The Age of Confusion

“We must harness the power of Globalisation, and, pursuing its inexorable development, overthrow its institutions and replace them by our own. In doing so, we will, whether or not this is the intended outcome, bring forward the era in which mankind ceases to be bound by the irrational loyalties of nationhood.” (George Monbiot, The Age of Consent)

The journalist and activist George Monbiot is a prominent spokesperson for what he and others call the ‘global social justice movement’. Monbiot’s is an influential voice in the media, the ‘movement’ and even in sections of the ‘establishment’ in Britain; his latest book has been reviewed, respectfully if also critically, by (among others) the former Minister of the Environment and the former head of the country’s main employers’ federation.

This influence, and the ambitious scale of his ideas, makes George Monbiot’s work deserving of serious attention.

The Age of Consent offers something of a manifesto for a ‘new world order’, whose centre is the proposal for a World Representative Parliament (WRP), established by nation-states via a founding treaty, and composed of 600 representatives elected by constituencies of about 10 million people each. These constituencies, only roughly coinciding with national borders, would give (for example) Germany 8 representatives and China around 130.

Its primary purpose would be to hold other powers to account; it would review international decisions made by governments, financial institutions and corporations, the United Nations, World Trade Organisation (WTO), and (before their abolition) the International Monetary Fund (IMF) and World Bank.

For George Monbiot, the World Representative Parliament would be taken seriously because it would be the only such institution operating on a truly global scale. At first, it would exert no direct control over anything. Sovereign states would risk only a loss of credibility by ignoring its decisions; its power would rest solely on its moral authority.

In addition, Monbiot wants to democratise the existing UN General Assembly. Instead of the present one country/one vote system, each country’s votes would be allocated according to its population and position on a global democracy index. The powers of the UN Security Council would be transferred to this newly-democratised chamber, now an auxiliary to the WRP.

These two assemblies would then constitute the beginnings of a bicameral government on a planetary scale. The system would then be able to confront the existing world wide powers governing the planet – which by contrast would be exposed as coercive, largely self-appointed vested interests. In this challenge, the world government would be aided by a more powerful International Criminal Court, able to prosecute company directors as well as dictators.

Monbiot’s radical reforming agenda goes wider. An International Clearing Union (first proposed by J.M. Keynes) would replace the IMF and the World Bank. This ICU would operate symmetrically in relation to creditor and debtor nations, clearing temporary surpluses and deficits on their balance of payments. This would break the stranglehold that the United States and its allies (the “confederacy of exalted thieves in Wall Street, Tokyo and London”) maintain over the international financial system.

Monbiot also proposes mandatory ‘fair trade’ laws for cross-border trade, protection for infant industries in less developed countries, and outright debt forgiveness for all heavily-indebted nations.

I will assess this radical set of proposals by examining their realism, their likely consequences if made effective, their desirability, and alternatives to them. If George Monbiot’s ideas, as I shall argue, do not convince, how can current debates about global governance be better advanced?

A want of realism

George Monbiot’s proposals have no chance of being implemented peacefully unless there is a cataclysmic change in the configuration of the international system – something unlikely to happen peacefully in any case. This is because the full implementation of his proposals would require the complete destruction of US economic, political, cultural and economic power.

Monbiot recognises that “the rest of the world… has the means to wreck the US economy and, in doing so, to threaten its status as the global hegemon. This may be necessary if we are to construct a world order base on equity and social justice.”

But he seems not to understand that such a radical change in the architecture of international economic power would also devastate just those peoples and nations whose welfare he wishes to foster – which rely on the US to import their goods. The growing prosperity of the US economy in the post-1945 era has, after all, been crucial in helping raise many countries out of poverty.

The ‘weapon of debt’ is not possessed by the poor nations. If it exists at all, it is possessed by Japan.

