a new age of global responsibility

Social EuropeJournal Volume 5 • Issue 2

Winter/Spring 2011www.social-europe.eu

Contributions byThomas PoggeAndrew F. Cooper Eric HelleinerKarin Roth

A New Age of Global Responsibility

Dani RodrikJoseph StiglitzPaul CollierPierre MoscoviciStephen Barber

Social Europe Journal • Volume 5 • Issue 2 • Winter/Spring 2011

Editorial Board

Giuliano Amato Former Italian Prime Minister

Stephen Barber Book Review Editor, London South Bank University

Stephen Haseler The Global Policy Institute

Klaus Mehrens IG Metall

Henning Meyer Editor, London School of Economics and Political Science

Poul Nyrup Rasmussen Former Danish Prime Minister, PES President

Philippe Pochet General Director of the European Trade Union Institute (ETUI)

Karin Roth German Member of Parliament

Angelica Schwall-Dueren Minister for Europe of the State of North Rhine-Westphalia, Germany

Dimitris Tsarouhas Bilkent University Ankara

Editorial Team

Jeannette Ladzik Assistant Editor

Ben Eldridge Design & Layout www.beneldridge.co.uk

Social Europe Journal is published by Social Europe Journal Ltd in cooperation with:


THE LAST YEAR was a tumultuous year in European and inter-

national politics and the ten-sions over economic policy and how to deal with the – hope-fully – tail end of the Great Recession is set to occupy us also in the new year, as Joseph Stiglitz’ article suggests. One of the key lessons, however, has been the insight that the interdependent nature of our globalised world is a phe-nomenon not only found in academic textbooks but also in reality. In many respects, politics has not lived up to this challenging situation yet.

For this reason, the current issue of Social Europe Journal will look at some of the press-ing problems that need to be addressed in times that require ‘a new age of global responsibil-ity’. Health in particular is an area that has taken a backseat in the wake of fundamental eco-nomic problems; but the issues have not gone away. Karin Roth in her contribution outlines the devastating situation in many African countries and Thomas Pogge, in the lead article of this journal issue, outlines how a Health Impact Fund could help to address many of the persist-ent incentive problems in the health industry and create the first real global public good.

In recent years, the G-20 has attracted significant attention as a new forum to deal with global (economic) problems. Andrew Cooper and Eric Helleiner shed some light on positive as well as negative aspects of the G-20 experience and make some valuable suggestions for nec-essary improvements of the framework. Following this Dani Rodrik points to some on-going problems of global governance in general and Paul Collier chal-lenges the wisdom that democ-racy and economic development necessarily go hand in hand.

Of course, the continued soul-searching of European social democracy remains high on our agenda. Pierre Moscovici takes stock of the European Left and suggests new policy directions to build the ‘Good Society’. Finally, Stephen Barber reviews Tony Blair’s autobiography.

As always, we hope that we have brought together a stimulating set of articles and you enjoy reading them. All the best for 2011!

Editorial

Henning MeyerSenior Visiting Fellow at the London School of Economics and Political Science and Editor of SocialEurope Journal


The Health Impact Fund: Enduring Innovation Incentives for Cost-effective Health Gains Thomas Pogge

Advances in Global Economic Governance Amid the Obstacles at the Seoul G-20 SummitAndrew F. Cooper and Eric Helleiner

Establishing Comprehensive Health Care Systems on the Basis of Solidarity – Developing and Coordinating Concepts for African CountriesKarin Roth

Don’t Count on Global GovernanceDani Rodrik

Alternatives to AusterityJoseph Stiglitz

Development Models Revisited: European Democracy vs. Asian AutocracyPaul Collier

The Left in Europe: What Does the Future Hold?Pierre Moscovici

Tony Blair’s ‘A Journey’: Justification and Lament Stephen Barber

Contents

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5 Social Europe Journal • Volume 5 • Issue 2 • Winter/Spring 2011

The Health Impact Fund: Enduring Innovation Incentives for Cost-effective Health Gains

Thomas PoggeLeitner Professor of Philosophy and International Affairs at Yale University

HUMANITY SPENDS over 500 billion euros on medicines each

year, some 1¼ percent of world income. Is this money well spent? Data for answer-ing this question are sparse. While new medicines must pass through elaborate clinical trials before they are allowed on the market, there is very little systematic study of their subsequent use and impact. We don’t know to what extent medicine dispensed (i) is actu-ally used, (ii) while it still has its potency, (iii) in accordance with the correct instructions, and (iv) by patients for whom it is indicated and (v) whose condition and circumstances allow them to benefit from it.

Given the magnitude of the expenditure, we ought to learn more. But we know enough to conclude that there are huge inefficien-cies in the current system.

These inefficiencies are gen-erally related to how we pay for the introduction of new

medicines. Development and especially testing of new medi-cines is expensive; and invari-ably such expenditures often fund failures as when a candi-date drug’s safety and efficacy cannot be demonstrated. Most basic research is done with public monies at universities and governmental institutions. The later stages of development and testing are typically funded by pharmaceutical companies. These firms obtain patents on promising compounds, which secure them a temporary monop-oly on the manufacture and sale of any product allowed on the market. During this period of market exclusivity, compa-nies can drastically mark up the price of a medicine, sell-ing it at 10 or even 100 times the average manufacturing cost. At the end of this period, competing generic produc-ers usually make the medicine available at much lower prices.

Predictably, this incentive system creates a lot of unneeded innovation. When one company pioneers a genuinely new kind of medicine, other firms scram-ble to introduce similar drugs. Having more than one medi-cine in a therapeutic class can be beneficial as physiological variations among patients affect how well they respond to spe-cific treatments. But this benefit

‘Companies can drastically mark up the price of a medicine, selling it at 10 or even 100 times the average manufacturing cost’


rapidly declines as additional ‘me-too’ drugs are introduced — the twelfth cholesterol-lowering product, for example, adds very little value for patients. But it can add much value to the bottom line of the company introducing it, especially as competition among patented medicines tends not to result in meaningful price reductions.

This leads to four important inefficiencies. First, the incen-tives for copycat innovations are too strong: too much is spent on developing and introduc-ing me-too drugs that barely improve our pharmaceutical arsenal. Second, the incentives for genuine break-through inno-vations are too weak: the profits of the first-in-class innovator are predictably decimated as me-too competitors gain mar-ket share at its expense. Third, marketing battles among thera-peutically similar high-margin drugs are extremely costly and represent a major component of total industry expenditures. Fourth, such marketing often has adverse effects, inappro-priately influencing doctors or patients to choose a subopti-mal product or one that does not benefit the patient at all.

