The Juggling Contest -- Balancing the Global Economy: An interview with Economist James Quilligan

This interview is a follow-up to Guest Blogger James Quilligan's blog which appears in my previous post "Stimulate This!"
In the previous post Mr.Quilligan shares with us what is emerging out of the UN Conference on the World Financial and Economic Crisis and its Impact on Development, along with some insights on the barriers to achieving equity and stabilization. This post will be followed by a continuation interview with questions and answers specific to our shared passion of economic and environmental equity including a new take on the Waxman-Markey measures.

CW: You mention that there are discussions happening on both emergency and long-term measures on financial reform -- how much long-term thinking is possible in the midst of such an urgent crisis? It seems as though there are all hands on deck just to keep the plates spinning? Is there room for innovation? Is there an openness to creating new models?

JQ: A lot of exciting dialogue and planning is taking place. While the world is still engaged in its old juggling contest involving foreign reserves, trade balances, financial leveraging, international balance of payments and the global balance of power, many new variables have now inserted themselves into the prime equation -- including human needs, human rights, human security, energy security and ecological debt. In trying to manage all of these factors without adequate global standards, rules and institutions, the de facto policy of laissez-faire competition continues to shape our global attitudes and practices. Yet at the international level, many leaders have recognized that there are major problems with our traditional concepts of legal boundaries -- including private property and sovereign borders -- and much progress is being made on trans-border cooperation agreements.

But the real epistemic break is happening where individuals with deeper understanding are organizing to preserve and manage a particular commons which they depend on for their own livelihood or well-being (be it natural, social, cultural or intellectual), and allowing the energy of shared governance to flow in and through that space. These autonomous commons groups are organizing spontaneously across the world in response to the global economic crisis and will eventually develop a unique ontological identity and power as a third sector to solve the local and transnational problems that businesses and governments are not equipped to address on their own.

CW: In your article you say, "Without coordinated efforts by developed nations to help the world's poorest nations, 100 million people may fall into extreme poverty each year for the foreseeable future." What would real coordinated efforts look like, and what would it take to facilitate those?

JQ: The Outcome Document of the UN Economic Conference states, "Strong action is needed to counter the impact of the crisis in poor countries and help them restore strong growth and recover lost ground in progress toward their development goals." Where to start? Let's recall what John Maynard Keynes proposed at the Bretton Woods conference in 1944 -- an international requirement for trade surplus nations to recycle their financial excess through a global resource pool, which would then be redistributed to poor nations that need help. In rejecting Keynes' proposal, the United States assured him that the poor nations of the world would develop rapidly if a few rich countries would provide them with capital and technical knowledge on a discretionary basis. If international trade and market-driven investment are not enough to end poverty, the US told Keynes, then loans for credit payments adjustments and development issued by the new International Monetary Fund and its sister institution, the World Bank, supplemented through foreign aid, philanthropic grants and remittances, would be sufficient to end poverty.

So that's the deal that went down at Bretton Woods. Now, fast-forward sixty-five years to the present: the post-war laissez-faire system for the distribution of world resources has utterly failed to curb global poverty, while many entrenched interests are still trying to breathe life back into the dying carcass of that system. The point is that we need an updated version of Keynes' proposal for automatic -- not voluntary -- recycling of the world's resources and an economic multilateralism that includes the equal participation of rich and poor nations in the international rules and institutions for managing these global allocations. In the short-term, it means creating global stimulus measures through new liquidity and development financing to boost trade, financing, infrastructure, agriculture, green technology and human security needs in all nations, not just the richest ones. In the long-term, it means the creation of development measures beyond the UN Millennium Development Goals, the protection of our common global resources including a strong climate change treaty, the restructuring of global economic rules and institutions, the establishment of new forms of governance, and the generation of multilateral financing through the implementation of global standards.


CW: The global economic summit called for the creation of a new body, a Global Economic Council, to coordinate and oversee the international economy. This would certainly be a departure from our present lack of international economic coordination, but is it possible that a council could be effective? How would it function? Who would be involved?

JQ: Long before the recent UN proposal, the Brandt Commission and the Commission on Global Governance also called for a high-level body to monitor and coordinate the international economy and development. It is still a brilliant idea. Instead of a large bureaucracy, it would be a small council that would provide oversight and advice on the coordination of global policies, specifically to monitor the state of the international economy, anticipate monetary and financial crises, track currency exchange rate stability, take the risk out of international financial flows, provide a long-term policy framework for sustainable development, secure consistency between the major international organizations, register input from regional organizations and build consensus between governments on new global economic policies.

The UN is also calling for new mechanisms through its Economic and Social Council and the UN system for resource mobilization, surveillance, regulation, and coordination of the global economic system and multilateral financing for development. Obviously, in order to earn respect and legitimacy, this council and the other proposed oversight committees and agencies must be comprised of people of the highest integrity, who are globally representative and thoroughly transparent public servants. Certainly, this would require an unprecedented degree of international trust, but that is precisely what this economic crisis is about -- restoring trust in our social and financial institutions on the basis of a new global system of value.

