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- [00:07]
Thomas Small
Liberal democracy.
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Narrator/Host
For more than two centuries it has been the dominant political ideal of the west, promising prosperity, freedom and rational government. But in an increasingly authoritarian world rocked by economic stagnation, populist backlash and ideological confusion, is liberal democracy still fit for purpose in the 21st century? Sir Vince Cable was once the leader of the Liberal Democrats in the United Kingdom. A professional economist, he was one of the few British politicians to foresee the 2008 financial crisis and as business secretary was given the task of rescuing the real economy. In his new book, Eclipsing the China, India and the Forging of a New
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Thomas Small
World, Servince argues that we have enter
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Narrator/Host
a new age of vast super state competition, above all between China, India and the United States. In this conversation we discuss the crisis of globalization, democracy versus authoritarianism, the ideological blinkers of all political elites, east and west, and whether the liberal international order is destined to completely break down. I'm Thomas Small, this is my conflicted conversation with Sir Vince Cable.
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Thomas Small
Hello, Sir Vince, it's so nice to meet you. A real honor, sir. Thank you for coming on Conflicted.
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Sir Vince Cable
Thank you very much and welcome into my home.
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Thomas Small
Well, it's very nice to be in your home, as it were. Virtually at least you have quite a library there. You've come on the show to discuss your new book, Eclipsing the West, China, India and the Forging of a New World. And based on that library, I can see you've done quite a bit of reading in the course of your research for the book.
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Sir Vince Cable
Yes, indeed. Well, I'm rather proud of my private library. I know it's a bit unfashionable, everything's supposed to be digitized, but I like the feel of books, not just reading them, but the physical essence of books is wonderful.
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Thomas Small
It's a beautiful sunny day there in London. I will say, sir, that where I live in York it is very sunny and beautiful, a rare treat these days. And I was delighted to read that you grew up in York and that your father worked for Roundtrees.
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Sir Vince Cable
That's correct, yes. My first 18 years were in the city of York. Happy memories.
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Thomas Small
Amazing.
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Sir Vince Cable
Yeah. My mom and dad started their lives working. My mother was a working on a production line at Terry's. My father was in rancheries. He subsequently progressed from kind of manual work to professional. He taught bricklayers, people in the building trades at the York Tech College and that was his life. But I sort of grew up there, did my education, my early romances and various other university of life experiences before moving on.
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Thomas Small
Well, listeners who don't live in the UK may not know that the city of York, a beautiful city in the north of England, has two very, very famous chocolate factories, one on each side of the River Ouse. I think it's rather romantic to think of your parents as each working in the other factory and falling in love.
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Sir Vince Cable
Absolutely.
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Thomas Small
Now Servince, you are an economist by training and I see that in the late 60s for, for two years you worked in Kenya as a special advisor to the government there, advising the Kenyan treasury. I'd love to hear a little bit about that time. I think it will help ground our larger conversation about what you cover in the book. Because as we've tried to explore here on Conflicted, we think that the experience of former imperial subjects, the experience that they underwent after achieving independence, isn't understood or even thought about enough. And there you were at the coal face really of an important African country charting its post colonial course. What was that like and what did you learn?
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Sir Vince Cable
Well, calling me a special advisor is a little bit grand. Basically there was a scream operating in the 1960s since enlarged, where young graduate economists were sent out to mainly Africa, but also Caribbean Pacific to fill holes in the administration which had been created when expatriates left after independence. And there was a hiatus until young African graduates came to fill those jobs. So I was ludicrously under qualified actually. But I was a body and I learned very quickly on the job and I was involved in setting up big aid projects with the World bank and the Germans, the Japanese, other donors at the time, some of which have turned out to be very productive and others of which have been embarrassing fiasco. But I guess I was responsible for both. But I learned a lot. And I also got married to an absolutely wonderful woman from Kenya, Kenya Nation. And we were very happily married for over 30 years. But sadly she then passed away.