The current incentive system also sustains three important biases that cause additional

inefficiencies. One bias is against medicines likely to come into wide use only after their pat-ent has expired. To prevent the build-up of drug resistance, the medical establishment wisely uses certain advanced treat-ments only on patients who do not respond to the usual ‘first-line’ regimen. It is extremely important to have such last-resort treatments available (for drug-resistant TB, for instance, which is infectious and does not respond to any of the standard treatments). But the resulting anemic outlook for profits — dependent as they are on sales volume prior to patent expiration — provides only weak incen-tives for introducing such drugs.

The second bias favors main-tenance drugs and disfavors vaccines. The former are to be taken continuously in order to relieve patients’ symptoms and perhaps prolong their lives. They tend to earn much more for their patent owners than cures of similar therapeutic benefit. Preventative medicines (such as vaccines) tend to earn even less as they are typically bought by large purchasers who can press for substantial reductions in the mark-up. This bias influences not merely how pharmaceuti-cal companies research some given disease, but affects even

more profoundly their preferred targets: in favor of diseases where research is likely to yield a maintenance drug and against diseases where a vaccine or cure is the likely outcome.

The third bias favors diseases afflicting a sizable proportion of the affluent and well-insured. Having introduced a new medi-cine for such a disease, a firm can sell substantial quantities even at a very high mark-up. Like profits cannot be reaped from drugs for diseases concen-trated among the poor, and such diseases are typically neglected by commercial biotechnology and pharmaceutical firms. The result is that billions are spent on researching hair loss and minor skin ailments even while huge gains in global health could be realized through additional research into neglected tropi-cal diseases and tuberculosis.

Poor people are also the main victims of two further inefficien-cies resulting from temporary monopolies. Due to the huge gap between price and average manufacturing cost, a patent owner is losing many profitable sales to patients who are willing and able to pay more than manu-facturing cost but not the much higher monopoly price. The pat-ent-holding firm may wish to sell to the poor at lower prices, but if it served the poor more cheaply, then many of the more affluent would also find ways to buy at lower prices. So prices remain high, and mutually beneficial sales forgone amount globally each year to over 100 billion euros in deadweight losses. This economists’ expression is espe-cially fitting here as millions of poor patients actually die because generic manufacturers are no longer permitted to serve

‘Billions are spent on researching hair loss and minor skin ailments even while huge gains in global health could be realized through additional research into neglected tropical diseases and tuberculosis’


and save them under the tight patent rules that Western govern-ments have managed to globalize as the WTO TRIPS Agreement.

When life-saving drugs are known to be available at huge mark-ups, the desperation of poorer patients creates illegal supply. Some such illegal prod-ucts are bioequivalent to the genuine article, but most are not. Common in the less developed countries are counterfeit prod-ucts that contain a much-diluted dose of the genuine medicine. The product makes patients feel a little better (so they buy more). But in cases of infec-tious diseases, it may have the particularly pernicious effect of allowing the disease to survive and to adapt to the medicine. Counterfeit products accelerate the development of drug-resist-ant strains of the target disease which, in the case of communi-cable diseases, endanger us all.

Litigation over monopolies constitutes a tenth major inef-ficiency. Innovators patent their discoveries in many countries, monitor all these jurisdictions for possible infringements, and then fight protracted legal bat-tles with other innovators and especially with generic manu-facturers. This activity has very little social value and reduces sharply the profits of pharma-ceutical companies — as does the extensive lobbying these firms undertake toward defend-ing and expanding their patent-ing and other privileges. Billions of euros are wasted annually on these rent-seeking activities.

The enormous inefficiencies of our pharmaceutical patent regime are known, and so are the burdens it places on the poor. But what choice do we have? Without patent-protected

mark-ups most commercial pharmaceutical R&D would cease; and in any case there is no chance for the unanimous agreement among WTO mem-bers that any amendment to TRIPS would presuppose.

Yet, we do have a choice, and a good one. We can create the Health Impact Fund as a com-plement to the current patent regime. The HIF is a pay-for-per-formance mechanism that would offer innovators the option — no obligation — to register any new medicine. By registering a prod-uct, the innovator would agree to make it available, during its first decade on the market, wherever it is needed at no more than the lowest feasible cost of pro-duction and distribution (to be determined through competitive tenders submitted by generic manufacturers). The innovator would further agree to allow, at no charge, generic manufacture and distribution afterwards (if some relevant patents on the product are still unexpired). In exchange, the registrant would receive, during that first decade, annual reward payments based on its product’s therapeutic ben-efits. Each year, the HIF would divide its annual reward pool among all registered products in proportion to their assessed health impact in that year.

The HIF would do more than foster the introduction of new high-impact medicines,

especially against the long-neglected diseases of the poor, and facilitate access to registered products by tightly limiting their price. In addition, the HIF would also motivate registrants to ensure that their products are widely available (perhaps at even lower prices), competently prescribed and optimally used. This marks another sharp con-trast with the current innovation system which provides an incen-tive only to sell, without regard to whether the product is right for the patient. (This incentive to sell is excessively strong in the case of patent holders and often too weak in the case of generic producers, with the result that the end of market exclusiv-ity usually brings a drop not only in price but also in sales volume because the product is no longer heavily promoted.)

The HIF can provide optimal innovation incentives only if potential registrants are assured that the HIF will continue to have annual rewards pools to distribute throughout the dec-ade following market approval. The HIF’s core funding is there-fore best guaranteed by a broad partnership of countries. If all countries agreed to contrib-ute just 0.01 percent (1 euro of every 10,000) of their gross national incomes forward-going, then the HIF could get started with nearly 5 billion euros annually. This is a reasonable

‘The enormous inefficiencies of our pharmaceutical patent regime are known, and so are the burdens it places on the poor’


minimum because the high cost of introducing new medicines requires large rewards, because the reward rate should not be affected a lot by any single reg-istration and also because the health impact assessment costs (which are subject to substan-tial economies of scale) should absorb no more than about ten percent of the HIF budget.

The HIF can be seen as sustaining an enduring com-petition among innovators that ranges over all countries and all diseases, with earn-ings tied to impact on health. Health impact can be measured in quality-adjusted life years (QALYs) saved. The QALY metric has been refined over the last 20 years and is already extensively used by insurers in deciding which new drugs to cover. Taking as baseline the pharmaceutical arsenal before a registered medicine was intro-duced, the HIF would estimate to what extent this medicine has added to the length and quality of human lives. Starting from clinical trial data, this assess-ment process would also draw on pragmatic trials in real-life settings, on randomized follow-up of specific doses and patients,

and on geographically disag-gregated statistical analysis of sales data as correlated with data about the evolution of target diseases. These estimates would be imperfect — but they would achieve a vastly better correlation between profits and actual health impact than the current system. And so long as any errors are random, they would only have a relatively slight effect on the incentives of potential innovators. (I would be only slightly less willing to work in my present job if my salary varied randomly in a plus/minus 30 percent range around its current level.)

