welcome my name is Johan Norberg and this is my first lecture for the Liberal Academy called what is

globalization and introduction globalization is one of the most talked-about phenomena in the last few
decades in world politics and world economics but what is most people focus on one of the things that
begin to travel across borders more than they used to do often it's about different relations between
various governments in the world some people focus on the growing clout and interest in multinational
institutions like the United Nations the World Bank the IMF or the European Union and some focus on
multinational corporations the fact that more companies now have various activities in many different
countries I think those are some of the phenomena that we can talk about when it comes to
globalization but what it's really about is the ability to do anything across borders more than we used
to the ability for people to move and to do things and to cooperate across borders not to be limited by
the job specific Geographics of your position and of your situation not to have your faith decided by
the place where you were born and when we talk about that we must focus on the reasons for this
globalization what is it that is meant given people the opportunity to do those things for good and for
bad because when you do things cross borders you can do good things quicker you can also do bad
things you can increase cooperation you can increase the value that you produce in the economy but
you can also engage in international crime or create pollution across borders or or terrorism across
borders so it's really in a way value neutral but the fact that we can do more things across borders is
important and it means a big great shift from what the world used to be like let me first focus on the
technological preconditions for globalization in our world which is a result of growing communications
technologies and an increase in the ability to to transport things people goods across borders it is
about the growing efficiency of different transport technologies like the a growing efficiency of air
flight the deregulation of air flight which has meant that the price of traveling across borders is now so
low that poor students can travel to fly away to another country and protest against deregulation of
air flight and other things that it's a big shift it used to be called the jet set the small elite that was so
wealthy that they were able to fly on jet planes to other places but the two most important technical
technological shifts that were important for globalization's I would like to focus on are both we can
both take as a starting point the year of 1956 because in 1956 it was a totally different work when it
comes to communication let us start with communication in 1956 the telephone cable under the
Atlantic Ocean could only carry 36 phone calls at the same time 36 phone calls that makes it quite
difficult to integrate markets to be able to cooperate with others to be able to get your goods from
another place or synchronize prices or anything like that to source labor from another country from
another continent only 36 calls at the same time could be made between Europe and the Americas
which meant that if you were a student in another country it was difficult to get access to the Atlantic
cable and be able to call home but it was also difficult to National Economic Cooperation going fifteen
years later it was possible to have four thousand phone calls going on at the same time because of an
increasing the efficiency of the Atlantic cable but the big shift came with fiber optics cables making it
possible to have millions of calls at the same time and also lower in the price by something like 99.9%
suddenly then it's possible to be in constant contact with other places to learn about what is going on
to learn about the shifting prices to learn about what they are able to do that might help you out and
with the world wide web with the internet it was suddenly possible to stay in touch with all parts of the
world at the same time which makes it possible with international organizations multinational
companies and the world kinds of cooperation across the borders so that's communications which is
very important but also the ability to move things around to move goods across borders and there the
biggest change of all the technologies is the creation the invention of the container of container
shipping the big metal box that was actually invented in 1956 the very same year that the Atlantic cable
could only carry some few phone calls in 1956 that it this suddenly happened before the container
what you had to do was to put all the things that you wanted to ship to another part of the country or
to another country all together you had to carry them from the factory to the truck you had to offload
it manually you had to lift it into the the ship the boat that is going to another country it took a lot of
time a boat had to stay in the hopper for for something like a week it was incredibly expensive you took
a lot of muscle power it was a heavy load and it was also something that meant that you couldn't really
scale it up to a really large scale but in 1956 the trucker the American trucker Malcolm attained he had
the idea of having a metal box that you could just hold onto the truck and then hoist it straight into the
cargo full of the other truck overnight he lower the cost of loading and offloading a boat by something
like 97 percent this makes a huge difference because it's difficult to be the best in all kinds of things to
be able to produce a computer angle together with all its components and have everything in one place
in one country even what a company so only a few countries only a few economic centers in the world
before 1956 were able to really have a high technological production goal but suddenly with the
container was possible to specialize and just perhaps be able to be the best when it came to one
specific part of the computer one specific component and just put it into the container and send it to
the other side of the planet and then suddenly more countries were able to be a part of the global