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Thomas Small
Oh goodness, I'm sorry about that. Must have been very painful. It's amazing to think that you've written this book now which is trying to help us understand the present, trying to chart the next presentation, 30, 40 years. And yet there at the beginning of your career, you were in a country that was building new state institutions, trying to stabilize a pretty volatile economy and to define a development model in the wake of the colonial period and at the same time experienced all the growing pains that countries like Kenya did. It lurched towards one party dominance, really political, one party state sort of system, overly centralized, early signs of sort of patronage politics, obviously long simmering ethnic tension. So you were there seeing it all from at the beginning of your career and now in your latter years you're writing about countries, specifically China and India, that have gone through the same phase. I mean, in a way this book is the capstone of your whole career.
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Sir Vince Cable
Indeed. I've always been fascinated by this big question, why is it that some countries grow economically and others don't? And East Africa at the time was a wonderful kind of experiment, laboratory experiment, because you had Kenya, which was under President Kenyatta's guidance, becoming independent, developing its own institutions, but also trying to work with the private sector. Kenyatta had a great belief in the product potential of African peasant farmers, which was totally justified and been a great success. He was also open to private investors, domestic and foreign. And the contrast was with Tanzania next door, which opted for kind of a self reliance strategy which didn't work out well. Kenya did slide unfortunately into crony capitalism if you like. There's a lot of corruption, but by and large, despite the many, many challenges, it's been a relative development success story. But as you say in your introduction, I've always been fascinating this problem. I went from Kenya to work in Latin America for some years and then mainly in the 80s and 90s on India. And when I went to Shell as their chief economist, they sent me out to the big emerging markets which are essentially China do evaluation. Should they be building up their presence there and trying to understand the risks and the opportunities. But I've come back to this in later life. I had a 20 year interlude in politics in Parliament, the cabinet, leading my political party. But when I've retired, I've gone back to working on development in China particularly and trying to produce this book which essentially is a contrast. It's trying to understand how China, India got where they are from. They had a similar starting point, 1947, 48, Chinese Revolution, Indian independence. They embarked on a rather similar pattern of development based on five year planning, a great belief in heavy industry, learning from the Soviet model. But they've diverged greatly, mainly because after Deng Xiaoping took the reins in China, they embarked on this very radical reform and opening out which has totally transformed China into a almost developed country. It is developed in many parts in the coastal areas. India has lagged behind, but it's now interestingly the fastest growing economy in the developing world. 7% growth a year, potentially a big upside as well.
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Thomas Small
Yeah, in the book you basically are laying out the case that the post Cold War model of globalization, a model that was based on really mutual economic benefit, kind of this idea that it's a win Win situation for everyone. You argue that this is breaking down. I think we can all see that that's the case and being replaced by a new paradigm. You call it geoeconomics. So three core super states you argue are emerging. The US obviously, China and India, where economic policy is driven by national security and zero sum thinking, especially in the US China relationship, but also in the China India relationship. Interestingly, explain why you think this is happening.
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Sir Vince Cable
Well, first of all, I'm one of the few people left on the planet who is a great fan of globalization. I think it did the world a great deal of good. Hundreds of millions of people who stagnated in extreme poverty have been lifted out of it. Of course, that was mainly in China, but many of the other emerging powers that looked outward to international trade benefited and so did the West. It's become fashionable in the kind of MAGA circles to decry international trade and interdependence. But actually interdependence did us a great deal of good and at least partly explains the high living standards. Of course not everybody benefited. There's been a left behind class which populist politicians have fed off. But by and large globalization was good for the world. But unfortunately there was an Achilles heel and it was revealed rather brutally with the financial crisis 2008. The effect of that has been economic stagnation in Europe and North America turning against international integration.
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Thomas Small
I'm glad you bring up the 2008 financial crisis, because you saw the crisis early. People forget that the financial crisis in a way began as much in the UK as it did in the US with the collapse of Northern Rock, a British bank in 2007. And from those years onwards, you became a really trusted voice. You appeared frequently in the media criticizing the then labor government's response to the crisis. But then in 2010, you entered of the coalition cabinet and so you were suddenly actually involved in the ongoing response to the financial crisis. A crisis which lingered and lingered. What did your experience in government reveal to you about the way the world works that you didn't already know, if that makes sense.
