perjantai 7. toukokuuta 2010

We are living in a turbulent world - the illusion of the world government and the neo-liberalism

We are living in a turbulent world - the illusion of the world government and the neo-liberalism

The illusion of the world government

Since the World War II[1], the United Nations, the UN has had the responsibility for the collective security in our globe. The UN Charter Chapter VII sets out the UN Security Council's powers to maintain peace. The most famous article 42 allows the Council to determine the existence of any threat to the peace, breach of the peace, or act of aggression and to take military and nonmilitary action to restore international peace and security. The UN Charter's prohibition of member states of the UN attacking other UN member states is central to the purpose for which the UN was founded. Theoretically, the UN Charter relies on John Lockes’ ideas that postulate social contracts[2], first among citizens in order to establish an organized political community (state), and second between citizens and rulers about the transfer of power from the former to the latter, defining their mutual rights and obligations[3].

The UN Charter established a constitutional-like order among member states that is governed by the rule of law and viewed as legitimate by all its member states. The UN Charter is based on the assumption that policies of assertive multilateralism and cooperative security promote better international order and stability, than what would exist under traditional balance-of-power politics. The UN Security Council[4] is the organ charged with maintaining peace and security among nations. The decisions of the Council are known as UN Security Council Resolutions. The legally binding nature of Resolutions has been the subject of continuous controversy. In the case when the Council cannot reach consensus a resolution, it is possible to produce a Presidential Statement that is non-binding in its nature. This kind of complex decision-making is the reason why the UN Charter has been so difficult to empower.

In the 80s, the end of the Cold War raised expectations that the foundations of a new world order could eliminate new wars. The time of hegemonic wars of superpowers was over and the rebuilding of international institutions was focused more than the struggle for hegemony. The problem of a new world order is that international conflicts are dramatic and episodic. They are no more traditional wars but so-called terrorism or small wars. In the 80s, the Balkan crisis escalated into ethnic cleansing[5]. Since then, there were many multilateral interventions, both the UN/ EU actions and the NATO actions. The massive intervention by the US and its NATO allies in Europe in internal conflict in Bosnia and Kosovo is an example of military operations through which third parties intervene in civil conflicts to stop the fighting[6]. The problem was that the multilateral intervention of the UN could not stop militarization and human rights violations. The Serbian government's actions in Kosovo followed the same pattern that was applied by Serb forces in Bosnia[7]. The Serbian government repeated its historical pattern of military actions, and the UN involvement in Bosnia can be classified as a catastrophe.

Contrary to popular belief, little actual intervention took place. There was a clear contrast between the firm rhetoric of the Security Council resolutions[8] and actions. When enforcement did take place, it was the NATO that acted, not the UN. The reason was the same as many times earlier and later. The Security Council was unable and even reluctant to punish the UN member state of its aggressions against civilians. The U.S., Russia and China concentrated in their own political maneuvering and paralyzed the decision-making of the Security Council. Somewhat later the UN was passive in responding to the bloody conflicts in Rwanda and other parts of Africa. The interdependencies of the UN member states seem to weaken their capacity to deal with cross-boundary crises. In that sense, the UN has simply been unprepared for the complex conflicts like the organised mass murders that characterised the last decades. The political tensions in the UN have coursed many other negative effects like unwarranted political influence of multinationals and downward pressures on labor and environmental standards.

The legitimacy of the UN to intervene in humanitarian crises is highly dependent on its member states that exercize the legitimate power over their own territories[9]. The strengthening of international governance, especially in the field of the protection of human rights and the treatment of minorities is necessary. Unfortunately, the UN lacks the potency to equalize power disparities. The UN can only make international conflicts more civilized and less brute[10].