economy more countries were able to to use their labor to use their ideas to be a part of the world
and then at the same time we had a reform deregulation of logistics of transports generally so that it
was suddenly possible for one company in Shanghai in China to to make an agreement with one
company and say we want these goods shipped to a specific address in San Francisco and then that
company was suddenly able to hire all the trucks the boats the railways everything and send it over
there and give just one invoice to this company in Shanghai that makes a big difference then
everybody even if their inland they can use imported components they can also export to other parts
of the planet so this combination of communication and of transport made it possible to begin to have
a more global economy we had new competitors we had freer prices we had a possibility for more
countries to participate it was possible for countries without much access to capital and technology to
start exporting clothes toys simple manufacture but when you start a factory which produces toys you
can also you have to also have a factory that's able to produce high technology in the future if you
have harbors and containers that ship simple goods like garments clothes then you can in the future
also use those harbors to exports cell phones or iPhones to another part of the planet so these
technological preconditions are incredibly important for what we call globalization but there were also
important political constraints to globalization that had to be reformed that had to be dealt with it
does not help much having access to this technology if you cannot use it the Internet is a great thing
but what if you live in Cuba or in North Korea and you're not allowed to have access to it the container
is an amazing thing but if you live in Zimbabwe the cost of just sending that drug with a container
across the border with vegetables or something some kind of good in it is the cost in terrorists in in
license requirements in corruption in taxes is actually higher than sending it all the way from simba
South Korea South Africa to Sweden or the Americas so you also need liberalization of the economy
liberalisation of these technologies and the democratic revolution and the liberal revolution that the
world has seen since the 1970s has made that possible it's difficult to remember now but in the mid-
1970s many people thought that we wouldn't see more of liberal democracy in the world the u.s.
ambassador to the United Nations Daniel Patrick Moynihan said in 1975 that he thought that
democracy was increasingly tense to the condition of the monarchy in the 19th century a holdover
form of government one which persists in isolated a peculiar part of the planet and he concluded that
it has simply no relevance for the future because at that time the Soviet empire was wrong and began
to expand into Vietnam Cambodia Laos and Latin America was ruled by military dictatorships the
central in Eastern Europe was ruled by dictators India even India experienced the period home
dictatorship at that time but then it happened because people fought for the freedom because more
well-educated and richer people they demand more freedoms in their own lives and also because they
were inspired by others communications technologies and a new global media told the world about
what was happening in other places and in the nineteen eighties communism collapsed the Soviet
Union was dissolved military and fascist regimes collapsed apartheid was abolished in South Africa
with more democracy in Africa January and the big gigantic economies of India and China that used to
be live under self-imposed isolation from the rest of the world they began to liberalize their economies
and reach democracies also open their markets to more free trade and open financial markets to the
rest of the world in the year 1900 more than 100 years ago around zero percent of the world's
population lived in a real democracy with one man and woman one vote because women was most
often excluded even in those places few places where they had the franchise minorities ethnic
minorities or the poor were excluded from elections by 1950 31 % of the world's population lived in
democracies and by 2050 8 % of the world population did according to Freedom House the Civil
Liberties watch stopped today even the remaining dictators have to pay lip service to democracy as an
ideal and hold staged elections and they even though they try to control the discussion and censor the
internet people know more about what is going on in the world than ever before and they have begun
to liberalize their markets even in the most controlled state capitalist or socialist economies because
they've realized that they can gain so much by parties in the global economy so what does all this
mean if we have this technological change that makes it possible for more people to do more things
across borders and also a political revolution and liberalisation that is given even though it's not
perfect it hasn't reached everybody it has meant more opportunities for people to do things to get
access to the knowledge the ideas the technologies of other places what does this mean well let's look
a little bit at how globalization in many instances sets people free because more people can now
participate communicate and cooperate across borders than ever before and therefore they can also
learn more from others than they used to do they are not limited to the ideas and the technologies
that were developed close to them in by their own nationalities suddenly means that people can have
access to the latest knowledge and they can use that to improve their businesses their culture their
research their societies that is what globalization the biggest potential of globalization being able to
use the brain the talent the hard work of people even though they do not live in your vicinity one of
the biggest changes is that it means an economic catch-up it's easier for poor countries to catch up
with richer because they can now use and get access to the ideas the research the technology that it
took other countries much longer time to to get access to between 1960 and the end of the 1990s rich