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Sir Vince Cable
Well, the metaphor I use, and it may be a bit tired, but I think the metaphor that best explains the significance of the 2008 crash is that it was like a kind of economic heart attack. And it did, as heart attacks do, lasting damage, of course you recover, which is what happened. The surgeons were quick on the uptake. They pimped adrenaline to the system, cheap money, quantitative easing. The patient was kept alive, but it's fundamentally weakened. And of course subsequent shocks Brexit in the UK's case, Covid, the Ukraine war, now this war all are not great if you've got, got a weakened heart, which is essentially what's happened. But in terms of the crisis itself, I don't claim to have understood the full ramifications of it. I mean the whole business of the complex derivatives in the financial system, which happen mainly in the us. But what I was warning about was the fact that mortgage lending was just getting completely out of control. Banks were lending way beyond people's means, bidding up the price of hous to unrealistic levels. There was going to be a reckoning at some point. And it happened in the case of the UK with Northern Rock. And then it spread primarily through the US and US institutions. But it came to the UK because Britain has, I think four of, or did have four of the biggest banks in the world in terms of balance sheets and two of them went down. Barclays almost went down, but was rescued with a slightly questionable deal with I think the Qataris. And we had a financial system that was very, very heavily dependent on these global banks. There was a tradition in the UK going back decades, if not centuries of a lack of institutions turning savings into investment in small growing companies, which remains a problem. If you're a startup in the UK and you, you're trying to expand, it's very difficult to raise capital. But if you're an international business wanting to borrow from one of these big global banks, that's no problem. And the financial crisis of course aggravated that problem. And I spent a large part of my five years in government trying to find workarounds, to try to get capital flowing into business or small medium sized business to help them to survive and then to grow. And it was an uphill struggle, but it was worthwhile. And the British economy stabilized under our government. People have criticized the austere public spending policies, but it was probably necessary in view of the high levels of government debt that had been built up in the course of the crisis.
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Thomas Small
Well, I think that having given a full throated defense of globalization, it's interesting that you should have just explain that 2008 financial crisis and the long withdrawing roar from the high water years of globalization, because the financialization of the global economic system, the way in which that may have contributed to things like offshoring and the rise of China, which we will now talk about. Some people would say that's sort of like the dark side of globalization, maybe a necessary evil given the benefits of globalization. But some people say that, look, globalization okay, it's good. But it has this dark side and we saw it all play out in 2008 and the political pressures that you talk about of populism and things, including Brexit in this country, but obviously the MAGA movement are not unrelated to that financial crisis and the policy choices made then.
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Sir Vince Cable
Yes, I was a bit careless with the way I expressed it. I'm not an unqualified enthusiast for globalization. You're quite right. Financialization has done a great deal of damage. The free flow of money without effective capital controls of any kind has done damage. What I was essentially praising was the role of international trade. And the irony is that with the backlash against globalization, it hasn't come in the form of restricting finance, which flows freely. Very difficult to control anyway, but that flows freely. But Mr. Trump and similar minded people have decided to take the ax to international trade, which was the bit of the global integration that was of the greatest benefit.
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Thomas Small
Well, there's the line drawn in the sand between the way in which people feel that the problems of globalization should be addressed. And you're firmly on the side of support the international trade flows, maybe start regulating the finance flows now to go back to your book, we recently hosted Kishore Mahmoudani on the show and he told us about his idea that the 21st century will be the Asian century. In your book, you reject the concept of an Asian century as too vague and you instead prefer to talk about super states, some of which, two of which are in Asia. What is the difference?