The People's General Assembly of the UN has repeatedly indicated an emerging consensus that the time is ripe for reformulating the UN's rules of the game by making them more compatible with democratic principles. These top-down approaches have long been wishful thinking[11]. Many of the UN’s specialized organizations like UNESCO have succeeded well and they are important part of the networking with NGOs[12]. Referring to the UN’s important principles of human rights and sustainable development, the UN is particularly suited to integrating discrete groups into an international organization and facilitating transnational institution building. Due to the increasing number of intra-state wars, the nature and means of international peace and democracy missions have changed. In complex intra-state wars not only military intervention is needed but multidisciplinary operations which include a wide range of civilian tasks, from coordinating humanitarian assistance and human rights monitoring to supporting institution building. NGOs not only address vital issues of the world environment, human rights, religious conflicts, migration, and refugees, but also have created methods of collaboration over borderlines.

Interventions to a state in crisis can be unilateral (one state takes action) or multilateral (such as UN or NATO action). There are certain conditions[13] associated with multilateral interventions that will increase the likelihood of success. An alternative model to multilateral legitimacy is still the historical model of dominance. For many years to come, the U.S is the only one reaching the status as a military superpower with global reach, although China and India are expected to be formidable economic powers in the future. The EU is doomed to walk in the shadow of the US and the NATO as long as its member states are reluctant to establish a political union as a necessary condition for conducting a single foreign and security policy. Max Boot[14] has noticed that the small war has been a way of furthering American interests. The judicious application of military force as the only option in regions where diplomatic or economic incentives fail to persuade can be potentially dangerous policy to follow in the time of globalization. Boot highlights the shadow of Vietnam that has the corrosive effects on US foreign policy.

Boot sees the U.S. as an altruistic agent in international affairs that is solely responsible for the collective security in our globe. In that sense, the Pax Americana can be seen as parallel concepts with the Pax Romana and the Pax Britannica. However, Boot’s vision of the Pax Americana contains return to the UN norms: the peace-keeping, peace enforcement, and humanitarian missions.

Unlike the model of world government, the model of global policy networks is not based on any political doctrine. Network model can be seen as a reflection of new trends in international relations that shows fragmentation of formerly unitary state structures, increasing direct contacts across national borders of the non-governmental organizations (NGOs) in public policies. On the global scene, the recent appearance of NGOs in practically all spheres of interest can be interpreted to signal the dynamics in international cooperation. The anti-globalization and environmental NGOs can be harmful to G8 countries and multinationals, but this is exactly what democracy is about. A good reason to favor the network-based and bottom-up approach is the fact that the most formidable, global networks use this approach. In Anne-Marie Slaughter’s judgment, global networks increasingly exchange information and coordinate activity to combat crime and address common problems on a global scale.[15] Like Anne-Marie Slaughter has pointed out A New World Order can only be based on network approach on the bottom-up instead of top-down.

Since the 1990s, when the Balkan crises erupted, the EU has been trying to make the transition from reacting to crises on an ad hoc basis, to anticipating and preparing for such crises. The EU has strengthened the civilian side of conflict management. A key issue is the training and rapid deployment of qualified civilians. The EU has established civilian crisis management capabilities in police, civilian administration, rule of law and civil protection. The EU challenge is to link the institutional approach to the network approach of governance. The EU’s special resources and its unique legitimacy as representative of the common interest makes it the outstanding candidate for fulfilling the role of network manager, a role which means arranging and facilitating interaction processes within networks in an open, transparent and balanced manner[16].

The EU brings together the states and societal actors for mobilizing pan-European flows of ideas, knowledge, funding, and people. Attention is given to NGOs[17]. State and civilian actors are involved in networks ranging from the EU-level to decentral sub-national levels in the member states.

In Africa, the major obstacle of institution building is the local armed conflicts[18]. Small arms are the weapons of mass destruction of the poor. They have had a great destructive influence on political and social structures. The reasons for armed conflict vary. There is a clear need for better analysis of the root causes of conflict and of the early signs of an emerging conflict[19]. In some countries, the government has failed to govern. These governments are unable, or unwilling, to provide security and basic governmental services in their territories. Failed states are first and most humanitarian disasters, where the main victim is the population. Increases in population, declining economies, poverty, environmental degradation, injustice, and foreign debts are typical reasons to failed states that are also becoming an increased threat to international peace and security. Nevertheless, despite all the technological advances, it appears that military means are not any more reasonable to be used.