Moreover, Monbiot’s discussion of debt forgiveness is inconsistent. As the world’s largest debtor nation, surely the US should also be forgiven its debt? But this is debt mainly to other advanced industrialised countries, particularly Japan and the European Union. The ‘weapon of debt’ is not one possessed by the poor nations; if it exists at all, it belongs to Japan (and soon also by China, now the world’s second largest economy). But used as a weapon, debt would do at least as much harm to the perpetrator as the target. Japan and the US are locked into a reciprocal relationship to guarantee each other’s prosperity.

This raises another important point. ‘Globalisation’, such as it exists, is above all an experience shared among economically-advanced countries. The poorest countries do not engage in much international trade; they are locked out of globalisation. Indeed, this is true of a wider range of economic activities among non-OECD countries. Perhaps then, ‘globalisation’ is not the ubiquitous source of the problems of the poor as it is so often characterised?

Neither the US nor other rich countries would passively consent to radical change on the Monbiot model. Their citizens – not just their political and corporate leaders – will demand protection and security against such an eventuality. They are likely to feel better represented from within their states than by any World Representative Parliament or reformed UN General Assembly.

By contrast, many of the peoples notionally ‘represented’ in these latter forums are denied domestic representation from legitimate institutions. Citizens of these countries will most likely demand more of their nation-states if their security is threatened by potential economic collapse. More generally, the rich as a whole will not give up their privileges to be run by the poor. If this is what ‘global democracy’ means it just will not happen.

The problem with global government

Monbiot’s political as well as economic prognosis is also deeply faulty. The constituencies of ten million that would feed into his WRP would be so remote as to lack any credibility. Monbiot sees this proposal as allowing the voice of the excluded and unrepresented (like indigenous peoples) to be heard. But these peoples are not populous enough to gain even one representative between them; and even if they were granted representation, their voices would be marginalised by those from vastly larger constituencies.

Monbiot proposes that the WRP and new UN General Assembly would initially have no formal power except talk. But there is a tension here with his discussion of these assemblies enacting laws and generating mandatory fair trade standards.

How would laws and standards set at a global level be enforced in Monbiot’s world? At present, only nation-states have this power; but enforcing global rules would require that states gain more powers. How can this reinforcement be squared with Monbiot’s proposed undermining of the “irrational loyalties of nationhood”?

Monbiot tries to finesse this inconsistency by quietly morphing the proto-global parliament of the twin assemblies into a ‘government’ or ‘governance system’. But he fails to assess the necessary steps between these two levels.

Democracy in any meaningful sense does not involve merely the activity of a parliament. It also requires real control over a government or governance system controlling various service and enforcement agencies.

But the WRP would not be directly linked to any administrative or governmental institutions; it would have no enforcement powers; it would wield no policing or military capabilities. How could the ‘laws’ passed by the WRP be anything other than those arising in the context of ‘the court of world public opinion’?

States, financial institutions…military and paramilitary powers… conduct their activity on the basis of an assessment of their strategic interests not according to moral principles.

Of course, global public opinion does matter; on occasion it can clearly affect the actions of governments and international institutions. But this happens within the context of the existing array of global governance mechanisms. How would the addition of another forum help?

The arenas of power that a World Representative Parliament (WRP) would confront are not moral agencies, but states, financial institutions, markets, and military and paramilitary powers. The latter act on the basis of an assessment of their strategic interests, not according to moral ethical standards. How would the existence of a WRP change this?

Cosmopolitan illusions

Some may dismiss Monbiot’s proposals as the non-academic ramblings of a sincere but misguided journalist. That would be condescending, disingenuous and quite wrong since what he actually offers is a popular version of what is sometimes called the cosmopolitan democracy thesis.

This thesis is taken very seriously in contemporary academic debate. Indeed, there are a number of proposals for re-vamping the UN and further developing the regime of international law as the key features of a cosmopolitan international political order and global civil society, all of which mirror Monbiot’s suggestions. They may not be quite as Utopian as his, but they share a common underlying sentiment: globalisation is upon us, it is undermining the effectiveness of national borders and the democracy that has traditionally been associated with that national context, and it requires new forms civil society and democracy to be developed to operate at a global level.

