Business Transformation Change Management

Globalization: "We must harness the energy of revolt"

Interview The bestselling book "The Revolt against Globalization" by the well-known Israeli journalist Nadav Eyal was recently published in German after many translations into other languages. We took his stay in Berlin as an opportunity to talk to the author about the paradoxes of the global economy and why we should hug its complexity.

"Let's fight for the rational age, because if we don't, it will disappear", says Nadav Eyal. Photo: Dani Bar Adon
"Let's fight for the rational age, because if we don't, it will disappear", says Nadav Eyal. Photo: Dani Bar Adon

Nadav, you say the age of responsibility is definitely over. Then what are we witnessing now – the age of irresponsibility?

I call it the age of revolt. The age of responsibility was built by people who saw two wars and were cautious realists. When they had decisions to make, they listened to their common sense and research. When scientists studied the effects of chlorofluorocarbons (CFCs) on the atmosphere in 1974, they discovered their harmful effects on the ozone layer. East and West came together and took the steps of the Montreal Protocol to ban CFCs. No one said that it was a communist conspiracy to oppress the West. And the protests by the industry were of no use. But today science and democracy mean less and less. The researchers Foa and Mounk asked people born between 1930 and 1950 how important democracy is to them. 60 to 70 percent in the USA and Europe say that it is essential. But when they asked the same question to people born between 1970 and 1990, only 25 to 30 percent value democracy.

That alone doesn’t make a revolt. What brought that term into your mind?

Democracy, liberal values and globalisation were very essential for the improvement of the human condition – that child mortality is down, that general living conditions are up, that the wage gap between countries of the global South and the West is narrowing. And all this is threatened now. The age of revolt is dominated by people who feel that their jobs, their identity and their personal security are under threat. Current power structures are no longer relevant. Therefore, the revolt is a platform for all kind of fundamentalists and people who want to fight against the ideas of science, facts and a rational society.

Globalisation is neither good nor bad. The reality is more complex.

How do these destructive tendencies come about?

The revolt is driven by the mechanisms of globalisation, by its dichotomy: On the one hand, many claim it is an exploitative system and a sweatshop, others say it is simply fantastic, pink and brings prosperity. But globalisation is neither good nor bad. The reality is more complex.

For example, while we have many high-tech hubs in the Western world, we use the countries of the Global South as "exploitation hubs". People there are exploited because of labour laws, oppressed trade unions, working conditions and low environmental standards. But these centres of exploitation have an increasingly shorter life span. Whereas in the past it took hundreds of years for people to revolt against this kind of exploitation – as was the case in Haiti in the 17th and 18th centuries – today it is much faster. Look at China: it started out as a sweatshop, but globalisation has caused wages to soar. The West, for example Canada, used to send plastic waste to China. But as more and more people are living a better life, they are also fighting against pollution.

You describe various paradoxes: globalisation is a means against poverty, but also allows exploitation, too much truth spreads the impression that everyone lies to each other, indifference becomes revolt...

Globalisation is based on a dialectic process. And that is one of the things that is very difficult to explain. If a politician is saying something on TV, people can check that by asking Siri. What they find doesn’t need to be true, but with a post saying this politician is a liar, it gets viral. The point is: Everybody is lying sometimes. Politicians, journalists, companies have been lying to us for many years. But suddenly came a tool for free that allowed us to check if people are lying. And this was an implosion of truth: there was too much truth in the world. Therefore, people shut their eyes and say, let's not talk about facts, let's talk about opinions. All is a big lie and that allows us to say things like “the world is flat”. It's just not something you argue about anymore. And that's really dangerous. People want a quick fix.

How can people be convinced that the world is not just black and white when they have a need for simple answers?

Many people like Steven Pinker in his book "Enlightenment now" talk about the merits of the notions of Progress. But constantly reciting the achievements will not convince people. Obama tried to do this in his speeches in 2016. Hillary Clinton tried that too, and people rejected it because there is an element of threat in play there. People constantly feel that they can be fired immediately because of a robotic arm or because of the jobs that are moving east or south. 70 percent of the jobs lost in manufacturing in the United States in the last decade were due to automation and outsourcing.

 

We are going to need a model that gives people security.

 

For the left wing, globalisation is a right-wing economic agenda. For the right-wing, globalisation is a left-wing universal identity issue. At the same time, the radical nationalists, populists and fundamentalists are leading a crusade to destroy it completely. They want to replace it with their sphere of globalisation, which will be anti-liberal, chauvinist, sometimes racist and violent. We live in a house that is not yet finished. It is not sustainable, with a lack of solidarity and protection for the workers.

So, leaders have to give people more security in your opinion?

People in the USA have experienced many radical moments, the election of Obama, but also that of Trump. These radical moments give us the feeling that nothing is certain and everything is possible. Take a look at the Trump tax reforms. After increasing tariffs on steel, which paradoxically led to a crisis in the American steel industry, he is now increasing tariffs on steel products. Where will this lead? We are going to need a model that gives people security. Even Tom Friedman, a positive prophet, says to me in the book that there are many communities out there that have been devastated by globalisation, that we have not taken care of them, even though we promised to. We should listen to the people and take them seriously.

But many people, at least in the western world, are drawing economic benefits from globalisation and still reject it...

Many people see that immigration changes their communities. Some of them hate immigrants and vote for populist parties, even without having foreigners in their neighbourhood. Do you think that people are stupid? They know that the number of foreigners is increasing. People see on TV that the country is changing. They feel that their country and their personal security are threatened by terror and radicals. New research shows that people affected by the financial crisis have actually tended to vote left. People who are went to the more radical right are those who look at the abyss and say: I don't want to get there. This is very similar to the situation in the 1930s. It was the middle class that was afraid to join the line of the unemployed, which gave the Nazis more and more power.

