Understanding The J Curve

The J Curve by Ian Bremmer

KAI RYSSDAL: United Nations Secretary General Kofi Anan had a downbeat assessment of conditions in Iraq today. It's not a civil war, he said. Not yet, anyway. Anan's just back from a week in the region. He was speaking at the U.N. today. At a conference of international donors to the Iraqi government.

Even in the best conditions, public policy's a tough thing to quantify. To plot on a graph and see what works and what doesn't. Of course, that hasn't stopped people from trying. Ian Bremmer's latest book is called "The J-Curve."

Ian, good to talk to you.

BREMMER: Pleasure to be here.

RYSSDAL: We can all understand this concept of a J curve on a graph, but what I need you to do for me is explain what's on the axes and why that matters.

BREMMER: Sure. Well, the vertical axis is stability — you're looking at how stable a country is. And the horizontal axis is relative openness — openness both internally and externally to ideas, transfer of people, and investment.

RYSSDAL: The left side of the curve is sort of steep and ugly, dropping down. And then it sort of scoops up gradually to the up and to the right. Implying, I suppose, that you can have stability and openness in varying degrees on both sides of that curve.

BREMMER: That's right. But the interesting thing about the curve is that there are many authoritarian states that are quite stable and they want to stay that way. And the way that they stay that way is by keeping themselves closed. A country is not like a child. You know, you send it to its room when the boy or girl does something you don't like. A country that is stable because it is isolated wants to be sent to the equivalent of its room. And the United States may have some success as the world's policeman, but does not have success as the world's parochial school.

RYSSDAL: What's the economic component of the stability element of your graph? If you're rich and powerful and happy and healthy are you inherently more stable?

BREMMER: The entire curve shifts up. You can get away with a lot more. You can get away with reforms; you can get away with closing down your country. So, if you're Russia, if you're Iran, and you want to really close your society, you have a lot more flexibility.

RYSSDAL: You know there is one country at least where economic reform seems to be sort of destabilizing — or at least problematical: China. You spend a chapter on it in your book.

BREMMER: There are two things happening in China at the same time. One is China is becoming richer. A lot of what they're doing in opening their markets is bringing more cash to the average Chinese. And that gives the government more flexibility. The entire curve, the entire J curve shifts up. At the same time, China is a country that is stable because it's closed. And the big question in China is, will economic growth happen fast enough that they can get away with this increased political instability. There is a reason why when people demonstrate in China the crackdown is immediate. There's a reason why Google is not allowed to operate in an unfettered form.

RYSSDAL: Let's say somebody at the White House picks up your book and starts flipping through it and says, hey, these are some interesting ideas. Apply these for me in practice, as a policy tool.

BREMMER: The problems that the U.S. runs into are with countries on the left side of the curve — and that's true in Iraq, it's true in Iran, it's true in North Korea, it's true in Cuba. There's a reason why Fidel Castro, who's just hit 80, is the longest serving head of state in place today in the world. Forty-seven years. U.S. sanctions on Cuba have helped facilitate that. They don't help to remove Castro from power. They don't help to open Cuba for American foreign direct investment. They don't help to make life better for Cuban citizens on the ground.

You know, looking at Iran . . . Iran is not North Korea. Iran has been one of the more open states in the Middle East over the past 20 years. And the existing government wants to change that, they want to consolidate power and close that country. The U.S. should do everything possible not to help them.

RYSSDAL: Ian Bremmer's the president of the Eurasia Group, that's a political risk consultancy group based in Neew York City. His latest book is called "The J Curve." Mr. Bremmer, thanks a lot for your time.

BREMMER: Pleasure.

About the author

Kai Ryssdal is the host and senior editor of Marketplace, public radio’s program on business and the economy.

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