, in [general] the system is holding firm. A lot of these [counterproductive measures] will go to disputes [at the WTO] and will either be settled or pulled back… Now, the question is, where next? We have more regulations on the export of kiwi fruit than we do on the export of capital. And we’ve got to be careful, I think, not to overcorrect.
Arabic Knowledge at Wharton: Do you think we are in close danger of doing that right now?
Moore: We are a bit, you know. I am a militant moderate, and militant moderates don’t make headlines. It’s the soaring speech: ‘We’ll fix it, the global new world order.’ And of course, there have to be international standards. I am a free market guy, but a free market without the WTO, without regulation, without transparency, without bankruptcy laws, without independent central banks, it’s not a free market; it’s a black market. And maybe in the financial sector, we had the white man’s black market, the white man’s underground economy.
And what is an underground economy or a black economy? It’s not transparent. You don’t know who owns it, or where it’s going. So some of my Asian and African friends, we’ve had some good laughs the last couple of years when we’ve seen the Western banking system act like some of the markets that people disapprove of. Of course, the Asians, some of them, understandably, [are] a little miffed. Because when they hit the wall and they had the Asian [economic] crisis, they were told not to stimulate, they were told to balance the books, they were told to remove the subsidies on palm oil, on rice, and on energy, creating riots in which people were killed and governments fell. Now they see the West doing the opposite.
Arabic Knowledge at Wharton: You’re sitting in a different region right now. It’s Abu Dhabi, in fact. And so what are you seeing in the United Arab Emirates, for instance, about the reaction to the downturn being in the recovery phase? Where do they fit in all of this?
Moore: The market has slowed; I mean, just look out the window. If you’re in Dubai, for the last 10 years there would be sparks as workers were building things. Of course it’s slowed. But this region’s slowing growth is probably still more than the growth my country has had on average for the last 25 years. There are some very smart things happening in this region. You have got to be careful, because I’m a little compromised. I want so much for this region to work. If it doesn’t work here, it doesn’t work. These are special places. These are little laboratories of change.
Arabic Knowledge at Wharton: But where are you seeing that?
Moore: Well, there are some very good governance issues in economic transparency, in economic liberty. The index has shown many of the emirates [states] have better commercial governance than some places in Europe. This is work in progress and people are edging there… What is it; [in the United Arab Emirates] you have 40% of the population under 20 or 50? Where in history have expats outnumbered local people? You know, given my culture, if there’s a problem you look at more democracy. Would it personally allow 500 million immigrants to come in 20 years, and invade? Of course it wouldn’t. I am a reckless, dangerous optimist always on these things. I can only see the good.
Arabic Knowledge at Wharton: Another area you just spoke about was protectionism. What’s your view as an optimist in terms of protectionism?
Moore: Well, the G-20 might condemn protectionism, but then they appease the little group here and there. This is naughty, counterproductive and humiliating for those who do it, because they know better. So far, it hasn’t been to the level of endangering the global economy. But here’s the thing: A lot of these decisions are illegal in terms of the agreements these governments have entered into. And so a lot of them will end up at the World Trade Organization in disputes. And then, of course, they’ll kick the WTO for deciding that this was illegal in terms of their agreements. [In March, a WTO panel found that four European governments provided French jetliner manufacturer Airbus with illegal aid that gave it an unfair advantage over its U.S.-based competitor, Boeing]. We can live with that. That’s a good thing to have the WTO for. When we say trade war breaks out, we don’t really mean that. We’re [referring to a] dispute settlement. But put too much pressure and throw a couple of hundred cases at the WTO and the [organization] would become stressed, and we don’t want the WTO to become like the League of Nations [a precursor to the United Nations, that failed to prevent the Second World War].
Arabic Knowledge at Wharton: Was the WTO like that when you were leaving it?