With the HIF so designed, innovators would seek to develop for HIF-registration products that can reduce the burden of disease most cost-effectively. And because regis-tration is optional, the reward rate is bound to be reason-able. Taxpayers can anticipate that pharmaceutical innova-tors won’t profit excessively because windfalls would cause the entrance of new registrants which would decrease the uniform reward rate (euros per QALY). Registrants can antici-pate that their rewards won’t

be unreasonably small because a low reward rate would be self-correcting by slowing new registrations. Competition would ensure that registered products are rewarded at a rate that is profitable for innovators and maximizes the effect of the HIF.

To ensure that the HIF is cost-effective also relative to other public health expenditures, a maximum reward rate can be set, with any remaining funds to be rolled over into future years. To reassure potential innova-tors, one can also add some protection against an unreason-ably low reward rate. A further attractive optional feature is to allow registration (perhaps with a 5-year reward period) of tradi-tional medicines and new uses of existing medicines in order to incentivize clinical trials on their efficacy and optimal use. (It is yet another inefficiency of the current system that it provides no such incentives because traditional medicines are not patentable and mar-ket exclusivity on new uses is effectively unenforceable.)

Is the HIF proposal politically realistic? The legal suppression of the generic manufacture and sale of advanced medicines, such as second-line AIDS drugs, has seriously harmed many poor people. This alone should lead affluent people to support the HIF; we should not want pharmaceutical innovations developed for us to be incentiv-ized and rewarded in a way that harms the poor. But our inter-est in cost-effective provision of medicines can also be invoked, as the HIF addresses ten of the eleven inefficiencies dis-cussed above. (We are working on the last: designing stronger incentives for the development

‘Affluent patients, insurance companies, governments, and international organizations would benefit from the existence of a permanent source of new, high-impact medicines that from day 1 are sold cheaply and nonetheless with much dedication’


of last-resort medicines.)Affluent patients, insurance

companies, governments, and international organizations would benefit from the exist-ence of a permanent source of new, high-impact medicines that from day 1 are sold cheaply and nonetheless with much dedica-tion. By refocusing pharmaceu-tical firms on achieving health impact, the HIF would engender substantial reductions in the global burden of disease and thereby also reduce the dan-gers affluent populations face from invasive diseases (such as SARS, drug-resistant tubercu-losis and strains of influenza).

Do pharmaceutical companies oppose the HIF? Not so far. And why should they? Most people working in the pharmaceuti-cal industry choose this career because they hope to play a role in the introduction of impor-tant medicines for the benefit of humankind. They are far more eager to defeat malaria than hair loss. But any such research effort must be sustainable and accord with management’s responsibilities to sharehold-ers. The HIF would make such important research sustainable by adding substantial financial rewards to the less tangible benefits of image enhancement and brand recognition (which help a firm market all its other products). For innovators in developing countries, the HIF provides new opportunities to sharpen their teeth by research-ing local diseases in regard to which their more established foreign competitors do not enjoy a huge head start. And the HIF brings generic manufacturers the opportunity to submit tenders for producing HIF-registered medicines for their registrants.

The creation of the HIF would be an important struc-tural reform, creating the first genuine global public good. It would be a step toward the much-needed moralization of the supranational sphere by manifestly embodying the idea that all human lives are of equal value. It would lift huge burdens of disease and insecurity from the poor and thereby empower them to take a more active role in their further political and social emancipation. It would be possible to modify the HIF if/as experience warrants, and its annual reward pools could be scaled up to attract an increas-ing share of new medicines. The model could be replicated in other domains, such as agri-culture and green clean tech-nologies, where the current patent system also leads to the inefficient underutilization of beneficial innovations to the detriment especially of the poor.

The HIF is a work in rapid progress. You can keep track through www.healthimpactfund.org


Andrew F. Cooper Distinguished Fellow, CIGI and Professor, Department of Political Science, University of Waterloo

Eric HelleinerCIGI Chair in International Political Economy and Professor, Department of Political Science, University of Waterloo

Advances in Global Economic Governance Amid the Obstacles at the Seoul G-20 Summit

DURING ITS FIRST year, the G-20 leaders’ forum elicited considerable

praise as a new institution of global economic governance. From the first Washington G-20 leaders’ summit in November 2008 through to the third Pittsburgh summit in September 2009, many observers argued that it helped policy-makers manage the global financial crisis in a much more coopera-tive and effective manner than their counterparts in the era of the Great Depression. The G-20 leaders were also applauded for proactively launching important international reform initiatives to address key causes of the crisis, notably global imbalances and regulatory failures. Analysts drew a contrast between the G-20’s experience and the failed international initiatives in the early 1930s, notably the 1933 London Economic Conference.1

In contrast to the successes of the initial summits, the Toronto summit in June 2010 and especially the Seoul sum-mit in November 2010 present more sober experiences. As the urgency of the economic crisis diminished, the sense of com-mon purpose that had united the G-20 leaders seemed less present. By the time of the Seoul summit in particular, the G-20 became caught up in a

number of bitter disputes, such as those over the ‘currency war’, both in terms of US charges of Chinese manipulation of the RMB and US quantitative eas-ing, and global imbalances and the debate over current account targets. The media now adopted a much more skeptical view than their earlier glowing reviews of the G-20’s role as a crisis com-mittee. The new mood was summed up by the Financial Times which concluded that the Seoul G-20 demonstrated ‘how not to run the world’.2

Although fully cognizant of the enormous obstacles before the G-20, we shift the emphasis towards the positive features that emerged out of the Seoul summit. As Stephen Krasner predicted, the Seoul G-20 ‘stum-bled’ over a wide number of the impediments before it.3 Yet, in terms of both agenda and form, this stumble does not translate into a collapse of the entire G-20 project. Amid all of the high-profile tensions, there are glimpses of forward progress with respect to the details of both the post-crisis interna-tional economic reform agenda and the G-20 architecture.