CW: The global economic and environmental transition is clearly the major issue of our time. It's a large question, but what will this change really involve? How long do you expect it will take before we resolve the present crisis and create a new global economic system that is environmentally sustainable?

JQ: It's safe to say that this transition will play out for most of the 21st century. That means successive waves of intensive transformation for us and for our descendants. Our generation is tasked with the hardest part, because we are between the tides of the outgoing and incoming forces of this global evolutionary change -- and we have been caught flat-footed, inadequately prepared for this axial moment. The main challenge now is to develop a new global understanding of the relationship between economics, energy, the environment, food and water, all within an international, intergenerational and interspecies context. Here in the US, our modern interpretations of the values of the Enlightenment -- famously enshrined in the US Declaration of Independence and Constitution -- are quite strong on freedom but particularly weak on the equity of individuals with each other and with nature.

As the G-2 (that is, China and the United States) seeks common ground on a range of issues for a new international balance of economic and political power, the US is facing a partner which -- despite its many political deficiencies -- is deeply committed, historically, culturally and economically, to finding harmony between human beings and nature. Liberal democracy will not lead us wisely through this period of Great Adjustment unless we understand that the ultimate source of value comes, not from business or government, but from our natural, cultural, social and intellectual commons. Government should not be granting anyone the rights to these commons, we should be taking them -- they are ours by right of birth.

The immediate crisis we are facing is to shift from seeing energy, nature, food and water as monetized commodities to recognizing them as reserve values that are essential for our survival and well-being. Only then shall we understand that money is a cultural creation expressing the intrinsic value of these commons -- and not a function of the marketplace or of a Central Bank. The creation of a new international monetary system is just around the corner and global value must be integrally informed by human beings, culture, the environment and energy, which means a complete rethinking of all our values for a fair, inclusive and sustainable globalization supported by an authentically new and resilient multilateralism.

CW: Thank You James, its a rare opportunity to get to hear some "behind the scenes" information on the process of the UN Economic team, and even more rare to hear innovative thinking on our collective economic future. I certainly hope that many of the strategies on creating aligned global economic governance and value allocation to the commons come to fruition. Thank You so much for your time and willingness to share.

To read more from James Quilligan, visit his website: http://www.global-negotiations.org.

Comments

[Bob56]

I heartily agree with James. If we truly want to eliminate Global Poverty we need to share the world's resources in an equitable and just manner.

[hearmeout]

Obviously true, inarguable even, and yet what has ever been 'equitable and just' about capitalism? Show me one period or locale in capitalism's history where it chose the equitable and just path over the most profitable one. And the problem is that the alternatives to capitalism always lead to something even worse - i.e., dictatorships that never seem to 'wither away' - so this is essentially what we're left with. Democracies in which opposing value systems - the profit motive of capitalism vs. the egalitarian ethic of democracy - forever struggling. It's difficult enough for the democracies to resolve these conflicts into an uneasy stalemate within their own borders, but expecting them to export this resolution to foreign citizens on some sort of grand scale, especially as global demand contracts - which is a long term, not a short term problem - is pure fantasy. Eliminating global poverty is simply not a variable in the capitalistic equation. Sad, tragic, unjust - yet true as well.

[hearmeout]

...into a reality.

[hearmeout]

Wonderful contribution Christiana, as always. But I fear that developed nations are going to turn increasingly inward as the crisis endures. For how do we "resolve" a crisis when the crisis is actually a fundamental turning point in our nation's economic history? Decades of debt-financed mass consumption have come to an inglorious end, as critics - yourself included, I'm sure - have always warned that it would. Have you seen the PCE chart posted on the St. Louis Fed's website? This is not an economic crisis in need of resolution; it is a phase shift of genuine epic proportion. The United States and the world are in for a very long, very difficult slog - eerily similar to the 1930s (the charts thus far are considerably worse this time around). And we all know, unfortunately, as the developed nations suffer the undeveloped ones will suffer considerably more. I wish there was a way around this, but I don't think anyone, including James Quilligan, actually knows of one.

The silver lining in all this, of course, is perhaps the thing that really matters most, ultimately - the planet. As the global economic crisis worsens industries everywhere will spew fewer toxins and by the time we finally do lift ourselves from this quagmire - a decade perhaps, if we're fortunate - we'll hopefully possess the wherewithal to build an economy that is both more compassionate and more sustainable.

Keep up the good work; it's people like you who could transform that hope

[bvalocore]

Wonderful article! James Quilligan is articulating the formula for the future that we must begin to create now before it's too late. As long as there are even a few hungry people, none of us can live lives that are truly whole and without shame. Everyone must step up and take a certain amount of responsibility to build the sustainable future we all agree we want to see.