A key feature of the cosmopolitan schema is the progressive ‘legalisation of the international’, mirrored in Monbiot’s book by its suggestions for the law like outcomes of the global Parliament’s deliberations and the enhancement of the International Criminal Court (ICC). But independently of cosmopolitanism, for good or ill, the global is being progressively ‘legalised’ anyway. This legalisation affects such diverse areas as traditional trade and investment matters (contract law, commercial law, WTO agreements, etc.), human rights, the conduct of warfare, criminal activity, the environment, intellectual property rights, etc. In its quasi-legal register it encompasses the introduction of international standards, benchmarking norms, codes of practice, audits and registers.

The problems with these developments are well known. There is no formal jurisdictional body operating at the global level that can exercise authority over these various juridical and quasi-juridical initiatives. The question is, will such a body or bodies emerge? In the absence of a truly world government or genuinely integrated global governance system (not just a Parliament), the short answer is not in the foreseeable future. Existing states and powers will not give up their authorities to such bodies, however much their actual powers may be being undermined in a de facto sense. So, what might be the consequences of such a fuller and deeper ‘legalisation of the international’ in the absence of such global bodies to properly oversee and regulate that legalisation? Four things stand out.

First, these initiatives will not advantage the poor, the least fortunate and the unlucky at the expense of the powerful, though they will massively raise expectations that the disadvantaged, the unlucky and the poor will benefit. Dashed expectations are not a recipe for harmony. Remember that the USA, India and China (amongst others) have all so far refused to sign up to the ICC. Until they do, even this modest initiative, which places far more limits on the power of the court to intervene in the activities of sovereign nations than some of its opponents and supporters recognise, will remain moribund. Secondly, the powerful would use the law to their own narrow advantage when and where they can or see an opportunity to do so, which will be often. Thirdly, it will lead to greater caution on the part of the important powers in tackling governance issues and conducting interventionary initiatives, Fourthly, it will greatly enhance the status and incomes of the international legal profession, who will probably be the only ones who benefit.

The progressive ‘legalisation of the international’ could lead to more international tensions and conflict rather than less.

If this assessment is anywhere near correct the progressive ‘legalisation of the international’ could lead to more international tensions and conflict rather than less, the exact opposite of the hoped for outcome. To give just one instance, when the full impact of China joining the WTO sinks in and begins to take effect, and it is realised that the Chinese authorities neither fully want to – nor, indeed, fully can – meet the legal requirements of the WTO, trade tensions across the Pacific are likely to heighten (just as they have done across the Atlantic, but in the case of the Pacific these are likely to be much more intense and conflictual). Sharp US international corporate lawyers are already preparing for the fray (and they will make plenty of money out of it)!

Despite all its adverse publicity over recent months, the idea of a ‘coalition of the willing’ forged amongst the great powers to sort things out relatively informally between themselves, acting according to mutually agreed rules and norms, has some advantages over too much enthusiasm for a formal legal structure. These often tacit coalitions can also have a long-term beneficial effect for all – the poorer nations and peoples not excluding; for instance, in the case of the way piracy was eliminated from the high seas at the beginning of the 19th century and slavery later in the 19th century. And such coalitions will emerge anyway whether we like it or not.

The great powers have always claimed and exercised a certain autonomy of action in the international sphere. They will continue to do so, and with a certain justification. Thus the suggestion Monbiot makes about what is the most consequential of all decisions to be made at the international level in his parliament – the decision to go to war – being required to demonstrate “… an overwhelming majority of the assembly’s weighted votes…” would be a recipe for a potentially disastrous inaction. Agreement will never be reached. Complete hyper-caution would ensue.

Sorting the wheat from the chaff

Monbiot proposes to wind up the IMF and the World Bank, which he argues are beyond reform This goes against the general cosmopolitan position on these matters, which is to argue they should be ‘democratised’ in some way.

Once again this is most unlikely to happen. The USA will not allow their democratisation. Nor will it allow them to be dismantled, whatever the calls from both left and influential sections of American right, which also wants to see this.

