Inside the Wall - The Toronto G20 Redux, Pt 3

(Originally published Nov 11)

This week world leaders, finance ministers and their retinues are once again meeting for the G20 summit, descending this time on the city of Seoul. Protests have broken out in the streets, as expected. The mandatory dramatic images of citizens being pepper sprayed have been rolled out to the international media. And South Korea has shown it can deploy a militarized security force with the best of them: demonstration is simply 'illegal' within 2km of the site and a battery of water cannons, armoured vehicles, robots, roadblocks and helicopters says so.

As it turns out, the real melee to watch in Seoul may be inside the security wall this week. With talk of a showdown between the US and Germany and China over currency manipulation, the World Bank's push for a stronger global trade unit, and the ongoing implosion of sovereign European bonds in overexposed countries (most recently, Ireland), the occasional firework is sure to be lit inside the conference center as well. Despite the mass media's overwhelming focus on protest, violence, and damage to property it's clear that the police, the intimidating hardware, and the very real populist opposition to the summit are symptomatic of, but are not the ultimate cause of the dis-ease afflicting the streets of any recent G20 host site. That's the part of the story reserved for the business sections and back pages of the paper, couched in the pallid language of global economics, abstraction, and understatement.

For an example, look no further than our PM Stephen Harper, a journeyman of some reknown in the art of public misdirection. Speaking in Gatineau back in April, he said;

"...to the extent we now have a truly globalized economy, we need some semblance of global governance. That’s what the G20 is so if the G20 doesn’t work, something else will have to fill that gap. We’re not talking about world government. No one is prepared to surrender their sovereignty to the G20 or some other body but what they are going to see in practice is that we are going to need to co-ordinate our policies to create stability for all of us.”

Yet at a press conference held at the Toronto G20 summit's conclusion, he said something a little different:

"we cannot be effective at major economic matters any longer unless we work with our economic partners around the world and work with them closely and intimately. That is essential. I know some people don't like it. It is a loss of national sovereignty but it is a simple reality. It is a simple reality." (emphasis added)

Global Governance or Global Government?

Terence Corcoran, editor of the Financial Post and someone who knows a thing or two about economics dismantled the semantics of 'governance' in his column of June 8, backed up by a recent study from the University of Waterloo's global policy thinktank CIGI which advises us: “We should not shy away from naming the big fish honestly. It is global government.” Corcoran writes;

"G20 mania has a darker side — a growing push for forms of global government. Paul Martin rejects such suggestions. In the latest issue of Policy Options, Mr. Martin says 'effective global co-ordination does not mean the slow road to global government.' He’s not reading the background papers."

The term 'governance' is one that stretches back to Plato and means, roughly, 'to steer'. While there's some dispute about distinctions between the political process and what governments do versus the wider process of governing or administering any institution, clearly the concept of governance is the wider of the two. It's also a term which, until a few years ago, most people would associate more with the corporate boardroom (see eg; 'corporate governance') than a representative, democratic government. In practice, it has become a euphemism which equates the two, and this is an important shift, an expansion in our understanding of the nature and purpose of government and its relationship to other institutional powerbrokers: “NGOs, research institutes, religious leaders, finance institutions, political parties, the military etc.” all have a place at the table, in the view of one large UN agency. Ideas of good governance are content-free however when it comes to giving direction on the structure of government, merely advocating an effective “mediation of the different interests in society”. Presumably, anything goes so long as it keeps the trains running on time.

The G20's Democratic Deficit

By any standard of governance Canadians might find remotely familiar, rule by a council of elite ministers unelected to their office is anathema.

It's a corrosion not only of this country's sovereignty but its parliamentary institutions as well. It is a serious and potentially critical insult to the Westminster  tradition to have heads of state negotiating de facto economic treaties beyond the reach of national jurisdiction and (worse yet) far beyond the reach of those marching to have their voices heard outside the summit's steel wall.

