WEBVTT - Branko Milanovic on What Comes After Globalization 0:00:02.720 --> 0:00:13.960 Bloomberg Audio Studios, Podcasts, radio News. 0:00:18.079 --> 0:00:22.000 Hello and welcome to another episode of the Odd Lots Podcast. 0:00:22.079 --> 0:00:24.360 I'm Joe Wisenthal and I'm Tracy Alloway. 0:00:24.520 --> 0:00:24.920 I have a. 0:00:24.880 --> 0:00:28.000 Personal question for you this time. All right, do you 0:00:28.040 --> 0:00:31.639 think of yourself as like a member of the global elite? 0:00:32.280 --> 0:00:34.400 Like are you? Do you consider yourself elite? 0:00:34.520 --> 0:00:38.000 I probably should in some ways, because I think a 0:00:38.040 --> 0:00:40.080 lot of people would say someone who grew up in 0:00:40.120 --> 0:00:45.040 different countries, went to international schools, went to I guess 0:00:45.040 --> 0:00:49.640 a high profile university now works in the liberal media, 0:00:49.920 --> 0:00:53.080 as people would say, would be like a classic elite. 0:00:54.240 --> 0:00:57.520 But does anyone ever actually think of themselves as the elite? 0:00:57.640 --> 0:00:57.720 Now? 0:00:58.040 --> 0:01:01.160 I try to, you know that it could maintains journalistic unbiased. 0:01:01.160 --> 0:01:03.360 And I would say, look, Jared, Tracy, they are clearly 0:01:03.360 --> 0:01:06.920 among the elite. They have good jobs at a Fortune 0:01:06.920 --> 0:01:10.600 five hundred company. They are among the most well educated 0:01:10.600 --> 0:01:14.720 demographic to ever exist in history. We get to work 0:01:14.720 --> 0:01:17.040 in a nice air condition of office, et cetera. On 0:01:17.080 --> 0:01:18.880 the other hand, you know, I could say, like, look, 0:01:19.400 --> 0:01:22.919 that's nice. The real elite are big tech CEOs, et cetera. 0:01:23.360 --> 0:01:26.120 But I look, I think everything's relative. 0:01:26.200 --> 0:01:29.480 I'm we're an elite, I think objectively speaking, but I 0:01:29.480 --> 0:01:32.600 also think I've been I was thinking about this. There's 0:01:32.680 --> 0:01:36.960 really three big things that I think are like if 0:01:36.959 --> 0:01:38.959 we think about the second the rest of our lives 0:01:39.040 --> 0:01:41.880 or et cetera, Like three really big things that would 0:01:41.920 --> 0:01:44.360 like cause me to have sort of like. 0:01:44.640 --> 0:01:47.440 Elite status anxiety go on. 0:01:48.120 --> 0:01:50.320 Well, one of them is AI because we don't know 0:01:50.360 --> 0:01:52.600 what it's going to mean for our literal jobs or 0:01:52.640 --> 0:01:55.040 the companies we work for, et cetera. That's a really 0:01:55.200 --> 0:01:58.400 big one. Domestic politics. I think, like you know, I 0:01:58.440 --> 0:02:01.440 think we're living in the United States, domestic politics feel 0:02:01.560 --> 0:02:05.120 like they continue to go off the rails in various 0:02:05.120 --> 0:02:07.840 ways that could impact a lot of things. And then 0:02:07.920 --> 0:02:11.480 I think, unfortunately, maybe I'll change this one day. I 0:02:11.480 --> 0:02:15.200 don't speak Madron, and if all of the interesting markets, 0:02:15.280 --> 0:02:18.640 finance news, if that becomes like the center of economic 0:02:18.720 --> 0:02:21.960 activity in like some really big way people talk about 0:02:21.960 --> 0:02:25.280 the China shock that they mostly are talking about sort 0:02:25.280 --> 0:02:28.600 of rustbelt manufacturing, there's like a China shock for like 0:02:28.680 --> 0:02:33.520 sort of service level financial services, et cetera. I don't think, 0:02:33.639 --> 0:02:36.040 like you know, I don't think I would have as 0:02:36.160 --> 0:02:37.839 much to contribute in that world. 0:02:37.639 --> 0:02:39.880 You won't need to learn Mandarin, Joe. You can just 0:02:39.880 --> 0:02:40.720 just use AI. 0:02:41.040 --> 0:02:44.920 You know, have you seen the AI translator gadgets I have? 0:02:45.040 --> 0:02:46.680 Yeah, some of them are really good. 0:02:46.760 --> 0:02:48.720 Yeah yeah, And like you had these things, there's two 0:02:48.880 --> 0:02:51.400 sides of a screen and you're just talking then for 0:02:51.440 --> 0:02:52.120 the other person. 