countries grew faster than the poor on only 30% of low and middle-income countries grew faster than
the United States was still a world where people were limited to most often to the technologies the
businesses that were close to them but since the year 2000 ninety percent of the low and middle
income have grown faster than the United States on average by three percent and this is a huge
change which adds up to poverty reduction to an increase in living standards in a way globalization is
the biggest thing that has happened to mankind at least when it comes to the quantitative change
then it's even bigger than the Industrial Revolution because what was the Industrial Revolution of the
late 18th and early 19th century really about it was about around 200 million people in Europe and
North America which and it about 200 million people and it took around 50 years on average to double
their income China and India has now done the same thing five times faster with ten times more
people China and India alone and then we have all the other low and middle-income countries that
have done that so they done it five times faster with ten times more people that adds up to a change
that is 50 times bigger than the Industrial Revolution and the biggest change is not the economy it's
not how it grows that's an important thing but the biggest thing about that is that it sets people free
from the limits that geography and often local politicians or despots put onto their lives Bill Gates of
Microsoft Fame put it thus recently if I had to pick a place in the 1950s where I was born if I could
choose between being of average talent in a small American city and being a genius in one of the low
and middle-income countries around the world I would have preferred to be of average talent in a
small American see because there you had access to all the things that made you more productive and
make your life easier and better you had access to capital technology education businesses that could
provide you with know how the technology to make your life more productive so that you could gain
and get a higher wage today he says I'd rather be that genius in an Asian country an African a Latin
American South American or Eastern European country because now when borders are more open
when capital and technology and businesses can move about the world and people can move then it's
possible for capital to find talent almost wherever it hides and that's a democratic revolution a
democratic revolution that means that it's no longer the place that you're born that makes the biggest
change to the life that you can live it's possible to get access to brains the talent the ideas of other
people even though you live somewhere else when I think of globalization I think of one particular
journey that I made to Vietnam that is still formerly a communist dictatorship but has begun to open
up has begun to liberalize since its economy since the 1990s and that is made made a huge change it
has opened up to more of competition in the economy and as made it possible to begin to export large
scale many companies have invested in Vietnam and started production of garments and clothes I met
one young woman TG who lived there she worked in one of those factories producing for other
markets sometimes it's called a sweatshop it's we talk about it as a low skill lower with low wages and
bad working conditions and that's true if we compare it to the kind of workplaces that we have in parts
of the world where we have we've had an industrial development going for a longer period than 20
years but to compare to the life that she used to live and the kind of life that some of our neighbors
and relatives still make this is a tremendous change it has made all the difference in her life it has given
her a much higher wage he earns now five times more than she used to be as if they turn her family
out of poverty but it's also meant that she doesn't have to work day in and day out in the rice fields
which is something she did since she was a young girl 10 to 14 hours a day in the burning Sun or in the
intense rain she now has a job indoors producing shoes for Western markets she can afford now and
this is the biggest change to forego her son's income in all previous generations of Vietnamese they
had to put their children to work from an early age not because they were mean or evil because they
dependent on they were dependent on their labour income for their own survival now with this kind of
income she can afford to give her son an education instead and to make sure that she will get bigger
opportunities in the future nearly all the children in her own generation used to work few do in her
son's generation because during the 1990s Vietnam experienced rapid growth and increased exports
and in just five years with the increase of globalization and investments from multinational
corporations and access to free trade across the planet in just those five years the number of child
labourers in Vietnam was reduced by 2.2 million people and when I talk to teacher about her son's
future she thinks that she has the potential to become a doctor in the future so when I think of
globalization I do not think of the big multinational institutions or the big multinational companies or
any of those large-scale developments those are important they are also part of globalization but what
it really means is the axis for common people to ideas technologies that make them more productive
access to factories with machines and know-how that makes them more productive access to other
markets where they can sell their goods because that is where it starts that is what we didn't have
before we've always had a tiny elite that could travel the planet we always add the jet-set but now we
have teaching and her son's generation that grow up in a globalized world and it makes all the
difference to them so when I think of globalization I think of teaching that's it for me today thank you
for your attention and please go to the website and read more and send questions if you have them
and welcome back next week for the next live session thank you