The New Statesman Essay - The challenge of our age

Clare Short believes globalisation can be harnessed to benefit the world's poor

I have an uncle who is an accountant, coming up to retirement age. He told me recently that one of the joys of his life has been arguing about politics. He is not an active party member, but he has carried Labour's best values with him throughout his working life and always argued the cause. Now he finds that people are no longer interested in arguing about politics.

I do not believe that this situation is a tribute to the Third Way and the hegemony of new Labour; we can see it in the media, the House of Commons and the Labour Party itself. There are still major issues of concern - desperate poverty in the world, conflict in the Balkans and inequality in Britain. But the passion seems to be going out of politics because there no longer seem to be ideological choices.

Some may believe this is attributable to Tony Blair's style of leadership. But it is not exclusively a British phenomenon. The same thing is happening worldwide: in South Africa, for example, the ANC government is as anxious to encourage inward investment and business confidence as the newest of new Labour politicians. The ANC passionately wants to reduce the dreadful levels of poverty and inequality that are the legacy of apartheid. Yet its room for manoeuvre is confined, as is that of all governments, by the need to retain the confidence of the powerful international markets so as to achieve the economic growth needed to reduce poverty.

I think there are two explanations for this profound change in the nature of politics. The first is that we have, over the past 50 years, learnt important lessons about the desirable balance of power between states and markets. Too much state power over the economy leads to economic collapse. This was demonstrated spectacularly ten years ago by the Soviet model, but more quietly in sub-Saharan Africa in the 1980s, when the heavily state-controlled economies there grew more slowly than did the population, leading to an irresistible rise in poverty.

But an excess of markets has been tested to destruction: Thatcherism, Reaganomics, monetarism or neo-liberalism - it has many labels. Until the late 1990s it was the dominant economic model in the world system. It meant minimising the role of the state and allowing markets to flourish. The theory was that although inequality would grow, so would the economy. This would lead to a trickle-down of wealth. Certainly inequality grew in industrialised and developing countries alike, but what wealth was created did not trickle down. This extreme belief in markets is now being rejected as people turn again to the socialist political tradition across the world. The Socialist International now has more member parties that ever before - over 170 and growing, and half of our member parties are in government. This is a major historical opportunity and a considerable responsibility.

The second major explanation for the ideological spark being removed from national politics is the nature of globalisation itself. The major issues of poverty, environment, war, human rights and democracy will be shaped by the international institutions that we put in place. No nation state alone can control these forces. In order to manage globalisation equitably, we need to strengthen and shape the UN, the World Bank, the IMF, the World Trade Organisation and other international institutions. There are massive distributive decisions to be made, but they will be controlled by how we shape our multilateral institutions, not by how we behave as individual nations. This does not mean that national governments do not matter. It is they - on our behalf - who must shape the new international system. Neither does it mean an end of ideology. The ideological questions are now more international than national.

Globalisation is as great a historical shift as was the change from feudalism to industrialisation. When we consider how this earlier shift remade the political and economic landscape of the whole world, we have some indication of the enormity of the changes that globalisation is bringing to our economies and societies.

There is no question that this process is generating new wealth, and that many millions of people across the world are benefiting. There is also no doubt that increased economic interdependence provides an opportunity to lift many of the world's poorest people out of their poverty. However, there is no guarantee that it will do so. Greater economic integration also brings risks. Instability in one part of the world will impact adversely on the performance of economies across the globe - witness the effect of recent economic problems in Asia and Russia. There is also the risk that we will damage the environment by non-sustainable forms of economic growth and that the gap between rich and poor, within and between countries, will grow wider, with a large part of the world's population excluded from the benefits of economic progress.

Global inequalities have certainly grown dramatically in recent decades, as figures from the UN Development Programme show. In 1960, 20 per cent of the world's population living in the richest countries had 30 times the income of the poorest 20 per cent. By 1995, they had 82 times as much income, with a small number of the globe's richest individuals wealthier than some of the world's poorest countries.

