#10 Lord Stephen Green of Hurstpierpoint

The Nalu Finance Podcast

In this episode of Nalu Finance, we sit down with Lord Stephen Green to explore the themes behind his latest book, The Human Odyssey and the complex intersection of culture, morality, and global economics.

Lord Green discusses:

• How Eurasia shapes global commerce and politics

• Why understanding China's worldview is critical

• The investor’s dilemma when values clash with opportunity

• How urbanization and technology are redefining human interaction

• Why nuclear proliferation and AI pose long-term challenges

• The importance of engaging with other cultures to find shared values

He also reflects on the moral dimension of investing, the limits of globalisation, and how personal choices can still serve the common good.

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🎙️ Transcript: Stephen Green: 00:06 The human approach and the wise approach and the enriching approach is to see engagement with other cultures, other self understandings as a source of learning for oneself. And through that, we will be better placed to confront the common challenges.

Sponsor: 00:22 This podcast is courtesy of the Zurich branch of Commerzbank AG, which offers over 20,000 publicly offered leveraged structured products in Switzerland. These structured products are accessible through a multitude of channels, including the BX, SIX Exchanges and Swissquote Bank. More information can be found at certificate.commerzbank.ch.

Stefan Wagner: 00:46 Stephen Green was educated at Lansing College, Sussex at Oxford University, where he graduated in 1969 with a BA in politics, philosophy, and economics. He also obtained a master's degree in political science from the Massachusetts Institute of Technology. He was created a Life Peer in 2010 and was appointed Minister of State for Trade and Investments in 2011. He retired from this position in December 2013. Lord Green began his career in 1970 with the British Government Ministries of Overseas Development. In 1977, he joined McKinsey & Co., with whom he undertook assignments in Europe, North America, and the Middle East. He joined the Hong Kong and Shanghai Banking Corporation in 1982.

In 1998, he was appointed to the board of HSBC Holdings PLC as an executive director. He became group chief executive in 2003 and group chairman in 2006. He retired from HSBC in December 2010. Lord Green is currently the Chairman of the National History Museum, Chairman of the Asia House, and President of the Institute of Export and International Trade. Thank you, Stephen, for taking the time. So after the financial crisis in 2008 and 2009, you wrote or published the book Good Value, which I really enjoyed. And it was sort of a reflection on money, morality in an uncertain world. Now, your latest book is The Human Odyssey, East, West and the Search for Universal Values. What influenced you to write that book?

Stephen Green: 02:23 Well, it was a, in a sense, a distillation of a lifetime spent partly doing business and living in Asia. and partly kind of voracious reading, as my wife says. If she turns her back, I'm reading a book and there's an element of truth in that. So, in a sense, that book tries to bring together my sense of what's going on. I mean, it's a ridiculously ambitious project, but I enormously enjoy doing it. And it starts from a simple thesis, really. which is that we all live on the continent of Eurasia, the land mass that extends from Ireland in one direction to Vladivostok in the other. And that's about two-thirds of the world's population and it's about two-thirds of the world's economic output.

And as connectivity increases, both physical and virtual, so we're becoming more and more aware of each other, and in the process becoming more and more aware of the fact that Eurasia is home and origin to all of the world's great living cultures. And as they bump up against each other, it is interesting to explore, to say the least, it's important to explore how We are dealing with different senses of self-awareness, different senses of what's important. What does this mean in commerce, for sure, but actually more generally, what does it mean for human life, the fact that we're all coming together in that way?

So I tried to explore where we got to and what it might look like over the next hundred years. Because in that context, the big question geopolitically on the world stage is the rise of China and the way in which the other great superpower of the world, America, America is going to deal with that and how they're going to interact with each other and what does that mean for the rest of us. So, like I say, a ridiculously ambitious project but fascinating to do.

Stefan Wagner: 04:15 Coming back to the book and also your previous book that I mentioned, Good Value, morality seems to be sort of an essential aspect of your book. One example also that is a big project obviously is China's Belt and Road Initiative. It will bring many opportunities. Investors are looking on it. How do you see, should investors incorporate their values if they particularly not agree with where they potentially could invest in?

Stephen Green: 04:44 Well, that's a very difficult question. I know, sorry.

Stefan Wagner: 04:47 That's why I'm asking you, because I myself struggle with that.