Harper may soft-shoe the issue, assuring us that this is just the way things are now, but there is no way to reconcile Canada's pluralistic ideals with the image of twenty global leaders and guests debating economic policy behind closed doors in a high-powered board meeting. Perhaps he's perfectly comfortable with this arrangement - after all, this is the PM that has taken action to sideline parliament, muzzle his own party and shift power into his own office and that of the Privy Council - but the rest of us should view these developments with growing apprehension. History has taught us the hard way that questions of economic and foreign policy must be subject to the debate of a representative legislative branch, they cannot and must not be left to arbitrary executive power. Strong rule of this sort is the philosophical provenance of Plato, Hobbes and Machiavelli - the autocrats, not the great egalitarians that shaped Western democracies - Pym, Locke, Smith, Jefferson, and our own George Brown.

It ought to go without saying, then, that it's doubly obscene for our Prime Minister to attend such a meeting on November 11th, a day we remember the sacrifices that helped define our status as a nation independent of empire.

Central Planning, Economic Apartheid

Canadians did not vote for the G20. South Koreans did not vote for the G20. The G20 nominated and elected itself the supreme economic council for the globe last year in Pittsburgh. In association with the World Bank, the International Monetary Fund, the Bank of International Settlements, the European Central Bank and the US Treasury (among others) the G20 has now undertaken the task of formulating regulation for lesser banks as well as finding a global income stream with which to fund future projects - in other words, economic central planning.

The need for a ‘New Bretton Woods’ agreement has been invoked on multiple occasions, referring to the meetings held in the wake of WW2 that resulted in the creation of these very same global financial institutions and the canonization of Keynesian economic theory. (See here and here for examples of thought opposing Keynes.)

For the grandees and mandarins that move within this network of summits and conferences, this is no doubt a capital idea – it's a very clubby sort of world at the top. Many of the finance ministers and heads of central banks that attend have worked at the largest banking institutions, rotating in and out of private and public sector jobs. There’s even a name for this jet-set class of powerbrokers: ‘Davos Men’, implying regular attendance of the World Economic Forum in Davos, Switzerland. Our own Bank of Canada governor, Mark Carney, is an alumni of Goldman Sachs, which played such a notable role in the property derivatives crisis of 2008 and has been described, in one notable column by Matt Taibbi as a 'blood sucking vampire squid'. It should come as no surprise, then, that the G20 generates such outrage wherever it goes, though most particularly among students - those who have the most to lose when their futures are forfeit to the will of distant councils.

The fact that the views of those in the streets are not representative of other broad sectors of the population deserves comment. While much of this disconnect may be chalked up to apathy, there’s also a  fundamental dissonance at the heart of the message sent by labour, students, and the many civil society groups that form up to push back against the institutions of globalization. They blame ‘capitalism’ and critique the international system on this basis, clamouring for various degrees of socialism under which they believe that the very real injustices facing the poor and the colonized will be addressed. In some sense, what they hope for is to have their people at the tables of power.

But how are these not their people? IMF managing director Dominique-Strauss Kahn is a longtime scion of French socialism, and as the head of a fund empowered to issue Special Drawing Rights to nations is in the van of international central banks and satisfying one of the central planks of the Communist Manifesto: “Centralization of credit in the hands of the state, by means of a national bank with State capital and an exclusive monopoly.” Ditto for the Federal Reserve and World Bank, both agencies of the sort of economic centralization that binds together smaller jurisdictions and forces them into a collective dependency. China is of course a Communist state incorporating growing elements of Corporatism. Canada and the US are mixed economies both, combining elements of capitalism and redistributive socialism.

The critique of ‘capitalism’ levied by anti-globalization marchers could hardly be more anachronistic. In the first place because there is scarce little capitalism around to be observed in the wild, and secondly because those silent masses who do not feel moved to speak out against the G20 implicitly know that they owe the standard of living they enjoy to either the few remnants of economic liberty that still exist – or the ongoing seizure of foreign resources by multinationals. When told that internationally managed trade is ‘free’ trade and the G20 is ‘capitalism’, their silent consent is thereby secured by a radical confusion of these terms.