Because of its demographics, Europe needs immigrants, but mainly it needs a model for immigration. I talked to an immigrant family that lives in Germany. They work, they are successful, they speak German. What Germany is doing here is remarkable. But if countries don't have an immigration ethos, it's very hard to accept immigrants.  Then it can all collapse, even the German efforts.

Nadav Eyals book was recently published in German.
Nadav Eyals book was recently published in German.

You mean, we need new policies? Will that be enough?

First, we must harness the energy of the revolt. We need to hug it. Not all people who voted for Trump or for AfD are racists. These people have sometimes voted for the CDU or for Obama. If we want a rational discussion, we have to talk to people rationally, without generalising, but by exposing the lies. When I met with the Greek racist Plevris, the father of right-wing extremism, and he says to me, name one bank that is not controlled by "the Jew" - and then I show in the interview that this is ridiculous. It is no fun talking to these people, but that is what we have to do. As a journalist I try to convince through stories. I explain things through research, even if the findings are not always popular. We have to consolidate this in a story that may not be as optimistic and flourishing. It just says: Let's fight for the rational age, because if we don't, it will disappear.

What about company representatives, top managers, entrepreneurs and executives - what role could they play in fighting the revolt?

As long as the economy is legally focussed on bringing more profit to stockholders, managers will shape their decisions accordingly. They don't understand the value of communities and the ways in which they can influence their business. That is not part of their strategy. Take a look at Facebook's fourth quarter results: They are not happy with 25 percent revenue growth to $21 million because it's the lowest fourth quarter revenue growth in the company's history. Are we kidding here? Their profit from this was about 7 billion dollars net income.  This is better than any casino. Is it difficult for you not to publish false information on your platform? Hire another 10,000 people and make sure you are the cleanest platform ever in the history of the world! Because if you don't, you risk not only your shareholders, but your entire company. Why won't they do that? Because the shareholder will dump the stock. That's the truth.

To what extent do companies feel responsible enough for the conditions under which their products are manufactured?

Often there is a distance between the company, the person who consumes the product and the person who actually makes it, or the person who suffers from the environmental pollution caused by its manufacture. Managers can say that they had no idea that people were suffering at any point in the production chain. We have had this problem since the beginning of globalisation. You can see it in the first opium war against China and in Haiti. Big corporations must have an ethical approach from the beginning. But most of them only have one when they get caught - like the German car companies with their car emissions. Most of the time, managers know exactly what is going on, but they either don't want to hear about it, they hide harmful behaviour or they actively cheat the public about it. This applies to tobacco, energy, opioids and many other things. You must understand that some of these practices may be "only" unhealthy or unethical, while others are simply illegal.

Recently, more and more companies are talking about purpose, sustainability and ethics. But economic success is often achieved at the price of exploitation and environmental destruction. To what extent do we perhaps need a new economic system?

Before we have a new capitalism, why not the old capitalism? The one we had with higher taxation and higher growth, maybe coupled with more environmental regulations. Sometimes, when you have high taxation, it is an incentive for companies to reinvest in their own business rather than buying their own shares to inflate prices. Then perhaps we will have the growth rates that we had after the Second World War and into the 1970s.

People will be willing to do much for their bosses if they feel a stability that is missing in a world of revolt.

What price will we all have to pay to get out of the age of revolt?

In Pennsylvania, the starting point of the industrial revolution in America that is dominated by coal mining, we have forgotten the people. Why don't we give all the incentives for high-tech companies to move to rural Pennsylvania, invest tons of money and offer companies to work there tax-free for 15 years? This would be one way to create a new Intel or Facebook in rural areas. We can take care of these forgotten people; we have the resources.

And if you live in the centre of big cities like Munich or Tel Aviv, you could pay a special solidarity tax for people who live a hundred miles away. We need to support a fair globalisation. Otherwise all the nationalists, protectionists and the Trumps of the world will come. We are opening the door for them by saying we do not want restrictions, but only supply and demand. Just with regulatory ideas such as those called for by globalisation critic Joseph Stiglitz, we will banish their ideas to the dustbin of history.

The world of work also experiences a high degree of duality when it comes to management: traditional management representatives, who adhere to Taylorism, fight representatives of New Work, agile management methods, the dismantling of hierarchies and self-organisation. What could these actors learn from your book?

I talk to corporations not only about planning ahead, but also learning not to plan ahead. It is obvious we are seeing a more fluid world of demand, an acceleration of changes in taste and technological leaps. This threatens production lines and management everywhere, but it is also a great opportunity. Corporations will need to walk away from dogmas and adhere to facts in order to survive this sea of rapid changes. As far as management is concerned, it is not only about making the job market more flexible, but also providing security for the people who make market economies work – the workers. People will be willing to do much for their bosses if they feel a stability that is missing in a world of revolt. One of the main problems in the age of revolt is that we no longer see the cornfield. Only from the bird's eye view the whole picture is revealed. Despite all the technological and social changes, we still live with the same hopes and dreams we had 500 years ago. People want enough money, a better life for their children, hope and love. This is the central paradox that even business leaders must understand.

About Nadav Eyal

Nadav Eyal, born in 1979, is one of Israel's most well-known journalists. He is the international chief correspondent of the TV station Reshet 13 and was international correspondent for the Israeli daily newspaper Ma'ariv, based in London. He studied politics at the London School of Economics and law at the Hebrew University. He has written for the Haaretz newspaper, the US journal Foreign Affairs, and the US news website Daily Beast.

„Revolte. Der weltweite Aufstand gegen die Globalisierung“
Von Nadav Eyal
496 Seiten, €29,99 (D)
ISBN: 978-3-550-20071-7
Erscheinungstermin: 31. Januar 2020