Latest estimates suggest that the world's 225 richest people have a combined wealth of over $1 trillion, equal to the annual income of the poorest 47 per cent of the world's people; this in a world where vast - and growing - numbers continue to live in abject poverty. There are an estimated 1.3 billion people - two-thirds of them women - who live on less than 60 pence a day, without access to adequate food, clean water, sanitation, essential healthcare or basic education services.

There is a clear moral imperative to tackle such poverty. We have an irrefutable common interest in doing so. Many of the world's contemporary challenges - war and conflict, mass migration, the violation of human rights, international crime and terrorism, the degradation of the global environment and rapid population growth - are rooted in underdevelopment and poverty.

Promoting sustainable development will help us to reduce poverty and contribute to greater global stability. Progress in development can also provide greatly increased opportunities for trade and investment. And it can help create the conditions for more effective international co-operation to deal with global environmental problems such as climate change, ozone depletion and threats to biodiversity.

This is why it is wrong to talk of globalisation as if it is inherently good or bad. Global economic integration and interdependence are a reality. We cannot recreate a world of insulated national economies or a world in which we can remain immune from events taking place elsewhere. The challenge of our age is to manage this interdependence in a way that is equitable and environmentally sustainable, that maximises the benefits of interdependence and minimises its costs.

One of the most significant changes since Labour's election in May 1997 is the creation of a new government department: the Department for International Development (DfID). Under the Conservatives, the Overseas Development Administration (ODA) was a subordinate part of the Foreign Office, headed by a minister outside the cabinet.

Defined simply, the DfID's task is to work to eliminate abject poverty from the world, and it is forging the necessary alliances internationally to make progress towards that objective. We might equally have defined our role as working across the international system to ensure that the world's poor are not excluded from the benefits that globalisation can bring. The two objectives are one and the same.

In our white paper on international development, published in November 1997, we endorsed the major United Nations poverty eradication programmes. The overall strategy is to commit the world's richest countries to work in partnership with developing-country governments to achieve a number of specific targets. The main target is to halve the proportion of the world's population living in abject poverty by 2015. This means a billion people working their way out of extreme poverty within 20 years. Associated targets include universal primary education; basic healthcare and reproductive healthcare for all; and a commitment to put in place sustainable development plans in every country by 2005.

For many poor countries, making progress towards these targets will require substantial grants or low-interest loans. It is very worrying, therefore, that levels of aid continue to fall across the world. Here in Britain, for 18 years under the Conservatives, aid was consistently cut as a proportion of national wealth. Labour has stopped that downward trend and we have committed ourselves to increasing overseas aid spending by 28 per cent in real terms over three years.

A commitment to increase the quantity of aid needs to be matched by a determination to improve its quality and effectiveness. Over the past 50 years, development assistance has too often been used to further political objectives, bolster cold war allies or facilitate commercial contracts. With the cold war behind us, and with greater clarity about what works in development, there is no longer any justification for misusing aid resources in this way. Here in Britain, Labour has been rigorous in ensuring that aid resources are well spent, in line with our new development priorities. In its most recent review of the UK development programme, the development assistance committee of the OECD praised the UK and described the DfID as "one of the most professional and innovative aid agencies in either bilateral or multilateral sectors".

Ensuring that the world's poor can benefit from globalisation requires a wider set of policy responses. There is a complex web of issues - environmental, trade, investment, agricultural, political and security - that affects the development prospects of poorer countries. Meeting the international development targets depends on implementing these different policies in a complementary way as they affect the developing world. In other words, the needs of the world's poor cannot be treated as an optional extra. Rather, they need to be central to the way in which we approach the management of globalisation and the sort of political and economic institutions and structures we devise for doing this.