0:02:52.320 --> 0:02:52.720 Yeah. 0:02:52.760 --> 0:02:55.240 But setting that aside, I don't know how well that 0:02:55.240 --> 0:02:57.440 would work on the podcast or video medium. 0:02:57.720 --> 0:03:00.760 I gotta say I still watch ninety Day Fiance now 0:03:01.680 --> 0:03:06.120 no Go Americans dating and marrying foreigners from abroad, and 0:03:06.160 --> 0:03:08.960 there are a lot of translation apps on that show, 0:03:09.680 --> 0:03:11.680 many of which go very very wrong. 0:03:11.800 --> 0:03:15.160 So anyway, anyway, on this last point though, I think, 0:03:15.520 --> 0:03:18.880 like we know that probably start certainly with like the 0:03:18.919 --> 0:03:22.079 first Trump administration, sort of like US, China attention has 0:03:22.639 --> 0:03:25.880 been sort of on this linear increase. It probably accelerated 0:03:26.200 --> 0:03:29.400 during COVID, and it's clearly spread beyond the US. It 0:03:29.480 --> 0:03:31.840 just gets seems to get more intense by the week, 0:03:32.120 --> 0:03:37.160 including in Europe, where I think China anxiety the loss 0:03:37.200 --> 0:03:41.240 of like industrial competitiveness has now really become top of mind, right, and. 0:03:41.240 --> 0:03:43.720 It's even broader than China. I mean, we've spoken about 0:03:43.760 --> 0:03:46.440 it on the show but it seems like there's a 0:03:46.480 --> 0:03:51.720 real nationalism to economics nowadays. Because of the pandemic, because 0:03:51.760 --> 0:03:54.680 of the war in Iran now and various other disruptions 0:03:54.680 --> 0:03:58.320 that we've seen, governments are really focused on building up 0:03:58.320 --> 0:04:02.040 their own supply chains, building up their own manufacturing bases, 0:04:02.080 --> 0:04:05.360 their own critical resources, and all of that. So everyone 0:04:05.400 --> 0:04:08.160 seems to be trying to bring things in house, which 0:04:08.560 --> 0:04:12.040 at the moment largely means taking things away from Asia. 0:04:12.200 --> 0:04:14.720 Yeah, that would be the goal, right, they want to 0:04:14.920 --> 0:04:15.960 replace these things. 0:04:16.080 --> 0:04:20.680 Anyway, I think, as you know, forty, I'm about to 0:04:20.680 --> 0:04:21.560 turn forty six. 0:04:21.680 --> 0:04:24.160 So maybe if I'm lucky about halfway through my life, 0:04:24.200 --> 0:04:26.640 I would say the first half of my life I 0:04:26.760 --> 0:04:30.080 have benefited a lot from the certain order of things, 0:04:30.320 --> 0:04:32.599 And when I look around the landscape, I would say, 0:04:33.120 --> 0:04:35.600 I am not so sure that the order from which 0:04:35.640 --> 0:04:39.479 I've enjoyed many fruits and privileges is going to be 0:04:39.720 --> 0:04:41.440 as durable in the second half. 0:04:41.480 --> 0:04:43.360 Sure, got sare okay, So. 0:04:44.400 --> 0:04:47.040 We should talk about what were these fruits and privileges 0:04:47.080 --> 0:04:50.400 that we enjoyed, and perhaps what would a new sort 0:04:50.440 --> 0:04:53.160 of order in which some of these arrangements from which 0:04:53.200 --> 0:04:54.920 we've benefited, If they change. 0:04:54.960 --> 0:04:56.520 What could some of this look like in the future. 0:04:56.960 --> 0:04:57.960 All right, well, I'm very. 0:04:57.880 --> 0:05:01.280 Excited to say we really do have the perfect guest, 0:05:01.520 --> 0:05:04.360 someone we wanted to talk to for a long time, 0:05:04.520 --> 0:05:06.520 someone whose work is right in. 0:05:06.400 --> 0:05:06.919 The heart of this. 0:05:07.000 --> 0:05:09.640 We're going to be speaking with Franco Milanovitch. He's a 0:05:09.680 --> 0:05:12.720 research professor at the Graduate Center at CUNY, the City 0:05:12.800 --> 0:05:15.400 University of New York, and he is also the author 0:05:15.800 --> 0:05:17.760 of a new book came out this year, The Great 0:05:17.760 --> 0:05:22.039 Global Transformation to the United States, China and Remaking of 0:05:22.080 --> 0:05:25.719 the World Economic Order. Professor Milanovitch, thank you so much 0:05:25.760 --> 0:05:26.799 for coming on. 0:05:26.960 --> 0:05:28.640 Thank you very much for having me, it said, it's 0:05:28.680 --> 0:05:29.159 a pleasure. 