The neo-liberalism

In the Western countries, a Keynesian macroeconomic theory and a social democrat or a Christian democrat ideology dominated since the war. States had a strong role in the economy and major parts of markets were regulated. When the International Monetary Fund, the IMF and the World Bank were created at Bretton Woods in 1944, their mandate was to lend for reconstruction and development of states. The IMF was employed to stabilize currencies and to help countries to avoid economic crises. The World Bank was meant to facilitate long-term investments in underdeveloped countries, to expand and strengthen their economies. The main instrument has thought to be lending major project investment money at low interest to correct for the deficiencies of local financial markets. In the three decades after the war, the IMF and the World Bank were appreciated as progressive organizations and loyal allies to the poor countries. In the 80s, their policies were suddenly totally opposite to that. Instead of facilitating stable exchange rates and helping countries to protect themselves, they began to work against obstacles to the market liberalization.

The IMF and the World Bank are blamed to be far too neo-liberalistic. According to neo-liberalism, market exchange is an ethic in itself, capable of acting as a guide for all human action[20]. Neo-liberalism is not a force like gravity but an artificial construct. We need workable international taxation, including a Tobin Tax on monetary market transactions[21].

Friedrich von Hayek, the philosopher-economist and his students like Milton Friedman at the University of Chicago can be classified as contemporary neo-liberals. The Chicago school has succeeded to build an ideological cadre that has taken the hegemony in the IMF and the World Bank in which the U.S. is the major shareholder. The Chicago school has made neo-liberalism seem as if it could be the normal condition of humankind. Two famous politicians have often been mentioned as forespokers of neo-liberalism. In 1979, when Margaret Thatcher came to power, she undertook the neo-liberal revolution in Britain. Thatcher's doctrine is based on the notion of competition. For her the market is the standard solution to increase efficiency. Ronald Reagan was the one whose neo-liberal doctrine and policies made the Chicago school possible to takeover the IMF and the World Bank. Reagan is the president who succeeded to change the U.S. income distribution totally[22]. As the result, the U.S America is now one of the most unequal societies.

A central element of the neo-liberalism is the downsizing of the public sector. Privatization as the trend began in Britain and spread throughout the world. In reality, most of the public services constitute natural monopolies[23]. The public service producer often has the optimal size and the lowest possible costs to the consumer. Public services require large investments and continuous maintance. Public monopolies have not been inefficient because of the public ownership as neo-liberals claim. When a natural monopoly is privatized, the new capitalist owners tend to impose monopoly prices and lower quality on the public services. This kind of structural market failures has earlier been prevented in the EU by state-owned monopolies. Privatization favors capital and moves wealth from the bottom of society to the top[24]. The difference between the EU and the US is that in the US, natural monopolies are difficult to maintain because of the huge geographic sized of markets.

In the developing countries, state-owned monopolies are often the only way to build up the infrastructure for the public services. The state is the only one that can take the risk of lending from the global financial markets.

There is a global trend towards greater inequality. The ideological justification for such measures is that higher disposable incomes for the already rich and higher profits will stimulate investments and provide more jobs and welfare for everyone in our globe. The only predictable result is disruptive stock market bubbles and financial crises of poor countries. The neo-liberalistic policies of the IMF and the World Bank can even deepen crises by downsizing of the public sector and thereby, domestic market demand. Instead, the IMF should promote international cooperation to make it possible for people in local communities to control their own economic lives[25]. The WTO established in 1995 trumps on behalf of free trade. The original mission of was, however, different[26]. Most of developing countries are disappointed at the WTO’s failure to create fair rules in international trade[27]. An example is cotton farmers in Africa that have difficulties to compete against the US and EU cotton subsidies, which has threaten the livelihoods of 15 million people dependent on cotton farming in West and Central Africa[28]. Some sociologists have claimed that the WTO is the major obstacle of the global justice[29].