That is why action on international debt relief is so important. Many of the world's poorest countries carry heavy debt burdens which are a drain on their economic development. In 1996, the major creditor nations, the World Bank and the International Monetary Fund, agreed to the Heavily Indebted Poor Countries Initiative (HIPC). This was the first serious attempt to address the problem of debt in a comprehensive way, bringing together debts owed to individual governments with debt owed to the multilateral development organisations.

While the initiative has brought benefits to some countries, three years on from the start of HIPC it is also clear that it has fallen well short of its own declared objectives of creating a sustainable exit from unpayable debt for the poorest countries. Debt relief under HIPC proved to be too little, too late, and Labour last year pushed for a fundamental review of the initiative. That review is now under way, and progress has been made. Our aim has been to secure faster, wider and deeper debt relief for those indebted countries that have a clear commitment to poverty reduction and to free up resources for essential investment in health, education and other anti-poverty programmes.

Similarly, on investment issues the objective should be to strengthen the capacity of developing countries to articulate their own interests in investment negotiations and to put in place policies that will help them to attract increased flows of direct investment. Private capital has an absolutely crucial role to play in improving the development prospects of poor countries. And there has been a huge growth in levels of foreign direct investment into developing countries over recent years. But so far those flows of investment have gone to a small number of developing countries.

A commitment to make globalisation work for the world's poor also needs to be reflected in international trade policy. This has been a particular priority for the Labour government. In May 1998, speaking in Geneva at the 50th anniversary celebrations of the General Agreement on Tariffs and Trade (Gatt), Tony Blair committed the government to a free and fair international trading system, but one in which the benefits of increased trade would be more equitably spread. And he pledged to work with developing countries to help them secure their proper interests through the multi-lateral trading system.

The DfID has since been working with the United Nations Conference on Trade and Development (UNCTAD), the World Trade Organisation (WTO), the International Trade Centre (ITC), the World Bank and developing-country governments, to ensure that developing countries can use the WTO to advance their interests more effectively.

But a major aim must be to manage globalisation in a way that is fair and sustainable. For too long the politics of globalisation has lagged behind the economics. If economics is global, then our politics must be global, too. And for that we need an effective international system and greater levels of international co-operation.

There is a curious paradox at the heart of globalisation. While economies and peoples are being drawn ever more closely together, some political forces seek refuge in narrow nationalism and isolation - for example, the right-wing forces in the US that reject America's participation in multilateral organisations such as the UN, the World Bank and the IMF. One strand in British Conservatism is similarly in retreat from international engagement.

But there are also those on the left who seek to turn back the tide of globalisation, who want to put the globalisation genie back in its bottle. They see the IMF and WTO as hostile institutions and want, like King Canute, to rail against the power of global market forces. They fail to remember, however, that the great multilateral institutions were created not by conservatives, but by progressives.

The task today is to strengthen and renew institutions such as the World Bank, the IMF and the WTO and to recast them to greet the new millennium. Labour is closely involved in seeking to strengthen and reshape the work of the United Nations, the World Bank and the IMF. Past World Bank policies often paid too little attention to the social and environmental costs of economic reform. That is changing. And Britain is a major player in World Bank discussions, working with like-minded forces to change the approach of the bank to adjustment and economic reform programmes.

This is a large agenda. But it is the agenda on which a new politics must be constructed and new alliances forged. As a recent Foreign Policy Centre paper on globalisation (David Held et al, 1999) pointed out:

"The challenge of globalisation is ultimately political . . . This means rethinking politics. We need to take our established ideas about political equality, social justice and liberty and refashion these into a coherent political project robust enough for a world where power is exercised on a transnational scale, and where risks are shared by peoples across the world.

"And we need to think about what institutions will allow us to tackle these global problems while responding to the aspirations of the people they are meant to serve."

This is, indeed, the challenge of our age. Our political tradition - working with progressive forces across the world - is well placed to rise to that challenge, to help manage globalisation in pursuit of the common objectives of global peace, sustainable development and social justice.

