INTEGRATED GLOBAL GOVERNANCE NEEDED
Op-ed article submitted to the New York Times
June 1, 2012
The world’s monetary, financial, economic and commercial systems are singly and jointly in a mess. They do not work, singly or jointly. They are unsustainable now and they will be unsustainable in the medium and long-term. Greece’s and Spain’s present monetary, financial, economic and commercial systems will not create jobs, increase quality of life for people and planet. The other euro-zone countries’ monetary, financial, economic and commercial systems, even of Germany, The Netherlands and other more or less well-off countries are also not sustainable without structural changes as ECB’s president Draghi has made clear in his recent speech to the European parliament. What is needed is bold leadership to stop the forces of divergence and push for convergence of common values and vision, of fiscal unity, of Europe-wide governance to start with.
What is needed for Europe, China, the USA and the rest of the world is bold leadership for global governance that would integrate not only the nation’s monetary, financial, economic and commercial governance but also its social and environmental global governance. It is this task that essentially faces the world’s heads of state (can they called leaders?) at the forthcoming Rio Earth Summit this month.
How can they accomplish such momentous task while the nations are less focused on moral, cultural and political convergence and more on divergence, bickering among themselves while hundreds of millions of people are unemployed, ill-housed and of deteriorating health and when the prevailing global monetary, financial, economic and commercial systems enrich the few, impoverish the many and imperil species and planet?
Though the Summit’s pursuit of a green economy and an integrated institutional framework for development may produce some desirable outcomes, they will not be sufficient to match the task for integrated global governance. The focus should be on two priority areas: the acceptance of a common value base and the transformation of the international monetary system.
Though the Rio 1992 Earth Summit produced its Rio Principles, which was a poor reflection of the various Earth covenants that were circulated by civil society, the Rio 2012 Earth Summit should finally become serious in adopting the integrated social and ecological values of the Earth Charter. It should follow the example of UNESCO and countries such as Costa Rica which have taken this common value vision as the basis of their policies. The importance of values and principles over methods is well expressed by American transcendentalist Ralph Waldo Emerson when he stated at the end of the 19th century: “As to methods there may be a million and then some, but principles are few. The man who grasps principles can successfully select his own methods. The man who tries methods, ignoring principles, is sure to have trouble.”
The international monetary system acts as glue binding together the monetary, financial, economic and commercial systems. That monetary system if working properly would also lubricate those systems, so that they would work smoothly. The international monetary system can be considered to be the linchpin of those global systems. Transforming that most basic of the world’s global systems would drastically change those other connected systems.
That transformation would take place when the international monetary system was to be based upon a carbon monetary standard with its guiding principle of monetary justice. It would lead to the proposition that the more a nation decarbonizes its society, the stronger its economy and currency become. Most importantly, it would combat the looming climate catastrophe and advance low carbon and climate-resilient development in communities in the global North and South. Unfortunately, organizers of the forthcoming Rio Summit deemed it politically not feasible to include the climate issue as part of their development pursuits in the Summit as if the two realities can be separated. Thus, real integrated global governance based upon a common value system and encapsulated in the overarching value of monetary justice will have to wait till the world’s monetary, financial, economic and commercial systems will become even less functional and people’s demonstrations become more wide-spread. It was only due to people pressure that FDR was forced to pass enlightened legislation in the 1930s. It was also at that time of the Great Depression that outstanding economists such as Irving Thomas and other members of the Chicago School promoted the idea of having a banking system based upon 100% reserves and a financial system based upon money rather than credit. These transformational ideas are resurfacing during these times of the Great Recession. They have to be combined with the transformational idea of a carbon-based international monetary system to redirect the world’s monetary, financial, economic and commercial systems.