The time has come to create democratic institutions of global governance designed to end corporate rule, secure the human rights and democratic sovereignty of people everywhere, and restore control of national economies and resources to national and local governments. All of this can be achieved within a framework of agreements intended to support economic justice, food security, full employment, environmental sustainability, and financial stability.
Consistent with the principles of democracy and subsidiarity, such a system would be designed to support national and local jurisdictions in controlling and using their own resources to meet their own needs consistent with their own circumstances and cultures. Rule making, standard setting, and enforcement functions would be predominantly national and local. Global level rule making and intervention would center primarily on those matters of compelling international interest — such as maintaining stable, balanced economic relationships among nations. Trade and investment agreements would embody a strong bias for the poor and seek to secure weak nations from predatory actions by strong nations and global corporations.
Markets need rules and since the purpose of the market is to serve people, these rules should favor community interests. This will happen only if the rules are made by people acting in their capacity as citizens of place-based communities.
By the late 1990s, the core institutions that governed the global economy were all suffering crises of public legitimacy. The IMF was widely blamed for setting the stage for the Asian Financial crisis of 1997 that threw over 100 million people into poverty. The World Bank was seen as pushing bad projects and bad policies on much of the world. And the WTO was widely viewed as a trade cop for the rich nations and their corporations. A decade later, they still suffered legitimacy crises and the Fund and Bank had also fallen into financial crisis as countries cut back on borrowing from them; as for the WTO, its negotiations for an ill-named “development round” languished in stalemate.
Although these institutions failed from a public perspective, they had been highly successful in opening national economies to penetration and exploitation by global corporations. When the global collapse of 2008 caught fire on Wall Street and spread around the world, the corporate interests these institutions serve grasped the opportunity to lavish new taxpayer resources on the World Bank and IMF with the claim that the assistance was essential to save the world’s poor from ruin. As with the Wall Street bailout, the real goal was to save the world’s rich. In 2009 and early 2010, lending from these institutions has expanded exponentially.
There is a better way forward. In 2002, 21 experts from North and South gathered under the auspices of the International Forum on Globalization to put forward an alternative set of global trade and investment and finance institutions in the book: Alternatives to Economic Globalization. Today, eight years and many crises later, we invite a new dialogue over these proposals. It makes sense to look at them in light of the current crisis.
We offer a brief overview of alternative institutions. We make the argument for decommissioning the core multilateral economic institutions and unifying global economic governance under a restructured United Nations system. We end with proposals on what new institutions might do the job better.
We argue that a goal of civil society should be to replace the institutions of corporate rule with institutions that are democratically accountable to the will of the world’s people — much as an earlier generation replaced the institutions of monarchy with the institutions of political democracy.
The current institutions are the creations of men and a few women whose vision of governance centers on the short-term needs of global corporations and banks. The creations of humans, these institutions can be replaced.
Adapted from Chapter 10 of Alternatives to Economic Globalization: A Better World is Possible (John Cavanagh and Jerry Mander, eds.)