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May 26, 2006

Blair and reform of economic institutions

The British Prime Minister, on the 24 May 2006, raised the issue of international institutional reform based on democratic values. He described the problem as 'the structures of 1946 trying to meet the challenges of 2006'. How do we think through, in value and other terms, the consequences of global interdependence?

With respect to Tony Blair's speech of the 26th May, I wish to reflect on the values that are stressed for an interdepenent world. He characterized these as 'liberty, democracy, tolerance and justice'. 'Four freedoms' underscored the approach to international issues after the Second World War and Blair's list contains a more abstract version of at least some of the freedoms from that time. One would have thought that 'liberty' carries similar ideas as 'democracy'. 'Self-determination' was the term in the four freedoms but this is probably one that Blair wished to avoid given, for example, the claims of the Kurds or of Tibet. It is necessary to support freedom from hunger (liberation from poverty) and this is no doubt part of what Blair means by justice. The universal application of global values means the application of the values of liberal democracies. If we see religious fundamentalists in all faiths as feeling threatened by such values, working on security and working on justice would not seem to be enough. Whilst the potential divison between 'hard' and 'soft' is there, Blair's notion of the 'universal application of global values' is one that will have to be fought for ideologically as well as in terms of institutional development. What is more, the eradication of poverty through trade plus aid is more likely to succeed when it does not come all tied up with one version of 'liberty' and one verison of 'democracy', as defiend from 'outside'. Care has to be taken to ensure that the universal application of global values is not simply a tautology. There are many people who are neither members of the religious right (variously defined) nor of other reactionary movements who are disturbed by the cultural and potentially corrupting aspects of global capitalism. Tolerance is a virtue that works in more than one direction. Global corruption is an issue that needs to be addressed under 'justice'. The generous policy of the United States on 'aid' is often defeated by its transparent and often single-issue, political objecitives.

The Bretton Woods system was developed to raise the levels of international trade and avoid the problems of the 1930s. Whilst it is generally held that the development of the institutions was a truimph of 20th century diplomatic efforts not everyone felt that the institutions, and the ways in which they worked, were appropriate. Blair outlined the issues with respect to the reform of the United Nations. It would be inconsistent not to support the democratization of the UN given the values he stated. What about the IMF and the World Bank? Blair states that reform is necessary but he provides few details. In the version of the speech that I have read, he talks of the institutions playing 'an important role in global prosperity and stability'. Is this acutally or potentially? Some would argue that they have added to the problems. If we really are dealing with 2006 though outdated institutions, then more searching questions would seem to be called for. The IMF does not have a democratic structure. Do these agencies do more good than harm? How would we assure ourselves that that is or is not the case? The WTO has been reformed and is constructed on one member one vote. Is it transparent (one of the values of democracy)? Can it be, given the secretive nature of trade? Is there any international argeement on the issue of reform for these organizations or, no doubt a forlorn hope, any agreement amongst 'experts'? The United States sees multilaeralism as a potential trap. How possible is it to secure a liberal international economic order and a supporting political order that is regulated by the kinds of values the Blair has set out?