Opinion

Chrystia Freeland

How do middle powers fare in a winner-take-all economy?

Chrystia Freeland
Apr 16, 2013 15:35 UTC

This essay was originally published in the Toronto Globe & Mail.

How should countries navigate the twin challenges of our time – globalization and the technology revolution? If that seems to be an abstract question, consider the people of Cyprus whose futures have been devastated by their country’s failure to surf those international waves, or the threat posed by North Korea and its refusal to participate in these two transformations.

Most of the conversation about how geopolitics is changing in the 21st century focuses on the shift from west to east, and on how we’re moving from the bipolar power equation of the Cold War to a new bipolar relationship, that of the U.S. and China, that determines the mood music for everyone else.

That’s true. But what if you aren’t in Beijing or Washington? How has the world changed for the middle powers, and what should we do about it?

The biggest shift is that business has gone global. Companies and capital operate internationally, often beyond the economic reach of any particular nation-state. People are pretty global, too, living lives that freely cross national borders.

But while the world is becoming borderless, it isn’t becoming flat. It’s spiky, and the economic forces of our age are making the peaks higher. We live in a winner-take-all economy, and the winning people, companies and ideas are increasingly concentrated in a handful of global cities – in fact, in a handful of global neighborhoods and sometimes, in the case of the plutocratic palaces at 157 West 57th St. in Manhattan or One Hyde Park in Knightsbridge, in a handful of buildings.

A novel look at emerging market entrepreneurs

Chrystia Freeland
Apr 4, 2013 20:22 UTC

If you read just one book this spring to understand how the world is changing, it should be Mohsin Hamid’s new novel, “How to Get Filthy Rich in Rising Asia.” The central theme of this funny and vivid work is familiar: the great shift in the global economy’s center of gravity from West to East.

What makes Hamid’s tale so revealing is that he gets beneath the human skin of that tectonic lurch. Asia’s rise is a story of the eastward tilt of global gross domestic product, but behind those numbers are billions of individual lives that are being radically transformed. In particular, Hamid, who lives in Lahore, Pakistan, focuses on the rapid urbanization that is both a driver and a consequence of economic growth in the emerging markets.

Hamid reminds us how epic that transition is for the people swept up in it. As he writes in his novel: “You witness a passage of time that outstrips its chronological equivalent. Just as when headed into the mountains a quick shift in altitude can vault one from subtropical jungle to semi-arctic tundra, so too can a few hours on a bus from rural remoteness to urban centrality appear to span millennia.”

When capital flies, but corruption stays behind

Chrystia Freeland
Mar 28, 2013 20:12 UTC

One of the most important political and economic facts of this young century is that capital has been slipping the traces of the nation-state. Business is global; government is national. That mismatch is one of the big sources of tension in the world today: Whether it comes to taxes, bank regulation or immigration, the fact that money and politics no longer live in the same neighborhood makes consensus harder to achieve.

For Exhibit A, you could point to the flood of Russian rubles into Cypriot banks- and the dramatic consequences.

Global businesses have profited handsomely. Multinationals have legally lowered their tax bills by shifting their profits to low-tax countries: As a scandalized British public recently learned, for example, Starbucks paid 8.6 million pounds, or $13 million, in corporate taxes in Britain over the past 14 years.

Hong Kong thriller, globalization and the campaign

Chrystia Freeland
Aug 16, 2012 15:58 UTC

We all know it would be virtuous to spend more time pondering the implications of globalization and the intricacies of high finance. But these aren’t always the most enticing subjects to study, especially in the languid, fading days of August. For an easy-listening approach to two of the most important themes of our time, you could do worse than devote an evening to the film “Supercapitalist,” a new financial thriller set in Hong Kong.

The most immediately striking take-away from “Supercapitalist” is the moral hierarchy it imposes on business. The only truly virtuous capitalists are the technologists – hard-working, creative and focused on innovations that will help ordinary people as well as the bottom line. Next best are the makers of real things, in this case a logistics company. Worst of all are the financiers, a treacherous, murderous bunch who care only about making money even if the price is human lives.

In light of the public attitude toward bankers, those who work for Mitt Romney should watch this film and talk to its star and screenwriter, Derek Ting. That’s because Ting has made a film that raises some provocative political questions, but his personal agenda is entirely artistic: He set out to tell “a universal, human story.” His ethical ranking of business, with the money changers emphatically at the bottom, is an instinctive choice, not an intellectual one. That says a lot about current views on the subject, even on one of the world’s most energetic capitalist frontiers.

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