The developed countries have initiated a new instrument: bilateral and regional free trade agreements (FTAs) to win concessions for more favorable rules. The US calls this approach competitive liberalization. The EU has declared its intention to use bilateral deals as stepping stones to future multilateral agreements. The EU argues that bilateral and regional agreements are vital for developing countries in Africa, the Caribbean and the Pacific to maintain their access to European markets in a form that is compatible with the WTO rules. One of the problem areas is intellectual property rights, IPRs that are most critical in the areas of life-saving medicines[30] and new biotechnology innovations meant to farmers. The liberalization of science-based products and digitalized services in FTAs threaten to drive local firms out of business, reduce competition, and extend the monopoly power of multinationals[31]. The risk is how to guarantee poor people’s access to essential public services. The US policy is neo-liberal and opens up public utilities in developing countries to foreign investors if the sector is opened to domestic private firms.

Te US and the EU are pursuing regional and bilateral free trade agreements through FTAs that makes poor countries more difficult to get a foothold in global markets. Although developing-country governments have proved themselves increasingly assertive at the WTO and in FTAs, the balance of power in current negotiations is in favor of rich countries and multinationals.

Local entrepreneurship is the only way to develop poor countries, to reduce the negative implications of financial volatility, to enlarge democracy, and thereby, to defend human rights and environmental sustainability.

[1]This conflict split a majority of the world's nations into two opposing camps: the Allies and the Axis and resulted in the deaths of 60 million people. More than 100 million military personnel from 61 nations were mobilized. However, nearly two-thirds of those killed in the war were civilians. Of particular note was the Holocaust, which was largely conducted in Eastern Europe, and resulted in the killing of around or even more than six million Jews and other minorities by Axis forces.
[2]The notion of Social Contract, although particularly influential in the seventeenth and eighteenth centuries, has a history which reaches back to the time of the ancient Greeks. The term refers to the act by which men are assumed to establish a communally agreed form of social organization.
[3]Clark, Grenville and Sohn, Louis (1966) World Peace Through World Law: Two Alternative, Cambridge, Mass: Harvard University Press.
[4]The Security Council is made up of 15 member states, consisting of five permanent seats and ten temporary seats. The permanent are China, France, Russia, the UK and the U.S. These members hold veto power over substantive but not procedural resolutions. The ten temporary seats are held for two-year terms with member states voted in by the UN General Assembly on a regional basis.
[5] The concept refers to practices aimed at the displacement of an ethnic group from a particular territory.
[6] Regan, Patrick M. (2002) Civil Wars and Foreign Powers: Outside Intervention in Intrastate Conflict, University of Michigan Press.
[7] Pevehouse, Jon and Goldstein, Joshua (1999) Serbian Compliance or Defiance in Kosovo? Statistical Analysis and Real-Time Predictions, Journal of Conflict Resolution 43, pp.538-546.
[8] Condemnations, demands, appeals for cessation of fighting, free passage of humanitarian aid and adherence to humanitarian law.
[9]According to Max Weber, the state is the source of legitimacy for any use of violence. The police and the military are the main instruments, but private forces in the form of associations and networks are also legitimated by the state. Weber, Max (1946) Science as a Vocation, in Gerth, Hans and Mills, Wright (eds.) From Max Weber: Essays in Sociology, Oxford University Press, New York.
[10] On 21 March 2005, UN Secretary-General, Kofi Annan, released his report “In larger freedom: towards development, security and human rights for all”.
[11]Richard Falk of Princeton and University of California at Santa Barbara, see his Reforming the International: Law, Culture, Politics, edited by Falk, Richard & Lester, Edwwin J Ruiz, & Walker, R.B. J. New York, Routledge, 2002.
[12]Since the World Summit on Social Development at Copenhagen (6 - 12 March in 1995) at Copenhagen, the U.N. itself has fully recognized the persuasive power of NGOs.
[13]Patrick Regan identifies three historically rooted conditions:
- mutual consent of the parties involved,
- impartiality on the part of the intervenors,
- the existence of a coherent intervention strategy.
Patrick M. Regan (2002) Civil Wars and Foreign Powers: Outside Intervention in Intrastate Conflict, University of Michigan Press.
[14] Boot Max (2002) The Savage Wars of Peace: Small Wars and the Rise of American Power, New York: Basic Books.

