Ian Goldin is a former vice-president of the World Bank and advisor to President Nelson Mandela. He is now director of the Oxford Martin School and professor of globalisation and development at the University of Oxford. In his new book, “The Butterfly Defect”, co-written with Mike Mariathasan, Goldin explores both the promise and the perils of globalisation. “We are more tightly linked than ever before,” they write.
That unprecedented integration of economic and other systems has brought with it previously unimaginable benefits to substantial portions of humanity. But it also exposes us to “systemic risks” of a kind we’ve not faced before, and which politicians, at both the national and global level, need to try to understand—and quick. They could do worse than read “The Butterfly Defect,” though its analysis of the risks that metastasise in fiendishly complex global systems will probably keep them awake at night.
I met Goldin in London earlier this week and began by asking him what he thinks the principal gains and benefits of globalisation have been.
IG: I think the last 25 years or so—the period since the fall of the Berlin Wall—have seen the most remarkable progress that the world has ever known in many dimensions of human wellbeing. Life expectancy, the reduction of poverty, quality of life, nutrition etc. If you look at this period in the long sweep of history, it will come to be seen as a period in which humanity leapt ahead in many dimensions. I attribute that largely to the coming down of walls and integration, which is how I define globalisation. It’s the flows between societies, principally the flow of ideas, that has lead to these changes.
Now, with that also comes great risk. For example, climate change, pollution, the destruction of biodiversity and so on are negative spillovers [of globalisation]. Then there is a series of new, emergent risks. I see the financial crisis of 2008 as one of the clearest exemplars of these new kinds of risk. It’s what I call the “butterfly defect”—small perturbations somewhere leading to these cascading, amplified shocks which can be deeply destabilising. Because there’s a mismatch between the integration processes and global governance, the risks are growing. You can’t manage globalisation at the local or national level alone. It needs management at those levels, and there’s a lot you…