Advances in the International Economic Reform AgendaMost of the media attention at the Seoul summit focused on

This article is a revised and updated version of our contribution to the June 2010 publication of the Friedrich-Ebert-Stiftung titled ‘The G-20: A ‘Global Economic Government’ in the Making?’(http://library.fes.de/pdf-files/id/ipa/07284.pdf ). We wish to acknowledge the support of the FES and particularly the encour-agement of Hubert Schillinger.


the heated disputes concern-ing currency issues and global imbalances. These disputes were very real, but it is important to recognize that they did not result in a pulling away from the inter-national negotiation of these sen-sitive issues. Instead, the G-20 leaders committed to ‘enhance’ the Mutual Assessment Process (MAP) that they had launched at their September 2009 sum-mit to promote ‘strong, sustain-able and balanced growth’. They assigned a G-20 working group the task of developing ‘indicative guidelines’ to identify ‘persistently large imbalances’ and committed to undergo the first assessment of ‘their nature and the root causes of impedi-ments to adjustment’ in 2011.

Of course, it is easy to be skeptical of what the MAP might achieve given the significant structural changes in surplus and deficit countries that will be required to reduce global imbalances. But it is also easy to forget the political difficul-ties that were involved in sim-ply getting the G-20 countries to agree to discuss the issue of global imbalances. Now that it is on the agenda, the G-20 has a useful role to play in nudging the process of structural change along by keeping the issue high on the political agenda. The Seoul summit continued to move this process forward.

The G-20 leaders also made some progress towards address-ing global imbalances in a more indirect way. In the wake of the 1997-98 East Asian financial crisis, many developing coun-tries built up official foreign exchange reserves as a form of protection against external shocks and dependence on the IMF whose actions in the crisis

were widely criticized for being counter-productive, too intru-sive, and overly influenced by US goals. Under the dollar-based international reserve system, this growing demand for offi-cial reserves was met by the United States running larger and larger current account deficits. If the demand for this ‘self-insurance’ could be reduced, this source of global imbalances could also be diminished.

The Seoul summit made some decisions that work in this direction. To restore confidence in the ‘multilateral insurance’ mechanisms offered by the IMF, the G-20 leaders backed further governance reforms to enhance the voice of developing countries, including a commit-ment to reduce European chairs on the IMF’s Executive Board by two in order to make more room for emerging market and developing country representa-tives. As part of a new ‘Seoul Development Consensus’, they also declared that ‘there is no single formula for develop-ment success’; a statement that should further encourage the IMF to move away from the one-size-fits-all development model it promoted in the age of the ‘Washington Consensus’. In addition to committing to double IMF quotas, they also backed the creation of a new IMF

‘Precautionary Credit Line’ and the enhancement of ‘capability’ of regional financial arrange-ments for crisis prevention.

Some progress also took place at the Seoul summit vis-à-vis the other main aspect of the post-crisis international economic reform agenda: the effort to address regulatory failures. To be sure, many observers were disappointed that the G-20 lead-ers failed to make any break-throughs on the key issue of how to mitigate the risks associated with systemically important financial institutions. But the G-20 leaders were presented with new strengthened bank and liquidity standards devel-oped by the Basel Committee on Banking Supervision – standards which they had requested at earlier summits and that they now endorsed.

In a little-noticed move, the G-20 leaders also asked the Financial Stability Board (FSB) for proposals ‘to strengthen its capacity, resources and govern-ance to keep pace with grow-ing demands’. This initiative marked an important effort to strengthen this institution, that the G-20 leaders themselves had created at the London sum-mit in April 2009 to strengthen regulatory and supervisory cooperation. Soon after its creation, policy-makers, such

‘It is also easy to forget the political difficulties that were involved in simply getting the G-20 countries to agree to discuss the issue of global imbalances’


as US Treasury Secretary Tim Geithner, described the FSB as a kind of new ‘fourth pillar’ of global economic govern-ance alongside the IMF, World Bank and WTO.4 But this ambi-tious vision was not initially matched by the tiny staff and resources it was allocated. The G-20 leaders appear finally to have opened a window to address this disjuncture between the vision and the reality.

Where the summit really broke new ground in the regula-tory field, however, was through its commitment to ‘better reflect the perspective of emerging market economies in financial regulatory reforms’. Although emerging market countries have gained new prominence in international regulatory policy-making through the G-20, the FSB and other bodies, they have not yet left much of a mark on the content of regulatory debates. At the Seoul summit, the G-20 leaders finally recog-nized, and agreed to address, this absence of ‘development’ content in the international regulatory reform agenda.

To implement this goal, the G-20 leaders identified a number of important issues that could be explored, ranging from trade finance to countries’ capacity to regulate and supervise local branches of large foreign finan-cial institutions. Elsewhere in the Seoul communiqué, they also prioritized other regula-tory issues of particular con-cern to many poorer countries. One such issue is regulation and supervision of commodity derivatives markets – markets that have been blamed for recent commodity price volatility, including that which contributed to the global food crisis of 2008.5

Even more important was the G-20 leaders’ call for further work on macro-prudential policy frameworks including ‘tools to mitigate the impact of excessive capital flows’. This statement marked the first time that the G-20 leaders had raised the issue of cross-border capital flows within their regulatory reform agenda. From the standpoint of many developing countries, the management of private financial flows has long been a key mac-roprudential issue and its profile has only been heightened by large inflows of capital over the past year that have threatened to overheat domestic financial systems in emerging markets. As many developing countries have placed restrictions on these inflows (including G-20 members such as Argentina, Brazil, China, Indonesia, Russia and South Korea), the IMF has chosen to view such measures in a much more sympathetic way than they did only a few years ago.6 The G-20 leaders’ decision to incorporate cross-border capital flows within its macro-prudential regulatory agenda suggests further sup-port for this policy shift.

Advances in the G-20 ArchitectureIn addition to these initiatives vis-à-vis the economic reform agenda, the Seoul summit also saw some advances relating to issues of process and form of the G-20 architecture. To begin with, the summit represented the first G-20 leaders’ forum to be hosted outside a G7/8 country. This development has been very significant in terms of the broadening of the sym-bolic ownership for the summit process; a point that the South

Korean hosts reinforced by focusing on many of the devel-opment issues mentioned above.

The summit also signaled a shift in the US role. During the initial stages of crisis manage-ment through the G2O, the US was able to display an impres-sive amount of entrepreneurial and technical power. President George W. Bush convened the first G-20 at the leader’s level in Washington DC, opening the way to a different relationship with the big emerging states in a manner impossible via the G7/8 process of outreach. President Barack Obama then moved towards a more consti-tutionalist approach vis-à-vis the G-20, locating the forum in an intricate web of maxi-multi-lateralism and orchestrating the decision at the September 2009 Pittsburgh summit to designate the G-20 leaders’ forum as the premier forum for interna-tional economic cooperation.