0:05:29.560 --> 0:05:31.960 What was the goal going into this new book. Well, 0:05:32.000 --> 0:05:33.320 I write a new book right now. 0:05:33.400 --> 0:05:33.599 You know. 0:05:33.800 --> 0:05:35.720 In to some extent when I finished the book, I 0:05:35.760 --> 0:05:39.920 thought the goal was basically to write and to write 0:05:39.960 --> 0:05:41.000 an autobiography. 0:05:41.520 --> 0:05:43.000 Okay, that could. 0:05:42.760 --> 0:05:45.280 Sound strange because there is very little love that book. 0:05:45.720 --> 0:05:48.679 But I covered the period from nineteen seventy four. Actually, 0:05:48.680 --> 0:05:50.520 I started the book in nineteen seventy four with the 0:05:50.520 --> 0:05:54.360 new international Economic Order and then how it failed and 0:05:54.440 --> 0:05:57.880 how then jonipolar moment came, and how the United States 0:05:58.080 --> 0:06:03.159 was not only the most public country economically, politically, militarily, 0:06:03.240 --> 0:06:06.920 but also ideologically. And how that order, which you might 0:06:07.000 --> 0:06:11.560 call near liberal globalization, is now expiring. And when I think, 0:06:11.600 --> 0:06:16.280 actually my entire life, I remember each of these four orders, 0:06:16.480 --> 0:06:20.520 and I'm now present at the birth of what they 0:06:20.520 --> 0:06:23.360 called national market liberalism, which I think, as you were 0:06:23.400 --> 0:06:27.159 saying before, is a new economic order where lots of 0:06:27.200 --> 0:06:32.039 activities would be brought back home and where external economic 0:06:32.080 --> 0:06:35.920 policies would be essentially mercantilistic and not free trade. 0:06:36.160 --> 0:06:39.080 Why do you call it national economic liberalism? 0:06:39.600 --> 0:06:41.880 I call it because I was thinking, actually if you 0:06:41.960 --> 0:06:46.840 define liberalism in the most general sense, or take also neoliberalism, 0:06:46.880 --> 0:06:50.240 which would not be very different. You have on domestic side, 0:06:50.240 --> 0:06:53.360 you have policies which are liberal policy is economically everybody 0:06:53.400 --> 0:06:57.039 knows that, you know, free pricing, competitions on. You have 0:06:57.200 --> 0:07:02.640 social policies which are about affirmative action egalitarianism in terms 0:07:02.680 --> 0:07:07.320 of personal identity. And then internationally you have policies on 0:07:07.480 --> 0:07:12.200 free trade, low tariffs, movement of capital, labor and goods. 0:07:11.760 --> 0:07:12.360 And so on. 0:07:12.760 --> 0:07:16.280 And finally you have an aspirational policy about the movement 0:07:16.480 --> 0:07:19.800 of the other factor of production labor that has never 0:07:19.880 --> 0:07:24.239 really happened, but aspirationally you can say, ideologically it is there. 0:07:24.720 --> 0:07:27.240 What is happening now is that we take this entire 0:07:27.560 --> 0:07:31.680 international part, chop it off and say, wait, these rules 0:07:31.720 --> 0:07:36.040 do not apply anymore. What applies now is essentially national 0:07:36.520 --> 0:07:40.040 sort of amercantilist policy. It's a policy of you know, 0:07:40.360 --> 0:07:43.640 bagger day lahbor to some extent, but certainly zero sum 0:07:43.680 --> 0:07:45.440 game or even a negative some game. 0:07:45.760 --> 0:07:46.880 It's entirely different. 0:07:47.240 --> 0:07:51.040 But domestically, I really see the administrations like Trump, Macron 0:07:51.080 --> 0:07:54.520 and others. I see them as essentially continuing with neoliberal 0:07:54.520 --> 0:07:57.760 policies domestically. So that's what I think. Actually, that's why 0:07:57.800 --> 0:07:59.920 I wented this new term. That was the kind of 0:08:00.120 --> 0:08:03.320 national liberalism. So it's not and do more precise national 0:08:03.760 --> 0:08:06.600 liberalism on the market side, not necessarily on the social 0:08:06.640 --> 0:08:07.480 side domestically. 