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</A> -Cui Bono?-
World government is coming. Deal with it.
Continental Drift
By ROBERT WRIGHT Issue date: 01.17.00 Post date: 01.06.99
In recent years, more and more people have raised the specter of world
government. Ralph Nader, protesters in Seattle, Pat Buchanan,
militiamen in the heartland--all sense an alarming concentration of
planetary power in one or more acronyms: WTO, U.N., IMF, and so forth.
Of course, these people have something else in common: They are widely
considered fringe characters--flaky, if not loony. And their eccentric
visions have been punctured by legions of sober observers. "The WTO is
not a world government," an economist wrote in a Wall Street Journal
op-ed last month after the Seattle protests against the World Trade
Organization. His verdict has been echoed by various academics and
pundits.
But this may be one of those cases when the flaky are closer to the
truth than the sober. Much power now vested in the nation-state is
indeed starting to migrate to international institutions, and one of
these is the WTO. This doesn't mean that two or three decades from now
we'll see world government in the classic sense of the term--a single,
central planetary authority. But world government of a meaningful if
more diffuse sort is probably in the cards. It follows from basic
technological trends and stubborn economic and political logic. And,
what's more, it's a good idea. Among other virtues, it could keep a
sizable chunk of the liberal coalition from veering off toward
Buchananism.
If the political forces driving the WTO toward firmer and broader
authority seem less than overwhelming, one reason is that the key
political players have a love-hate relationship with world government
and tend to dwell on the hate part.
Many on the left, when denouncing the WTO, talk as if national
sovereignty were sacred. The WTO, Nader has long complained, "means
foreign regulation of America. It means any two dictatorships can out-
vote us.... It means secret tribunals can rule against our laws." Yet
Nader and most of the Seattle left would gladly accept a sovereignty-
crushing world body if it followed the leftish model of supranational
governance found in the European Union. Indeed, it was partly to
please the Seattle activists that President Clinton espoused a future
WTO whose member nations would meet global environmental and labor
standards or else face sanction.
Many centrist and conservative free-traders also talk as if national
sovereignty should be inviolable. They were aghast at Clinton's
proposal to take the WTO "beyond its proper competence," as an
editorial in The Economist sternly put it. But they can live with
sovereignty infringement of a less leftish variety--the kind that
erodes a nation's power to erect subtle trade barriers via
environmental or health policy. They certainly didn't lose sleep over
the famous 1998 case in which the United States, under threat of WTO
sanction, relaxed its ban on shrimp caught in nets that kill sea
turtles.
Of course, these free-traders deny that this sort of ruling amounts to
world government. The Economist editorial said that "the WTO is not a
global government" but merely a place where nations "make agreements,
and then subject themselves to arbitration in the event of a dispute."
But isn't that a large part of what a government is: a body whose
constituents agree to respect its authority, to accept punishment if
they're deemed to have broken the rules?
Assorted other players, such as human rights hawks, also have mixed
feelings about world government. After Seattle, William Safire wrote a
column backing Clinton's view that the WTO should someday punish
nations that exploit child labor. This is quite a turnaround: Safire,
a longtime free-trader and something of a libertarian, now believes
that foreigners in Geneva should decide whether you can buy a soccer
ball made in Pakistan. Struggling to contain his cognitive dissonance,
Safire issued a disclaimer: "I am not a global warmnik.... Indeed,
laissez-fairies have always been dancing in my garden." If I were
Safire, I'd peek out at my garden to see whether the fairies are still
in a festive mood.
For all these people--traditional leftists, centrist and right-wing
free-traders, and assorted single-issue agitators (everyone except the
Buchananites, basically)--the fundamental question has been settled.
They agree that sometimes nations should surrender an appreciable
chunk of sovereignty to a central authority. They just disagree on
when. Even as they heap scorn on the notion of world government,
they're really arguing about what kind of world government we should
have.
The evolution of world government has two basic engines--stubborn
economic logic and stubborn political logic, both fueled by
technology's relentless shrinking of the economic distance between
nations.