Moore: It’s getting worse, but it’s larger. The WTO is curiously democratic. There is no executive council. Any country can veto a consensus, so …
Arabic Knowledge at Wharton: Is that a strength or weakness?
Moore: Well, it’s how it is. I mean, sovereign governments must make the decision. If we reach an agreement, then every parliament must ratify it on that basis. It is a binding dispute system. No country has ever refused to implement [a decision] eventually, through this drawn-out process. The dispute system is very civilized. I just don’t like to see the thing stressed out too much. It could spin out of control. It could, but it hasn’t yet.
But here is what’s happening: Because the Doha round was just too hard we have had an explosion of bilateral and regional deals. [The current WTO trade-negotiation talks aimed at lowering global trade barriers began in 2001, in the Qatari capital of Doha, but have been stymied over trade disputes, such as agricultural import rules]. And if I were a minister I would be [making similar deals]. But here is the thing … they are preferential trade deals. They give new privileges. They create trade diversion. They do not handle the real tough issues in agriculture that are normally postponed. They create new rules of origin. There’s no dispute system, but we do it. So trade is liberalizing anyway. But you know who is missing in some of these pictures? No America, no Europe.
The APEC [Asia Pacific Economic Cooperation] goals that we proudly proclaim, the new order –and I think I was responsible for this a little bit –we announced the Bogor trade goals of APEC [An agreement committing developed countries to achieve free trade and investment by 2010, and setting a deadline of 2020 for APEC’s developing countries]. Whoops, I think we might have overshot by 50 years. Overall, I think the system is holding together. It will be a splendid thing, if we could conclude this trade deal. But this means political costs, and the rich and the privileged, and the powerful and wealthy countries, and poor countries conspire to protect their interests against the consumer, against the worker.
The great moral issue of our age … has to be how to bring another billion people into the global economy, as citizens, producers and consumers. The poor can save the rich, yet again, if we empower them with citizenship and empower them as producers and consumers. You know, we have produced more wealth in the last 60 years than the rest of history put together. These are big things. Half a billion people [have been] lifted out of extreme poverty. These are not small things. Sit at a table and people will be moaning about the European Union. Well, the European Union is clumsy, and I don’t like its agriculture policy, but those great tribes haven’t been at each other’s throats for a while. When the French are asked who their best friends are, they now say the Germans. The Germans say the French. This is not a small thing now.
Arabic Knowledge at Wharton: The phrase that’s been used a lot is globalization, and that’s certainly the subject of the book that you just recently published, Saving Globalization. Why does globalization need to be saved, and from whom? Why do people hate it so much? You go to any G-20 meeting, and every city that it’s held in there invariably will be riots. So what’s going on there?
Moore: Well, firstly, it’s a provocative title, and I do tend to tap people on the chest with my finger when I am talking. But my case is, it’s a force, it’s a process, it’s not a policy, it’s been going on forever. It’s not new. It’s accelerating. It’s slightly more democratic. Can it be stopped? Not really. Ever since man stood up and looked over the horizons, he’s moved, traveled, traded [and] he’s done these deals. Can it be slowed? Yes. August 1914 [the beginning of World War I], fascism, Marxism slowed it, but it’s a process.
Arabic Knowledge at Wharton: Did we just slow it down just recently as well, in the past 18 months or so? Is that a bad thing necessarily?
Moore: Well, what’s the opposite of globalization? De-globalization. And what’s de-globalization? That’s a recession, that’s a depression. And what’s the most dangerous thing that comes out of these recessions and depression? It is the ugly unpleasant side of human nature, economic nationalism, violence, tribalism [and] protectionism.
Arabic Knowledge at Wharton: Even if people aren’t equating it with those forces, globalization still has numerous critics.
Moore: It’s a bad word, globalism. If you say "internationalism," it might float a little better… You know it is what it is. It’s a process. It’s not some Wall Street or City of London jack-up, [or] some gnomes like Mini-Me and Dr. Evil stating, "Right, we are going to conspire against the world."
