Johan Norberg's In Defence of Global Capitalism was a surprise bestseller—surprising not only because it was in favour of rather than against global capitalism, but also because his home country Sweden, a place long-admired by social democrats, was an unexpected source of classical liberal energy.
Norberg’s political life started when, as a schoolboy, he and his friends set up the Anarchist Front. Abandoning his adolescent anarchism for liberalism, his studies at Stockholm University brought him to the work of the 19th century Swedish liberals. His first two books were on the history of Swedish liberalism.
In 1999, he joined the permanent staff of Timbro, a Stockhom-based think-tank, and became involved in the growing debate over globalisation. In Defence of Global Capitalism was published in Swedish in 2001. It has since been published in a number of different editions around the world, including a version released by the CIS in 2005. Norberg is now a ‘freelance free-marketeer’, whose activities can be followed on his website, www.johannorberg.net. He visited Australia in October 2005, where he spoke to Policy editor Andrew Norton.
Liberalism
Andrew Norton: Let’s start with how you became a liberal. What attracted you to liberal ideas?
Johan Norberg: Several different factors. I changed my mind on several criticisms I had of modern society generally and big business especially through my own studies, particularly of my ancestors in Sweden. Why was it that my ancestors starved 150 years ago in Sweden? Their lives were saved by an era of globalisation, by being allowed to trade with the rest of the world and start businesses and things like that—the kind of things that I was very hostile to. A lot of young people in rich countries wanted to deprive poorer countries of the opportunities that made us rich. That didn’t really make sense to me anymore.
Another thing was more theoretical, I was looking for the kind of thinkers, the kind of theories that might make sense of my own more instinctive ideas on things. I was an anarchist at the start and read the classical anarchist works, but never really felt comfortable with them. They had these ideas on being free to do whatever you want as long as you live in tiny communities where people think alike, dress the same way and own everything in common. I thought, ‘well, that’s not really the kind of freedom I am looking for’. I found them a bit too repressive. Then I started studying the classical liberals instead, understanding that they had some of the same visions but went about it in another way. That really caught my interest.
AN: How much of what influenced you was distinctively Swedish liberalism and how much of it was the global figures?
Johan Norberg: I think it was the global figures and thinkers that made the most impact, but at the same time how Sweden was liberalised and developed. At the time I didn’t read the Swedish liberal tradition because it didn’t really exist in the textbooks. That was something I had to look for afterwards. My biggest work to date in Swedish is about the history of Swedish liberalism from 250 years ago and the kind of characters and heroes that I found.
AN: Were Swedish liberals connected to the international liberal movement or did they have similar ideas simultaneously, as often occurs in intellectual history?
JN: The early Swedish liberals weren’t really connected to anything but they got their influences from the Enlightenment movement in other places. They shared its basic outlook on individual freedom and optimism about the future, and drew their own conclusions, which happen to be very much in common with the rest of the world. But later on in the 19th century the Swedish liberals were very much a part of the global movement. They wrote about and discussed the thoughts of other liberals in other countries and had a view of a global movement for free trade, peace and limited government.
AN: You market yourself to a global audience but do you think there is still something distinctively Swedish about the way you see liberalism?
JN: That’s a good question, I haven’t really thought about that because so many of the things I have done and thought about have been ways of trying to find the not very local and nationalist aspects of things, more of getting rid of it. On the other hand, perhaps that’s partly Swedish as well, trying to find something in common between different cultures.
AN: When I compare Australian and American liberalism, the Americans are far more attracted to the natural rights view on liberalism, while it is more utilitarian and pragmatic in Australia. I think those two things reflect the different national cultures, the founding documents and the religious influence in the US compared to a secular, state-orientated society that built up in Australia.
JN: If I look at the history of Swedish liberalism, and I think I share this as well, it is always in the middle of things trying to reconcile traditions and principles. Classical liberals in Sweden had a natural rights perspective that gave them the basic principles and the broad outlook. At the same time they were practical when it came to applying this to the issues as they were.
The anti-globalisation movement
AN: Do you feel like you understand your opponents in a way that people who have had a different life history do not—that people who have always been on the right of politics simply don’t understand the left at some deep level?
JN: I think I do. If you have been brought up in a certain frame of reference you always understand it, you always recognise it when you see it in others, and that makes it easier to explain it in their words. On the other hand it probably also makes me more frustrated than others. If you come from a completely different frame of reference, you can say, ‘oh well, it's incomprehensible, I don’t understand what they are getting at,’ but having come from there, it makes it easier to be a little bit angry sometimes at how people do not lift their perspective and look at the longer term consequences of what they’re saying.
AN: What do you think is driving the anti-globalisation movement? In your Bonython Lecture you discuss the various inbuilt biases that people have. Do you think that these psychological or cognitive factors are a major influence?
