Market Watch: The Economist's Open Future Festival And Threats To Globalization
Bannon was humorous but unyielding; for him, protectionism is the way forward. Photo courtesy of Reuters
On Saturday, Sept. 15, I attended The Economist’s Open Future festival in New York City. The festival marked the newspaper’s 175th anniversary and was set to be a forum to recreate the case for the liberal ideology. The festival was to be held in New York City, Hong Kong, and London on the same day, with debates, discussions, and interviews. The festival garnered much attention, particularly because of the speaker line-up; in attendance were Nobel Prize-winning economist, Dr. Amartya Sen; President of the International Rescue Committee and Foreign Secretary, David Miliband; President of the American Civil Liberties Union, Susan Herman; Senior Fellow of the Brookings Institution, Richard Reeve; a couple of online influencers, activists, Dreamers, Facebook’s head of counter-terrorism, and others, all of equal importance and diverse professional backgrounds. Perhaps the most eye-catching individual present, however, was Steve Bannon, the former White House chief strategist and senior counselor.
Before even entering 7 World Trade Center, I was amazed by the level of activism taking place at the event. Individuals were handing out flyers stating that The Economist was hosting a bigot and unlike The New Yorker, tolerating intolerance. There were posters, shirts, and poorly made chants that all amounted to the general assumption that hosting Steve Bannon was ruinous and inhumane for everyone present. What struck me most, however, was the fact that Mr. Bannon knew he was attending a debate against The Economist’s editor-in-chief, Zanny Minton Beddoes. Walking into the boss’ event and debating on her turf was quite the move for Mr. Bannon, and many remarked a poor one too, on both Mr. Bannon and The Economist’s part.
Beddoes first proposed that the intention was to understand Bannon’s worldview of populist nationalism and why he believed it is a better route forward for civilizations today. Part of Bannon’s view was that illegal and legal immigration needs to be reduced to accommodate national citizens; economically, if immigrants and natives are substitutes, they are competitive in the same labor market. As a result, the influx of immigrant labor suppresses wages—in the short term. In the long run, wages tend to equilibrate regardless of the influx of labor supply. Beddoes rebutted against the notion that immigration reduces career opportunities and wage growth by stating that much of the U.S.’ innovation and capital creation has been the product of immigrants or at least, of children of immigrants. Closing borders would only prove to limit competition and sources to innovation. The goal for Bannon nonetheless is “full employment,” and that immigration should be purely merit-based.
Economic nationalism, to Bannon, “does not care about your race, does not care about your ethnicity, religion, gender, or sexual preference, it cares about whether you are a citizen.” Beddoes was fully prepared for this remark and brought up political figures such as Matteo Salvini of Italy and Viktor Orban of Hungary, both of whom believe that their nation’s immigration should be purely based upon race, ethnicity, religion, etc. Bannon believes, that these individuals are saving their countries, to which Beddoes’ dead-pan response, in true British manner, was “Mr. Bannon, this is exactly why people think you are a racist.” And the conversation went on, and on.
The overarching questions of the day were regarding open progress (technology and innovation), open markets (free trade and economics), and open borders (immigration and refugees), open ideas (free speech and debate), and open society (diversity and identity politics). The Economist’s decision to include Bannon was to prove that conversations should not become homogeneous echo chambers and should be opportunities to understand other worldviews. These are not threats to one’s own beliefs but rather an opportunity to challenge, if not bolster, one’s basis for beliefs. The unfortunate truth of the whole debate (which is now being called an interview) was to get such a conversation between two esteemed individuals on record. The sad reality, however, was palpable tension from continuous interruptions and a clearly set up outcome of dismissal for Bannon’s beliefs as bigotry and ill-informed absurdity; I truly would not have been surprised to find tomatoes strapped under our seats ready for a good throw. If the irony of “open ideas” and that debate was not enough, it was followed by Richard Reeves’ speech on ‘Respect.’ He even spelled it out for us, as a homage to the late Aretha Franklin.
Debates between protectionists and real-life successful immigrants, legal and illegal alike, is truly what made this a special affair. I could not stop questioning, however, the real future of the world on a societal level. The emergence of protectionism across nations (look to our tariffs, for instance), may be a chance to hit reset on the bureaucratic nature of the World Trade Organization and other institutions surveying aspects of international cooperation and communication. However, the price paid by society for government officials vying for protectionism is a seemingly deluded view of what an optimal society looks like. Converging markets proves to be an opportunity to gain more understanding of comparative advantage and prospects for innovation. Isolation and mercantilism create artificial economies that are built on bubbles and unsustainable promises of self-reliance. My main concern, highlighted by this event and daily reminders from the news, is that we require newer principles for globalization. Smith, Schumpeter, Heckscher, Ohlin – they are all crucial starting points for understanding the world as it is. But this is a new era where political rhetoric and economic mandates go hand-in-hand in further dividing civilians; a new understanding of what our future can look like in different world views is what may help to re-calibrate the global economy.