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Sir Vince Cable
Well, I have a great deal of respect for Professor Baba Ben. He actually wrote a very nice blurb on the back of the book. And I think actually our views are not too different. Asia, of course, is a big place and there are failed states. You know, you've got Myanmar, you've got terrible places like North Korea. Lumping it all into one didn't seem to be terribly helpful. The reason I single out China and India is partly for a rather mundane reason, of course, is their size. You have these two extraordinarily big countries, not just populous, 1.4 billion each, but also growing very rapidly at the same time. And we've got a position now where on some measures, China is the biggest economy in the world, on others behind the US but certainly in the same ballpark where you now have technological leadership in China, India hasn't yet caught up, and where the drivers of the world economy are taking place through what I call superstates. I mean, India certainly isn't a superpower, doesn't aspire to be One but enormously powerful states that have a massive weight in the world economy. I think the IMF calculated that last year about 45% of global growth came out of these two countries. And if you have a fairly plausible view of the picture, which is that China continues to grow but more slowly because of some of its domestic problems, that India continues to go along growth annually, which is somewhat below the potential, you get to a stage by mid century where these two countries alongside the US are the three biggest in the world by a very long way. And with economic size goes a lot of things. You've got more resources to spend on good things, research and development and foreign aid and bad things on the military. But size matters, which is why I've focused on these two countries. In a fragmenting world where barriers are going up, of course, size provides a form of insulation.
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Thomas Small
Well, to sort of open up the analysis a bit at the outset, what is the difference between a super state, in your use of the term, and a superpower, or even the term continental power, or even the term empire? How does a super state differ from superpower or empire? Is China not just an empire? Is India not just an empire?
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Sir Vince Cable
Well, they have elements of that, certainly. China has in many ways reproduced the borders of successful Chinese imperial dynasties of the past. And the role of Xi Jinping is not enormously different from that of a Chinese emperor in the past. There certainly are analogies, and some of the minorities on the edge of China in Tibet and Xinjiang would probably want to emphasize that historical aspect. But of course, they're modern states and they take full responsibility for living standards and economic management within their borders. We talk about modern, fully developed technological states. In India's case, of course, India has been a rather variable concept over the years. I hadn't realized until I read a very enlightening book about this recently that India was partitioned five times. Not just Pakistan, but before that, Burma was part of India. Nepal and a large part of the Arabian Peninsula. Kuwait, Dubai, Abu Dhabi, Oman were part
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Thomas Small
of India, part of the British government's control of India, part of the Raj.
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Sir Vince Cable
Yeah, the Raj, yes. So if you're talking about old empires, India's not somewhat diminished, but I use the word super state because you can be massive economically and even technologically in terms of population, in terms of outreach, without trying to be a dominant military power in the world. The US is clearly a superpower because of its military capacity. You could argue that they're misusing it, but they have it. India isn't remotely in that league, but it's an economic massive player. China's somewhere between the two. I take the view that China isn't trying to dominate the world. They're trying to be respected and to have some kind of global reach, particularly economically. But they've got two military bases, I think in the world. The US has 600 or something of that order. They're not comparable. We need a vocabulary which reflects this new phenomenon of countries that are big economically massive players but aren't necessarily trying to run the world.
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Thomas Small
You say that compared to India, China more successfully integrated faster into global supply chains and that China became a major player in the global market in a way that India lagged behind now. Now it seems a little bit to me that you take those global supply chains and that global market for granted in your analysis. Whereas in fact, those markets, those supply chains are a complicated bit of geopolitical technology underwritten by American military power and the Euro, American financial system, really. So this is just to sort of present the argument of China's critics, often from the right these days, who allege that China has been a bad actor in the global economy, essentially weakening the base upon which the whole system rests. What do you make of that argument?
