This Week: Going Outside the U.S. for Economic Ideas

"Quote" of the Week

Who Really is The World?

Some Non-U.S.-Centered Recommendations About the World Crisis

Greetings,

The recommendations that you will read in this issue of Nygaard Notes for addressing the global economic crisis will form the starting point for upcoming discussions at a major international conference in New York that will occur in early June. You haven't heard about it, I'm fairly certain, since not one word has yet been reported in the U.S. media. about the fascinating process of coordinating a democratic international response to the global crisis, nor about the ideas that will form the basis for that response.

I don't expect the Conference itself to be covered in this country, either, so I'll try to report a word or two about it after it occurs. If it does get covered in the media—or anywhere else that's easy to find—I'll try to give you some ideas of where you can go to learn about it. I think this stuff is tremendously important, both because of the process of what the United Nations is trying to do AND because of the radical nature of some of the proposals that are already on the agenda for discussion by the world's nations.

My belief is that the imagination of people in the United States—activists as well as the general news consumer—is severely limited by our ignorance of ideas like the ones presented in this issue of the Notes. Such ignorance allows our elected leaders to get away with their very limited and uncreative proposals for dealing with economic issues. Their constituents don't know any better! Secondly—and this is a big problem in the age of Obama—such ignorance sometimes brings us to get unduly excited about the very limited and uncreative proposals that we are offered. This is part of the reason we are being offered corporate bailouts instead of a New New Deal, and why U.S. leaders get headlines for conspiring with their pals in the G-20 but no criticism for ignoring MY (and perhaps OUR) pals in the rest of the world.

Therefore, let this issue of Nygaard Notes spark your imagination, and also serve notice that the whole world is not as unimaginative as the leadership here in the U.S. We are not alone!

I'll be out of town for a few days, so if you write to me—as many of you do; thank you!—I may take a while to respond. I expect to be back on the 28th of May or so.

Happy Spring!

Nygaard

"Quote" of the Week:

The theme of this week's Notes is the ongoing effort to forge a global, democratic response to the worldwide economic crisis. Here are the first words of the Preamble to a remarkable United Nations document (one that I quote extensively elsewhere in this issue) called "Recommendations of the Commission of Experts of the President of the General Assembly on Reforms of the International Monetary and Financial System" (the added emphasis is mine):

"The rapid spread of the financial crisis from a small number of developed countries to engulf the global economy provides tangible evidence that the international trade and financial system needs to be profoundly reformed... Without a truly inclusive response, recognizing the importance of all countries in the reform process, global economic stability cannot be restored, and economic growth and poverty reduction worldwide will be threatened.... This inclusive global response will require the participation of the entire international community; it must encompass more than the Group of 7, the Group of 8 and the Group of 20, but also representatives of the entire planet, the Group of 192."

Who Really is The World?

Last week I talked about the Group of Twenty countries—the so-called G-20—and the tsunami of media coverage that was accorded its meeting in April that was held to address the world economic crisis. Much of the coverage insisted on referring to it as a meeting of "the world's leaders." Well, the G-20 is no doubt an improvement over its even less- representative predecessor, the G-8 (which was only 8 countries: Canada, France, Germany, Italy, Japan, Russia, the United Kingdom, and the United States.) The G-8 was preceded by the G-7, and before that there was the G-6, and there has been talk about the G-8+5, and ... well, you get the point. There has been no shortage of attempts by the powerful countries to put together an exclusive club that agrees enough, and has enough power, to impose its will on the world. The current club is the G-20.

I ended last week by wondering if we couldn't do better than the G-20 at getting "the world" together to try to figure out what to do to make the world economy work better. I said we could do better, and that such a "something" was already happening. Here's the story.

"A Uniquely Inclusive Forum"

Just a week before the G-20 met in London in April, the United Nations General Assembly (UNGA) met to discuss an entirely different set of recommendations for addressing the crisis, and a different method of discussing them

While the G-20 likes to think of itself as "The World," the UNGA really IS the world, as it's membership includes 192 nations, virtually every nation on the planet. I'm not starry-eyed about it, as I know that the legitimacy of the leadership represented at the UN varies greatly. Still, it's the largest and most representative group we have.

On May 1st the United Nations (the Group of 192) issued a press release announcing that it was convening a three-day conference in early June to address the global economic crisis. As UN events often do, the conference has an ungainly title: "The UN Conference at the Highest Level on the World Financial and Economic Crisis and its Impact on Development." The Conference, say the organizers, "will provide a uniquely inclusive forum to address issues of urgent concern to all nations."

Unlike the Group of 20, with it's limited and exclusive membership, the United Nations has specifically invited participation in The Conference not only from UN member states and observers (including the Holy See and Palestine), but also from all types of "non-governmental organizations and civil society and business sector entities" from around the world. The countries attending this Conference are potentially far more legitimately influential than the self-selected "systemically important economies" that make up the G-20.

I say "potentially" because the degree of influence of any international grouping depends heavily on the active participation of the world's most powerful countries. And, so far, the single most powerful country—the USA—has not gotten behind the UN initiative. Apparently the U.S. will be in attendance at The Conference, but I haven't been able to find out who, exactly, will be there, nor what authority they will have. The U.S. Mission to the U.N. has had nothing to say about it. The President has had nothing to say about it. And the U.S. media has had nothing to say about it. So I decided that I would say something about it, especially about some of the ideas put forward by a Commission of Experts in preparation for this global conference. That's what the following article is about.

