babelblogs

hosted by cafebabel.com

Money

“GOVERNANCE” A THOUGHT FOR EUROPEANS ?

To begin this new article, I would like to come back on a few points from the article on capitalism. The crisis that some already qualify as being a "recession" will require us – if we want to come out on top - to reconsider and integrate the role of new actors as forces of suggestion , complementary to the functions of the State. Democracy in its governance is indeed changing, as a result of the enormous advances that have been taking place in the domain of communications, especially with the Internet, which itself is one of the main causes of the globalization of information.

Citizens and civil society, particularly those represented by associations but also by NGOs and foundations, can and should contribute to resolving this crisis that is looming on the horizon, mainly by taking its social aspects into consideration. There are not only inconveniences to this, as it can be a tremendous democratic restitution for our companies, which will lead to discussions that can conduct to changes in the governance of States themselves. With all these new actors and the state, we are confronted by a large debate, in which the role of morality and ethics, in the domain of politics and economics, would have to be discussed thoughtfully and responsibly.

The purpose of governance is to get closer to achieving political equilibrium and thereby guaranteeing an efficient and effective government. This means accepting a global approach of government power, that embodies more dialogue, consensus and taking into account multiple interests. In times of crisis, this integrated approach appears therefore to be a contemporary topic of great importance.

The concept is not only for domestic implementation but also for use on an international level. The inclusion of multiple interests, and the search for consensus could actually be the new guidelines for a modern form of diplomacy as part of a multi-polar world. Following this logic, it seems necessary, for instance, to restructure international organizations such as the United Nations, the IMF or the World Bank. All these organizations were introduced shortly after the Second World War, and the world has changed a lot since then, especially with the end of colonial empires, the end of the USSR and the emergence of new powers.

Taking into account the new face, or should we say multiple new faces, of the world, as an incentive to consider a major democratic reform of international institutions. A Security Council integrating an African country but also India and Brazil, as well as the creation of a seat for the European Union or even the chairmanship of major financial institutions such as the World Bank and the IMF, held by representatives of non-European countries, or from representatives not coming from the United States of America, are important elements to take into consideration if we want to mobilize the entire world in solving this global crisis.

The mobilization of a large number of countries and their citizens, to revive the global economy today, is an imperative that is binding everyone if we want to solve this crisis, that has become social and that we have been experiencing for several months, in the quickest and most evenhanded way possible. It is all the more urgent, as this crisis is not the only one we will have to face in upcoming years because the climate and energy crises also already constitute major challenges to face. The threat posed by the climate crisis can evidently only be faced on an international level as pollution and natural catastrophes know no state boundaries.

As far as energy is concerned, primarily oil, even if oil prices per barrel are currently low, a decrease of demand from industrialized and emerging countries seems unlikely nowadays, especially if we want to revive the economy through policies of large scale change. This is why we should prepare ourselves at present for a sudden rise in oil prices! The geopolitical consequences will be important in this race for energy. They will only be correctable through cooperation as the reserves of oil cannot be extended to meet the exceptional growth rate of our economical needs.

Governance is not only applicable at the international level but also locally. Indeed, consensus-building by taking into account the greater number of partners in policy making makes sense at the local level, in municipalities and at regional level, in the departments. This is a chance to see a direct and sustained involvement of citizens in the life of the city and / or region. This will make the populations feel like a part of the political decision making process, which can, in times of crisis, defuse many social conflicts.

We can also associate the business world with the practice of local governance. Indeed, decisions that are concerted and explained to an entire workshop, a division, or a plant would reduce the potential for conflict. This reduction of the distance between hierarchical floors makes it possible to mobilize all employees in a movement where everyone feels, by consensus, useful and essential for the proper functioning of the group as a whole.

This local governance is an important part of European civil society which is connected first in national governance at state level and, secondly, at a European level in Brussels. The involvement of a greater number of citizens in public decisions is ensured through the proximity to the fact, when the decision is taken closer to the citizen and also when it is explained on a national and European level. It is most probably through this form of participatory involvement, that we can establish a European citizenship that integrates both the local and national feeling of belonging.

The establishment of modern governance techniques appears easy to realize today using modern means of communication, especially the resources offered by the internet, which amply demonstrated its capacity to mobilize nations in the latest American Presidential elections. A great number of European citizens know and use social networks on the Internet, the transition to a form of governance incorporating this logic would be simple to implement for many citizens. Our politicians are already using websites like “facebook” or “viadeo” and their constituents have begun to incorporate the possibilities, for consultation and proposals, of these new platforms that bring politics within reach of the voters. For the European Union, this could be an extraordinary building site for a modernization of democracy which could become, once the work is completed, the real contribution of Europe to global democratic debate, one of the components of this "European way of life !" we have yet to find. We are in the European election year and we possess, through governance, a subject conducive to beautiful and noble political debates, which most probably interest voters, through the prospects they offer and the new dynamic process that they could engage in the European Union.

