Gabor Steingart

GMF. The German Marshall Fund of the United States
Washington, DC. Gabor Steingart from Der Speigel and author of the book “The War for Wealth” was the featured speaker, presenting his views on the appropriate response for the EU and United States to the rise of China as a global economic and political force. He addressed his remarks to an audience made up of, U.S. and European government officials, journalists and delegates from a diverse array of think-tanks and NGOs. GMF Transatlantic Fellow Richard Salt moderated the event.
Beginning by emphasizing that he was not “anti” globalization, Steingart argued that five commonly held misconceptions about globalization have resulted in misguided public policies in the developed world. The first of these is that Western-style capitalism won the Cold War; according to Steingart, communism had destroyed itself from within by economic mismanagement. Francis Fukuyama’s assertion of the “End of History” had been wrong, and China represented a new challenge to the Western economic system. Steingart argued that China’s “economic attack” is a stealthier strategy than any military threat; in his view, China avoids ideological issues and builds global clout by focusing on their main economic advantage – a vast reserve of cheap labor.
The second misconception is, according to Steingart, that the West could afford to transition from an industrial to a service-based economy, arguing that services are merely a function of an industrial economy – they could not replace the need for the former.
The third is his charge that economics were too often, wrongly, considered separately from moral values. Steingart argued that three components make up any product or service that consumers buy: resources, knowledge, and values. The former two are obvious; physical inputs and the idea behind its creation. The third – valures – includes , everything from the wages paid to the social programs that protect labor and the natural environment. Thus, the values a society holds dear are inherently embodied in any good or service that it produces, and are therefore supported whenever that good or service is purchased. He argued that China, or any other country with a huge supply of cheap labor, has the ability to undermine Western societies’ production values; the lure of cheaper goods caused consumers in developed nations to undermine their own values.
The fourth misconception he alleged is the assumption that democracies and social freedom always occur simultaneously. Pakistan and China were among the examples Steingart pointed to. Fifth, and last, he argued that there is a widespread misconception that free trade is advantageous to all participants, at every level. Not true, according to Steingart, who argued that European and American industrial workers lose out. He argued that only the top tier of economic participants in developed countries are receiving the benefits of globalization – because while they benefit from cheaper goods/services, they have become the disadvantaged consumers in a developed nation that can no longer afford to consider environmental and social implications.