The author is Secretary of State for International Development

Jens Schlueter/Getty Images
Show Hide image

The House by the Lake is a history of Germany told in a single house

History, which we learn about as a series of ideological abstractions, is lived concretely - in ordinary houses.

Recent years have brought a number of popular stories, told about Jews who lost their patrimony during the Nazi period: Edmund de Waal’s book The Hare With Amber Eyes, for example, which focused on a group of netsuke – small Japanese figurines – that was all that remained of his family’s once-vast art collection, and the film Woman in Gold, which tells the story of the descendants of Adele Bloch-Bauer, who successfully sued to reclaim Gustav Klimt’s portrait of her.

It is no coincidence that these stories are emerging just at the historical moment when the last survivors of the Holocaust are dying. The actual victims of the Holocaust suffered too much to be plausibly recompensed; there is no way to tell their lives ­except as stories of irrecoverable loss. It is only for the second and third generations that the restoration of lost property can seem like a form of making whole, or a viable way of reconnecting with a familial past. There is, however, always something a little uncomfortable about such stories, because they seem to suggest that regaining a painting, or a piece of real estate, does something to heal a historical rupture that in reality can never be closed.

The House by the Lake starts out seeming like another one of these stories. In 2013 Thomas Harding travelled from London to the outskirts of Berlin in order to visit a house that had been built by his paternal great-grandfather, a German-Jewish doctor named Alfred Alexander. What he finds is a shambles: “Climbing through, my way illuminated by my iPhone, I was confronted by mounds of dirty clothes and soiled cushions, walls covered in graffiti and crawling with mould, smashed appliances and fragments of furniture, rotting floorboards and empty beer bottles.” The house had been used by squatters as a drug den for years and it was now scheduled for demolition by the local authority. Here is a perfect symbol of a lost estate and the reader half expects Harding triumphantly to restore the house and reclaim it for his family.

Yet The House by the Lake has a more complex and ambiguous story to tell. For one thing, Harding makes clear that his relatives want nothing to do with the house, or with Germany in general. Harding comes from a family of German Jews who emigrated to Britain in the 1930s, starting new lives with a new name (originally they were called Hirschowitz). Understandably, they have no sentimental feelings about the country that drove them out and no interest in rekindling a connection with it. But Harding is an exception. His last book, Hanns and Rudolf, was also an excavation of the family’s past, in which he showed how his great-uncle Hanns Alexander fought in the British army during the Second World War and ended up arresting Rudolf Höss, the infamous commandant of Auschwitz.

Rather than let the house disappear, he sets about recovering its story, in an attempt to convince the German authorities to let it stand as a structure of historical value. In doing so, he broadens his subject from Jewish dispossession to the history of 20th-century Germany, as seen through the lens of a single modest building.

Alfred Alexander built the house in 1927 as a summer home for his family. He was a fashionable Berlin doctor, whose patients included Albert Einstein and Marlene Diet­rich, and he joined a number of successful professionals in building second homes in the village of Groß Glienicke, just west of the capital. The village had a long history – it was founded in the 13th century – but the exponential growth of modern Berlin had disrupted its traditions.

The land that Dr Alexander leased to build his house on was part of an estate owned by Otto von Wollank, who sounds like a stern Junker but was a Berlin real-estate developer who bought the estate (and then his title) in the early 20th century. Already Harding shows that the history of Groß Glienicke is bound up with social changes in modern Germany and in particular those in Berlin, whose population exploded in the years before the First World War. This made it more profitable for the von Wollanks to parcel off their land to city-dwellers than to farm it, as its owners had done since time immemorial.

The house that Alfred Alexander built was a modest one: a one-storey wooden structure with nine small rooms and, because it was intended to be used only in the summer, no insulation or central heating. It was a place for leading the simple life, for rowing and swimming and playing tennis, and the children – including Elsie, who later became the grandmother of Thomas Harding – loved to spend time there.