The economic logic is pretty simple. You could describe it as a series
of non-zero-sum games--a series of cases in which nations, to achieve
win-win outcomes or avoid lose-lose outcomes, enmesh themselves in
common governance. The series starts with that elementally human non-
zero-sum game, mutually profitable exchange. Nations trade with one
another. Then they see further gains in agreements that will mutually
lower tariffs (game number two). Then they decide all would benefit by
dampening quarrels over what constitutes a violation of the rules, so
they set up a way to handle disputes (game number three). Crossing
this last threshold--forming an inchoate judiciary--is what turned the
General Agreement on Tariffs and Trade into the World Trade
Organization.
But adjudication entails tricky questions. For example: How do you
handle covert trade barriers? When a country makes it illegal to
import shrimp caught in nets that kill sea turtles, is that just an
environmental law? Or is it de facto protectionism, as the WTO claimed
when it demanded that the United States quit barring shrimp imports
from several Asian nations? In theory, the United States could have
ignored the ruling. All the WTO would have done in response would have
been to approve retaliatory tariffs by aggrieved countries. Still, the
United States has benefited from so many WTO rulings that it has a
stake in preserving respect for them. That's the way good government
works: A central authority, by solving non-zero-sum problems, gives
out in benefits more than it exacts in costs, thus justifying its
existence. This net benefit is why WTO rulings will probably become
more binding, whether through sheer custom or through tougher
sanctions.
The WTO isn't breaking new ground here. It's following in the
footsteps of a body that's much further down the road of supranational
governance: the European Union. Europe is the most geographically
dense conglomeration of high-tech nations in the world. So, as
technology shrinks economic distance, Europe is on the leading edge of
the trend. That doesn't mean that its political present is the world's
political future. The EU has been shaped by various elements peculiar
to European history (including a dogged post-1945 desire to avoid war)
. Still, it may offer a hint of things to come.
For example: With transnational commerce growing, all of Europe's
national currencies became a bother. There was costly currency
conversion and uncertainty about exchange rates. So the EU opted for a
single currency. And one currency meant one central bank; each nation
lost its autonomous central bank and, at a more symbolic level, its
currency (or, as they aptly say in Britain, its sovereign). At this
point--with nations surrendering control over their monetary policy--
the line between a loose association of nations and an outright
confederacy has arguably been crossed.
As Europe was unifying its currencies, The Economist published an
article called "One World, One Money," noting the analogously powerful
logic behind global monetary union. The article stressed the political
difficulty of such a goal, and some economists doubt its economic
wisdom as well. Still, as exchange rates gyrated after the Asian
financial crisis, there was talk in both Argentina and Mexico about
adopting the U.S. dollar as official currency.
The EU also gets involved in regulatory issues, from food labeling to
health and labor law. (It decided that member states could--and,
indeed, must!--permit the sale of Viagra.) Right-wing free-traders
claim there is no sound economic rationale for this sort of meddling.
They say that the EU's attempt to specify everything from cheese
labels to the maximum length of the workweek represents the triumph of
interest-group politics. In some cases, at least, this is true; a
maximum workweek doesn't follow from Econ 101 principles about
maximizing GDP. But so what? Interest-group politics has always been
part of governance. At the local and national levels, much of
government consists of services rendered to various groups in order to
maintain their support for the larger governmental enterprise. The
question is whether at the global level, too, politics will dictate
the construction of a substantial body of law.
There is reason to think so, and much of it was on display in Seattle.
Well-organized interest groups in affluent nations fear--correctly, in
many cases--that they'll be hurt by the continued lowering of trade
barriers. So they want to thwart further lowering unless they get
global rules that will blunt its impact, such as the rules Clinton has
now embraced.
