David Sanger, a two time Pulitzer-Prize winning corespondent from The New York Times delivered a talk on globalization to an overflowing audience in Griffin 6 Friday night.
Sanger was introduced by Sophia Kuo ’00.
Sanger spoke for about 45 minutes and then took questions for about 70 minutes. His remarks addressed two primary themes: that no one is really in charge of the global economy but that this does not mean that there is nothing that can be done to minimize the negative effects of globalization.
Sanger began has remarks by recounting a dinner in 1991 with Bill Clinton when the then-presumptive Democratic candidate was meeting with New York Democrats in the finance sector to discuss market issues. At this meeting, Clinton first met Robert Rubin, who would later be secretary of the Treasury under Clinton. Sanger pinpointed this meeting as the moment of change between the old and new relationships between foreign, economic and domestic policy. Rubin, according to Sanger, became the architect of American foreign policy.
He oversaw a new era of foreign policy, characterized by interdependency instead of border patrols, and a meshing together of foreign and domestic policy on account of the new economic situation, to which the treasury had an important role in responding.
Sanger drew an analogy between the Times and the world economy. “The paper has distinctive sections: international news, domestic news [and] business news, and these used to fit neatly into their own sections. Now these sections need to talk with each other.”
Sanger discussed the Asian financial crisis of 1997 as an example of the effects of globalization. Prior to the 1990s, investors in currency had invested in the pound or the franc. When the Asian markets started opening to the West, investors poured huge amounts of money in without a real understanding of the markets in which they were investing. Countries which allowed investment wanted to convince investors that their economies were stable so they tied their currencies to the United States dollar. The value of the dollar began to rise on account of the strength of the U.S. economy. Productivity was not increasing as rapidly in the Asian countries that had linked their currencies to the dollar and as a result the products of these countries became more expensive and exports fell.
“When money came pouring into Malaysia,” Sanger noted, “Malaysia thought this was great, but when the money went pouring out, Malaysia thought it was a crime.”
Sanger continued, “There was a point when investors who had thought that things were wildly right with the Asian economies realized that things were wildly wrong. They panicked and pulled their money out, leaving economies in shambles.”
This crisis, according to Sanger, highlighted the fact that in the global economy there is no final authority. “The guy in Greenwich wearing red suspenders and moving currency in and out of Malaysia has a lot of effects but there is no one in charge,” Sanger said. “Each member of the World Trade Organization (WTO) has one vote but no one’s in charge. When a crisis arises, global leaders are interested in seeing that people in their own countries don’t starve.”
Sanger addressed the complications in creating rules that apply to all economies. Many opponents of the WTO World Bank and International Monetary Fund are opposed to the organizations’ sponsorship of projects that are detrimental to the environment. But the developed world polluted heavily in the development of their economies. Similarly if all members of the WTO were compelled to have minimum wages comparable to those in the West, producers would simply move to nations that are not members of the WTO.
Sanger advocated supporting international finance organizations despite their faults. He argued that these organizations should initially mandate widely accepted measures, such as bans of the labor of young children and basic safety standards, such as fire exits as stepping stones to the stronger measures that the protesters now demand.