Thought Leader: Gillian Tett

November 14, 2012

As part of the Carnegie Council Centennial Thought Leaders Forum, Carnegie Council's Devin Stewart spoke with Gillian Tett, a British author and award-winning journalist at the Financial Times, where she is markets and finance commentator and assistant editor.

DEVIN STEWART: Gillian, thanks so much for being here.

What do you find unique about today’s world, especially from a moral perspective?

GILLIAN TETT: Today’s world is marked by a very profound paradox. On the one hand, the global economy is connected as a single system more profoundly than ever before, partly because of technological change, which means that you have communication systems that bind the globe together; partly because of economic change, which means that globalization has linked markets, not just in finance, but in goods and people too. So you have a very, very interconnected system, and you have the ability of that system to transmit shocks very rapidly from one end of the globe to the other.

At the same time, though, you have a system that is still marked by tremendous fragmentation, not just socially, but also mentally and physically, in terms of how people live their lives. And there’s a real problem of tunnel vision, or silos, or tribalism, in many parts of that interconnected system. By that I mean that people who operate in one little milieu tend to not know that much about that’s happening elsewhere and often don’t really have any ways of breaking out of their own political and ideological sense of tunnel vision.

So, on the one hand, the system is interconnected, shocks can travel very fast. On the other hand, though, you have the tribal system where people actually aren’t that interested in understanding what’s happening elsewhere or getting inside other people’s heads.

And you also have a problem where you have technological experts controlling aspects of our economy that can affect everybody else. You have a lot of geeks in technological silos that nobody else understands.

So the real rub is that, although our system is interconnected and we can all suffer if something goes wrong in one corner of it, we don’t have the ability to actually understand those interconnections properly, and we also have a danger that the elites who exist in one silo are essentially blind to everybody else.

DEVIN STEWART: Part of our project is to look at this idea of a global ethic, which we’re interviewing people about, including our Fellows across the world. Does a global ethic mean anything to you; and, if so, what does it mean?

GILLIAN TETT: Well, the most practical aspect of a global ethic is a recognition that we’re all in this together. Precisely because our system is so interconnected these days and shocks can be transmitted very, very fast, we should all recognize that if we ignore the parts of the system that are poor or backward or don’t seem to have any connectivity to us, we could actually end up damaging ourselves.

We live in an era when if one part of the globe suddenly sees a pandemic start, it can spread across the entire system with terrifying speed. If something goes wrong in one corner of the financial marketssay, in relation to subprime loans or Chinese activitythat can also infect the entire financial system very, very rapidly. Similarly, if something occurs that makes the supply chains break down in one part of the globe, or some aspect of the commodity markets malfunction, that can impact us all.

So on the most basic level a global ethic should be a recognition that we simply cannot afford to ignore our neighbors, even if they don’t appear to immediately have much connectivity to us.

DEVIN STEWART: Would you say things are getting better or worse in the world today?

GILLIAN TETT: Things are getting better, in the sense that we have the ability to offer not just basic material needs to the globe, in terms of food and water, but also education, connectivity, information, and an ability to feel part of a system, in theory. Things like the impact of the mobile phone, which has suddenly allowed people in poor parts of the globe which never previously used to to have access to the rest of the world, are really transforming the way that the global system operates.

The problem, though, is those technological advances are going hand-in-hand with growing income inequality. And they’re also going hand-in hand with a political system that is pretty unresponsive in terms of providing the leadership that’s needed so badly to help us work out how to share the fruits of those technological gains.

DEVIN STEWART: As you know, Andrew Carnegie was one of the world’s first peace advocates. Do you think world peace is possible?

GILLIAN TETT: I think it would be very naïve to think we’re going to see world peace anytime soon. I think driving for world peace without driving for some element of economic integration and harmony is naïve, unfortunately.

History suggests that economic ties, free trade, economic interdependence, and commerce are some of the most powerful ways you can stop nations fighting each other and actually bring countries together. When countries feel they all have an economic stake in hanging together, that tends to mitigate the risk of war. It doesn’t always work, but it’s a pretty powerful disincentive to fight.

So yes, I think absolutely that governments and institutions like the Carnegie Council should be trying to promote the idea of peace and very much celebrating and lauding people who give their lives to that work. At the same time, though, it should also go hand in hand with a hardheaded analysis that economic ties need to be strengthened too.

DEVIN STEWART: I think our president would agree. He’s a realist.

What does moral leadership mean to you?

GILLIAN TETT: Moral leadership means having the courage to do things that may be unpopular, to speak truth even though it may not be what people want to hear, but also to retain a sense of humility.

One of the hardest things that besets any leader is that the very act of leading means you tend to become separated from the people whom you are leading, because in a sense you have to put yourself forward and maintain some distance to actually have the vision and leadership authority which allows you to lead. But if you stay in power too long, you tend to up falling prey to hubris and arrogance and becoming increasingly tone deaf to the people who put you there in the first place.

So the question of how you create leaders which have both the authority and competence to act but also the humility to listen is a real challenge.

DEVIN STEWART: One of our other questions is, there are many problems you’ve identifiedvulnerabilities, economic interconnectedness which can create shocks and so forth. Who is ultimately accountable for the problems you talked about? Is it people who have more power? Is it all of us? Who’s accountable?

GILLIAN TETT: At the end of the day, that great old Biblical phrase of “from those to whom much is given, much will be required,” is a very powerful mantra, whatever your religion or your ideological world view.

The reality is that today we have, not only great inequality in terms of wealth, but also great inequality in terms of opportunity. People who have been lucky enough to be given extraordinary opportunities and benefits really do have a responsibility to give backnot merely because that’s the right thing to do, although I fundamentally do believe it is the right thing to do, but also because they, in a sense, have self-interest.

We are more interconnected as a system today than ever before. That mantra that everyone is connected to everyone else through seven degrees of separation is probably these days out of date. If you look at Facebook, if you look at the economic ties that bind us, if you look at the ties through manufacturing supply chains or financial markets, or simply the fact that people travel around the world in a way that means that pandemics and epidemics can spread so easily, we as part of a global system are very, very, very interconnected.

We cannot afford to ignore something that’s occurring in a seemingly remote, irrelevant part of the world which is poor or isolated or separated from our daily lives because the events in remote parts of the world have a habit of ricocheting back into our own existence too.

Who would have dreamt that what happened, say, in Libya or Afghanistan or Saudi Arabia could have come back and affected the political debate in America so profoundly? Who would have thought that what happens, say, in the subprime world in California could have ricocheted through the financial system and hurt German pensioners, hurt investors all over the world? And who could have imagined that the type of thing that BP was doing in the seabed of the Gulf of Mexico would have had the ability to actually shake oil markets across the worldand again, pollute the seas, affect us all?

But the fundamental message from all of those examples is that we simply cannot afford to ignore what is happening in the small, geeky silos of our system, because what those technological experts are doing can affect us, and what is happening in the little-known, unseen parts of the globe can affect people who spend much of their time trying to ignore it. Does that make sense?

DEVIN STEWART: Perfect. Gillian, thank you.