Can these groups really hold trade liberalization hostage to their
agenda? Absolutely. In 1997, Clinton introduced fast-track
legislation, which denies Congress the power to amend negotiated trade
deals before voting on them--and which, practically speaking, is a
prerequisite for passing most trade accords. Bowing to Republican
pressure, Clinton phrased the legislation narrowly: it wouldn't have
allowed U.S. negotiators to include labor and environmental rules in
trade agreements. Liberal interest groups responded by defeating the
bill. So for now, at least, America's real-world political choice
seems to be either trade liberalization that invites lefty
supranational governance or no trade liberalization. Both Democratic
presidential candidates seem to favor the former option, and, if
elected, each of them would presumably seek the leftish fast-track
authority that Clinton didn't seek.
In the short run, this authority would yield little. Developing
nations generally oppose global environmental and labor law, which
raises production costs and thus dulls their factories' competitive
edge. Still, there are two reasons this obstacle will probably prove
temporary. First, the United States and other rich nations, with
markets that poorer nations lust after, have tremendous bargaining
power. Second, as time passes, the developing nations will themselves
develop strong constituencies for left-leaning world law.
This second point was lost in the post-Seattle commentary. Negotiators
for developing nations went on television and alleged that American
union leaders, with their poignant pleas for better working conditions
abroad, were phonies; they were at heart worried not about protecting
foreign workers but about making foreign labor more pricey and hence
less competitive internationally.
Absolutely true. In fact, many American workers would love to price
foreign workers out of the market entirely. But they never will. A
more realistic goal is to slightly raise labor costs abroad. And, if
they do that, they'll have most foreign workers on their side. Sure, a
few children will lose their jobs if child labor is regulated. And,
sure, if workers in poor nations are guaranteed the right to organize,
the result could be a minimum wage that would put a few adult workers
out of jobs. But the American minimum wage has the same effect, and
most workers still support it, for quite rational reasons.
So, in coming years, expect workers in poor nations to link up with
Western labor groups to pursue their common cause: higher wages in
poor nations. The groups won't see eye-to-eye on everything. American
workers would like to raise environmental standards abroad as a way to
increase production costs, whereas foreign workers will prefer the
sort of raised production costs that mean higher wages. Still, there
will be enough common interest that, to some extent, workers of the
world will unite--if not exactly in the context Marx envisioned.
Other international coalitions will also blossom. Western
environmentalists, for example, share an interest with Third World
tourist industries in cleaning up Third World cities.
As international lobby groups acquire power and start doing the things
national lobby groups have long done, economists and industrialists
will grumble about the costs. The special interests, they'll say, are
gumming up the works, dulling capitalism's edge, slowing down
globalization!
And it will be true. But is that so bad? Globalization has polluted
developing nations, dislocated workers in developed nations, and
radicalized some environmentalists and religious fundamentalists. And
radicalism is a special problem when, thanks to advancing weapons
technology, any two or three highly alienated people can create a
pretty lethal terrorist cell.
Don't get me wrong. Globalization is great. On balance, it makes the
world's poor people less poor (a fact that doesn't seem to have
penetrated the brain of the average Seattle protester). And it fosters
a fine-grained economic interdependence that makes war among nations
less thinkable. But these benefits are all the more reason to keep
globalization from getting derailed by the reactionary backlash it
incites when it moves too fast. And derailment is possible. As Paul
Krugman recently noted in The New York Times, the "First Global
Economy"--the one that took shape in the late nineteenth century--
foundered early this century in part because its constituency didn't
extend very far beyond a cosmopolitan elite.
Nor is the derailment of globalization per se the only thing to worry
about. Some historians trace the virulence of twentieth-century German
nationalism to the nineteenth century, when industrialization swept
from west to east, leaving bewilderment in its wake. And Russia, even
more than Germany, had to fast-forward from an age of serfs into the
industrial revolution--and, in a sense, it never recovered, never got
fitting governance. It got Stalin instead.
In a way, it's a misnomer to speak of slowing globalization. After
all, the things that might do the slowing--supranational labor or
environmental groups, global bodies of governance--are themselves part
of globalization. What is really happening is that political
globalization is catching up to economic globalization.