The US remains pivotal to the key policy issues, but the energetic shuttle diplomacy conducted by South Korea in the run-up to the Seoul summit highlighted well the role that other states could play in doing the crucial diplomatic work on the G-20. The role of mid-dle power states (as opposed to the BRICs) was also enhanced, as witnessed by the way that Australia and Indonesia have worked with South Korea in the so-called KIA grouping.

Much of the negative stalled image of the G-20 emerging from the South Korean sum-mit is connected with the rela-tive decline of US leadership, the result of which is taken to be the advent of a complex mode of multilateralism. But these changing contours – what


Richard Haass terms ‘messy multilateralism’7 – should be viewed not nostalgically in terms of a loss of US leadership. Instead, it is part of an awkward but constructive move towards a plurality of leadership.

Such a plurality of leader-ship spills over into a number of other components. One of these relates to the sensitive dynam-ics played out between the G-20 and the UN. The emerging G-20 nexus of multilateralism, with hub and spoke institu-tions, clearly privileged the IMF and the re-configured FSB in a manner far superior to that of other international bodies. The United Nations had initially embraced the notion of a G-20, including apparent signs that Secretary General Ban Ki-Moon would offer the UN’s New York headquarters as the site of the first summit. When this over-ture was declined, however, the UN was gradually marginalized from the G-20 process. Although Secretary General Ban did attend the first Washington G-20 sum-mit, a considerable distance appeared between the UN and the G-20 approach. For example, just days before the first G-20 summit, Ban focused his atten-tion on the need for ‘inclusive multilateralism’, with a focus on protecting the well-being of the developing countries, as well as major UN develop-ment goals, including climate change, food crisis issues and financing for development.8

Significantly, though, the division between the UN and the G-20 has eased appreci-ably. As South Korea sought to expand the G-20’s agenda, the UN endorsed the credo that the two institutions are differ-ent and complementary not

competing and contradictory.9 Secretary General Ban accepted a role in which he attends the G-20 summit as the world’s top civil servant but plays a secondary role to the leaders seated at the world’s ‘top table’ in terms of issues of interna-tional economic governance.

Another main source of opposition to the G-20 from outside the forum has been animated by concerns that the G-20 is a ‘concert’ of big coun-tries that can dictate the new rules to all the others.10 This attitude was expressed in the UN General Assembly most vehemently by Venezuela, Bolivia, Cuba and Nicaragua during the June 2009 ‘G-192 Summit’ on the financial crisis and international development.

To be sure, from the outset, the G-20 suffered from some defi-ciencies concerning its size and geographical make-up. Although the make-up of the G-20 more accurately reflects the structural shifts in global power at the start of the twenty-first century,11 the hold of a fragmented type of European representation is the other main feature of its com-position. In addition to the big four established members of the G-8 (the UK, France, Germany and Italy), the President of the European Commission and sub-sequently the Council President also gained entry. Moreover, since the first G-20 Summit in

Washington, the door has been left open for other European entrants, most notably Spain.

Realizing the damage to the G-20’s legitimacy due to the asymmetrical nature of its composition, the Seoul meeting settled on a formula for non-member participation, enabling the summit host to invite up to five guests, of which at least two must be from Africa. It is also reported that the Sherpas ‘set a tradition that the invitations should be made on a consensus of G-20 members, not in the host country’s own desire’.12 These new rules of engagement reflect a more formal effort to address the issue of represen-tation of non-members. The inclusion of Singapore in the ‘G-20 plus five’ format at the Korea summit was also signifi-cant in this respect13 since it has been, along with Switzerland and Qatar, the leader of the 3G group that has positioned itself as a bridge between G-20 members and non-members.

ConclusionAssessments of the G-20 leaders’ forum have become decidedly more negative during the 2010 and especially in the wake of the Seoul summit. Even top leaders such as British Prime Minister David Cameron concede that the G-20 no longer appears to be in ‘its heroic phase’.14 And yet, for all the criticism, the Seoul

‘Even top leaders such as British Prime Minister David Cameron concede that the G-20 no longer appears to be in “its heroic phase”’


summit made some advances in terms of both the substance of the post-crisis international economic reform agenda and broader issues of the process and form of the G-20 architec-ture. Concerning the former, some progress was made on important aspects of the two key issues on the reform agenda: global imbalances and regulatory reform. Concerning the latter, the Seoul summit was important in widening the ownership and leadership of the G-20 process, reconciling the UN-G-20 rela-tionship and formalizing engage-ment with non-G-20 members. Despite the public acrimony, the Seoul summit thus signaled the G-20 leaders’ forum is here to stay as a key fixture of inter-national economic governance.

Endnotes

1 Cooper, Andrew F. (2010), ‘The G-20 as an improvised crisis com-mittee and/or a contested ‘steering committee’ for the world’, International Affairs, vol.86, no.3, pp.741-757.

2 Financial Times (2010), ‘G-20 show how not to run the world’, 12 November.

3 Asian Institute for Policy Studies (2010), The G-20 and Global Governance Reform, Seoul, Yonsei University.

4 Helleiner, Eric (2010), ‘What Role for the New Financial Stability Board? The Politics of International Standards After the Crisis’, Global Policy, vol.1, no.3, pp.282-90

5 Clapp, Jennifer, Eric Helleiner (forthcoming 2011), ‘Troubled Futures? The Global Food Crisis and the Politics of Agricultural Derivatives Regulation’, Review of International Political Economy.

6 Grabel, Ilene (2010), ‘Not Your Grandfather’s IMF: Global Crisis, ‘Productive Incoherence’ and Developmental Policy Space’, Political Economy Research Center’s Working Paper, no.214, University of Massachusetts.

7 Haass, Richard (2010), ‘The Case for Messy Multilateralism’, Financial Times, 5 January.

8 Ban, Ki-Moon (2008), ‘Transcript of press conference by Secretary-General Ban Ki-Moon at United Nations Headquarters’, UN Department of Public Information, 11 November, available at: http://www.un.org/News/Press/docs/2008/sgsm11916.doc.htm.

9 Kim, T-h (2010), ‘UN, G-20 to work in mutually reinforcing ways’, Korea Herald, 15 November. Jones, Bruce (2010), ‘Making Multilateralism Work: How the G-20 Can Help the United Nations’, Policy Analysis Brief, Stanley Foundation.

10 Aslund, Anders (2009), ‘The Group of 20 must be stopped’, Financial Times, 26 November.

11 Alexandroff, Alan S., Andrew F. Cooper (2010), Rising States, Rising Institutions: Challenges for Global Governance, Washington, D.C., Brookings Institution.