Stephen Green: 04:51 It's also a very important one, because first, A, no country is perfect. B, we do have to recognize significant cultural differences in perspective on the world. see in the case of China we have to recognize before you get into any of the specific sensitive issues you have to recognize that this is a civilization with a three four five thousand year history behind it and a very rich culture of thought and Aesthetics both in art and in literature and in music and a self-understanding which is a which has always seen itself as, in a sense, the center of the world. Famously, the name of China means middle kingdom, central kingdom.

And it's a country which has taken its place again on the world stage, and again is an important word, over the last 30, 40 years because of the reforms and the opening up, which Deng Xiaoping started in the late 1970s, early 1980s. and that has put an end, in their minds, to a period of victimization. They see themselves as coming out of a 200-year period when they were victimized by Western imperial powers, Britain among not least, but perhaps Japan most of all, because it wasn't only the West. That gives China a certain self-understanding that it's important to understand, empathize with, come to terms with, because the fact is that China is going to be one of the two great powers of the world stage for the rest of this century.

The Belt and Road Initiative, that's China's foreign policy going global. you can track the evolution of the Chinese engagement with the rest of the world from really from the death of Mao onwards through Deng Xiaoping who famously said that China should keep a low profile and bide its time through to where we are now where President Xi talks in the UN and in Davos and in other sorts of contexts about China being a participant in a community of nations dedicated to finding the fair way forward for all humanity and such like.

And this isn't just rhetoric, this is China going global. Belt Road Initiative has got many aspects to it. It's partly, I think, a genuine interest in opening up trade and commercial links for the benefit of all, mutual benefit. It's clearly got some geostrategic benefits as well. It clearly creates market opportunities for investors. It's a complex thing because China is a complex country and its emergence on the world stage is the most important factor of this century.

Stefan Wagner: 07:50 You also, in your book that you wrote a lot in Eurasia, you mentioned, you know, how much everybody has gone into the city now, basically more than half the population now lives in cities. Do you think that could, this trend could reverse and potentially with the current situation we're finding ourselves with COVID or a pandemic in general, living that close together is not a good idea in an environment like this. And technology I would also hope will make it more easier to work outside the city.

Stephen Green: 08:26 Well, moving from London to Starnberg is a good example of the point. That's hence where the question was coming from. My journey has since been opposite. I grew up in a small village, but I've lived all my adult life in big cities in Hong Kong, here in London, in New York, actually in Riyadh. I've lived in Riyadh too, but I've lived in big cities. I think the honest answer is that it's too soon to tell what the impact of COVID-19 will be. It will change view of the way we relate to each other and some of our work practices, we will do more of virtual communication, I'm sure, less flying.

Stefan Wagner: 09:09 I could imagine that COVID-19 will do more for the technology strategy of companies than anything else has ever done before.

Stephen Green: 09:16 Well, it's certainly causing an awful lot of people to figure out how they're going to communicate when they're self-isolating. Will this overall affect the trend towards urbanization? I don't think so actually, the numbers are against it apart from anything else. This will pass, we will get through it and back to a more normal form of life, even though I think that will have been impacted, it'll be a long time before the consciousness will have lost the sense of what it was like to live through a pandemic. Nevertheless, the world's full of, you know, close to 8 billion people now, and we can't go back to an earlier time when 80% of the people lived and worked on the land and got their living from the land. We can't do that.

So, there's no way that you can significantly reverse the trend of urbanization. And in fact, I believe the trends will continue in the same direction. At the moment, Europe is over 80% urbanized. Asia is still less than 60% urbanized. There's no reason to believe that Asia won't head in the same direction. Africa, of course, is even further behind. No, I don't think that trend is called into question by COVID-19, and it does have all kinds of impacts on human self-awareness, societal relationships, and, of course, an impact on the planet through degradation of the environment and pollution of the atmosphere.

Stefan Wagner: 10:46 In your book, you describe a lot of historical and also potential future changes. Is there certain things you think that will stay the same?

Stephen Green: 10:58 Well, there's an interesting question. I want to answer, of course, the answer is yes, because I think there are some underlying, probably many levels of an answer to that, but the important one for me is that there are underlying commonalities about human experience that are timeless and in a sense not culture-bound. And one of the most fun parts of that book that I had as far as writing it was exploring those commonalities across cultures and across time as expressed in the literature of the Europeans, the Islamic world, China, India, Japan and so on. And what you find is that when you deal with human expressions of joy, sadness, loss and death sense of transience generally, those kinds of instincts.

