Norberg: “The rise of China is a challenge to globalization and liberal capitalism”


I remember being first introduced to Mr. Norberg through his book, “In Defense of Global Capitalism.” I was a 19-year-old economics student, and an enthusiast of liberalism, and new ideas. The book had a great impact on me, as I filled with content some of my intuitions. A lot has happened since then, and my faith in liberalism has faded a little; I guess that after 2008, every liberal in the West has been let down. Norberg, however, is not a quitter. He is back again with a new book to restore depleted energy liberals around the world: “Progress: Ten Reasons to Look Forward to the Future”. Norberg has the appearance of the Great Gatsby, but don’t be fooled, the man is an idealist. He bravely fights against big state and bigger taxes. In this interview we get a glimpse of his views on global issues.

 Q. Are you in favor of self-determination in regions of Western Europe?

A. I’m in favor of it for individuals, and I don’t think politicians should meddle in it, in any area. I think that self-determination belongs in various levels of governance, but it depends on what policy you are looking at. For instance, at the European level, it makes sense to have trade policies, because they create more freedom for people, rather than every region deciding on their own quotas and tariffs. On the other hand, we have issues like healthcare or education, where I think it makes sense to have it as close to the regional level as possible. But most importantly, I think the individual has the right of self-determination.

Q. Do you think that events like Brexit or the election of Donald Trump diminishes globalization or capitalism?

A. I think the issues you mentioned pose a problem to globalization and capitalism. I am very optimistic when it comes to globalization, but only if people have the freedom to exchange and travel across borders. So I am not very optimistic, because I am not so sure about politicians giving us these freedoms. And thus I think that Brexit and Donald Trump’s policies are going in the wrong direction, because they might undermine both globalization and capitalism. I mean, now in Davos, you can hear Trump talking about a trade war with China, and that can seriously undermine our wealth and our freedom.

Q. But don’t you think that events like Brexit can revitalize the EU?

A. Yes, I think it already has, the problem here is that Brexit might trigger some centralization tendencies in the future, and thus Brexit could lead other countries to try and exit the EU.

Q. Some newspapers say the influx of immigration in Sweden, your home country, is becoming problematic. Do you share this view?

A. Well, there are problems and some tension, but most of the news about the issue is probably exaggerated. For example, I recently heard that Polish leader, Kaczyński, said that Sharia law is being implemented in 55 Swedish areas. But what was this about? Well, it was a whispering game, and there was information quoting a police report that stated there were 55 no-go areas. But when you read the study from the police, it simply says there are 55 areas with organized crime problems, and some of them are no-go areas. That being said, I think there are big problems in Sweden, but we are mostly seeing them in organized crime. In the last few years, we have seen an increase of shootings in the street, and that is partly related to drug trafficking. We currently have a war on drugs in Sweden, and if you mix it with a recent, and huge, influx of refugees in Sweden, who are unemployed, and cannot find jobs, they turn to crime. Then these refugees have to fight their way up in these areas making them more conflictive.

Q. Some intellectuals say that capitalism has reached its own potential, and that we are living in a post-capitalist era. They say it is due to technology. Would you agree to that?

A. Well, it depends on what you mean by capitalism. I think the old, industrial capitalism has reached its limits. But when it comes to the market economy, based on private property, free trade, and so on, it is still thriving. And modern technology is based on these principles as well.

Q. They are based on these principles, but the way modern technology is advancing it’s possible that in 5 years from now houses will be built automatically, and that would mean a lot of unemployed workers.

A. Well that could happen, but the question is, is that such an awful scenario? I think one of the major problems we are having is the cost of building and housing for people. But yes, it can cause enormous tensions, if machines can create most of the goods we use. We will have autonomous cars, and lots of car drivers and lorry car drivers will be out of jobs in the future, and there will definitely be some tensions. But in the long run we will have newer jobs, and I am optimistic. The key is how can we create a smoother transition between the old and new economy. How can we help people obtain the skills they need to take part in the new jobs? I recently read a story about the first British citizen who used an umbrella, and was hated by people who rode horse carriages. In fact, they would spit on him, and try to run him over. Why? Because they thought umbrellas would kill their jobs. The philosophy is that humans tend to solve problems, and this creates jobs.

Q. We can all agree on that, but we are entering into an era where machines create other machines. Where is the human factor there?

A. Well, we are surely marching towards this future, but experts in the AI [Artificial Intelligence] field say that there is still a long way ahead until we see intelligent machines creating other intelligent machines. And yet, the industries creating more employment are those where “machines” are implied. Take for example the drone industry. The American military uses 168 people to manage one simple surveillance drone. And the more data these drone creates, the more there is to analyze. Thus, a drone also gives jobs to analysts, precisely 20 analysts per drone.

Q. Let’s talk about Macroeconomics. What is your take on austerity in Europe?

A. I think it’s difficult to analyze. On one hand there are aspects that are necessary and might even be useful when it comes to wasteful spending, and when it comes to areas such as the pension reform, and making sure people work longer. But there are downsides as well, mostly in the short run, we are witnessing tax increases that might create problems in economies that are going downhill.

Q. Austerity is something being applied to Nation-states, so would you say that the Nation-state as such, is outdated?

A.I am quite an agnostic when it comes to this issue; it is almost impossible to tell. It is quite obvious to see that the “nation” is not an optimal area for any kind of policy, but what is an optimal area? It is really difficult to make the right judgment. But we have learned that the nation is quite too small to deal with certain issues like trade or the environment, and these issues should be delegated to larger governing bodies, like Europe. And on the other hand, the nation is too big to deal with certain issues that are closer to people, or government structures like regions or cities.

Q. A country like China is experiencing an enormous economic growth, which is not quite a democratic country, and normally, countries translate economic growth into a bigger military, which constitutes the so-called “super-power.” Do you think these kinds of countries can use their prowess to affect the liberal, global economy?

A. I think they can, and I think that the risk exists. We’ve seen it historically when new countries emerge and they demand a new role in the world, and perhaps other countries are not so willing to give them this new role. We have seen it. At the same time, if we think that a still-impoverished China would be less of a threat we would be wrong. There is North Korea, an impoverished state close to China with nuclear weapons. So an impoverished country will not necessary avoid international tensions. So, either rich or poor, there will be tensions in both circumstances.

Q. In your last book, “Progress: Ten Reasons to Look Forward to the Future,” you outline 10 reasons to be optimistic about the future. Could you give us an 11th reason?

A. I think the 11th reason would be the technologies that are being developed right now. Like artificial intelligence [AI], and biotechnology; But especially Artificial Intelligence. AI is a technology capable of dealing with enormous amounts of data, an unfathomable task for us humans. We can see AI finding patterns that help doctors and scientists hypothesized further than in the past.

That’s another reason to look forward to the future.