Gordon Brown: globalization is a race to the top

By Penny Hawthorne | 8 September 2005

In an article in tomorrow's Financial Times, Gordon Brown, Britain's finance minister, puts the case for free trade and proposes a "European social model" with free-markets at its core:

The new protectionism we are seeing, however well intentioned, is a wake-up call because it is the last stand from those who believe we can stop the clock, postpone or prevent inevitable change. It is easy - as has happened in the last few weeks over Chinese imports - to complain about Asia's role in the world economy as a race to the bottom. Chinese wages are just 5 per cent of those in Europe. But my visits to Asia, especially to China, have convinced me that Asia is in no doubt that it is in a race to the top - investing in technology, innovation, science and skills, with 4m extra graduates every year from China and India.

And because it is a race to the top, Europe can only succeed by moving up the value-added chain. When we equip people for the future, investing in new skills, flexibility and greater fairness go hand in hand. An old European social model that leaves 20m unemployed is neither efficient nor fair. A new European social model that equips people for the new global economy creates a Europe that is flexible and fair.