0:08:07.800 --> 0:08:10.440 It's interesting you say something interesting in the beginning of 0:08:10.480 --> 0:08:12.520 your book where you talk about, you know, going back 0:08:12.560 --> 0:08:15.960 to the middle of the twentieth century, or maybe in 0:08:16.000 --> 0:08:20.920 the immediate wake of the Great Depression, to stabilize capitalism, 0:08:21.480 --> 0:08:24.360 we adopted sort of like the government got involved, we 0:08:24.720 --> 0:08:28.240 got we took in a little dose of socialism and 0:08:28.320 --> 0:08:30.880 that saved capitalism. And then you sort of kind of 0:08:30.880 --> 0:08:33.280 a joke you talk about like, okay, well the goal 0:08:33.400 --> 0:08:36.679 was maybe to you know, the sort of like post 0:08:36.679 --> 0:08:41.000 World War two era saved socialism and various by injecting 0:08:41.040 --> 0:08:44.559 some market element. And then there's like this in Yang 0:08:44.600 --> 0:08:46.760 effect that you sort of see where it's like two 0:08:46.880 --> 0:08:51.360 different systems adopt some element of each other in theory 0:08:51.520 --> 0:08:53.959 or that could have gone the way as a way 0:08:54.000 --> 0:08:55.480 of like bringing about stability. 0:08:55.840 --> 0:08:58.040 Well, that wasn't my idea. Actually I was brounk in 0:08:58.080 --> 0:09:00.640 that sense because I actually I in the very beginning 0:09:00.679 --> 0:09:02.840 of the book, as you know, in the introduction, I 0:09:03.000 --> 0:09:05.600 bring up my first book was published in nineteen eighty nine, 0:09:05.920 --> 0:09:07.760 and actually in the very first sentence of the book 0:09:07.800 --> 0:09:10.840 I mentioned it I ran into Jeff Sachs and David Lipton, 0:09:10.960 --> 0:09:15.800 whom I knew from work on Poland, and so I 0:09:15.840 --> 0:09:17.720 told them, well, I've got this book. And actually I 0:09:17.760 --> 0:09:20.800 gave the book to Jeff Sachs as a present. I 0:09:20.840 --> 0:09:23.440 found it in the bookstore, and then he said, okay, 0:09:23.520 --> 0:09:25.560 you have to write something. And I said to Jeff 0:09:25.600 --> 0:09:28.400 Sechs was trying to save socialism and Jeff kind of 0:09:28.440 --> 0:09:30.560 looks at me. He says, what are you talking about? 0:09:30.720 --> 0:09:33.080 And I remember these words exactly. He says, I'm trying 0:09:33.120 --> 0:09:36.920 to bury socialism, and I said, oh, why wait, And 0:09:37.080 --> 0:09:38.559 that's what I actually understood. 0:09:38.559 --> 0:09:39.559 The misunderstanding. 0:09:39.800 --> 0:09:43.960 For me, the introduction of market principles and market measures 0:09:44.320 --> 0:09:49.800 and privitization to some extent was exactly the same by analogy, 0:09:50.000 --> 0:09:53.760 what Caines did to save capitalism form Great Depression. You 0:09:53.840 --> 0:09:58.319 inject thoses of socialism in order to preserve the capitalist framework. 0:09:58.640 --> 0:10:00.839 So I thought the same would happen nineteen eighty nine. 0:10:00.880 --> 0:10:03.400 My big mistake. But I just wanted to mention that 0:10:03.440 --> 0:10:05.760 because I think it's a nice anecdote that actually we 0:10:06.440 --> 0:10:09.640 saw the same thing, but that saw them into different ways. 0:10:09.720 --> 0:10:13.440 But arguably that is a characterization of what did happen 0:10:13.679 --> 0:10:17.360 in China, particularly after Mile right. So I give this 0:10:17.360 --> 0:10:23.680 communist country, still communist, but clearly a country that has 0:10:24.120 --> 0:10:28.800 embraced I don't know about capitalism, but markets for sure 0:10:28.840 --> 0:10:30.600 in a very big way, maybe even better than us. 0:10:30.720 --> 0:10:31.680 No, I mean definitely. 