History Strikes Back: How States, Nations, and Conflicts Are Shaping the 21st Century

2. How to Build a Better World

31 chapter two How to Build a Better World Deploring political naïveté does not mean abandoning the goal of building a better world. On the contrary, it’s a necessary step toward that goal. Ideally, the world would follow the guidelines outlined in so many UN and Group of 8 (G-8) communiqués. Human rights would be respected, and men and women everywhere would find personal fulfillment. Everyone would belong to a single community where no one faced discrimination or mistreatment. People would join together to face common challenges like ending poverty, solving global warming, improving human health, ending shortages of clean air and water, preventing pandemic disease , managing migration, preventing the proliferation of weapons of mass destruction, stopping organized crime, ensuring cultural diversity, combating terrorism, and avoiding a clash of civilizations. Aside from those who seek to establish the domination of one particular state or people over others, who does not support such lofty goals? The nineteenth and twentieth centuries, especially in Europe, were marked by ideological struggles on which humanity’s future depended. Some of these ideologies—which stood in for religions —turned out to be totalitarian in nature. They led to widespread famine, war, concentration camps, and mass killings. More than sixty years after World War II, more than thirty years after Deng Xiaoping’s embrace of capitalism in China, and nearly twenty years after the fall of the Berlin Wall, what is left of this ideological clash? The dominant, and almost exclusive, ideology remaining today is market capitalism. Its proponents claim that no other economic system in human history has ever been able to produce so many goods and services capable of meeting human needs. That happens to be true, but it’s far from the whole story. Dogmatic neoliberals even argue that the market economy is the only reliable way to determine what is good or bad for society. They apply this thinking to both the short term and the long term and to all areas well beyond economics. But the deregulated, speculative , and financial type of capitalism that has evolved over the past twenty-five years no longer resembles the mixed economy, the “Rhineland capitalism” practiced in France or Germany, or even the theory of the market economy. This new economy, after all, ensures its profitability by forcing society to bear the bulk of its 32 How to Build a Better World social, human, and environmental costs. Moreover, it runs a very high risk of crisis when speculative bubbles burst. The American economist Joseph Stiglitz and the French economist Jean Peyrelevade are only two of the many experts who have warned about these excesses. The subprime crisis that began in the summer of 2007, and the chain reaction it has caused, should not have come as a surprise. Even aside from the current crisis, if all these external costs appeared on the balance sheets of companies today, the concept of their “profitability” would be completely different. In that case, the market would be a more accurate indicator of sustainable growth. But we’re not there yet. The ultra-free-market movement launched by Milton Friedman and propagated globally by Margaret Thatcher and Ronald Reagan has put proponents of state intervention, and even supporters of modest regulation, on the defensive. The movement is unlikely to fade anytime soon given the support for it in the developing world, not least in Asia. That’s the story of global liberalization over the past fifteen to twenty years. It began with the fall of the Soviet Union and then moved on to the transformation of the General Agreement on Tariffs and Trade (GATT) into the World Trade Organization (WTO) in 1995; the steady expansion of the WTO’s membership, reaching 150 with the accession of Vietnam in 2006; constant pressure to cut trade barriers; much faster growth of international trade than of productivity; and, most stunningly of all, the spectacular growth in the use of derivatives. How to Build a Better World 33 This tendency to allow market forces alone to govern world affairs is also leading to growing frustration and major resistance on several levels. Americans believe in the market but they also believe in American leadership. Europeans believe in the market, but they believe even more strongly in a more just and equal world, which is being undermined by globalization. A growing number of people in Europe, Latin America, Africa, and even...