[DemWehr]

Excellent article by James Quilligan. His thinking in the arena of economics reminds me of David Hawkins in "Blessed Unrest" on the environmental movement, David Korten in "The Great Turning, From Empire to Earth Community," and Richard Tarnas' "Cosmos and Psyche: Intimations of a New World View". All of these books, and Quilligan's thinking, are intimations of a new world view. How fortunate we are to have these thinkers amongst us, pointing out the inevitable truth of our situation and new, hopeful ways of thinking about it. Why doesn't the mainstream media pick this up? How about the Christian Science Monitor, which tends to be more hopeful? Thank you, Kosmos Magazine, for pointing this out to me.

[Bud Wilson]

James does an excellent job of revealing the essence of "enlightened self interest" - When one acts responsibly, with integrity, clarity and honesty, that individual is contributing to the well being of the whole. His article also demonstrates an awareness of deep ecological principles. When we all embrace the reality of our interdependent and interconnected nature, we will move closer to an equitable world. A world of haves without have-nots. We will be better off when we focus on quality of life rather than "lifestyle". Recognizing that our monetary system is a human construct is the first key to transform our standard accounting practices that allow for "externalities" on balance sheets. Whole cost accounting must be implemented with impunity. Cradle to cradle life cycle analysis must apply to all of our goods and services the world over. Everyone knows in his / her heart and mind that we can achieve balance and harmony among all people when we drop religious separation and fear induced economic dominance. We can do this!

[robertavl]

This article is very helpful and hopeful in understanding the complexities of the global economy as it strives to meet the needs of all humans

[Steisslinger]

This sort of thinking is essential. It is time for humanity to get smart and develop a system that protects our vital common resources while leveling the playing field so that all have the chance to prosper, not just the rich and powerful (theirs is a recipe for on-going resource wars and unrest)...

I think a great example of this new type of thinking is the Cap & Dividend proposal to curb carbon emissions and avoid privatizing our air, www.capanddividend.org/ ... all people benefit, not just big business.

I imagine changes like this will have to be demanded by the people and are not likely to come from our status quo political leaders, evidenced by the recent Wall Street mega rip-off. I wonder what it will take to shift priorities to climate justice, sustainable and just trade & development, and a green energy & economy focus? We need a mass mobilization akin to that of WWII, but his time led by the people for the great transformation of our economic system... let's not trust Wall Street and their yes-men to do this for us.

[olindae]

James ideas are insightful and positive. Olinda

[olindae]

James Quilligan"s comments give me encouragement. These Ideas show insight and the solutions are positive and I believe workable. Olinda

[Hydroptera]

Excellent, hopeful stuff! While a few (too many) do their worst to destroy life on this planet, there are groups of people the world over quietly preparing for the best. As our system built on greed implodes, plans for healing the earth and our relationships with each other are being laid on the table. It's up to us to choose to look at them. It's nice when media outlets like Huffington Post actually report on them! Of course the managers of the most harmful corporations are implementing plans of their own to manoeuvre around positive changes, but they're running out of wiggle room. Two of the most powerful words are getting spoken, "Enough!", and "Enough". Enough of this nonsense, and enough for all. Good luck to James Quilligan and all others who are preparing for this, our brighter future.

Thanks!

[Cynthia Etcheverry]

I am in a Socratic Society Discussion group called Holistic Quantum Relativity. This Intent Blog is about working toward discussing how we each can help create a better world for everyone. I received information from them about your article and found it very good. When gas got up to around $5 a gallon last year, it pushed everyone into a new state of mind. I was thinking, "What if it went up to $10 or even $20 a gallon, then what would everyone do?" I think it helped the world stop, take a breath and reevaluate a little bit more what is really actually important and what is not. I think many ppl are much more aware than maybe before of the global economy and it's impact on all of us. I still feel very ignorant of the subject and must continue to educate myself of it better. If some ppl are like me, they tend to let the big wigs take care of things, and just try to get by. This is not a good way to be. The more of us that are educated about these things, the more of us can make intelligent opinions and vote for things to progress our world.

[cindy r]

Thank you for this clear article and the hope it provides for those of us who see this type of change as very needed. Where is the rest of the media in reporting this story? Thank you Christiana Wyly and Huffington Post! And, thank you Kosmos Journal for alerting us to the article.

[anthrob7]

This is one of the most lucid specimens I've seen of "innovative thinking on our collective economic future". The call to recognize "The Commons" as the necessary and natural focal point for organization and action is right to the point.

[Gibran Armijo]

Very good article, heard of it through Kosmos Journal. Great insight in to the some of the UN Economic Conference workings and ideas. It is very important to follow through on the topics and ideas James Quilligan mentions. Only when more and more people are aware of the alternatives, can we take a change in course and steer together in a new direction.

It would be very interesting to learn on exactly how this would be implemented, most importantly of all, how do you get the nations to abide ... because in the end, if those who make the biggest impact on the system don't adhere or comply, then it falls short on its promise and its reason to be.