Monbiot and others like him fail to recognise that, in the case of international institutions of economic governance, there is almost invariably a trade-off between democracy and accountability on the one hand and efficiency on the other. This trade-off is a general feature of organisational design, but it is more acute in the sphere of international governance than in the case of domestic organisation. There are more diverse interests involved, decisions have to be made rapidly, and the consequences are potentially more widespread.

Keyne’s proposal for an International Credit Union was a good one. It would have had some advantages over the array of institutions that actually emerged from the Bretton Woods conference. But to suggest it form the centre-piece of a contemporary governance regime is wholly unrealistic. The key feature of any a forward looking regime is not to look back to the past. It is to grapple with the unique character of the present international system, not to nostalgically hanker after a past one.

Some debt reduction for particularly disadvantaged countries is sensible in particular instances, and ‘fair trade’ is a worthwhile objective.

But one should not necessarily be against all of the suggestions highlighted by Monbiot, following many others, in respect to international trade. Infant industry protection can be a good idea in some circumstances. Some debt reduction for particularly disadvantaged countries is sensible in particular instances, and ‘fair trade’ is a worthwhile objective. But there are downsides to these policies that need to be recognised and addressed.

Outright debt reduction is not a new policy. It has been tried before, and has generally failed, as William Easterly shows in The Elusive Quest for Growth: Economists’ Adventures in the Tropics . Those countries whose debt has been forgiven have just started to borrow further and got into exactly the same position once again. Generally, ‘fair trade’ results in higher prices than does ‘free trade’, and in as much that higher prices encourage output, over-production has tended to result. If it is to be successful, ‘fair trade’ must be combined with other policies designed to reduce supplier dependence upon a few staple products. None of these complications are sufficiently recognised by Monbiot in this book, although they have been elsewhere by advocates of free trade.

Practicable radicalism

In this final section I take up this challenge posed by Monbiot to those who do not buy into his radical utopianism. I offer what I believe to be some better suggestions, although I do not offer a comprehensive alternative set of policies, because I doubt that all the answers are knowable in advance.

Let us begin at the normative level. Do we really want ‘world government’? Perhaps not! Such a world government, if it were ever to emerge, is likely to accrue too much power to itself and become a threat to liberty. As an alternative let us rather consider the principle of pluralism at the international level, and argue for a range of governance institutions operating at different levels and in different spheres. This would be an argument for more institutions of international governance, not fewer, as Monbiot (following Anthony Giddens and others) would wish.

The world is just emerging from a period in which a ‘one size fits all’ approach to global institutional building; the so-called ‘Washington consensus’ – thrust upon it by a neo-liberal elite mainly from the advanced countries – is beginning to fragment. Does the world want to move straight away into yet another such ‘global’ initiative, this time under the title of ‘global governance’? I hope not.

And besides, it is not necessary. The seeming imperative to ‘confront globalisation head on’ arises from the idea that globalisation in its most extreme form characterises the international system and has taken complete hold of it. But suppose there is no generalized globalisation? There is ample evidence, as Paul Hirst and I showed in Globalisation in Question: The International Economy and the Possibilities of Governance , and as Alan Rugman showed in The End of Globalisation, that reports of economic globalisation are greatly exaggerated. At most we have a form of international ‘regionalisation’. If there is no fully globalised economy then there is hardly the need for such a dramatic response as offered by Monbiot and other cosmopolitans.

Instead of a global response we need a response at the level of the regionalised Triad (USA/NAFTA, the EU and Japan). It should be the Triad that is encouraged to develop the necessary governance mechanisms between its players so as to properly manage the international system, partly to its own advantage, but also for the benefit of the system as a whole. What is required are extended forms of economic governance, initiated by the Triad, that address the gross international inequalities current in the international system, and the ever present danger of a crisis and recession if market forces are left to their own devices.

The national arena that will remain central for the future of the international system and the furtherance of its governance.