The irony here is that when the choices offered by either side of the traditional political spectrum result in central planning, hierarchy, and the redistribution of wealth to their people, economic apartheid and the creation of walls follows time and again. Instead of having a debate on the role of the G20, it’s the very legitimacy of institutions like the G20 that should be under debate.

Historically, entire cultures have undergone trauma and schism under the yoke of central planners. When that happens, we are segregated by race, by resources, by tribe or class, and begin developing along different lines: with different interests and different myths. When this happens we look for difference, we are fearful of the other, we point fingers and we build walls. This fact should have been thrown into sharp enough relief by the steel fence that bifurcated Toronto in June.

Us and Them

us, and them
and after all we’re only ordinary men
-Pink Floyd

It's past time for a radical rethink of the state’s role in society. To return to the issue of global governance - can the G20 ever accomplish its stated goals? Can this potent combination of high finance, questionable conflicts of interest and macroeconomic management ever work? Or is it a doomed project – does the desire to impose broad solutions from above ignore the crucial contingencies within each nation that rule out a one-size-fits all solution?

Enlightenment thinkers never intended that the modern state should be a Leviathan, an overarching corporation delivering ‘services’ with maximum efficiency and enjoying invested rights as an individual (you can't rebroadcast question period due to 'crown copyright'), a chief executive or Crown,  a security force, and phalanxes of  lawyers to fight for its interests by any means necessary. What they intended was that the state and its overwhelming resources should be bound in chains so that its citizens could be free. Washington said: “Government is not reason, it is not eloquent; it is force. Like fire, it is a dangerous servant and a fearful master.”

The revolutions that rocked Europe and America in the 18th century were in large part a reaction against imperial governance – groups of powerful citizens that ruled by law yet by various machinations were not subject to the rule of law.

In a petition to James I of England in 1610, the English House of Commons wrote:

“Amongst many other points of happiness and freedom which your majesty's subjects of this kingdom have enjoyed under your royal progenitors, kings and queens of this realm, there is none which they have accounted more dear and precious than this, to be guided and governed by the certain rule of the law which giveth both to the head and members that which of right belongeth to them, and not by any uncertain or arbitrary form of government....” (emphasis added)

Four hundred years have passed and the year is 2010, yet we find ourselves mired in these same issues. Protests rock Europe and the global economy hangs in the balance, pushed to the brink by debt leveraged out into the global economic system while financial institutions deemed ‘too big to fail’ clean up on taxpayer bailouts and consolidate their market positions. It’s time that corporations were sundered from the state and its enforcers in the same way and for the same reasons that the church once was, but fear of the unknown, of disrupting the social order keeps populations in check and so top banks are given slaps on the wrist and continue the drive for global regulation while federal governments militarize local police.

Unfortunately, the passion for individual rights necessary to counter this tide has wholly evaporated from the culture, and people are ideologically neutered by cultural pressure to support either the 'left' or the 'right', positions which in practice or theory both support massive increases in the size of the state. In his seminal work The Road to Serfdom (read the illustrated version here in 60 seconds flat) FA Hayek, a noted opponent of Keynes and one of the last champions of economic liberty wrote that:

“’Emergencies’ have always been the pretext on which the safeguards of individual liberty have been eroded.”

We live in an age of crisis, we’re told. Measures must be taken. So – just relax, shop, enjoy entertainment, and the experts will take care of the threat of terror, of the economy, of the constitution of government, of your collapsing standard of living.

They just need a little more power is all.

Source: We Are Change Toronto

Back to: Everything is OK – The Toronto G20, Redux: Part 1
Back to: The Criminalization of Dissent – The Toronto G20, Redux: Part 2