12 Cho, J-s (2010), ‘5 non-G-20 nations invited to Seoul sum-mit’, Korea Times, 24 October.

13 Rana, Pradumna B. (2010), ‘Seoul G-20 Summit: Will It Adopt Singapore’s 3G Ideas?’, Eurasia Review, 2 November.

14 Quoted in Beattie, Alan, Christian Oliver (2010), ‘US hits at Greenspan comments on dollar’ Financial Times, 12 November.


FOLLOWING THE 3RD Africa-EU Summit in Libya last November, I

would like to propose estab-lishing comprehensive health care systems in Africa on the basis of solidarity and sus-tainable health policy.

Health is a human rightIn the 1948 United Nations’ Universal Declaration of Human Rights, the international com-munity professed the extraor-dinary significance of the field of health in international cooperation. This commitment requires a joint strategy, which is reflected in a distinct inter-national policy field known as global health governance. There are not only ethical concerns that have contributed to the development of global health governance, but also the reali-zation that the disastrous state of health in the poor regions of the world demands a global response. Otherwise, stability and security in these regions

might be at risk. A key element of development policy and the fight against poverty must therefore be universal access to adequate health care, espe-cially for the poor. Protection against the health and financial risks of illness must be pro-vided by nation states through a social security system based on the principle of solidarity.

Breaking the vicious cycle of starvation, illness and povertyThe poorest of the poor suf-fer over-proportionately from hunger and illness. The number of starving people worldwide has reached a tragic record high of over one billion – a quarter of whom live in sub-Saharan Africa. These people are caught in a vicious cycle of starvation, illness and poverty. Over 90 per cent of the global burden of disease falls on countries in the southern hemisphere, yet they have access to just ten per cent of all medical resources. Every year, nine million children under the age of five die, half of them in sub-Saharan Africa. Malaria kills a child there every 30 seconds. In sub-Saharan Africa 95 per cent of the one million malaria deaths, 67 per cent of the estimated 33.4 mil-lion people who are infected with HIV worldwide, and 31 per cent of the roughly 9.4 million

Karin RothGerman Member of Parliament for the SPD

Establishing Comprehensive Health Care Systems on the Basis of Solidarity – Developing and Coordinating Concepts for African Countries

‘A key element of development policy and the fight against poverty must therefore be universal access to adequate health care, especially for the poor’


tuberculosis victims occur each year. Moreover, ‘neglected diseases’ claim hundreds of thousands of victims. One par-ticularly horrifying fact is that 358,000 women and girls are still dying each year of treatable or preventable complications during pregnancy or childbirth. 50 per cent of these deaths take place in sub-Saharan Africa. Although health spending has increased considerably since the signing of the Millennium Declaration in 2000, according to official figures approximately 1.3 billion people worldwide still lacked access to effective and affordable health care in 2010. Currently, 12 per cent of the world’s population lives in sub-Saharan Africa. That is also where 31 per cent of the world’s ‘abject poor’ live. The region carries 24 per cent of the global burden of disease, but receives only one per cent of total global expenditures on health. That is why Africa must become a focus region for inter-national development policy in the field of health. According to the World Health Organization (WHO), seeking treatment for an illness constitutes the number one risk of falling into poverty. Each year 100 million people become impoverished because they have to pay for health care services. For this reason, many

people choose to forego impor-tant expenditures on nutrition and treatment for illnesses.

To break this vicious cycle, the donor countries must work with African partners, primarily through multilateral institutions, to agree on a common approach and strategy for developing functioning health care systems.

A joint strategy for estab-lishing health care systems based on the principle of solidarity – Developing con-cepts for African countriesThe goal must be to establish comprehensive and accessible health care in African countries. At the same time, we need to support our African partners in developing social security systems based on the principle of solidarity. The aim is to link social security and health care because they are two sides of the same coin. An independent pro-vision of medicines and health care services could not be main-tained in the long-term without the establishment of a sustain-able social security concept based on the solidarity princi-ple. It would instead again be dependent on external donors. The linking of these two sys-tems must take all aspects into account, from basic care to the provision of medications, from the training and availability of

personnel to reliable funding. Governments and donors must make a commitment to the prin-ciple of equity. The available resources must be used in order to enable better access to health care for the poorest and needi-est people. Financial resources must flow more strongly to rural areas and investment must be made in basic health care, for example in decentral-ized wastewater systems and water infrastructure. More than one billion people lack access to clean drinking water and approximately 2.5 billion peo-ple do not have access to basic sanitation. Contaminated drink-ing water and poor hygiene are major health risks and cause diseases that could be otherwise prevented. Every day 4,000 children in develop-ing countries die of diarrheal diseases and other illnesses caused by contaminated water and insufficient hygiene.

The establishment of com-prehensive basic health care systems must go hand in hand with successful donor-spon-sored projects in these regions. Experience shows that thanks to vertical health funds such as the Global Fund to Fight AIDS, Tuberculosis and Malaria, there has been some success in lower-ing the mortality rates of seri-ous diseases. These efforts must be continued and combined with a horizontal, systemic approach, which would estab-lish health care systems based on the principle of solidarity. From a long-term perspective, only such a horizontal approach involving state authorities as well as civil-society actors could produce lasting improve-ment in the quality of life and health for the population.

‘According to official figures approximately 1.3 billion people worldwide still lacked access to effective and affordable health care in 2010’


The German Federal Ministry for Economic Cooperation and Development’s sector strat-egy paper ‘Health in German Development Policy’, drafted under SPD Development Minister Heidemarie Wieczorek-Zeul, and the motion ‘Germany’s Responsibility for Health in Developing Countries’ (Deutschlands Verantwortung für die Gesundheit in Entwicklungsländern) put for-ward by the SPD parliamentary group in the German Bundestag during the 17th legislative term provide an excellent basis for developing such a horizontal approach. I consider it crucial to work with our African part-ners to further develop this concept by focusing on social security based on the prin-ciple of solidarity, taking the demands of the motion into consideration and aligning the concept with the special needs of sub-Saharan Africa.

One thing is clear to me as a social democrat: Health care is a public service. We advocate taxpayer-funded basic care and the strengthening of social secu-rity systems based on the prin-ciple of solidarity. This is the only way to establish and ensure protection against the risks of illness, especially for the poor-est of the poor. Private, for-profit systems are the wrong choice.

