Voices for Global Democracy

Those who see Globalisation as a potential force for good, have been for some time being turning their attentions as to how best to shape it and more importantly how to democratise it in order to make it fairer and more accountable. These include voices who have in the past been either instrumental in working for some of the institutions most closely associated with it as well as those who are against the process of Globalisation entirely.
Professor Joseph Stiglitz left academia to join the US Administration under Bill Clinton before joining the World Bank and becoming it's Chief Economist. A pragmatist and supporter of what he thinks globalisation can achieve for the World’s poor, Professor Stiglitz is however acutely aware of globalisations misuse and its often undemocratic methods. In is latest book ‘Making Globalization Work’, Stiglitz argues for the fundamental reform of Globalisation. He writes that unlike capitalism we have yet to learn how to temper Globalisation and as such though it has seen successes in reducing global poverty, the picture is often one of where one actor gains at the others lose.
His book proposes that the World should begin to democratise globalisation. In his arguement for this Stiglitz draws the reader’s attention to the vast unfairness of the current global trade apparatus. He argues that the system is virtually entirely based around the United States and that’s where the principle problem lies.
As the World becomes more interconnected we need more interconnected solutions to its problems, and now according to Professor Stiglitz more and more people within the US are seeing that this is the case. They are able to see that essentially going it alone, as they did in the recent example of Iraq with the cost of countless lives and an estimated bill at the end of it exceeding an astonishing $3 Trillion is not in the end to the US national benefit. Partly funding this was meant the US last year borrowed an astonishing $850 Billion, much of this coming ironically from their nearest rival the Chinese.
Stiglitz points out that supporters of Globalisation look towards China, where 300,000 people have been lifted from extreme poverty. He though weighs that against Africa, where arguably globalisation and the influence of China has had a very negative effect. China’s growth wouldn’t have been possible without globalisation; its exports to the Developed World have enabled it to grow at a fast rate. India too is largely benefiting from its status as a vast labour and manufacturing pool. Latin America on the other hand has suffered. This is largely due to the adoption thus far by those who promote globalisation of a set of policies known as the ‘Washington Consensus’.
The ‘Washington Consensus’ is so called because the US Treasury, the World Bank and the International Monetary Fund are located only a few blocks away from one another in central Washington DC. It is recognised that successive US administrations wield a high degree of influence over the policies of the World Bank and the IMF putting the US into an unassailable group that Professor Stiglitz refers to as the ‘G1’. The controversial appointment of Paul Wolfowitz in 2005 as head of the World Bank showed the continuing control Washington has over the Institution. Widely seen as one of the architects of the Iraq War, Wolfowitz was not seen as sufficiently independent of the US administration and not capable of understanding all the changes facing the institution.
One of the main principles as practiced by the Washington Consensus is that of fiscal austerity. Stiglitz argues that adherence to the policies of this ‘cartel’ controlling global economic practice in the American Capital has set back many developing economies for many years. This has given rise to mistrust of the US throughout much of the developing world, especially in Latin America. Stiglitz recognises that though he thinks the intentions of the IMF and others were good, there was a fundamental misunderstanding whilst dealing with these economies. He points in his book to the example of Ethiopia, where the IMF on getting involved claimed that the country’s financial books were basically not balanced. This was due to the IMF not including Foreign Aid received by the Ethiopian government in its estimations. Stiglitz on seeing this himself knew that this didn’t make sense, after all foreign aid was given to spend and Ethiopia spent the money accordingly. The austerity imposed by the IMF resulted in no money being available and therefore no expenditure on schools and improving other basic services.
The IMF’s belief in trade barriers comes into criticism too. The institution according to Stiglitz had little idea of how to create jobs once many had been lost due to the bringing down of trade barriers. It focused on the negative of opening up to subsidised goods. Farmers for example in the Developing World could of competed against farmers in the West but not against the rules coming from Brussels and Washington. The irony being that many of the countries in the West were able to develop to the extent they had by exploiting trade barriers. The IMF was now saying to countries, regardless of your state of Development that the liberalisation of trade was paramount. It is, as Stiglitz points out in the book far easier to destroy jobs than to create them.
The crux of globalisation today is that money, products and information are able to flow around the globe with a rapidity not witnessed before in history. Likewise nation states and peoples of the world are more interdependent and reliant on each other like never before. This includes the US, where because of ventures like the war in Iraq the US, but more importantly its people are realising that it will be wiser in the future to delegate to Institutions such as the United Nations in order to succeed. The UN particularly cannot afford to be undermined in the way that it was before the Iraq war. It may have come to the right conclusion but the political workings of it meant that in effect it was overruled by the United States.
A more powerful UN with an effective global law making branch would, Stiglitz argues lead to a more democratic development process around the world. Though people still identify most strongly with the nation state, there is increasing empathy with people from across borders. This is down to globalisation and a gradual coming together of people in many circumstances, business, travel and broader and faster communications. The shock of the Boxing Day Tsunami in 2004 was an example of the World coming together.
However it is unclear whether Stiglitz univocally supports a global government in the way that the environmentalist George Monbiot does for example. In his book ‘The age of consent’, Monbiot makes powerful arguments for global governance to counter the ‘rich few’ and from his perspective for the sake of the environment. Stiglitz is less revolutionary.
The problems of mismanagement and corruption as found in the Developing World have in many cases seeds in the Developed World. It is true that there are other complex endemic problems found in many countries that a more democratic way of providing development aid can address far better than the current consensus. Stiglitz’s main message in his book and Monbiot in his is that if we continue to make the rules of the game harder the most vulnerable economies of the world will continue to find it harder to develop and the only result the West will have will be the resentment felt by the worlds poorest towards it failed efforts.
As Monbiot writes; "Everything has been globalised, except our consent".
Links & Resources:
Economist's View - Blog review of 'Making Globalization Work'
George Monbiot - Homepage
Joseph Stiglitz - Homepage
Hii Dunia - Articles on Global Democracy; 1,2,3 & 4