0:10:31.720 --> 0:10:33.880 You can actually then translate what they said and said, well, 0:10:33.920 --> 0:10:36.400 maybe I was right, because I really meant China, but 0:10:36.480 --> 0:10:38.840 I did not in those days. I really meant Eastern 0:10:38.880 --> 0:10:41.560 Europe and the Soviet Union. China is of course a 0:10:41.679 --> 0:10:43.880 very special case, and of course I'm sure we'll talk 0:10:43.880 --> 0:10:47.200 more about China, but it is an example that again, 0:10:47.440 --> 0:10:50.800 fifteen years ago, nobody expected what has happened. And if 0:10:50.800 --> 0:10:53.120 people tell me they did expect, I just go back 0:10:53.120 --> 0:10:56.160 to what they wrote, and they caught Nobel prize, you know, 0:10:56.320 --> 0:11:00.200 prizes for writing that China would never technologically developed ten 0:11:00.280 --> 0:11:03.040 years ago, and then we see now the reality, which 0:11:03.080 --> 0:11:03.920 is entirely different. 0:11:04.520 --> 0:11:06.120 By the way, I'm going to get you to sign 0:11:06.400 --> 0:11:08.679 my copy of the book in the hopes that it 0:11:08.760 --> 0:11:12.000 makes it into the preface of your next piece of 0:11:12.040 --> 0:11:17.080 work anecdote. Yeah, okay, with a place like China, I'm 0:11:17.120 --> 0:11:19.720 glad you brought this up, because there's this weird tension 0:11:19.760 --> 0:11:22.920 in the way people talk about it as both an 0:11:22.960 --> 0:11:26.520 economic and security threat. You know, China is going to 0:11:26.520 --> 0:11:29.760 compete with us and it's going to get everything, et cetera, 0:11:30.520 --> 0:11:33.400 and then talk about it as a relatively weak country. 0:11:33.440 --> 0:11:36.040 In some ways, people still talk about it sometimes as 0:11:36.040 --> 0:11:38.440 a developing country or even you know, ten or twenty 0:11:38.520 --> 0:11:41.320 years ago, people would talk about the poor farmers. You 0:11:41.360 --> 0:11:45.040 hear less about that nowadays. How how would you explain 0:11:45.440 --> 0:11:49.320 like that the dual way that people tend to think 0:11:49.400 --> 0:11:52.120 and talk about China in terms of its threat to 0:11:52.160 --> 0:11:52.600 the West. 0:11:52.880 --> 0:11:56.040 Let me start first by rephrasing your question, because once 0:11:56.080 --> 0:11:59.280 you start speaking of the threat to somebody, then we 0:11:59.320 --> 0:12:02.640 are really no longer in economics as we studied it. 0:12:03.000 --> 0:12:07.040 We are now exactly in that world of merchantilistic into 0:12:07.120 --> 0:12:10.800 their national competition. And you know, it has actually sort 0:12:10.840 --> 0:12:14.520 of moved into our thinking without us even realizing. We 0:12:14.600 --> 0:12:16.600 give you an an anecdotables once on the show with 0:12:16.679 --> 0:12:19.120 very famous economists. I will not mention the name, and 0:12:19.200 --> 0:12:22.480 of course the topic was topic was China. And then 0:12:22.640 --> 0:12:25.040 he you know, we're talking about the general things about 0:12:25.240 --> 0:12:28.719 you know, wages, exports, import something like very general. We're 0:12:28.720 --> 0:12:33.560 actually general economic principles should apply. And then he suddenly says, no, no, 0:12:33.720 --> 0:12:36.480 but for us, the United States, it is bad. And 0:12:36.520 --> 0:12:39.760 I was thinking, wait, you're not in the government. I understand. 0:12:39.840 --> 0:12:41.760 I would understand if you were in a treasury. Yes, 0:12:41.800 --> 0:12:43.280 of course this is your duty to look up to 0:12:43.320 --> 0:12:46.440 the United States. But you, as a general economist, you 0:12:46.600 --> 0:12:48.920 have to think about whether it is good for the 0:12:48.960 --> 0:12:49.600 world or not. 0:12:50.120 --> 0:12:52.680 I think relative. 