Groß Glienicke was, however, no ­refuge from rising anti-Semitism: Robert von Schultz, the Alexanders’ landlord and Otto von Wollank’s son-in-law, was a leader in the Stahlhelm, the right-wing paramilitary organisation, and a vocal hater of Jews. After 1933, when Hitler seized power, things became much worse, though the Alexanders attempted to continue living a normal life. Harding quotes a diary entry that the teenage Elsie made in April that year: “Thousands of Jewish employees, doctors, lawyers have been impoverished in the space of a few hours . . . People who during the war fought and bled for their German fatherland . . . now they stand on the brink of the abyss.”

Fortunately, the abyss did not swallow up the Alexander family. By 1936, all its members had escaped to Britain. At first, they tried to keep legal possession of the Groß Glienicke house, renting it out to a tenant named Will Meisel, a successful songwriter and music publisher. (The company he founded, Edition Meisel, still flourishes today.) But Meisel, like so many ordinary Germans under Hitler, was not above profiting from the dispossession of Jews. When the Alexanders’ citizenship was revoked by the Nazi state and their house confiscated, Meisel bought it from the tax office at a bargain price, much as he had previously bought up music publishers abandoned by their Jewish owners. After the war, evidence of this profiteering delayed – but did not prevent – Meisel’s efforts to be “denazified” by the ­Allied occupying powers.

Meisel won the house by the lake thanks to one political upheaval and lost it thanks to another. The postwar partition of Berlin left Groß Glienicke just outside the city limits; as a result, Meisel’s business in West Berlin was in a different country from his lake house in East Germany. This turned him into another absentee landlord, like the Alexanders before him. Indeed, there is an odd symmetry to what happened next. Just as the Nazis had taken the house from its Jewish owners to give it to an Aryan, now the communists took the house from its capitalist owner and gave it to the workers.

Because of the housing shortage in postwar Germany, the small summer house now had to serve as the year-round residence for two Groß Glienicke families, the Fuhrmanns and the Kühnes. This required a series of alterations that destroyed much of the house’s original character – a typical eastern bloc triumph of the utilitarian over the aesthetic.

In tracing this next phase of the house, Harding shows what life in East Germany was like for some of its typical citizens. Wolfgang Kühne, a bus driver, was recruited by the Stasi (his code name was “Ignition Key”) but was soon booted out for failure to do any actual spying. His son Bernd was a promising athlete who unwittingly participated in the state’s doping programme, before an accident destroyed his sporting career. At the same time, the family benefited from the guaranteed food, jobs and housing offered by the state – perks that Wolfgang would miss after reunification brought capitalism back to Groß Glienicke.

The institution of East German life that the Kühnes could never ignore, however, was the Berlin Wall. Because Groß Glienicker Lake was legally part of West Berlin, a section of the wall ran between the house and the lake shore – a three-metre-high ­concrete monolith that was literally in the Kühnes’ backyard. They couldn’t have guests over, since they lived in a restricted border zone, which required a special pass to enter. Occasionally, Harding writes, the young Bernd and his classmates would make a game of tossing sticks over the wall, trying to set off the alarm tripwires.

This emblem of tyranny was just another fact of life for those living in its shadow. And that is, perhaps, the most important lesson of Harding’s book. History, which we learn about as a series of ideological abstractions, is lived concretely. This is why an ordinary house can serve so effectively as a symbol of the German experience.

Today, the Alexander Haus, as it is known, is a designated landmark and Harding hopes to turn it into a museum, a fitting new incarnation for our own age of memorialisation. Whether it will be the last stage in the house by the lake’s career is something only time will tell.

Adam Kirsch is a poet and critic. His latest book is “Emblems of the Passing World: Poems After Photographs by August Sander” (Other Press)

The House by the Lake: a Story of Germany by Thomas Harding is published by William Heinemann (£20, 442pp)

This article first appeared in the 08 October 2015 issue of the New Statesman, Putin vs Isis