|On the political economy of world
government: a short discussion of the role of the World Economic Forum
and the World Social Forum and indicating the possibility of a World Parliament
Thomas Colignatus, January 16, 2005
Rational agents would opt
for world government, properly defined. Without world government, dealings
between sovereign states are not only affected by the military and economic
power of those states and by the international bodies that they agree upon
to wield and control their power, like the United Nations (UN), Worldbank
(WB) and International Monetary Fund (IMF), but also by the flux of world
opinion. Many branches in economic theory tend to accept wants as ‘given’
but these wants are observed to develop over time and some branches of
economics can study those changes. The economic theory and practice of
marketing is explicitly directed at influencing consumer choices. There
is a similar situation with respect to world opinion. The media report
about activities at the World Economic Forum (WEF, annual meeting January
26-30 2005, Davos, Switzerland) and the World Social Forum (WSF, convention
January 26-31, 2005, Porto Alegre, Brazil). What are these forums, should
economists pay attention ? Can these forums affect the stock markets, the
oil price, exchange rates, labour relations, migration and tourist flows,
consumer boycotts, (inter-) national decisions ? We see that institutions
like the UN, WB and IMF have some dealings with WEF and WSF, but what are
those dealings and what do they mean ? Reports on these forums can be hopelessly
confused. A clearer scope of their objectives and limitations helps the
interpretation of these forums and the results reported. Basically, each
forum is only a market place and any result reported depends upon the very
source of it. The place where a result is presented only adds flavour -
but flavour sells to a target audience, and repells to some other audience.
The WEF is a non-profit institution and it can be observed to seek the
approval and participation of the powerful, rich and famous. The non-profit
status still allows perks like good salaries and good hotels in luxurious
resorts. The WEF can freely use the term ‘economic’
since there is no scientifically guaranteed protection of that label. The
WEF claims to be a socially responsible activity. The WSF originated however
as a social protest and countervailing activity to the WEF. It can freely
use the term ‘social’ since there is no scientifically
guaranteed protection of that label. The WSF can be observed to seek the
approval and participation of the ‘grassroots’, the
powerless, poor and unknown billions, but it is caught in the paradox that
it has to be economically financed nevertheless, with its participants
requiring a source of income, while it will have to develop some power
if it is to have the effect that it wants to have. The discussion of these
aspects helps to clarify that economics is a social science quite related
to ethics. From this point of view, the WEF and WSF are merely different
brands. A suggestion is to create a World Parliament (WP) by an open political
Tinbergen, world government,
globalisation, G8, development, world poverty, international bodies, United
Nations (UN), Worldbank (WB), International Monetary Fund (IMF), non-governmental
organisations (NGO), World Economic Forum (WEF), World Social Forum (WSF),
World Parliament (WP), ethics
Step (1): First see the summary, that forms an integral part of this paper. Step (2): Economics teachers will notice that some of their brightest students are interested in issues that might be indicated with keywords such as globalisation, G8, world development, world poverty and the role of international bodies such as United Nations (UN), Worldbank (WB), International Monetary Fund (IMF). Eventually, organisations like the World Economic Forum (WEF) and the World Social Forum (WSF) pop up in the discussion. Step (3): A standard approach is to ask those intellectually prone students to write a paper on the subject so that they spend some hours on the internet and produce that paper. (Socially inclined students would also help each other.) Step (4): Now you have to grade the paper. The subsequent discussion below is intended to help teachers give A’s to A-papers. Step (5): When presenting medals and prize awards to those honours students, you off-handedly refer to Jan Tinbergen and his thoughts on world government and the Optimal Order. PM. When the prize is an airplane ticket to Davos or Porto Alegre, a choice is involved, since the conventions are on the same date. If there would have been world government, one would hope for better planning.
When working through all these steps, it helps both you and your students to understand that economics is a social science closely related to ethics. So let us delve into ethics before concentrating on the dreary subjects of WEF, WSF and world government. (Ethics is also that students may help each other when writing their paper but that they don’t cheat unless nazis threaten to kill their family in which case they may consult books on ethics.)
It might be noted that interest
in globalisation etcetera does not imply that your students are bright.
In the past, some students have been throwing bricks at G8 meetings - which
is no proof of intelligence. The bright students in step 2 above know,
so to speak, that if they see a brick lying on the ground, then it can’t
be there since some less bright student has picked it up already.
Definition of economics
Many people, and especially economists, are a bit confused about what economics is. I can usefully quote from what I wrote elsewhere:
Colignatus (2005:11), "Definition & Reality of the General Theory of Political Economy", Dutch University Press, defines:
A social science closely related to ethics
As an economic adviser I don’t mind admitting that I enjoy apple pie, since people generally understand that they themselves don’t have to follow suit. It would be silly to assume that you would order apple pie just because I enjoy it.Yet, when I would admit that I enjoyed Michael Shenefelt’s "The questions of moral philosphy", Humany Books, an imprint of Prometheus books, 1999, then I hesitate, since an opposite effect might occur. That is, some students might think that they wouldn’t have to read that book. Such a pity. Are you sure that your brightest students are reading this ?
Anyway, Shenefelt recalls that the economist Jeremy Bentham advanced compassion.
After you have read Shenefelt, please consider Adam Smith (1759, 1984), "The theory of moral sentiments", Liberty Fund. This is one of the hallmarks of humanity, yet, you have to decide whether you want to enter that hall and join up. Please note that you are advised to read Shenefelt first, since it helps to dust the cover of an ancient treasure.