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Sir Vince Cable
Well, the Chinese model, which was, I think, fully manifest in the beginning of the 1980s, but then grew with expanding manufactured exports and reached its full potential when China joined the World Trade Organization 2001. It was actually following in the footsteps of other countries, but on a much bigger scale. I mean, there's not a great deal of difference between the way that the Chinese approach this and the Koreans did a generation earlier. But of course the finger wasn't pointed at Korea because they were politically aligned with people in the West. But the Chinese were following a well developed model. The Indians didn't follow because there was a tradition of protectionism in India underwritten by very powerful vested interests amongst the oligarchs of India. They were not exposed to international competition and they were not given the incentives to operate on a global scale in the way that was the case in China. Now, of course, there are elements of Chinese behavior that you can validly criticize. There is undoubtedly an element of subsidy for Chinese manufacturing. It isn't as great as people imagine. A lot of it goes to supporting failing zombie companies rather than exports. But it does exist. It was the case that the Chinese did their best to extract intellectual property wherever they could find it, often through illicit means. But this is not unusual. They were preceded in this by the Japanese and of course in the 19th century by the Americans. Americans development was based in many ways on theft of intellectual property from the Europeans, particularly the British. So I think being moralistic about this isn't terribly helpful. And actually, although the Chinese trade surpluses which peaked in the earlier part of the century and are now rising very rapidly again have been disruptive, do represent a China shock we tend to forget. There have also been periods when the Chinese have been very, very helpful. I mean immediately after the financial crisis in 2008, the Chinese did their bit by massive spending on infrastructure. Staggering scale. There's this apocryphal story that they poured more cement in three years than the United States had poured in the previous century. I mean that's true. It gives you some indication scale. And by investing massively they sucked in commodity exports from Africa, Latin America. Those countries in turn spent their money on Western manufactured goods. The Chinese did their best after 2008 to revive the world economy. They did. It wasn't done for altruistic reasons. It was self interested but it was nonetheless positive. So I don't regard the Chinese as, as bad actors. They're tough, they're very, very tough. They're clearly very self interested. Their instincts are mercantilist, they're export promoting, import restricting. But there's a positive side to Chinese developments and I think we do need to work with them. Trying to shut them out of the world is foolish.
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Thomas Small
We obviously have to work with them. And as you've made clear, the situation is very complicated. But even so, you know, I can see how China now, when it looks at the world order that is changing but nonetheless is there. You know, it's annoyed it is underrepresented in the rules based international system. For example, despite contributing what, 20% of global GDP at the moment it only has about 6% of IMF votes. So you know, this is a problem, problem. But China's strategy to overcome this problem is both to work within the system as it stands and to build an alternative system like the BRICS bank and the Belt and Road Initiative and so so forth. So is that not an example of what China's critics say about it? It wants to use the system to get strong and rich in order to break the system system to build something that is more beneficial to it.
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Sir Vince Cable
Well, it's not surprising that they want a system that aligns more closely with their own interests. And as you rightly said, they are underrepresented. India even more so so in the big international decision making bodies. I mean I think there's an issue about here who threw the first stone. I mean, in the last decade we've had a deteriorating relationship between China and India from the heady days when everybody saw it as a plus plus integration. But the Chinese view, which maybe derived from their own ideology but partly influenced by events, is that they have felt that the US the Westborn generally, is trying to suppress their rise, as they put it, that China is becoming a global superpower, superstate, whatever language we use, and that the US will not allow, it will not allow another country to become number one. And they've reacted to that, that by their own aggressive tactics, by using their choke points. And we saw this within the trade negotiations, the use of some scarce minerals. I think what it ultimately comes down to is a bit of simple arithmetic. At the moment, China's per capita income is about a quarter that of the US and its economy is the same size, roughly. If China grew to the point where its living standards are about half that of the US it would have an economy twice as big. And if its economy is twice as big, you'd expect its influence in the world economy to be twice as large. And the Chinese have taken the view that the Americans are never going to accept that. So they have adopted their own, what you call bad actor tactics, quite aggressive trading practices and so on to counter what they increasingly see as adversaries. And we're now locked into a kind of vicious circle where everything the Chinese do is seen as hostile and where they say everything the US does is hostile.