JN: I think they are reasons why things like the anti-globalisation movement can catch on and why others might find it somewhat appealing. However I think it is also more specific factors such as the globalisation of their opponents. Many different organisations and movements who used to protest against privatisation in a certain regional context or were interested in a local environmental issue saw that they couldn’t fight the problem with the local politicians any more, they had to go to the European Union or the WTO or something like that. Political issues have become more global so they had to globalise. All those tiny movements became one big movement going to the same protests, which was helped by the globalisation of media, the internet, and the deregulation of airflights which made it possible for students to go around the world and protest about globalisation and liberalisation.
AN: A new version of a working holiday there! I’m also interested in how you have managed to make yourself a global phenomenon, and in particular how you have marketed these ideas. The medium seems to be part of the message here. Your typical pro-globalisation advocate is a middle-aged economist, while you are a younger person whose background is not in economics. Do you think that has been part of your appeal to people?
JN: I think it is in a way, and in my Bonython Lecture I explained that people are interested in the exceptions more than anything else. I think that’s the case but I also think it is something deeper as well. Defending globalisation has become more economics than values and passions. This is partly because its official institutions have a lot of economists saying that ‘ok, we will try to measure this and oh we found out that apparently globalisation is a good thing, hmmm, interesting isn’t it’ but no, that not very interesting because that’s not what people listen to. I think the anti-globalisation movement was listened to because there were a lot of people who had genuine concerns and were really passionate about what they thought. I think that’s part of my story as well. I’m not doing this because I just happened to do an analysis of the statistics and then decided ‘ok, then I can be in favour of this’. It’s more like it’s a person’s story, it is about really fighting for something and I think people become interested in such backgrounds.
Happiness
AN: Turning to your more recent writing on happiness, it strikes me that on both sides of the debate there’s a lot of adapting new social sciences to very old disputes. Do you think that is going on?
JN: Yes, that’s going on definitely, but I don’t think that is a new phenomena. We have those different mentalities, different views of the world and then we jump to new fields of study. It used to be an argument between liberals and socialists about economics, then that turned into a discussion about what kind of society we want, what happens to the environment and things like that. I think that’s a good thing because we change our priorities when our societies change. In the beginning it was all about, ‘ok, how are we going to make sure that no one starves’ and that was the big issue, and then it became, ‘ok we are wealthier we can deal with that and now the environment is the big thing’.
AN: Do you think that if people find that aspects of a liberal society don’t make them happy that would count as an argument against liberalism or merely an argument you have to deal with?
JN: Of course if it turns out that we all become miserable in a liberal society I think that is a big problem. We would have to check our ideas and theories again and see why this has happened. But the fact that there is a degree of unhappiness in society does not necessarily mean that it is wrong and that it is a bad society. We have to compare it with other possible societies.
Furthermore, it says something about what is it that creates happiness. Is it society as such or is does it come from what we are doing, how we think and so on. And being a liberal, I think this is very much dependent on our own actions and deeds. I happen to think that we create happiness in the way that we create wealth. It is something that we can choose to do or choose not to do depending on our own actions. I think we grow with that freedom and can also make our lives better in that regard.
Creativity
AN: Another major theme in your work is the significance of creativity. Can you expand why you think creativity is so important?
JN: Because I think that all the major improvements, everything that drives society forward, come from creative thinking—strange new ideas which seem unreasonable or extraordinary at the time but which change the way we think. A lot of things can be achieved by hard work or discipline if we know where we are going. But I think that it is only innovative thinking that really creates revolutions. It’s not making the same old thing a little bit better, it is really finding a completely different way of solving problems. That’s why I think society has to make a lot of room for innovators and creators.
AN: People often talk about liberalism or capitalism bringing out the worst in human nature, selfishness or greed being the most common examples. You seem to do the opposite, and emphasise the way it brings out the best. Can you expand on how you think the institutions of liberalism and capitalism do that?
JN: It’s because that urge to create and to innovate is something we have always. In art and our private lives we constantly think of new ways of making life interesting and better and I think that’s really what capitalism is about. We talk about the profit motive and that’s definitely important, partly because making money shows what really works and what doesn’t, but I don’t think that’s why people go into business from the start. When people have solved a problem they do not lean back and relax with all the money they have made, no, they try to look for new problems to solve because there is something that is in that creative process that makes us really satisfied with ourselves and with life. We want to be creative individuals, we want to be productive individuals and that’s why we do it. It’s not that we have to. I think that evolution has given us some urges and instincts. Solving problems and being dedicated to doing that is something that has had a big survival value in human history. So exercising our minds is as important and as beneficial psychologically as exercising the body.
Inequality
AN: A lot of people can accept that liberalism and capitalism have these positive effects but worry about inequality. There’s an argument that status differences have negative effects on the health of low status people. Inevitably liberal society is going to have inequalities; it’s a product of things we have just been speaking about. How much do we need to worry about these kinds of criticisms?