No, they haven't changed. My favorite example, and I quote this in the book, is of a Tang Dynasty poet in China, so that's 1,200 years ago, writing a little poem on the death of his own three-year-old daughter. It's a very moving little poem. It describes how he follows the coffin out into the fields where the Hulkovin is buried and how he goes back home and he looks at her empty bed with the medicine bag still hanging from the side and is conscious of her loss. This could have been written anywhere at any stage and there's no reason to believe that that kind of experience of life is going to change.

Stefan Wagner: 12:33 I agree. Another point is that obviously there's a lot of fault lines in Eurasia. When I looked at it when I read your book the first thing sadly that triggered me to look it was that literally eight out of the nine countries that have nuclear weapons are located in Eurasia and Not all of them are very friendly to each other. I'm I live in Europe. I feel you know Europe will be caught between the US and potentially Russia for energy and China, maybe not so much India, but how will this could this play out for them and particularly if NATO doesn't hold up with the U.S. making, or their commander-in-chief making noises accordingly to it, I even fear that other countries could look into getting a nuclear deterrent. When you were writing your book, were you thinking about this or having a few on that?

Stephen Green: 13:31 I think you put your finger on something extremely important. As you say, eight out of nine nuclear powers, I mean, nuclear power, varying stages of nuclear capability, of course, but eight out of the nine are in Eurasia. And the ninth, of course, which is the US, is heavily engaged in Eurasia. So you could say that all of the world's nuclear powers are heavily engaged in Eurasia. And as you said so delicately, some of them are at loggerheads with each other. and you know we used to we used to talk when you were thinking of risk and you were thinking in your world of risk management of finance when I was thinking of it you thought of the various forms of risks and I remember somebody talking about the possibility of a pandemic 10 years ago and oh no probably longer than that actually even before SARS which was our first with a pandemic in recent times I remember somebody saying, could this be the next big thing? And that thought being poo-pooed by others saying, no, no, come on, in this day and age, medicine and all that. Well, now we know how sinister a pandemic really can be. Well, nuclear power is another one. It's gone off the radar screen to some extent. Those of us who remember the 1960s well, will remember the fear of a significant nuclear war between Russia and America.

Stefan Wagner: 14:58 We practiced to get under the table at school.

Stephen Green: 15:00 Yeah, I did too. I did too. I remember my parents, I remember the Cuba crisis and I was a boy at the time but I can remember looking at my parents looking for kind of assurance and you could see from the expressions on their face But they weren't at all sure how that would, whether that might not lead to a real disaster. So nuclear proliferation is still a big risk that we ought to be concerned about. And there are countries that have nuclear capabilities and have significant geopolitical rivalries or ambitions. So no, I think it's a big, it's a concern we should never forget.

Stefan Wagner: 15:40 And another one a little bit I think where the big powers are competing is artificial intelligence. you know, learning and retaining that learning through artificial intelligence obviously extremely can be accelerated. Have you, did you think about what approaches the different countries, I mean, US has a very different approach, US has the approach, we leave it up to the private sector. In China, it's very much government driven. And again, the rest of Europe, let's ignore Russia for the time, is sort of a little bit at loss, I find. At least, I don't find there's any proper strategy. And again, they find themselves in the middle. Whose technology do we choose? Not only in telecommunications that we have it, but how do we choose?

Stephen Green: 16:32 Well, a couple of aspects of that. Artificial intelligence is clearly going to change the world a lot over the next few decades. It's going to change economic activity. It's going to hollow out certain aspects of economic employment. It's going to remove the first stage of development for many countries as they open up. I mean, China and much of the rest of Asia. started on the road of economic development by being the source of cheap labor for goods that were then sold in Europe and America and Japan.

Artificial intelligence, taking the form, for example, of digital printing and ever more sophisticated means of doing stuff remotely without human intervention, removes that opportunity for the next wave of countries in the early stages of economic development. It's not good news for Africa, for example, um uh so that's one aspect of it uh another of course as a lot of us have noted is it will it will remove some of or some of probably quite a lot of middle management office administration kind of roles but overall Artificial intelligence should be seen as good news.