[15] Anne-Marie Slaughter points out that not only terrorists, arms dealers, money launderers, drug dealers, traffickers in women and children, as well as the pirates of intellectual property operate through global networks; government officials, such as police investigators, financial regulators, and even judges and legislators, also work in such networks. Slaughter, Anne-Marie (2004) A New World Order, Princeton, NJ: Princeton University Press.
[16]Kickert, Walter J.M., Klijn, Erik-Hans & Koppenjan, Joop F. M. (1997) Managing Complex Networks: Strategies for the Public Sector, Sage Publications Inc.
[17]Fisher, William F. (1997) Doing Good? The Politics and Antipolitics of NGO Practices, Annual Review of Anthropology, Vol. 26: 439-464.
[18] During the 1990’s, there were 111 armed conflicts in 74 locations. Half of these were major conflicts (more than 1000 battle related military deaths). Conflict has directly killed more than 2.5 million people in the last decade, and displaced and uprooted over ten times this number (31 million people). The international community spent € 200 billion on seven of the military interventions of the 1990s. Preventive action in each case would have saved € 130 billion. (Wallensteen, Peter and Sollenberg, Margareta (2001) Armed Conflict, 1989-2000, Journal of Peace Research, Vol. 38, No. 5, 629-644, Department of Peace and Conflict Research, Uppsala University).
[19]There are many factors which are early signals of potential conflict: Poverty, economic stagnation, uneven distribution of resources, weak social structures, undemocratic governance, systematic discrimination, oppression of the rights of minorities, refugee flows, ethnic antagonisms, religious and cultural intolerance, social injustice, the proliferation of weapons of mass destruction and small arms.

[20]Harvey, David (2005) A Brief History of Neoliberalism, Oxford, UK: Oxford University Press.
[21]Susan George, A Short History of Neoliberalism, Conference on Economic Sovereignty in a Globalising World March 24-26, 1999.
[22]In the 1990s, the extremely lucky top 1 % of American families could thank Reagan for a 50 % increase. A decade later, the top 1 percent was 115 times as well off as the bottom decile. Phillips, Kevin (1990) The Politics of Rich and Poor, Basic Books.
[23]A natural monopoly exists when the minimum scale of operations equal the actual size of the market.
[24]In Finland, Fortum, the vertically integrated and state-owned monopoly in electricity production was privatized in the beginning of the 2000s. The result was douple higher prices for consumers and huge options for the managers.
[25] A report released by the Independent Evaluation Office (IEO) of the IMF criticises the role of the IMF in managing aid inflows to Sub-Saharan Africa
[26] The WTO is based on John Maynard Keynes’s ideas from the wartime. Keynes uses the name the International Trade Organisation (ITO), supported by an international central bank, the International Clearing Union (ICU).
[27]Ikenberry, John (2001) After Victory: Institutions, Strategic Restraint, and the Rebuilding of Order after Major Wars, Princeton, N.J.: Princeton University Press.
[29] Korten, David (1995) When Corporations Rule the World, London.
[30]The proposed trade deal between the US and Colombia would increase medicine costs by $919m by the year 2020 in the country of 5.2 million people.
[31]In some countries like Mexico “liberalized” services are owned by over 80 per cent by multinationals, most of them are US-owned.

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