A strategy for medical care – Family planning as a key factorImproving the overall health care situation of a population specifically requires investment in medical care. An important aspect in this regard is the training of medical personnel and midwives, who, bearing in mind the gender approach, should become a focus of

development projects. In order to stop ‘brain drain’ – the loss of trained health personnel – direct support must be given to help employ and appropriately remunerate health care profes-sionals, for example through budget support in the health sector. The WHO’s Global Code of Practice on the International Recruitment of Health Personnel must be adhered to at national and EU level.

In addition, progress must be made regarding the avail-ability of essential medications at affordable prices in develop-ing countries. The production and trade of generic drugs, which are covered in the WHO’s Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS Agreement), must be increased. Product Development Partnership (PDP) is a promising approach to improve the provision of medi-cations. The partnerships com-bine funds from both the public sector and private foundations and donors to research neglected diseases and develop drugs. Only consistent support for research and development can ensure the affordable provision of medications in the long-term. Moreover, drug effectiveness must be significantly improved. One promising approach here is the Health Impact Fund, which aims to combine finan-cial incentives with the proof of effective medications.

Two major challenges for the health sector of develop-ing countries are guaranteeing access to family planning and sexual and reproductive rights. At the same time, these are key factors in reducing popula-tion growth in the long-term. Inadequate information, a lack of possibilities for prevent-ing unwanted pregnancies and sexually transmitted diseases, insufficient medical care dur-ing pregnancy and childbirth, persistent violence against women, little protection for women against rape, the devas-tating disease known as fistula that often follows rape, the continuing practice of female genital mutilation and unsafe abortions considerably increase the mortality rates of women and children. Family planning plays an important – if not the most important – role in sav-ing the lives of women and children. 215 million women worldwide lack access to mod-ern methods of contraception although they would like to plan the size of their families or allow adequate spacing between pregnancies. In my opinion, it is essential to incorporate comprehensive family plan-ning, education and assistance, and the protection of women’s rights into programs, which aim to achieve the health-related Millennium Development Goals.

A strategy for establish-ing comprehensive structures

‘One thing is clear to me as a social democrat: Health care is a public service’


– Ensuring the provision of public services.

There are health care systems, which have been established in sub-Saharan African countries, such as Burkina Faso, Ghana, Kenya, Nigeria, Rwanda and Tanzania. Germany and the donor community must support these existing systems. In the long-term, however, we should support their transformation into systems based on the principle of solidarity. Health is a public good and access to health is a universal fundamental right. It therefore follows that health care is the task of society as a whole. The provision of social public services, including health care services, is both the respon-sibility and most basic duty of the state. However, health care and other social public services are gradually becom-ing products. Social security systems are being capitalized. Thus, the efforts of donors and partners to implement health care systems based on the principle of solidarity must be made a basic requirement in development cooperation.

Cooperative systems can and should serve as an example because the idea behind them has already been taken up by community-based approaches to social security. In this respect it is important to cooperate

with our partners in Africa. The reciprocity-based forms of health insurance that have already emerged in some regions – a form of public health insurance based on the traditional system of providing assistance on the basis of reciprocity, which has produced non-profit medical insurance providers – have to be integrated and combined with state social insurance systems. A system based on the principle of solidarity must be adapted to the cultural, social and political circumstances in which it will operate. Most importantly, the socio-economic characteristics of the population must be success-fully integrated into the infor-mal economy. Men, women and children must have equal access to health insurance systems.

A strategy for international cooperation and reliable fundingThe available funds currently spent on health could be uti-lized more efficiently through coordination and consulta-tion among actors. In order to achieve this, it is necessary to create an office for global health leadership. The WHO can and must assume this role by shaping and provid-ing the framework for global health and offering competent consultation to all partners on establishing social health

insurance systems based on the principle of solidarity. The WHO needs independence, strong structures and a suffi-cient budget to fulfill this role.

In addition, multilateral structures must be promoted and existing, suitable instru-ments supported. The Global Fund to Fight AIDS, Tuberculosis and Malaria has proven to be a particularly effective multilat-eral instrument. It is therefore clear to the SPD that support for the Global Fund urgently needs to be doubled. Subsidiary organizations of the UN, such as UNFPA or UNAIDS, as well as organizations like IPPF or the GAVI Alliance, have also effectively and efficiently improved the global health situation, including in Africa.

The health sector shows clearly that the 2 to 1 bilat-eral to multilateral ratio for the allocation of development cooperation resources, which is currently being imposed, does not sufficiently address today’s challenges and therefore urgently needs to be revised.

It can hardly be expected that in the near future our African partners will be able to fund a national health care system on the basis of their tax revenue. Therefore, we must strongly support our partner countries in establishing an efficient tax system, which would raise tax revenue and therefore increase their national budgets. They should be supported in allocat-ing at least 15 per cent of their budget to health care, as pledged in the Declaration of Abuja. In this respect, it is especially important to have verifiable, responsible governance and solid financial budget and tax policies in our partner countries.

‘It is necessary to create an office for global health leadership. The WHO can and must assume this role’


There must be close coordina-tion between the EU, additional donor countries and Germany on health funding. Germany must adhere to its pledged 0.7 per cent ODA quota. This is the only way to ensure that Germany makes an appropri-ate contribution to improving health care in the develop-ing countries of sub-Saharan Africa. In order to increase the efficiency of cooperation in the field of health, the development cooperation of individual EU member states must be made more coherent. Moreover, coop-eration between the EU and regional organizations, such as the African Union, SADC (Southern African Development Community) and the African ACP states, must be improved.

In the medium-term, achiev-ing mixed financing should be our priority. An important tool to obtain this is sectoral budget support from bilateral sources as well as multilateral sources, such as the EU and other insti-tutions. However, this would require a new EU Africa concept including free trade agreements with respect to their effects on health. I strongly believe that our partner countries need to be able to rely on predictable fund-ing for their health care systems.


EVERYBODY AGREES THAT the world economy is ill, but the diagnosis appar-

ently depends on which corner of it you happen to inhabit.

In Washington, accusing fingers point to China, blaming its currency policy for causing large trade imbal-ances and ‘destroying jobs’ in the United States. Go to Seoul or Brasilia, and you will hear complaints about the US Federal Reserve’s hyper-expan-sionary monetary policies, which are leaving emerging markets awash in hot money and raising the specter of asset bubbles. Ask in Berlin, and you will get an earful about the absence of fiscal probity and structural reforms elsewhere in Europe or in the US.

The fault, dear Brutus, is nei-ther in our stars nor in our-selves. Thanks to globalization, it lies in our trade partners!

Self-serving as it may seem, this viewpoint is not without some merit. As economies become intertwined, decisions taken in one part of the world reverberate in other parts, often pro-ducing unintended consequences.