However, the likelihood of the Triad alone developing extended forms of governance along these lines is low, despite its desirability. The differences of interest that characterise the Triad are just too large and enduring for them to countenance the establishment of such a programme in the absence of a dramatic crisis or downturn in the international economy.

Thus we are left with one feasible alternative option; that it will be national governments that take the lead in any further extensions of international governance, on an ad hoc and limited functional basis rather than in terms of some comprehensive global initiative. This meets both the analytical finding that individual national economies are still not as integrated or interdependently configured as is commonly thought (other than in Europe – though even here there is still a surprising degree of non-integration), and that it has been individual national governments that have centrally participated in the construction of such governance mechanisms in the past.

Thus, it is the national arena that will remain central for the future of the international system and the furtherance of its governance. We will have to continue to rely upon co-operation between national governments for any enhanced but limited governance, in what will essentially amount to a ‘muddling through’ strategy rather than any comprehensive global initiatives. Such a system of individual governmental co-operation to establish governance institutions – known as multilateralism – has proved to be a robust mechanism over the post-Second World War period, largely because it is cheap to establish and to run. Countries will not give up these benefits lightly. In the longer term the advantages of multilateralism should not – and, indeed, will not – be abandoned just because the Bush administration seems not to like it.

Why not promote new regional monetary unions with the issue of their own monies, together with a range of enhanced regional development banks designed to suit more local circumstances?

Indeed, instead of fewer and more global institutions of governance, the implications of the above analysis would be to promote the construction of additional and more varied forms of governance. For instance, why should it be only the EU that develops a new monetary unit? Why not promote additional regional monetary unions with the issue of their own monies? And why not a range of enhanced regional development banks, designed to suit more local circumstances.

Also, instead of amalgamating or dismantling the array of the existing institutions, why not promote and bolster additional alternatives to these which operate with different goals? There could, for example, be a body to finance long-term development aid through a tax on foreign direct investment (FDI) flows between the Triad countries. The Japanese have floated the idea of an Asian IMF to manage the balance of payments problems of the East-Asian economies. This first faltered in the face of US and Chinese opposition, but since the East-Asian financial crisis of 1997/98 China has warmed to the idea so it could be resurrected. Indeed, the current active development of an East-Asian bond market represents a good sign since this will eventually allow those economies to borrow in their own currencies rather than in US dollars.

Similarly, the Mercosur countries of Brazil, Argentina, Paraguay and Uruguay have at times promoted their own economic integration and the possible development of a common currency. Arguments involving similar developments in Africa are also current as M. Siddiqi shows in ‘A Single Currency for West Africa?’ (African Business, September 2000). The adoption of the Australian dollar has also been suggested as the basis for a southern-Pacific economic and monetary union.

Thus there is a growing confidence amongst a number of regional trading and investment groupings like these, where new institutional initiatives for governance are being floated. It is this that should be pressed as against any more global institution building. The development of limited and controlled competition between institutions of this kind would promote innovation and regulatory initiatives. Such ‘limited regulatory competition’ is also more likely to initiate greater accountability amongst the existing institutions than abstract calls for their ‘democratisation’. The creation of monolithic ‘global’ economic governance institutions along the lines suggested by Monbiot and others is likely to the needs of the less developed economies and the poor worse than the existing array of institutions have done.

Conclusion

George Monbiot’s ‘global social justice movement’ is an unstable amalgam of anarchists, environmentalists, international protectionists, disillusioned reformers, well meaning third wordlists, well-intentioned debt forgivers, and rabid US haters. This is not a recipe for a coherent and consistent position on global governance reform. One consequence of this amalgam is that it inhibits sensible and realistic, but still quite radical, analysis of the international system and the promotion of feasible alternative governance structures.

Of course there is a need for serious reform and change. And the USA is not going to get involved with this without constant pressure and cajoling in a multilateral context. But neither can the US be simply written out of the picture. Until this is fully recognised, and a different analytical stance taken on these matters, the oppositional groups required to press for reform will remain marginal, fragmented and ineffective.

Read George Monbiot’s contributions to our Globalisation discussion forum.