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Thomas Small
Well, what I really appreciated about your book is the amount of information, data analysis you bring to bear on the difference between the developmental model that China pursued and underwent compared to India. I wonder if you would sort of, you know, succinctly describe the difference between the two countries in that regard. But also to respond to this, which is, as I was reading it, I did begin to wonder, wonder if it's the case that in the 21st century, at least in this new era of fragmentation and super state rivalry and competition, given all of that, if in the 21st century democracy is a problem, well,
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Sir Vince Cable
it pains me to say it, but I think in many respects it is. I'm a very committed democrat and I've been involved in democratic politics most of my life, but we have seen not just difficulties but big structural weaknesses. Most of the democracies which flowered after 1990, many of them have slid back into semi authoritarian government. Even India, many ways an incredibly impressive story of democratic governance has become more autocratic. Countries like Turkey, and of course we now have the United States Democracy is in trouble. And as economic difficulties have mounted, and by economic difficulties, I mean stagnation rather than global depression, people have reacted through frustration to populist politics. By contrast, the Chinese offer a model of what they would regard as efficient authoritarian government. They would say, we plan long term, we think long term, we make tough choices. I mean, if you're critical of China, you could say, certainly say, that they make bad choices. The handling of the COVID pandemic was a classic example. They do overreact to challenges. The way they've dealt with minorities on the periphery is particularly bad. So I don't want to be an apologist for modern China, but I think we're now getting to a position where if a neutral country is offered a choice between the dysfunctional democracies of the west and certainly the United States, and the efficient autocracy which the Chinese claim to offer, it's not obvious which way they would go. And in many cases, China might be seen as a more attractive model. I think if the Chinese themselves, privately, of course, there's things you say publicly and privately were asked Chinese leadership is what kind of ideal they would like. It's probably something like 200 times Singapore, which is. It's not a highly repressive autocracy, but it's one party government, super efficient, not terribly tolerant of dissent, but allowing sufficient escape valves to be classed as a semi democracy. So I think if China was heading in a more democratic direction, that's where it would go.
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Thomas Small
Everybody wants to be Singapore servants Everybody wants to be Singapore. I wonder, though, because as I was reading the book, on the one hand, it seems that Indian democracy may have been one of the causes why it didn't develop as fast as China and its authoritarian one state model. But there's also the suggestion in the book that democracy may provide India with greater sort of buffer, a sort of support system for when shocks occur. So maybe down the line the Indians will be grateful for their democracy. So it's not just that democracy is necessarily bad. How do we square the circle here?
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Sir Vince Cable
Yeah, I think whether or not Indian democracy survives is probably the best test of democracy as a system, because, of course, its challenges are infinitely bigger and more difficult than what we face in Western Europe, for example. But somehow the system keeps going. The metaphor I sometimes use is that China's a bit like cast iron. It's extremely strong, but under pressure could crack and break, whereas India's a bit like wrought iron. It's not as strong, but it constantly bends and adapts and it never breaks. India's been through a whole series of very, very serious crises, many of them particularly in the 1970s when you had Mrs. Gandhi's emergencies and to somehow bounce back from it. And what Indian democracy has done is on the one hand, and it is a break on radical reforms. It's very difficult for the government to push through radical reforms of agriculture. You've got hundreds of millions of landowning farmers who are going to fight back. So it's difficult to push through radical reforms. But at the same time it does provide a kind of feedback mechanism. If the government's really fouling up, people react. A good example was the 2024 election in the which the RUL BJP party was expected to win very comfortably, but actually they lost large numbers of seats in their own heartland, which was a real wake up call. You're not giving us what we were expected in terms of economic delivery. And as a result, some of the BGP leaders who base their popularity almost exclusively on religious bigotry are now realizing they have to deliver on development.
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Thomas Small
Well, you know, I think we in the west understand how democracy can get in the way of radical reform when those reforms are necessary and also how the democratic process can sort of try at least to communicate to decision makers what the populace want. I mean, whether the decision makers are able to or willing to do it is another question. Now Servince, you're an economist and economists tend to adopt the assumption assumption that at base political actors are essentially rational. Now here on Conflicted we have tried to show that in some parts of the world at least, ideologies, especially radical ideologies, are much more genuinely embraced by political decision makers than analysts often think, which may lead those analysts to misunderstand things. For example, we see the war in Iran now of course, a very complicated and controversial war, I know, but according to my co host Eamon Dean, at least the leadership of the Islamic Republic genuinely believe that their revolutions theological and eschatological ideas are true. Less mystically, but no less radically, Kevin Rudd, the former Australian Prime Minister and an expert on China, has written persuasively that Xi Jinping really and truly holds to the Marxist Leninist consistent conception of dialectical materialism, which he blends with a very robust sense of Han Chinese supremacy, a hybrid called Xi Jinping thought. And of course, as you've already alluded to, we know that the ruling BJP party in India has embraced Hindutva, an unapologetic Hindu supremacism. Now you discuss these things in your book, but you tend to portray them as tools which politicians employ, perhaps cynically, certainly instrumentally, to achieve certain ends like social cohesion. But what if they really believe them? How does one factor for the non rational or not wholly rational component within geopolitics?