Some Non-U.S.-Centered Recommendations About the World Crisis

The recommendations discussed by the UN in March were put forward by a group called The Commission of Experts of the President of the UN General Assembly on Reforms of the International Monetary and Financial System. That name is too long, so it's also known as the "Stiglitz Commission," after its chairman Joseph Stiglitz, winner of the 2001 Nobel Prize in Economics. The other experts are people like economists, finance ministers, bankers, professors—that is, they really are experts.

Many of these experts come from the Group of Twenty. or G-20, countries—since they are, after all, important countries—but in contrast with that group, the membership of the Stiglitz commission extends beyond the wealthy countries and their friends and allies. Experts are included from Egypt, Tanzania, Colombia, Ecuador, Barbados, Nigeria, Malaysia, Algeria, and Cuba, among others. In addition to these experts, the UN also is consulting with "civil society groups across the globe ... to compile their views" on next steps for the global economy.

The Stiglitz Commission was convened by the President of the General Assembly—Nicaragua's Miguel d'Escoto Brockman—in order to "review the workings of the global financial systems and to explore ways and means to secure a more sustainable and just global economic order." All of this is in preparation for an upcoming conference on the crisis with the lengthy title mentioned above. I'll just call it The Conference. The Conference is coming up in early June.

The recommendations of the Experts are quite important, and fascinating. However, not a word has been reported in the U.S. media about these ideas, nor of the conference at which they will be discussed. What kind of recommendations are these experts offering?

Some Ideas from Around the World

Here are some excerpts from the recommendations of the Stiglitz Commission. The experts' words appear in italics, and each one is followed by a comment from me indicating why I included it.

"Reform of the international system must have as its goal the better functioning of the world economic system for the global good. This entails simultaneously pursuing long-term objectives, such as sustainable and equitable growth, the creation of employment in accordance with the ‘decent work' concept, the responsible use of natural resources, and the reduction of greenhouse gas emissions, as well as other more immediate concerns, including addressing the challenges posed by the food and financial crises."

Who in the United States has even heard of the "decent work" concept? This is an example of an exciting initiative happening in the world that never seems to get imported into the United States in any meaningful way. Visit Wikipedia and learn more.

"As the world focuses on the exigencies of the moment, the long-standing commitments to the achievement of the Millennium Development Goals and to protecting the world against the threat of climate change must remain the overarching priorities; indeed, appropriately designed global reform should provide an opportunity to accelerate progress toward meeting these goals. While the world will eventually recover from the global economic crisis, the resolution of other challenges, including that posed by global warming, additional measures will be required."

See Nygaard Notes #320 for more on the Millennium Development Goals. Another important international initiative that remains largely unknown here in the States.

"The conjunction of huge unmet global needs, including responding to the challenges of global warming and the eradication of poverty, in a world with excess capacity and mass unemployment is unacceptable."

I await the day when major political leaders in the U.S. make statements like this one, and take actions to back up the statement.

"Greater transparency on the part of all parties in responding to the crisis is necessary. More generally, democratic principles, including inclusive participation in decision-making, should be strengthened and respected."

The current effort by the world's powers—as seen in the G-20 process—is to negotiate a transition from a unipolar world dominated by the U.S. to a multipolar world dominated by the U.S. and some European, and maybe Asian, partners. Much of the rest of the world—especially the least powerful countries—wants a more democratic process, as articulated here. People in the U.S. should know this.

"...there should be an appropriate mechanism within the United Nations system for independent international analysis of questions of global economic policy, including its social and environmental dimensions... The panel should comprise well-respected academics from all over the world, representing all continents, including representatives of international social movements."

Not only is the Commission of Experts calling here for all countries to be involved, but they acknowledge the legitimacy and importance of social movements. It would be truly amazing to hear such a call from U.S. leadership. Which is why it is important to push U.S. leadership to attend conferences like this, and to press our media to cover them. Such ideas would appeal to many in the U.S., if only we were allowed to know about them.

"...the difficulties associated with the dominant use of a single national currency as the international reserve currency are well known and solutions have been proposed in the form of a global reserve system."

The "single national currency" to which they refer is the U.S. dollar, which has been the international reserve currency since at least World War II. The world is moving away from it, as indicated here, which is a telling marker of the decline of the U.S. empire.

The Experts call for "a global economic coordination council" which "should meet annually at the Heads-of-Government level to assess developments and provide leadership in economic, social and ecological issues. . . . Important global institutions, such as the World Bank, IMF, WTO, ILO and entities of the United Nations Secretariat dealing with economic and social issues would provide supporting information and participate in the council, which could thus provide a democratically representative alternative to the Group of 20."

The establishment of such a council would mark another move toward more democratic management of the world economy. Could U.S. leadership support such a thing? Not if U.S. voters never hear about it.

"The development of financial institutions that are too big to fail has played an important role in the development of the crisis and has made the resolution of the crisis both difficult and costly, both for taxpayers and for the global economy. It is imperative, therefore, not only that there is adequate oversight of these large institutions but that efforts be made to limit their size and the extent of their interactions in order to limit the scope of systemic risk."

In my recent series "On Freedom," I talked about the need to limit the freedom of some in order to increase the freedom of others. This call for limits on the size and power of these huge institutions (they're not "people," after all!) is an example of what I had in mind.

"In the absence of adequate global coordination, financial sector regulation will need to be based in the host country, not the home country, and may entail requiring the establishment of subsidiaries, rather than relying on branches."

Since most of the "home countries" are in the wealthy parts of the world, this call to give some power to the host countries would be a dramatic shift in power relations. That is, an Exxon refinery in Venezuela would be regulated by Venezuela, not by the United States. Imagine!