This has a precedent on a smaller scale. In the United States during
the early twentieth century, as economic activity migrated from the
state to the national level, the national government grew powerful
enough to regulate it. Some of these regulations made simple economic
sense, but some of them--labor laws in particular--were political in
rationale and had the effect of subduing capitalism, dulling its
harsher edges. This was, among other things, a preemptive strike
against Marxist revolution--against the turmoil that unbridled
modernization can bring--and a successful one. Enlightened capitalists
realized that giving labor a seat at the table would help make the
world safe for capitalism.
By the same token, enlightened capitalists should today invite the
Seattle protesters indoors. One way or another, people who feel
threatened by globalization will make their influence felt. Either
they'll modulate globalization by linking up with like-minded groups
abroad to help shape international rules or they'll take the economic-
nationalist route and lobby for the sort of trade barriers that, in
addition to starting trade wars, often involve xenophobia and
nativism. The way to keep these people from being sheer
protectionists--and, in some cases, from morphing into full-fledged
Buchananites--is to turn them into WTO lobbyists, which means making
the WTO a body worth lobbying. Put suits on those scraggly rabble-
rousers and send them to Geneva!
The WTO, though the topic of world governance du jour, is hardly the
only global institution with real economic power. The International
Monetary Fund (IMF) makes loans to troubled nations to prevent
panics--the rough analogue of a nation's bank-deposit insurance--and
in return asks for sound management and transparent bookkeeping. This
may not sound very forceful. But to lend when the private sector
refuses to do so is to subsidize, and with subsidy comes power. Much
of the U.S. government's power over states, after all, consists not of
legalized coercion but of strings attached to subsidies.
After the Asian crisis, some economists argued that the IMF had been
too heavy-handed--that it shouldn't demand fiscal austerity so single-
mindedly and that by too readily bailing out bad investors it
encouraged more bad investment. But almost no one is saying the IMF
should quit lending altogether, and almost no one is saying it should
quit using its lending as leverage of one sort or another. As with the
WTO, the mainstream argument isn't about whether to have a form of
world government but about what form of it to have.
And, as with the WTO, the reason to expect the IMF's ongoing
solidification is simple. Its authority results from shrinking
economic distance. This shrinkage is the reason economic downturns can
be contagious, the reason rich nations suddenly care about the
financial soundness of poor nations. And if there is one thing the
basic direction of technological change clearly implies, it is
continued shrinkage--more interdependence among nations.
For that matter, the shrinkage of noneconomic distance will also
continue. A decade from now, global laws regulating the prescription
of antibiotics could make sense, if the too-casual use of these drugs
creates strains of super-bacteria that can cross oceans on airplanes.
And then there is cyberspace, that notorious distance-shrinker and
sovereigntysapper. It empowers offshore tax-evaders, offshore
libelers, offshore copyright-violators. Nations will find it harder
and harder to enforce more and more laws unless they coordinate law
enforcement and, in some cases, the laws themselves.
But, even given all these reasons for firmer and broader global
governance, will it ever get as firm and broad as the governance of
nation-states? Probably not. World government may well always rely on
member states to levy its sanctions. It will probably never inspire
the patriotic fervor nations do. And it may always be diffuse,
consisting of lots of partly overlapping bodies: some regional, some
global; some economic, some environmental; some comprising national
governments, some comprising nongovernmental organizations.
Why won't world government ever be as taut as old-fashioned national
government? For one thing, governments have traditionally drawn
internal strength from external opposition. If you scan the historical
and prehistoric record for distant parallels to the current moment,
the nearest approximations you'll find are when agrarian villages have
united to form "chiefdoms" or when chiefdoms evolved into ancient
states. And there are no clear examples of such transitions happening
in the absence of external hostility. For a full-fledged global
political conglomeration to take place without the threat of war
against a common foe would mark a contrast with all of the known past.
And, barring an invasion from outer space, no such threat will be
available.