0:12:53.160 --> 0:12:55.280 But since we are now in this new world, what 0:12:55.360 --> 0:12:57.040 do I think about China. First of all, I have 0:12:57.120 --> 0:12:59.320 to tell you that, for example, what you see in China, 0:12:59.320 --> 0:13:01.600 actually it happened to me like a week ago. People 0:13:01.640 --> 0:13:03.760 are very much surprised when you tell them you're now 0:13:03.760 --> 0:13:05.840 a rich country. I mean when I say, okay, by 0:13:05.880 --> 0:13:08.319 the World Bank definition, Actually this is the real conversation. 0:13:08.720 --> 0:13:11.400 You are the upper middle class income country. And they 0:13:11.400 --> 0:13:13.280 are kind of surprised. And there was a woman who 0:13:13.320 --> 0:13:15.400 tells me, you know, I submitted a publication for the 0:13:15.520 --> 0:13:18.520 U and US Journal and I paid I think fifty 0:13:18.559 --> 0:13:21.360 dollars as a developing country. And they right back to 0:13:21.400 --> 0:13:24.280 me and say, no, you are now classified as advanced 0:13:24.280 --> 0:13:26.680 country and you have to pay one hundred dollars for 0:13:26.760 --> 0:13:30.400 the submission fee. But you know, this stuff is still 0:13:30.520 --> 0:13:33.120 very much present in China. I think Chinese do not 0:13:33.360 --> 0:13:37.120 see themselves by and large as a rich country. They 0:13:37.240 --> 0:13:40.640 speak of this as you know, officially moderately prosperous society. 0:13:40.920 --> 0:13:43.600 And I think it's a correct denomination, if you will. 0:13:43.920 --> 0:13:46.240 China is not France, it's not tally, it doesn't have 0:13:46.280 --> 0:13:49.640 the income level. But on the other hand, as you 0:13:49.800 --> 0:13:53.840 actually implied, technologically, it is at the level which is 0:13:53.880 --> 0:13:57.280 actually only similar to the United States, And that is 0:13:57.320 --> 0:14:00.720 that duality that we observe. You know, maybe the villages 0:14:00.760 --> 0:14:02.480 I have not been there, but I know that actually 0:14:02.559 --> 0:14:05.720 they are villages whare below two dollars per day. You know, 0:14:05.800 --> 0:14:08.800 we are absolute public in line. And on the other hand, 0:14:09.160 --> 0:14:12.280 we have them as a leader of the artificial intelligence 0:14:12.360 --> 0:14:15.280 so par You. 0:14:15.240 --> 0:14:17.440 Know, I think for a long time people of the 0:14:17.440 --> 0:14:19.080 West like didn't think about China. 0:14:19.080 --> 0:14:20.200 I mean maybe like people in the. 0:14:20.160 --> 0:14:22.120 Treasury or whatever, or in a few they didn't think 0:14:22.160 --> 0:14:26.400 about China very much. It feels to me like one 0:14:26.440 --> 0:14:28.680 of the remarkable things about the last ten years, and 0:14:28.720 --> 0:14:32.280 it literally has been ten years, has the whole West 0:14:32.440 --> 0:14:36.440 and the Western political economic unit. So it's like governments 0:14:36.440 --> 0:14:39.920 in Europe and obviously the US, and then as you 0:14:39.960 --> 0:14:42.200 say in your book, you might also as part of 0:14:42.200 --> 0:14:45.640 this Western political bloc might even incline to include like 0:14:45.960 --> 0:14:50.000 Korea in Japan. Has you travel around you were recently 0:14:50.000 --> 0:14:54.680 in Paris. Has everyone essentially come around in some level 0:14:54.760 --> 0:14:57.080 to where Trump was in twenty sixteen. 0:14:57.520 --> 0:14:59.680 Yes, I think basically that's the case, you know, and 0:14:59.720 --> 0:15:02.680 that actually, if I go back to my book chapter one, 0:15:02.960 --> 0:15:05.240 it is structured on two levels. We talked so far 0:15:05.280 --> 0:15:08.440 about the level, the first level, which is country's GDPs 0:15:08.480 --> 0:15:13.120 and countries importances, and of course China then suddenly starts 0:15:13.120 --> 0:15:16.720 playing a very important role there. But there is another level, which, 0:15:16.760 --> 0:15:18.560 of course, thanks to the world that I've done for 0:15:18.920 --> 0:15:22.240 thirty years on global income distribution, I also observe, and 0:15:22.360 --> 0:15:26.200 that second level is personal income level. What happens with 0:15:26.240 --> 0:15:28.880 the rise of Asia and China in particular is for 0:15:28.960 --> 0:15:32.720 the first time in two last centuries, you have lower 0:15:32.840 --> 0:15:38.080 parts of Western income distributions sliding down in global order. 