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Sir Vince Cable
With difficulty, I think, starting with the examples you chose, which are very telling. I don't actually agree with the Kevin Rudd view about Xi Jinping and China. None of us know this is a very remote figure. But he seems to be actually very pragmatic. We've seen a recent about turn on his crackdown on the big tech companies, for example. He's now re embraced them and spoken in praise of the market economy, which is a bit difficult for a dogmatic Marxist if that's what what he is. I think in his case under Chinese leadership, extreme nationalism is a better description of an ideology that cuts against what I would regard as economically rational behavior. And as you rightly say, the Indian Hindutva is a very powerful element in thinking. I suppose as an economist I'm rather left flummoxed by this. I mean, what do you do in a world where people are irrational in which they are voting for things which make them poorer? I mean we have this debate in the UK about Brexit and you could say that in a democracy people are fully entitled to make choices which make them poorer and so on. Unfortunately, when they become poorer they then become angry and even more ideologically driven and we get into a vicious circle. So I perhaps take an unhealthy deference to people in countries like China which try to seemingly try to behave in a scientifically rational way. A very good example is the current arguments about global warming. Right. Scientifically almost unanimous. Few people could deny that this is a massively serious problem and you need steps to deal with with it by changing your source of fuels or suppressing demand or a combination of those things. And the Western Europeans sort of get it, the Chinese get it, whether or not they're doing the right things, the Indians get it. But you're now dealing with this anti woke movement in the US and to some extent in the UK which trying to deny basic science. And that is really, really alarming. And it's not at all if you're trying to apply rational thinking, what you do about it other than despair.
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Thomas Small
Well, this is interesting because. So you were the leader of the Liberal Democrats and having interrogated the democracy half of the Liberal Democrats just a few minutes ago, I thought we might interrogate the liberal half. I would say you're maybe more full throatedly Liberal than democrat, given your economic bona fides. But I want to wonder if the commitment among some, and I'm just playing devil's advocate here, but if the commitment among some Western liberal elites, as they're called, Western decision makers, et cetera, if their commitment to a liberal vision of the world where humans are essentially rational, not fallen or motivated by passion, essentially where they're essentially individuals, not essentially members of a community community, and where rational technique can overcome all challenges. So a sort of faith in technocracy, not to mention lots of other commitments, such as what some critics would say are radical LGBT rights and radical multiculturalism, all that stuff which is called woke. So is that commitment amongst our liberal elites any less radically ideological than Xi Jinping thought or Hindutva, even any less non rational? And when it comes to climate change, and I know there's this consensus opinion, but if you're just a normal dude like me, you're trying to navigate your way through a very conflictual media environment, sometimes you see presentations by people who seem to know what they're talking about, who say, actually the whole anthropogenic climate change narrative is total ideology. It's just not true at all. And so you think, well, I don't know what's going on actually, but maybe our liberals have their own essentially non rational ideology hiding behind a rational posture, just like all ideologies. Do you see what I mean? How can ordinary people make sense of this?
- [44:53]
Sir Vince Cable
Yeah, no, I do see what you mean. No, I think extreme liberalism, which focuses too much on individual rights, is, is actually unhelpful. And I think what I would call modern liberalism or social liberalism does recognize, as you say, we are part of society, we are part of communities, both at a national level and at an international level. And the concept of the common good is a very important one. And people like Rawls, who developed liberal democratic thinking in modern times, have been very conscious of that. And I think there is a difference between, between the extreme libertarian form of liberalism, which is very unhelpful and doesn't represent the idea of community and common cause. It's not one I follow. I'm much more comfortable with the. Well, what used to be called the social liberalism, which you see in Canada, would be a very good example of a socially liberal approach, both domestically and internationally. So that that's where I am.
