Televising money; ever uttered the line, "That's so provocative there should be a book on it"? Dan Yergin not only wrote The Book on globalization—The Commanding Heights—he produced a fascinating 6-hour televised documentary on the subject. TIE caught up with the idea entrepreneur in an exclusive interview

International Economy, The, Summer, 2002

TIE: Your book and most of the television series was done before 9/11. If you had written the book and produced the series after 9/11, would the story have changed at all?

YERGIN: The most difficult thing would have been to go out with the series immediately after 9/11--without some time and perspective. We had already thought through some of these conflicts in the revised book's new chapters on globalization, and the whole last third of the show was about the debate over globalization. In our minds--or at least in my mind--I tried to come to grips with whether globalization is irreversible or not.

We had already done a segment about the first stage of globalization--a time of optimism and emerging markets, technology, tens of millions of people coming to the United States without the need for passports. And it all ended with a terrorist's bullet in Sarajevo in June of 1914. So that was already in place. What September 11th did was to highlight that theme and put it into a very stark light. We had quotes from both Keynes and Hayek looking back on the world before 1914. Really, epitaphs. Hayek's quote, which is much shorter than Keynes, was: "We didn't know how fragile our civilization was." And so on September 11th--we already kind of had the material. To be sure, we're talking about the last part of a six-hour series that spans a century.

One thing that 9/11 did was to drain a lot of the optimism out of the age. A certain period that began in the early 1990s ended on September 11. We're now in a different era.

TIE: Is globalization irreversible?

YERGIN: There are a lot of ways that it's irreversible. Technology is not going to go backwards; computers are not going to get slower; the Internet will not be eliminated. But there's another sense in which it is not irreversible, and that's in terms of disruption. After all, the first age of globalization ended with massive disruption. Already, prior to 9/11, there was a concerted effort to disrupt the institutions that help the world economy run fairly smoothly, by making it impossible, among other things, for the people connected to those institutions to meet. So things can go off the tracks. Despite the fore-bodings, it turns out that the economy did not go into a major crisis in the autumn of 2001. There's a lot of resilience in the economy and in the institutions. But confidence is far more conditional today. Which makes the responsibility greater to keep things in kilter.

TIE: Do you think that there's a sense now that maybe we overemphasized the economic aspects during globalization's heyday? That is, we have economic man, but we also have religious and cultural and ideological man. Has communications technology--the Internet and satellite television--exacerbated the crisis, in the sense that people now know or are much more aware of religious and cultural differences, and resent those differences regardless of the economic implications?

YERGIN: Those tools are open to every-body for whatever purpose they want. Some people in transnational networks take advantage of the tools of globalization in order to try and shatter the interconnected world. The very fact that people are getting "closer" creates not only comity, but also conflict and tension, resentments and anger.

TIE: There are roughly six billion people on the planet. In the last 20 years, we've added at least a billion people net to the developing and industrialized world, with the rest of the world living below the poverty line. And as tough as it is to add people to the modern world, the rest just keeps growing. The gap between rich and poor continues to grow simply because we can't expand the rich side fast enough. Do you buy this analysis?

YERGIN: In one sense the gap grows because the advanced nations have grown a lot. Even there, however, the data shows faster growth in the "new globalizers." The notion that globalization creates inequality is really wrong. What creates poverty? Why are countries very poor? Part of it has to with their own institutions--what do they spend on education, for example, and what do they spend on health, and how much corruption is there in the society?

Working on The Commanding Heights television show for three years, I came away with a few basic ideas that are not necessarily the conventional wisdom. They may also sound very obvious. First of all, global poverty: Thirty years ago, what was the poorest continent in the world? It was Asia. Today in many Asian countries, the per capita incomes put them into the middle class. Singapore, which was so dirt poor 40 years ago that people didn't even know if it would survive, now has a higher per capita income than Britain. So this notion that it's just a world divided between the advanced countries and the rest of the countries really is historically inaccurate. Part of the residue of the Asian financial crisis has been to create a fog around this central point, so that many people don't see what's actually happened in the world.

Today, the most dynamic part of the world economy is probably the new globalizers. Two countries we spend a lot of time on in the show are China and India, and with good reason, given their importance in the years ahead. We probably wouldn't have the Internet as we know it today were it not for India and the Indian Institutes of Technology. People just don't see it; they don't see that the growth rates are faster. And as soon as you do start to get this record of achievement, some people dismiss it. Yet when you come down to it--it sounds very simple--but the engine for reducing poverty is trade. But it's not very well communicated and not very well understood.