0:15:38.440 --> 0:15:41.680 So if you are bottom decile in Italy, okay, you're 0:15:41.720 --> 0:15:44.560 not reached by Italian standards, but you know you're okay. 0:15:44.880 --> 0:15:47.960 In the world level, you're at the seventies percent all 0:15:48.000 --> 0:15:50.680 of the world thirty years ago. Well now you're at 0:15:50.680 --> 0:15:53.920 the fifty fifth percent. In other words, if Italy had 0:15:53.960 --> 0:15:56.760 qualified for the World Cup, that Italian would not have 0:15:56.800 --> 0:16:00.600 the money to come to watch Italy, but the money 0:16:00.760 --> 0:16:03.560 thirty years ago to come to watch Italy. So you know, 0:16:03.680 --> 0:16:09.640 there is this loss of economic position of individuals in 0:16:09.760 --> 0:16:12.880 Western countries so you know that the China thing plays 0:16:12.880 --> 0:16:15.560 on two levels. It plays at the level us rest 0:16:15.560 --> 0:16:18.120 of China or European Union, which is an abstract level 0:16:18.160 --> 0:16:20.600 of state versus state, but it plays at the level 0:16:20.720 --> 0:16:23.720 you against the Chinese guy. Yeah, and that I think 0:16:23.840 --> 0:16:25.680 is there. Actually, that's what I tried to bring in 0:16:25.680 --> 0:16:27.680 the book, these two levels, and I think it's important 0:16:27.760 --> 0:16:28.640 to have them in mind. 0:16:44.400 --> 0:16:47.120 I like the idea of measuring wealth in ability to 0:16:47.160 --> 0:16:48.640 watch World Cup games. 0:16:48.480 --> 0:16:50.320 It's internationally priced good, you know. 0:16:50.480 --> 0:16:54.480 Yeah, just going back to the idea of national market 0:16:54.600 --> 0:16:57.320 liberalism and pressing on the point you just made. I mean, 0:16:57.720 --> 0:17:02.400 the response to or the back against globalization in your 0:17:02.480 --> 0:17:06.600 description has been I guess, tearing down the liberal aspect 0:17:06.840 --> 0:17:11.720 of the international economy and international trade and not domestically. 0:17:11.800 --> 0:17:16.040 So domestically you still preserve, you know, large parts of capitalism. 0:17:16.480 --> 0:17:19.160 It didn't have to go that way, right, You could 0:17:19.200 --> 0:17:25.199 have had domestic changes in terms of income redistribution and 0:17:25.240 --> 0:17:26.960 things like that. Why do you think so much of 0:17:27.000 --> 0:17:30.679 it was just focused on the international order rather than domestically. 0:17:30.960 --> 0:17:32.719 You know, I don't know, but let me try to 0:17:32.760 --> 0:17:36.240 answer that question. You know, I'm very often asked, probably 0:17:36.240 --> 0:17:38.800 you would have asked if I don't bring it up first. 0:17:39.000 --> 0:17:40.320 That was the elephant chart. 0:17:40.359 --> 0:17:41.000 The elephant chart. 0:17:41.119 --> 0:17:42.080 Yeah, the great elephant chart. 0:17:43.520 --> 0:17:45.840 I was going to ask if you're annoyed every time 0:17:45.960 --> 0:17:47.800 anyone mentions the elephant chart. 0:17:48.200 --> 0:17:50.359 I'm actually part of it, but pill I have to 0:17:50.440 --> 0:17:52.440 use it, you know, the elephant chart with the show. 0:17:52.920 --> 0:17:56.560 Really the bottom line is okay, middle classes, so the 0:17:56.600 --> 0:17:59.320 West have not been doing well. Growth three to one 0:17:59.359 --> 0:18:03.199 percent random per capita not very well. The top of 0:18:03.240 --> 0:18:06.400 the Western distributions are doing very well, you know under 0:18:06.440 --> 0:18:09.440 Clinton especially, you know, three percent and more. And then 0:18:09.480 --> 0:18:11.600 of course China is doing very well. So you are 0:18:11.640 --> 0:18:13.960 sitting there, you are a government of the United States. 