At 16, the rugby star Gordon Brown made history as the youngest student to ever enroll at the University of Edinburgh. Blind in one eye following a sports injury, his titles evolved to include university lecturer, Member of Parliament, Chancellor of the Exchequer, and the Prime Minister of the United Kingdom. Capital letters are the trend in power designations.
Brown began his Malcolm Wiener Lecture in Political Economy to an overflowing audience at the John F. Kennedy Forum on September 23 with the illuminating confession that “When you go into politics, rationality and objectivity are left behind.”
The Scottish MP moved beyond this platitude (that seemed to ring frightfully true for the American political system) to address what he deemed the “first crisis of the global age.” The recent global financial meltdown Brown linked with the 1929 Great Depression in saying, “Then, as now, governments were amateurs in a world with great challenges to be met.” He called for new policies in response to a serious shift in the global framework. “For over 200 years Europe and the United States have dominated the global economic scene,” Brown asserted. “This is the first time since the Industrial Revolution that they are responsible for a minority of investment, trade, goods and services.”
Brown’s solution to this worrisome trend simply and unsurprisingly was to have open access to Asian markets. It seems unreasonable, Brown claimed, that Western manufacturers have been “ignoring” 60% of the world’s population. He emphasized, “There has been an unbalanced and unsustainable discrepancy between consumption and manufacturing.” The answer, driven by American leadership, would entail opening up markets in Asia to an increased active consumption of American and European goods. Referring to potential, job creation, and progression, Brown favored global reorganization for global problems, as the time for nationalism and inwardly focused countries “has passed.” He rejected protectionist trade policies like sanction, bans, and import quotas, citing them as ineffective and, in the long-run, counterproductive for trade, as such measures only increase hostilities on both sides. He stressed that the glory days for American and European manufacturing were not in the past; so long as new consumer markets could be opened in newly-developing Asia, particularly in countries like China and India which are building new middle-classes, manufacturing in both hemispheres could benefit from mutual, open trade.
Such sentiment goes against the legislation passed on September 29 by the United States House of Representatives – H.R. 2378, the Currency Reform for Fair Trade Act, would impose sanctions on China for its “undervalued or overvalued (misaligned)” currency based on the U.S. dollar. In the world of sticks and carrots, unfortunately, sticks rarely work. Imposing sanctions on China will mean that China can find other markets for its products – who doesn’t want cheap goods? – and, in retaliation, might now be less willing to open up its newfound consumer markets to America. Luckily for the US, it’s not Japan. Otherwise, retaliation would be guaranteed. For those who are unwilling to believe that the Chinese middle class would ever have wanted anything to do with American products anyway when so much cheap manufacturing occurs in China itself, here’s a fact: General Motors is still alive today because it found a new market in China – GM sales in China increased by 67 percent in 2009 – to replace declining (dead?) sales in the States. Perhaps our own legislature should think beyond short-term election results and actually think about what will be good for our country in the long-run. The manufacturing industry might like politicians a bit more this November (let’s face it – who would actually like them this November?), but it will still be at operating under actual potential without a new market that, unlike the current American market, is willing to spend money.
Still, as H.R. 2378 shows that Brown’s economic recommendations are controversial, the former PM addressed the problem of risk management. The financial sector took risks without sufficient underlying capital and, Brown argues, “The values for fairness, enterprise, competition, and responsibility need to be brought to markets and government.” Strikingly demonstrating his political tact, the current MP then called on optimism. He spoke to the formation of a global constitution that would contract the stated morals into the global economy. This constitution would further eliminate or heavily sanction “tax havens” to ensure that finance is transparent and liquidated.
Allowing that his idea for a global revolution and a global constitution may sound implausible and even impossible to today’s world, Gordon Brown spoke to what seemed impossible to the world just 20 years ago: ending apartheid in South Africa and collapse of the Soviet Union. Brown then passionately affirmed, “Today I feel fortunate to represent a jobless constituency.”
Art Bartolozzi ’12 (abartol@fas) doesn’t believe in revolutions without dancing.
Susan Zhu ’11 (szhu@fas) wishes we had President’s Questions and athletic intellectuals in Congress.