This does enable human beings to leverage their own competence so much more in the same way as previous technological revolutions have done. They have the capacity to be used for evil purposes as well as for good. But the basic fact is that they leverage the human being enormously. So this is good news for us. but it's also very challenging good news. We're in the very early stages of how it will play out.

Stefan Wagner: 18:21 This is a little bit of a personal question for my side, probably driven by it, because you pointed out many future challenges are coming up. And I always think to myself, you know, I can sit on the sideline, watch the news and commentate on it. But, you know, if I want to be part of the solution, not just commentating from the sidelines, how should one get involved in the sense? Is it politics? Is it supporting a specific person? I don't know. You chose multiple routes.

Stephen Green: 18:52 I don't think there's a single answer to that question. I think if we start from a perspective that we want to make a difference, you want to improve conditions for humanity, you're not going to be able to boil the ocean. It's given to very few people to make historic changes in life and very few people indeed. But all of us have the opportunity to do some things and they can be near or far and they can be in different areas of human endeavor, media, finance, I mean, you know, the whole range of activity, all of that can be seen under the aegis of a perspective that wants to make a contribution to the common good. I don't think there's any great mystery about that. It is, of course, sometimes challenging. It's challenging because there are surely some areas of activity which are very difficult to reconcile with any meaningful definition of the common good.

And if you're engaged in that, you have to ask, well, why am I doing well? You know why? I've got one life. Why am I using it for that? And it's also challenging because none of us are perfect, so none of us are going to get it right all of the time or do it as well as we could. We're all going to get distracted by baser motives. That's, I'm afraid, a reality of the human condition. But I don't treat that as a reason to be pessimistic about the opportunities that we all face. And we all face them at whatever stage of life we find ourselves. I mean, I'm distinctly a has-been as far as the banking world is concerned. you know, coming up 10 years. And I've done a few things since. I do the things that I, at least I try to do, the things that look as though they're used, not look as, that are making a contribution. Do I get this right all the time? I'm sure not. But I think we've all got the opportunity at whatever stage of life we are at to ask ourselves that question.

Stefan Wagner: 20:52 And last question, and that's sort of a question I pretty much ask anybody for any interview and it's a little bit sort of a fun question. It's my fun question is what is your favorite up to three finest movies? You know, I mean, well, you, you, you gave me notice of this.

Stephen Green: 21:09 I should open up. And I find it very difficult to answer. Wall Street, of course, was a, was a, was a, was an impressive movie. And the Bonfire of the Bandit is another one. Actually, if I was sent to a desert island, I was allowed to take a book or a film on this subject with me. The book I would take is Trollop's The Way We Live Now. which is set in the 19th century, needless to say because that's where he lived. I think it's the best book he wrote and it tells you all you need to know about the way in which money and dealing and sort of contaminate human relationships. It's a very powerful book and it's In one sense, of course, it's very much a book of the 19th century. In another sense, it's time that you could read it and say, gosh, I recognize these instincts, these behavior patterns right now.

Stefan Wagner: 22:10 Excellent. Thank you. I'm going to look this book up. I am not aware of that one.

Stephen Green: 22:14 I suppose I'll tell you what I would like to just reflect on. This book that I've just written, whose subtitles, East, West, and the Search for Universal Values, this is a pervasive concern for all of us, of course, is what is it that unites us as we face common challenges? And we all know what the headline, in headlines at any rate, what the big challenges are. And of course, above all, I mean, we're living at the moment through a pandemic, but I think more on a longer-term basis, the big issue is clearly climate change, environmental degradation, and so forth. The connection with that and urbanization we've already talked about. but how do we discover the common values, the common approaches that are going to enable us to confront those challenges on a cohesive basis.

So it's to me the big question of our time and this is really the point I want to make, you discover those values, what you really think is important by engaging with others and indeed you discover a sense of who you really are by engaging with others. and learning about them, recognizing what they have to contribute to an understanding of the big issues of the world. So this is not a matter of, in any simple way, of lecturing the rest of the world on the basis of European values. It is a matter of a journey of self-discovery, where we discover what is really important through engagement with others.

The alternative of seeing the great issue between America and China as one of confrontation, seeing that as being a task of containment, of a new and threatening alternative way of doing things, is a recipe in the end for disaster. The human approach and the wise approach and the enriching approach is to see engagement with other cultures, other self-understandings as a source of learning for oneself and through that we will be better placed to confront the common challenges.