Still, we do face what you could call planetary security problems, and
they will help sustain the current drift toward real, if loose, world
government. Impending climate change may not have quite the viscerally
galvanizing effect of troops massed on your border, but it does
qualify as a common peril best combated by concerted action. Terrorism
is also a common peril (and, actually, a pretty galvanizing one). As
more compact, lethal, and long-range weapons make terrorists tougher,
national governance will become less and less adequate to the task of
national security.
Already, with the Chemical Weapons Convention, the United States has
agreed to international inspections intrusive enough to have filled
the Senate chamber with plaints about surrendered sovereignty. But the
surrender (a minor one, in truth) was rational; permitting such
inspections on our soil is the only way to get them to happen on
foreign soil. And chemical weapons are just the beginning. Biological
weapons are orders of magnitude more lethal and much easier to make
covertly. The encroachment on sovereignty that combating them will
require is, to current sensibilities, shocking. But the idea of
trauma--say, 20,000 deaths in an American city--has a way of making
the unthinkable widely thought.
As technology pulls and pushes nations together, it highlights an
irony: world government, which for so long was a pet cause of the
idealistic left--the "woolly minded one-worlders"--isn't getting much
support from the left. True, some Seattle activists profess a
willingness to work with a left-leaning WTO. But when Naderite Lori
Wallach declared, "We're the coalition that's going to tell the WTO,
`You're going to be fixed or you're going to be nixed,'" her heart
seemed to be with the "nixed" part. Certainly that was the sentiment
of the average Seattle protester.
But, even if nixing were within the left's power, it would be a
mistake. Stopping the WTO in its tracks wouldn't turn back the clock.
Under current tariff levels, globalization would continue (and,
besides, tariffs would probably keep dropping via bilateral trade
deals). The various problems that exercise the left--environmental
decline, an exodus of low-skill jobs from high-wage nations, human
rights violations--would persist.
And these problems are just about impossible to solve without an
enforcement mechanism--without the power of sanction that the WTO,
more than any other world body, has to offer. The Rio accords on
global warming, for example, lack an enforcement mechanism and are
notable for the blithe disregard with which various signatories have
treated them. The history of international labor accords tells the
same story. After the Seattle talks, a New York Times editorial said
that "the administration can urge other groups, like the International
Labor Organization, to pursue the issue with or without the WTO's
participation." Which is to say, with or without effect. The ILO has
been in existence for 81 years and, lacking the force of sanction, has
been unable to do much of anything.
One oddity in contemporary political nomenclature is the tendency of
leftist economic nationalists, who favor raising tariffs, to call
themselves "progressives." Early this century, progressives were
people who realized that communications and transportation
technologies were pushing the compass of economic activity outward,
from individual states to the United States. In response, they pushed
economic regulation from the state to the federal level. The modern-
day successors to these progressives should be advocating
supranational regulation, not impeding it with unilateral tariffs.
Seattle may have moved them in that direction. At the end of the week,
however virulent the anti-WTO rhetoric remained, the "progressive"
left was thinking more seriously about using the WTO as a vehicle for
its agenda. One big reason was Bill Clinton. For an American president
to say that global laws on the treatment of workers should be enforced
with real sanctions authorized by a worldwide body was a milestone in
the evolution of global governance.
Clinton's remarks have been dismissed as a transparent ploy to lock up
the labor vote for Al Gore, as a nostalgic effort to bond with 1960s-
esque protesters, and as a tactical blunder that alienated negotiators
from poor nations. All of this may be true. But it's also true that
these days Clinton is said to be preoccupied with his legacy, trying
to pave the way for a thumbs-up verdict from historians a generation
hence. If so, then one-worlders should be cheered by his Seattle
performance. No one has ever accused Bill Clinton of not knowing which
way the wind is blowing.
--end--
------------
"Rarely have Americans lived through so much change, in so many ways,
in so short a time. Quietly, but with gathering force, the ground has
shifted beneath our feet as we have moved into an Information Age, a
global economy, a truly new world."
-President William Clinton State of the Union Address 1998
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