0:18:14.040 --> 0:18:17.159 Let's say you have two possible options. You have, Okay, 0:18:17.240 --> 0:18:20.040 we go for policies that would actually tax the rich, 0:18:20.280 --> 0:18:22.680 that would transfer the money, that would do I don't know, 0:18:22.800 --> 0:18:26.680 serious start of risk, killing of labor, public education because 0:18:26.680 --> 0:18:29.680 I come from public education, public education rather than private, 0:18:29.840 --> 0:18:32.280 get rid of all these fancy schools that are being 0:18:32.320 --> 0:18:36.919 bankrolled by billionaires and do a serious effort. Or you say, oh, look, 0:18:37.359 --> 0:18:40.760 China is like screwing us, so let's go after China. 0:18:40.920 --> 0:18:44.080 China is really benefiting because they are stealing property rights 0:18:44.080 --> 0:18:47.240 and they're doing this or that, and eventually the decision 0:18:47.480 --> 0:18:50.119 was made why it was made like that, but maybe 0:18:50.119 --> 0:18:53.360 politically it was more pragmatic or whatever. And I think 0:18:53.440 --> 0:18:56.640 that Trump twenty sixteen for me is the watershed here 0:18:57.000 --> 0:18:59.840 because many of the policies that Trump then imposed and 0:19:00.119 --> 0:19:03.280 regarding China that continued under Biden. They were done in 0:19:03.320 --> 0:19:07.320 a more maybe intelligent way, but basically they continued, and 0:19:07.359 --> 0:19:09.360 I think that was the change. And then after that 0:19:09.440 --> 0:19:12.159 we really have an acceleration in these policies. But you 0:19:12.240 --> 0:19:15.040 have a very good question. Maybe for political scientists, I 0:19:15.040 --> 0:19:17.399 don't know. It could have gone the other way. I 0:19:17.440 --> 0:19:20.119 totally agree it would have gone into more social democratic 0:19:20.320 --> 0:19:25.000 capitalism rather to go into this nationalist liberalist Yes. 0:19:25.000 --> 0:19:28.280 Yeah, because this is something I think about a lot, 0:19:28.359 --> 0:19:30.800 which is like, let's say we were like take back 0:19:31.480 --> 0:19:35.159 rewind the clock toll, like nineteen eighty nine or nineteen 0:19:35.240 --> 0:19:38.919 ninety two, and I always think to myself, like, I 0:19:38.920 --> 0:19:40.840 was nine years old nineteen eighty nine, so I didn't 0:19:40.880 --> 0:19:44.000 think about these things. But I always think to myself, 0:19:44.119 --> 0:19:45.600 like if I had been to say, like in my 0:19:45.800 --> 0:19:48.480 early in my career, in my twenties. In those years, 0:19:48.840 --> 0:19:53.160 I'd be like, oh, it's obvious, like liberalism or neoliberalism, 0:19:53.240 --> 0:19:56.200 one of those two. It's just like, it's clearly, it's 0:19:56.240 --> 0:19:59.680 clearly the way of the future. It's clearly supure. It's 0:19:59.760 --> 0:20:03.520 proof even itself in the decisive test against like which 0:20:03.640 --> 0:20:07.239 was the better model against the Soviet Union. Even to 0:20:07.280 --> 0:20:12.320 this day, I actually find it pretty remarkable the degree 0:20:12.480 --> 0:20:16.840 to which China held the line in that decade when 0:20:17.000 --> 0:20:20.480 everything was pointing to It's like, the question is settled, 0:20:20.520 --> 0:20:23.720 we know what's the better system. And now, of course 0:20:23.760 --> 0:20:26.280 we have lots of people questioning all the systems. But 0:20:26.359 --> 0:20:30.560 it's sort of remarkable to me that in the nineties specifically, 0:20:30.640 --> 0:20:34.159 you had like one country that not only didn't just 0:20:34.200 --> 0:20:37.320 sort of like embrace you know, re elections, et cetera, 0:20:37.520 --> 0:20:39.480 Like it didn't even ever seem to be to come 0:20:39.480 --> 0:20:40.240 particularly close. 0:20:40.440 --> 0:20:42.320 Well, I often think of the nineties. I was older 0:20:42.359 --> 0:20:44.600 than you and then, and I was then in Washington 0:20:44.680 --> 0:20:47.159 and working for the World Bank. You know, the neoliberal 0:20:47.240 --> 0:20:51.480