Alfred Marshall (1890, 1947:3) wrote:
A point of consideration is that some people associate economics with money only, or perhaps a limited concept of ‘production’. However, economic theory is quite rich in this. A good discussion can be found in the work of Hueting - see my short overview of his work.
It is interesting to observe that some might interprete these approaches of Smith, JS Mill, Bentham, Marshall, Keynes and others as ‘rightist’ while others would consider them ‘leftist’. These are curious interpretations depending upon time and circumstance. The proper approach is science and ethics. There is no political choice involved - albeit perhaps in the sense that decent scientists tend to support human rights.
If you want to understand
political economy, please read my "Definition & Reality of the General
Theory of Political Economy". My website contains a non-printable PDF.
The World Economic Forum
We can safely assume that students will use the internet to fill their papers with all kinds of details and even pictures of the World Economic Forum. Hence, it is of no use to us to dwell much on the WEF here. Interesting for us are only these quotes from their website http://www.weforum.org, January 16 2005:
"The World Economic Forum is an independent, international organization incorporated as a Swiss not-for-profit foundation. We are striving towards a world-class corporate governance system where values are as important a basis as rules. Our motto is ‘entrepreneurship in the global public interest’. We believe that economic progress without social development is not sustainable, while social development without economic progress is not feasible."
"We enjoy a unique global
standing by recognizing and responding to two new developments:
"Entrepreneurship in the
global public interest
"The foremost community
of world leaders
"Separate surveys of the
world's leaders - who are invited to the Annual Meeting - and the world's
citizens show that ending hunger and poverty is their top priority. The
survey represents the views of 1.2 billion people."
The WSF can be found at http://www.forumsocialmundial.org.br.
Our key piece of data is the "Interview with Oded Grajew, Initiator and Secretariat Member of the World Social Forum" by Nic Paget-Clarke for "In Motion Magazine" on September 1, 2004 in São Paulo, Brazil, see http://www.inmotionmagazine.com/global/ogwsf_int.html.
Grajew appears to be a businessman and thus was a natural participant to the WEF. However:
One can observe these points:
Article 1 contains the phrase "opposed to neo-liberalism and to domination of the world by capital and any form of imperialism". Article 4 is most explicit:
Given the stated frustration of Grajew that the WEF showed resistance to change, perhaps it didn’t properly function as a market place ? In that case, the root cause would not be opinion but procedure. Indeed, one can consider it unfortunate that business leaders and grassroots representatives are not discussing world issues together at the same market place.
It may also be that the WEF and WSF have different views on economics. The WSF Charter of Principles has 14 articles, and the following amendment would help:
Creation of a World Parliament
A suggestion could be to
set up a World Parliament (WP). The current UN represents nations and not
people. It could be interesting to set up a body representing people, a
World Parliament. This body could only talk, but that is plenty of power
to start with. When there are 10 million people around the globe interested
in this idea, and each is willing to pay € 10 per annum to participate
in the vote, then there is € 100 million to play with each year, and
that is good money for an experiment in world democracy. The € 10
annual contribution could be seen as a barrier to participation, but democracies
have known census limits before and were still considered decent beginnings.
Possibly, half of that amount is lost to transaction costs, such as translations,
registration, cashing, selection of candidates, processing the ballot,
but then € 50 million remain. When there are 100 Members of the World
Parliament (MWP), including the executives, each earning € 50 grand,
then there remain € 45 million to allocate by parliamentary procedure.
One can create a website, broadcast the weekly sessions, discuss what single
language to use, where to locate the WP (Greece, Egypt or Thailand are
logical places), what problems to study or investigate, what activities
to license, and how to promote popular support for the WP. When the funds
increase, they would allow two chambers of Parliament while the executive
would develop separate ministries. If the issue is handled well, existing
political parties would be motivated to participate in the process since
it gives them exposure; if some participate then the others will have to
join the competition. When the WEF and WSF are viable economic activities,
as they apparently are, then such a venture as this WP would seem to be
viable too and have more (internal) democratic legitimacy.
World opinion can be influenced
by activities on market places such as WEF and WSF. Economic science can
play a useful role here, particularly if people better understand what
economics is. Eventually, rational agents would opt for world government,
Colignatus (2000), "The seminal contribution of Roefie Hueting to economic science: Theory and measurement of Sustainable National Income", draft, at http://thomascool.eu/Papers/Environment/HuetingsContribution.html
Colignatus (2005), "Definition & Reality in the General Theory of Political Economy", 2nd edition, Dutch University Press
Marshall, A. (1890, 1947), "Principles of economics", Macmillan
Shenefelt, M. (1999), "The questions of moral philosphy", Humany Books, an imprint of Prometheus books
Skidelsky, R. (2000:264), "John Maynard Keynes. Fighting for Britain 1937-1946", Macmillan
Smith, A. (1759, 1984), "The theory of moral sentiments", Liberty Fund
Paget-Clarke, N. (2004), "Interview with Oded Grajew, Initiator and Secretariat Member of the World Social Forum", In Motion Magazine, September 1, http://www.inmotionmagazine.com/global/ogwsf_int.html.
World Social Forum, "Charter of Principles, as established by the World Social Forum International Council on June 10, 2001", at http://www.forumsocialmundial.org.br/main.php?id_menu=4&cd_language=2