Olivier VEDRINE

Monday, March 16 2009 By Olivier Védrine

MUST CAPITALISM BE RESTRUCTURE ?

While reading the newspapers, listening to the radio or watching television, we notice the abundance of opinions on the crisis we are facing as well as the numerous experts ready to explain the downfalls of our market economy. It seems to me that there are two pitfalls which should be avoided in this reasoning:

- the first being the belief that we will emerge from this crisis in one or two years as it is only a cyclical period of adjustment; - the second being the idea of a “reformed economy,” which would give us the possibility to radically change the economy and carry on to a new, radiant tomorrow.

The first point of view is no longer widely spread, I’m afraid that the second, on the other hand, is in full bloom. It would be seriously dangerous to tell the many victims of this crisis that all of their problems can be solved by quickly applying radical new rules in hopes of achieving a new, more “humane,” economy.

If we are truly interested in finding a solution, we must direct our attention to the definition of capitalism itself. We should be told less about the end of this system and more about its reformation. Since the 1980’s, finance has taken the reins of the economy and virtualized operations (i.e. derivative markets). The true economy though is not virtual, it is real, and it is the value of labor. I produce and I sell a good that exists: this is the moral sense of capitalism.

It is not the vocation of the financier to run the system on his own, it is on the activities of entrepreneurs that everything depends. Banks should return to their founding objectives: to serve industry! That is the only reform we can expect from our economy. One cannot expect capitalism to erase social inequality or reform the health system, that is not its role and never will be. That duty belongs to the state and to politicians.

This does not mean that we should not think about adaptations that could be made to the system, to future stakes, and to the modern world. I believe that there is a necessity for the return of the state/or states as regulators under certain circumstances that remain to be defined. May be the establishment of “New Ideals” in Europe, as in the United States could be an answer. What is sure, is the absolute necessity, current and future, to manage the consequences of the crisis. In effect, the failure of reflationary policies will serve as arguments to policies that promote rapid solutions which are always disastrous. From protectionism to nationalism they will drive us towards a result which we must now avoid. For example, if Europe fails in its reflationary policies, as Europe can only face this challenge as a whole as no state can do it alone for lack of means, we can only imagine the kind of arguments that would be provided for promoters of certain radical ideas. The result could be the end of the European Union. On the other hand, this may be a chance for the European Union, if it succeeds in protecting our societies through its decisions, to rise as a new important actor, primarily for its citizens but also for the rest of the world. The sum of the tools needed to face future issues and problems could only be put together by nations and/or groups of nations. May be through this unexpected consequence of the crisis we will see the emergence of a true international community.

After the necessary return of the state and politicians in the economy, we must now analyze what the structural possibilities are for our economies to better understand the changes. These begin with the requirement to increase investments in the research sector to benefit researchers. Primarily, a company needs a product to sell which is the result of a process of research and development. There can be no innovative, solid, and lucrative companies without high quality research. Tomorrows products are in our laboratories (which is favorable) or in the laboratories of our competitors (which is less favorable). There lie our future profits and thus our future employment. That is what will also oblige us to invest in new technology. The transformation of the automobile industry, which will undergo a crisis similar to that of the steel industry in the 70’s and 80’s, will only advance through the application of the following: clean cars, with lower consumption rates and /or built entirely from recycled materials, as well as being crammed with innovative navigation technology.

Efforts in the renewable energy domain also create wealth and employment. The use of new forms of energy (solar, biomass, geothermic…) in real-estate development, require new types of industry and thus provide employment. Environmental issues are already forcing us to change our lifestyles which will require us to create companies in the near future to satisfy the demand for new materials, new energies, and for new forms of consumption.

Another issue must be considered so as to adapt ourselves to the new situation: the role of new actors as possible sources of ideas, complimentary to the functions of the state. Through instruments such as the internet, which has indeed lead to the globalization of information, democracy as we know it is in metamorphosis. Citizens or groups of citizens, through associations as well as NGO’s and foundations, must and will participate in the resolution of this crisis, especially when it enters its social phase. To our societies, this may prove to be a formidable democratic renewal and the debates that will follow will bring about change in the way states themselves govern. Here, with the sum of these new actors and with the state, there will be a great debate of ideas where the appropriate place of morality and ethics in the economy and in capitalism will be able to be approached.

This crisis can be an opportunity for Europe. In effect, if this occurs, through a visible cohesion of its member states, Europe will find the echo of its citizens more than favorable. The EU will begin a new chapter in its history where, united and interdependent, strengthened by a large democratic area with a renewed economy, it will be able to face future challenges and crises and in a multi-polar world, make its voice and propositions heard.

Olivier VEDRINE

Monday, January 26 2009 By Olivier Védrine

Entries feed - Comments feed