- [46:08]
Thomas Small
It's interesting because it sort of overlaps with that earlier question about the international world order that is founded upon at the moment and has been founded upon for 75 years. American military power Anglo European financial power, but basically that American military power. And because there is one superpower with one super powerful navy, as Britain used to be, sailing the seas, keeping the shipping lanes open, fighting piracy and more or less controlling strategic choke points or trying to, we're seeing it happen in real time right now at the Strait of Hormuz in order to maintain that world order. But that, that very fact requires a sort of liberal orientation, a sort of global common good. We're all in this together, which robust nationalism would definitely push against. And yet some degree of nationalism is required to at least underwrite that superpower's self identity and strength. So it's hard to triangulate between these two things. The question is now that we're in a fragmentary world and China, let's say, is trying to contest that superpower powers power, whether they could literally replace the global order enough to keep trade flows moving because they don't possess that liberal orientation.
- [47:40]
Sir Vince Cable
Yeah, well, first of all, you're right about the role played by the US until recently. I would say on balance it was very benign. We wouldn't have had the rules underlying globalization, the peace with which to prosper without U.S. leadership. And I never had any problem with Britain being a close ally of the United States until the recent administration. It all seemed to me the US were operating in a generally benign way. One may have disagreed with particular things, the Iraq war or whatever, but in general their role was a very positive one. But that's no longer the case. I think what you're touching on is something I described in the book, which is called the Kindleberger Trap, which is if you have a global hegemon, which the United States has been a superpower setting the rules for the world and it ceases to perform that role for whatever reason, you're in great danger of the whole system falling apart, which is essentially what's happening at the moment. And what do you do about it? Well, maybe there's a new superpower coming up that will replace it, but the Chinese show no particular interest in performing this role. And so we have a kind of downward spiral where rules are broken. We no longer have effective rules governing trade. The law of the sea is no longer respected. Basic war crimes are no longer treated as war crimes and so on. There is a real danger that in the absence of US leadership and then the absence of someone else taking its place, we finish up in a very, very bad place. And I, you know, discuss various scenarios which lead us there and potentially how you get out of it.
- [49:42]
Thomas Small
Well, Servince I just want to end with one question, really. Then where are we going? It seems to me that there are a lot of unknowns at the moment. The extent of China's demographic decline. Decline. The true extent of China's overall debt burden. I think this is often not discussed enough. The world order that will emerge out of the Ukraine war and now the Iran war, whether America is really retreating or whether it's just shoring up its power, these things remain to be discovered as time unfolds. Where do you think we'll be in 25 years?
- [50:17]
Sir Vince Cable
Well, there is a danger at the moment. We get into a totally chaotic situation where order is breaking down and nothing is replacing it. One of the scenarios I sketch out in the book is what I call a vortex. One thing leads to another. Eventually we get to a disaster that people are forced to sit up and take notice of. It could be a global depression. And the events in the Middle east may conceivably be triggering that. At the moment, it may be a climate disaster. It may be that one of these rogue states starts actually using nuclear weapons, something appalling. And my inherent optimism leads me to believe that in those circumstances, basically good people respond. And you've got the middle powers, as they're called in the world. The Europeans, the Canadians, the Indians, others who are potentially disadvantaged by chaos, who do try to get together to reassemble some new order that deals with those challenges that we have. You may think that's a little bit sort of lame optimism, but, you know, without it, you do feel a sense of despair because we are currently heading in a bad, bad place.
- [51:41]
Thomas Small
I. I don't think it's lame at all, Sir Vince. I am also an optimist. So let us hope and pray that we emerge out of this difficult time stronger than ever. Thank you, Sir Vince Cable, for coming on Conflicted. It's been really excellent having you.
- [51:55]
Sir Vince Cable
Thank you very much indeed for having me. It's appreciated. Thank you.
- [52:04]
Narrator/Host
That was Sir Vince Cable. His new book, Eclipsing the West is available from all good booksellers. And remember, for deeper dives into the ideas we explore on this show, including extended conversations and Q&As with with my co host Eamon Dean. Check the show notes for details on how to join the conflicted community. I'm Thomas Small. Conflicted is a Message Heard Production Our executive producers are Jake Warren and Max Warren. This episode was produced by Thomas Small and Ross Field and edited by Lizzie Andrews.