Arabic Knowledge at Wharton: But do you think there is something going on with corporate business and political leaders, a need to be doing something to change the profile of globalization so that it can accelerate or gain momentum?
Moore: Actually, research shows that in the poorest parts of the planet, in India and in Africa, these are the people who support globalization the most. That the most de-globalized places are the darkest, most unpleasant places, [such as] North Korea [and] Burma, the closed societies, and those who oppose it have no real [alternative] model to hold up. [But] unless domestic governments have policies at home of social security, of social cohesion; the work force will feel threatened [by globalization]. And that’s why workers in the United States are very suspicious, because if they lose their job, they lose their pension [and] their health insurance. Whereas workers in Sweden know there are safety nets, restructuring money, and they are more comfortable with economic integration.
You can’t blame working people [for feeling] threatened. It’s hard to explain theories [of globalization] … to some 55-year-old meat worker who has been thrown out of work in New Zealand. He tends to get a bit concerned.
So my title is provocative. I spend a lot of time in the book talking about how the premiums of education and the premiums of intellectual property now rule; the genius of the limited-liability company, and how to share wealth. And I come down on the new enemies of reason, logic and evidence. The right wing ignores evidence on stem cell research. The left wing doesn’t want read any evidence on [genetically modified] foods and [that is] car-sticker, radio-bite politics that just won’t do for the modern world. And so that’s the case I tried to establish.
Arabic Knowledge at Wharton: I want to back up and explore a bit about what compelled you to write this book now. What sort of work and research went into it, and in that process what did you learn along the way?
Moore: [After] 40 years of being in active politics, trade unions and business, and about five years putting it together, I guess, essentially, I am a bit of a know-it-all and a show-off. And I just wanted to put this down –the global crisis enabled me to focus and tidy some of it up and get it down.
Arabic Knowledge at Wharton: Did you learn anything new along the way?
Moore: Oh, every time. Unfortunately, every couple of years, Lord John Maynard Keynes, the great economist, was cornered by the "gotcha" press, and they said, "Lord Keynes, you may well say that [now], but 10 years ago you said the opposite." It’s the question that politicians dread. And Keynes said, "You’re right. I have changed my mind. When the evidence proves I am wrong, I change my mind. What do you do?" What a great answer. And there are things that change your mind and there are situations –I am from a generation, despite free Internet and free fax machines, that I still use a fountain pen. You know the society has changed. I don’t think my principles have changed. What my objectives are and how we get there does change.
Arabic Knowledge at Wharton: In what way?
Moore: I love books; I’ve got a huge library. But I seldom have time to go and read them, because I can find the book on the Internet. [It’s efficient], it’s fantastic. Here’s the thing: Now, in American terms, I am a [Daniel Patrick] Moynihan Democrat, right?
You come into politics, you want to improve the lot of your people and, you know, a lot of people need someone to love, somewhere to live, somewhere to work [and] something to hope for; I still believe that. But I now believe people need something to own, something to lose and something to pass on. And in our countries, and in poorer countries, if people haven’t got anything to lose that’s when others offer them a different vision of society, and these religious fundamentalists, political fundamentalists, racists, intolerants, [that’s why] we see these in all of our societies…
There are a lot of people who need somebody to blame. And whom do we blame? It’s the Chinese for putting me out of work. It’s the Australian banks that closed my business down. It’s the American imperialists. It’s the Arabs and their oil prices. Anybody but myself [is] whom I can blame. And there are a class of politicians who are nasty, who manipulate this in all our societies. And this kind of economic nationalism always leads to something more fundamentally dangerous. It will end with the burning of sparrows and books in the night. We have learnt all this. In the main, we can expose these people, but you have them and I have them.
Arabic Knowledge at Wharton: Do you think you are doing enough to change or to combat those people?
