Stirred into action by political apathy

April 6, 2001

What led to protesters attacking Starbucks and setting light to cars? A loss of faith in democracy, says Noreena Hertz. Mandy Garner reports.

Noreena Hertz has always been precocious. At three years old, it was already clear to her parents that she was advanced for her age. At school, she was put into a class a couple of years above her age group to ward off boredom. She sat her O levels at 14 and started university at 16. Now at 32, after business school, stints in Russia advising the government on privatisation policy and in the Middle East researching how business can promote peace, she has written a book on globalisation that is sure to propel her into the media stratosphere.

The Silent Takeover earned her a six-figure advance - the highest yet for a work on economics. It attempts to tread the difficult path between accessibility and academia. It is packed with statistics and general theories about economics and politics, but is written for as wide an audience as possible, with lots of human interest stories to illustrate how neo-liberalism works at ground level.

Hertz, associate director at the Centre for International Business and Management at Cambridge University, also has a series out on Channel 4 soon, called The End of Politics? .

When we meet at her London flat, she is still in the middle of filming and has just given her first lecture based on her book. She is very pleased with the response because she was worried people would think it was "a dumbed down analysis of the world we are living in".

She acknowledges that the book and media scrum around her might create jealousy among colleagues and that the papers might put a spin on her that she did not intend, the most likely being a focus on her personal life, her gender and her age. But there is little she can do about that. She already has the somewhat dubious honour of having been misquoted in The Times as saying she wants to make economics "sexy", and says after the interview that she is glad I did not ask about her love life.

She is a media dream: you can foresee articles in every part of the national newspapers, from the women's pages and fashion sections - she favours leopard print tops over academic tweed - to business and economics. This, and the huge interest in an accessible book on the social and political effects of globalisation following Naomi Klein's success with No Logo , probably explains the hefty advance.

The thesis of the book is that over the past two decades, the balance of power between business and politics has shifted to such an extent that people are becoming increasingly apathetic about politics, resulting in the kind of pressure-group protests we have seen from Seattle to Prague. It argues that the only way to stop the rot and reassert public faith in democracy is for politicians to curb the power of multinationals.

Hertz became interested in the subject after completing her MBA at Wharton School in the United States. Having studied how capitalism works, she was given the "amazing opportunity" of seeing how the theory could be put into practice in a previously Marxist system. Luckily she had learnt Russian at school, having chosen to study a third language rather than home economics. "Coming from an arch feminist household (her mother, who died when Hertz was 20, was chair of the 300 Group, which was involved in putting women into politics) I did not even entertain the idea of doing home economics."

It was 1991 and Hertz was 22. "I was one of the people selling the neo-liberal project to Russia, advising the government on privatisation," she says. As time passed, however, she grew increasingly concerned about the effects of wholesale privatisation with no safety nets.

"I realised I needed to think more about it." She started a PhD and spent two and a half years in Russian factories studying the effects of the privatisation policies on the ground. "What interested me was the relationship between economics and society, but my ideas were out of fashion. Famous academics were publishing studies saying Russia backed market economics. They were flying in and having high-level meetings, while I could see that things were not changing, that there was corruption and poverty."

From Russia, she moved to the Middle East and worked on a regional project that showed how Arab-Israeli joint ventures could play a role in promoting peace. "At first people were cautious about it, but close day-to-day interaction can dispel the myths people have about each other and in small ways can contribute to peace."

Her work showed how business was taking on roles that were once associated with government. "It fascinated me how politicians were ceding power. I stepped back and saw that this was part of a bigger story, that we are living in a whole new world. I wanted to see what this meant."

Hertz says business is reluctant to appear to be stepping into the political arena, although many companies contribute to social projects, whether because of some moral sense or for publicity reasons. "It is early days. We have to view the rhetoric companies are speaking with some degree of suspicion, but things have undoubtedly changed and millions are being put into rebranding companies as ethical investors."

But she adds: "This is a response to a growing active consumer and shareholder movement that has risen as a result of the economic boom. It is in corporations' bottom-line interests to focus on these matters. And they have to make decisions on that basis. Government, therefore, definitely has a role to play in keeping them in check."

But what if the government involved is undemocratic? Hertz says that, in that case, multinationals can play an important role in promoting change. "What can the British government do about human rights abuses in Burma? Threaten sanctions? Companies can threaten to pull out. That can have more effect. But it all depends on people somewhere else championing the rights of people who do not have a voice."

Hertz does not anticipate the anti-capitalist movement resulting in the emergence of a new political party. Rather, she expects it to put pressure on existing parties to take action. She has interviewed business and political figures for her Channel 4 series and says that, ironically, business leaders seem to be much more responsive to the new mood than politicians.

"They recognise that there are legitimate concerns and that they ignore them at their peril. Politicians are taking the issues on board much more slowly. They are so weighed down in bureaucracy, whereas corporations are used to giving a swift response to their customers. Government could learn from business. For instance, the supermarkets were quick to react to the problems around genetically-modified food, while Blair was still defending Monsanto. The trouble is, they are unrepresentative, unelected institutions dependent on who has the most money."

Despite her academic credentials, Hertz is no ivory-tower intellectual. She worked at Vogue and, while at Wharton, worked behind the scenes in Hollywood. "I always wanted to explore the world," she says. "Fashion sounded exciting at the time, but I was passionate about films. I wanted to be a film producer and every summer at school I wrote to film companies asking for a job as a runner."

She is defensive of the decision to make her book and the Channel 4 series as accessible as possible, without losing any intellectual credibility. "I believe that academics should not write in academic code for other academics. Sometimes it seems they are being deliberately abstruse. I am writing about issues that affect all of us. There is no reason why they should not be as accessible as possible to ordinary people. It is actually harder to simplify complex issues than make simple ideas more complex. Perhaps the system needs to adapt to reflect that there are a growing number of academics who want to reach a wider network."

Over the past two years at Cambridge, she has noticed that more of her students are becoming interested in the globalisation issue and corporate responsibility. She seems to have tapped into the Zeitgeist - countries such as New Zealand and Bolivia are beginning to wrest control of privatised services and even in the United Kingdom, leading figures are beginning to question our reliance on big business, although Hertz says the government appears slow to react.

She is ready to accept the inevitable comparisons with Klein, but asserts that, while she admires No Logo , she hopes her book moves the anti-corporatism argument on to a more measured, less black-and-white footing, focused more on politics.

So what is she going to do once the publicity dies down? She is hoping for a long holiday. But with the rights already sold to Germany and the US, she may have some time to wait.

The Silent Takeover is published by William Heinemann, £12.99 on April 20.

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