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From: donpat3/19/2006 8:25:02 AM
   of 12865
 
If avian flu doesn't get us, the political Numskulls will

By Niall Ferguson
(Filed: 19/03/2006)

Think of the world as a human head. If that makes your own head hurt, then perhaps a little nostalgia on my part may help. When I was a boy, I was an avid reader of The Beezer (which was to The Beano what The Telegraph is to The Mail). My favourite cartoon strip was The Numskulls.

Most of the action in The Numskulls took place within a human head that was operated by a small team of homunculi. "Blinky" controlled the eyes, "Brainy" the brain, "Cruncher" the mouth, "Luggy" the ears and "Snitch" the nose.

The setting being 1970s Britain, the five Numskulls did their jobs with all the energy and efficiency we then associated with unionised employees in a nationalised public utility. They were forever falling asleep on the job or skiving off work altogether. Above all, there was an almost total absence of cooperation. Regular demarcation disputes would lead to paralysing strike action. As a result, "Our Man" - as the owner of the head was invariably known - suffered humiliating mishaps on a weekly basis.

Now translate this metaphor into our own times. Think, as I said, of the entire world as a human head populated and run by Numskulls. There are many more of them than there were in The Beezer. Indeed, the head has never been more crowded. Yet compared to his British counterpart in the Seventies, this global version of Our Man is amazingly well run.

Cooperation between the different faculties has never run so smoothly. The Numskulls who operate the brain are busily exchanging ideas. Those whose job it is to send sensory information to the brain are working even harder: never have there been so many visual and aural stimuli to transmit.

Above all, Cruncher is setting records for productivity. For this global head is consuming resources insatiably. Our Man was a relatively thin chap. But the body underneath this global head must be truly huge. (I am not sure whether it is a muscle-bound Mr Universe or an obese Fatso, but let that pass).

This is not a bad metaphor for globalisation, that remarkable process of international integration that policy wonks, finance geeks and academic nerds love to discuss. Globalisation is good. By knitting together global markets for commodities, manufactures, services, capital, labour and knowledge, we have significantly raised the material standard of living for a majority of the world's population. A few diehards on the Left still dispute this, but the empirical evidence is against them.

The International Monetary Fund's most recent World Economic Outlook tells the story. Since the 1970s, the trend growth rate for world output per capita has risen from just over 2 per cent to just over 3 per cent. It's never been higher. In the same period, the growth rate for the volume of world trade has risen from 6 per cent to 8 per cent. Capital flows have grown even faster. International migration has also accelerated.

The reduction of barriers to free economic exchange has not only boosted growth, it has also reduced inflation and long-term interest rates. And, just as importantly, it has reduced volatility, so that the world economy seems to suffer fewer painful recessions than before. In other words, the Numskulls are cooperating. What's more, it's not just some of the Numskulls who are reaping the rewards of this cooperation.

The biggest anti-globalisation myth is that inequalities are widening, a relic of Marx's idea that capitalism would lead inexorably to the concentration of wealth in a few hands. Wrong: as in the last age of globalisation (before 1914), growth is benefiting most people.

Only think of the extraordinary leap forward being achieved in Asia, largely on the back of rapid export growth. How can a process that enriches the two most populous countries in the world be increasing international inequality? (That's not to deny that inequalities within some countries, notably China and the US, are increasing. But don't blame globalisation for that; blame national tax and welfare systems.)

Now let's ask what could go wrong. After all, Globalisation Mark I fell apart disastrously in the mid 20th century. The Numskulls fell to fighting among themselves. Even in peacetime they ceased to cooperate. Ideological fevers such as fascism infected the global brain. Then, after 1945, the world was afflicted by a split personality, as one "lobe" went communist while the other stayed capitalist.

Could globalisation break down again? History suggests it faces two kinds of threat: the natural and the man-made. The most obvious natural threat is that the world could be swept by a pandemic. True, the World Health Organisation has thus far confirmed only 173 cases of avian flu in humans, but more than half of those people died. And the virus has been spreading rapidly westwards from East Asia as far as Western Europe. A small genetic mutation could greatly facilitate its transmission from birds to humans and between humans.

To understand what could happen, consider the impact of the Spanish influenza pandemic of 1918-19. As if to mock the efforts of men to kill one another during the First World War, the virus spread rapidly from America to Europe aboard crowded troop ships. Within three months of the first recorded outbreak in Kansas, it had reached India and Australasia. In all, around 40 million people died, including one in every 100 American males between the ages of 25 and 34.

A pandemic of comparable magnitude would kill globalisation, not least because of the panic it would unleash. International travel would cease. Indeed, all face-to-face meetings would have to be abandoned. Offices, factories and schools would close. We would all be confined to our homes until hunger drove us to don face masks and venture forth to scavenge in deserted supermarkets. In this scenario, there is no need to use a metaphor to convey the danger we face. Every human head would be terrified of inhaling the lethal virus.

Yet this is only one of the ways that history suggests globalisation could end. It is just as possible that we might wreck it ourselves, without any help from a vengeful Nature. After all, the end of the first age of globalisation predated the flu pandemic by some years.

The outbreak of world war in 1914 led to an immediate breakdown in international trade. Even before that, a backlash against free trade and migration had begun, as one state after another moved to raise tariffs or restrict immigration, trends that reached their disastrous nadir in the 1930s. Call it a globotomy. For it was deliberate action by the Numskulls themselves that severed the world's neural pathways.

Today the Numskulls doing the most to lobotomise the global mind are to be found (not for the first time in history) in the US Congress. Earlier this month, Senators effectively blocked a company based in the United Arab Emirates from acquiring facilities in American ports on the ground that their employees might help Islamist terrorists.

Not content with this insult to Middle Eastern investors, the same body last week came within a hair's breadth of defaulting on the federal debt, voting by just four votes to increase the legal debt ceiling. Given that around half that debt is held abroad, this was playing with financial fire.

Never in the history of the world economy has one advanced economy been as reliant on inflows of foreign capital as the United States today. It's that international overdraft which allows Our Man to keep sucking in and consuming foreign goodies. Unfortunately, the Numskulls in Congress seem more worried about impending mid-term elections than the stability of the global economy.

Yes, globalisation is good, but that doesn't make it irreversible. My fear is that if the flu doesn't get Our Man, then the political Numskulls almost certainly will.

Niall Ferguson is Laurence A. Tisch Professor of History at Harvard University www.niallferguson.org
© Niall Ferguson, 2005

opinion.telegraph.co.uk
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