JN: I think that we don’t have to take that too seriously. When we think of inequality as a problem that’s a way of saying that wealth is just as bad as poverty. It isn’t. Poverty is the problem of people who lack opportunities, who aren’t able to live the kinds of lives we would like everybody to have. Saying that inequality is the problem is a way of saying that we might just as well take away the wealth rather than the poverty.
It’s true that inequality does have an effect on people who feel they are lower in the status chain. For evolutionary reasons, being lower in the pecking order is a problem. But I think that sort of mentality, that sort of instinct, exists in whatever kind of sphere you would like to discuss. We could remove all sorts of economic inequalities and we would still have the same problems of status and hierarchy whether in fashion, looks, abilities or whatever. People would again compare themselves to others and feel that same hunt for status.
I think the most important way to deal with inequality is to create several different levels of measurement so that you feel that there is not just one way of comparing with others. If there are many differences then you might be ahead in one of them. I think one of the best ways of doing that is to have a very lively civil society with a lot of different organisations—because then you can always have a better knowledge somewhere or be head of a local organisation dealing with the roads or whatever. Pluralism is the best way to deal with inequality.
The developing world
AN: A number of people have criticised your view that there should be free movement of people between states as well as free movement of goods and services and ideas, often on the grounds that once you have a welfare state this means that immigration is almost like coming into your personal house and taking your goods. How do you deal with that kind of objection?
JN: I think that’s the one major objection which has to be taken seriously. As long as we have welfare states it is very difficult to open our borders. I think that’s an argument against the very generous welfare state, that we sort of say that ‘ok, if you come here you are supposed to have almost equal living standards which means that you can’t come here, you must stay wherever you are with the lack of opportunity and freedoms you have there’. I think that’s a bad way of going about it. I think the better way, and what I would propose to deal with both problems, is to deal with over-generosity of the social system.
AN: Do you think there would be large scale movements of people if the rules were changed?
JN: I think that in some instances there might but I think two things are important here. If we do away with the opportunities of just arriving and living at the public’s expense, I think a lot of the not very thought-through immigration would disappear. The other thing is that what we have to do at the same time is to change our policies (now I’m speaking about the European situation as I am not really familiar with the Australian one). One of the major reasons why people desperately want to cross the border and go into the EU is that that is the only way for them to sell their resource, their work, to the European market. If you live in Northern Africa, it used to be a place that produced agricultural goods for Europe. Now with our protectionism, with our subsidies and things like that, it is impossible. So you have to get into Spain to be able to produce for Europeans and get a higher income. I think we should abolish our protection of agricultural goods first and make sure people are allowed to have better opportunities back home. In that case I think a lot of the pressure of immigration would probably disappear.
AN: In your book you support waiving debts owed by third world countries, going against the orthodoxy that this is bad for their credit rating. Can you explain why you argue this?
JN: I’m not in favour of an unconditional debt cancellation, but I’m in favour of it for several countries because I think that the debts are unjust. Institutions like the World Bank or IMF have lent enormous funds to tyrannical individuals in poor countries who haven’t used the resources in a productive way but instead have used the money to oppress their populations even further. Several of these countries have begun to make a transition, the old leaders have gone, they have turned into democracies or semi-democracies. In that case I think it is an insult to force the people who suffered from the dictatorship to pay off their debts. We made that decision when it came to South Africa. The South African people today shouldn’t be forced to pay off the debts of the apartheid regime. The same argument goes for a lot of these countries. I don’t understand why the Iraqi population today should be forced to pay off the debts of Saddam Hussein. I think those who lent those enormous sums should face the fact that they made the wrong decisions, they’ve financed very unproductive investments. One beneficial result of that I think is that many international institutions will be a bit more cautious when it come to lending to tyrants in the future.
AN: Still on developing countries, how easily do you think that the institutions of a liberal society can take hold in countries where people don’t fully understand property rights or the rule of law? In tribal cultures it is natural to favour your relatives rather than abstract rules. Do you think that is a huge challenge in creating liberal societies in the developing world?
JN: Yes, I think it’s a huge challenge and the jury is still out in many places I think. But I would say that so far I have almost always been pleasantly surprised by the fact that these things can take root in so many places. One hundred years ago or 50 years ago we wouldn’t have thought that Asian countries would be able to develop those institutions, property rights, democracy and so on, but now Japan, South Korea, Taiwan and so many other countries have really proven us wrong, We see that some of the countries in Africa have been able to deal with this to some extent at least, countries like Botswana and Mauritius. It probably means that there is something deeper in the human instinct and human will to improve their lives that makes it possible for them to adapt to new ideas. It is not easy of course. We have lived with these institutions in our countries for a couple of hundreds of years. If you have never done that and you are trying to implement it it takes a bit more time so we have to be a bit more patient in that everything won’t work perfectly from the start. But I think at least they can do it in a shorter time than us because they can learn from the lessons that we have drawn and from our mistakes as well.
AN: That is a hopeful note on which to end.Thank you