Moore: I think that I have, you know. I am a true believer and I come at this from a social justice point of view on how democratic capitalism can spread virtues [including]personal ownership of business, personal ownership of time and funds … health insurance … but these are things that make a mature democracy. Globalization doesn’t mean one football team; it needs not to be boring. In fact, if you have a look at it, three quarters of the countries in the United Nations didn’t exist 50 years ago. So much for the death of the nation state. Languages are almost dead in my country… People are fundamentally better and getting better with every generation.
Arabic Knowledge at Wharton: You are an optimist.
Moore: You know, in our parents’ time we shot lions and cut their heads off, and put them on the wall. I mean, imagine if you did that now?
Arabic Knowledge at Wharton: Let’s fast forward to 10 years from now. Think about you and your role personally, but also about globalization. How would you define success?
Moore: You will notice with our brothers and sisters [in developing countries] and see what’s happening with their life expectancy, childbirth, and education and whether or not in the next 10 years we can do what we did in the last 10 years by putting three or four hundred million people back into the global economy.
Those poorest countries that have the lowest life expectancy and the most unpleasant people running them, are those that are the least globalized? I heard some say, "Oh capitalist greed is wrecking the environment." [There is] a bit of truth to that. But there is also such a thing as Communist greed, and Fascist greed, and the worst environmental outcomes were in the Fascist and Communist, centrally controlled countries. Who’s got the better environmental record, South Korea or North Korea, Thailand or Burma? And having a vote is only one part of democracy, you know. [There is also] the rule of law, independent courts, property rights, and freedom of, and freedom from, religion. These are also parts of democracy, and for the first time in human experience more than half the people in the world can choose their government. It’s not happened before.
Arabic Knowledge at Wharton: Well, you are an optimist then.
Moore: You’re right. You know, I was in a Chinese university, [and] this kid was six feet [tall], and I said, "You’re going to be playing rugby," and we talked about it. And diet is not a small thing — he explained that his [older] brother is five-foot-four or something because he was born during the Cultural Revolution. His parents were only five feet tall. Life expectancy, education, literacy, childbirth ratios, I think these are good measurements. Now, how do we take the story in China and India and put it into other places and balance the environmental factors such as the use of water, energy and pollution?
Arabic Knowledge at Wharton: One final question. Is there anything in your career that you would do differently if you could go back and redo something?
Moore: I think I would make all the mistakes again, but probably sooner and get it over with.
Arabic Knowledge at Wharton: Such as what?
Moore: I would like to have, in terms of my own country, gone to more compulsory saving systems for individual accounts. And, you know, a collective and compulsory system, individually owned and all that, and I think there is a lot more that we could have done in education than we have done. But you know, these are matters of scale, these are not huge things. On the international scene, my low point was Seattle, you know. I was the WTO director general [ during the 1999 WTO Ministerial Conference in Seattle, which was forced to end early by mass riots
Arabic Knowledge at Wharton: Was there something you could have done differently though?
Moore: Yeah, I think I must accept my share of that responsibility. There is enough blame for all of us, but I take my share. We got China up and through. Now imagine if China was not on a rules-based system, and every year China had to go along to the U.S. Congress or to my parliament, and say, "Oh, will you please let us have the same trading respect and systems as every other country?" And some politician says, "Ah, you know that would be a very dangerous thing." So China is part of it, and the main is abiding by its rules and where it’s not, they get slapped inside the system. There are some problems in implementation in some of the intellectual property areas. But here is a thing about intellectual property: China now has the second-most patents pending. [That’s a] big thing…
I am heartbroken that the Doha trade round has taken so long. I mean, for those who protest against the system, I do hope they realize that if we continue to block it, all that does is lock in yesterday’s injustices, and every agreement is really yesterday’s compromise in the best endeavors… If the deal were struck [to reduce Western tariffs on African exports] it would provide returns to Africa up to five times more than all the aid and overseas development and debt write-offs put together just in agriculture. It’s not a small thing. It’s a big thing.