The illusion of tackling the World crisis
without World institutions

Global economic crisis vs. democratic globalization

There is an illusion that nations can tackle the world economic
crises, and more largely the main issues affecting all mankind,
within the present system in which nation-states are supposed
to cooperate according to the old and ineffective inter-national
paradigm.

Nation-states are divisive and narrow minded,
what are needed are global democratic federal institutions

The illusion

If everybody looks at its own shoes,
how to find where the pont road leads?


The incentive illusion persists - the exalted G20 did not do much
to avoid it - that every country can protect itself from
world economic
crises by acting alone.

Not only a country cannot tackle by itself all the World economic,
financial and monetary imbalances and its seq
uels (sovereign debt crisis,
distrusts in major currencies...). but neither can it boost in a sustainable
way its own economy, with just lip service given to the need of global
coordination, not to say supranational institutions.
  • Specific problems can and should be solved at the national level,
even at the provincial or big city level. Those are better
tackled at the "ground-level". This is a basic princ
iple of
federalism.
  • But to limit the res publica (the public concern) to just that level
- at a huge price - entails the risk to bring contradictions
(between national policies) and to be counterproductive
if
there are not
also worldwide solutions lead by worldwide
democratic authorities.


Without them, some moves by territorial entities can even be
:
  • At the expense of their neighbors.
    • Or at their own expense .
because of "moral hazard" and "free riders"
(see below the example of protectionism)
...Except that we still don't have such
    worldwide democratic authorities!

This does not just apply to the present crisis, it is about all world
financial / economic (and other)
distortasymm imbalances,

Here are some example of those flaws (without giving a priority ranking
as none should be neglected), as detailed in the
democratic globalization
article
:
* The lack of a true World monetary system (and its incidence
   on trade distortions).

*
The lack of a global financial supervision not only as a police
   to fight fraud but also as an intervention body to prevent economic
   nightmares.

* The shortage of some natural resources, and their high price
   volatility

* The need to develop and disseminate knowledge, and boost
   innovation
as key economic resources
for our 21st century.

* The diverging demographic evolutions between World regions,

* The issues of the access to basic survival needs: food, water,
    energy, health...

    By the way, this goes against a "degrowth" ideology that take as a
    pretence a scarcity affecting our small planet. Economic growth is
    matter of innovative solutions, and there is no limit to initiative and
    innovation.

* The fight against poverty

* The problems due to climactic changes

* The ever present occurrence of military conflicts, local or
   widespread,
  
*
The still not sufficiently fighted occurrences of dictatorships, 
  
crimes against human rights,

* The global spread of organized crime, terrorism,
* and also the growing cyber safety / privacy menaces.

* Last but not least, the spread of some radical ideologies to
   which nobody is immune.

* Well, this can forget some aspects, so just add your pet ones
   manually, but it might be difficult to fight on too many fronts
   at the same time

Are intergovernmental organizations passive?

Does nobody find it strange that the UN, the WTO, the IMF and the
World Bank did not propose any full fledged global cure and common
project?
They were just happy to get some monitoring power and a few more
money to lend to basket cases, in the form of painkillers when a country
debacle can endanger the whole system (
systemic risk)?
  • Is this just because they are prisoners of the nation-states ?
(well, they are false "global" organizations, they are just
"inter-national").
  • Or because they are comfortable at keping the status quo
as criticism-fearing bureaucratic bodies ? (although
they were not really accountable for their blunders in
other situations),
  • Or because ...they do not have any clear idea of what to do?
or even if there is a need to do something,
  • Or because they would not admit that world citizens
get some power in their governance?

And what about :
* the non coordination between so-called international bodies
   (IMF, ILO, WTO and others)
to tackle monetary, commercial and
   social matters
together as a whole.
* also the near passivity of the G20 mentioned above that was supposed
   to bring more global cooperation?
About the world monetary system, see a dedicated article:
"
Towards a world currency"..

What is needed

We have to wonder if politicians will take their lessons and start to
understand, under world citizen pressure, that we have to
  • change that global political governance system
(or lack of global system, as every nation-state only does
what seems good for itself).
The world is dominated by clans, as a headless
undemocratic
animal.
  • take a totally different approach that would create 
really democratic global authorities
(a
democratic globalization).
It might be a bit clocktoo late as concerns the current crises and
their sequels.
Anyway, it is also a long term goal.

Let us hope that a little more cooperation and coordination take place.
But that will be only a tiny step towards global solutions. They need
real global democratic institutions to bypass the blindness of the
present "inter-national" organizations
.
Those are still paralyzed by the old divisive nation-states system,
showing little interest for the common fate of the World and its
residents.

A specific issue:
the protectionism temptation


Economic barbed wires


The protectionism temptation, by using various tools (import control, export
subsidies, currency manipulations, professional endowments and protections...),
can bring disastrous perverse effects:
  • For the global economy:
* International trade slowdown that would freeze most major economic
    activities

  • For the countries that would adopt it:
* Price raises (shortages, import taxes, lack of competition...)
*
Acceleration of business relocation outside the country (*)
* Anti-innovative complacency and creation of fat, inefficient and
     not customer-friendly overprotected local monopolies,
* Retorsions from other countries,
* Surge in contraband, black markets and exploiting loopholes 
* Surge in corruption to get either more private import exemptions
    or on the contrary to get more barriers to competition,
* More generally, less freedom of choice for citizens and businesses
     ...
and less freedom generally  (closed country)

(*) because of a competitiveness collapse on foreign markets,
and difficulties
       to integrate
their sourcing into a world network.

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M.a.j. / updated : 22 Sept 2015
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