The fires of the US sub-prime mort-gage crisis were stoked not just by domestic regulatory failures, but also by a global ‘saving glut,’ which sent banks on a wild goose chase for yield. The US crisis promptly turned into a global meltdown thanks to the commingling of balance sheets across jurisdictions.

The absence of global institu-tions – acting as lender of last resort or serving up coordinated fiscal

stimulus – aggravated the crisis and delayed the recovery. And now, go-it alone fiscal, monetary, and exchange-rate policies are spilling across national borders, threatening currency wars and protectionism.

How we deal with these challenges is the greatest economic question of our time. One approach, favored by technocrats and most policymak-ers – at least until domestic politics intrudes – is to seek solace in ever-greater global governance. Global problems, after all, require global solutions, which means strengthen-ing international organizations like the International Monetary Fund, increasing the effectiveness of global forums such as the G-20, and negoti-ating stricter international codes and standards (as has occurred with capital-adequacy requirements, for example).

Another approach is to recognize that global governance is bound to remain incomplete, and to moder-ate the side-effects through a more cautious form of economic globaliza-tion. This strategy entails throwing some sand in the wheels of the global economy in order to expand room for domestic policy and limit the impact of adverse spillovers from other coun-tries’ actions. This option may seem protectionist, but it could ultimately ensure a more durable globalization.

Many of the world economy’s trou-bles today originate from our unwill-ingness to recognize that domestic policy objectives will ultimately trump global responsibilities, no matter how C

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Dani RodrikProfessor of Political Economy at Harvard University’s John F. Kennedy School of Government

Don’t Count on Global Governance


much we pretend that they can be subsumed under international commit-ments. Consider a couple of examples.

The Uruguay Round of the World Trade Organization was widely hailed as a great achievement, because it brought subsidies and many other types of industrial policies practiced by developing nations under strict inter-national discipline. But WTO restric-tions simply led governments to pursue similar objectives through other means.

This had some fatuous implica-tions in the case of China. Once China became a member of the WTO in 2001, it could no longer rely on explicit tariffs and subsidies. So it began to promote its industries through an undervalued currency instead. China’s current-account surplus rose by leaps and bounds, stoking global macroeconomic imbalances and, with them, tensions in the US-China economic relationship.

The world economy would have been better off with fewer restrictions on the use of industrial policies by China (and other developing countries). And, looking ahead, if the rest of the world wants China to accept greater multilateral oversight of its trade bal-ance, there will have to be a quid pro quo of some kind – perhaps an exemp-tion from WTO rules on subsidies.

Similarly, when emerging markets opened themselves up to financial globalization, they reasoned that capi-tal flows would facilitate their eco-nomic development. They thought that appropriate macroeconomic policies and prudential regulations

(along with support from international financial institutions) would help them deal with any adverse effects. But financial markets have turned out to be fair-weather friends: nowhere to be seen when most needed.

That has forced developing coun-tries into costly attempts to protect their economies from financial mar-kets’ fickleness. Worse still, they have had to adopt strategies – such as currency intervention and accumu-lation of foreign-exchange reserves – that export financial instability to others. It would have been bet-ter to avoid all this by exercising much greater caution in opening up to global finance in the first place.

Those who advocate greater glo-bal governance warn us that, without tighter international economic rules, a free-for-all will leave all coun-tries worse off. But it is a mistake to imagine the world economy as if it were like, say, global climate – with its health and stability ultimately depending on the pursuit of univer-sal instead of parochial objectives.

Economists teach the virtues of open trade because it benefits us – not because it benefits others. Exposing the domestic economy to global mar-kets – unlike curbing emissions at home – brings its own rewards. A world economy made up of countries that pursue their own national interests will perhaps not be hyper-globalized, but it will, by and large, be an open one.

Certainly, the global economy needs some traffic rules where there are clear cross-border spillovers. But the balance between national pre-rogatives and international rules must make a virtue of political reality. If we veer too far toward global govern-ance, we will end up with meaning-less rules that beg to be flouted.

‘A world economy made up of countries that pursue their own national interests will perhaps not be hyper-globalized, but it will, by and large, be an open one’


IN THE AFTERMATH of the Great Recession, countries have been left with unprecedented peacetime

deficits and increasing anxieties about their growing national debts. In many countries, this is leading to a new round of austerity – policies that will almost surely lead to weaker national and glo-bal economies and a marked slowdown in the pace of recovery. Those hoping for large deficit reductions will be sorely disappointed, as the economic slow-down will push down tax revenues and increase demands for unemployment insurance and other social benefits.

The attempt to restrain the growth of debt does serve to concentrate the mind – it forces countries to focus on priori-ties and assess values. The United States is unlikely in the short term to embrace massive budget cuts, à la the United Kingdom. But the long-term prognosis – made especially dire by health-care reform’s inability to make much of a dent in rising medical costs – is sufficiently bleak that there is increasing bipartisan momentum to do something. President Barack Obama has appointed a biparti-san deficit-reduction commission, whose

chairmen recently provided a glimpse of what their report might look like.

Technically, reducing a deficit is a straightforward matter: one must either cut expenditures or raise taxes. It is already clear, however, that the deficit-reduction agenda, at least in the US, goes further: it is an attempt to weaken social protections, reduce the progressivity of the tax system, and shrink the role and size of govern-ment – all while leaving established interests, like the military-industrial complex, as little affected as possible.

In the US (and some other advanced industrial countries), any deficit-reduc-tion agenda has to be set in the context of what happened over the last decade:

• a massive increase in defense expen-ditures, fueled by two fruitless wars, but going well beyond that;

• growth in inequality, with the top 1% garnering more than 20% of the country’s income, accompa-nied by a weakening of the mid-dle class – median US household income has fallen by more than 5% over the past decade, and was in decline even before the recession;

• underinvestment in the public sec-tor, including in infrastructure, evidenced so dramatically by the collapse of New Orleans’ levies; and

• growth in corporate welfare, from bank bailouts to ethanol subsidies to a continuation of agricultural subsidies, even when those sub-sidies have been ruled illegal by the World Trade Organization.

Joseph Stiglitz University Professor at Columbia University and a Nobel laureate in Economics. His latest book, Freefall: Free Markets and the Sinking of the Global Economy, is now available in French, German, Japanese, and Spanish.

Alternatives to Austerity

‘The attempt to restrain the growth of debt does serve to concentrate the mind – it forces countries to focus on priorities and assess values’

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As a result, it is relatively easy to formulate a deficit-reduction package that boosts efficiency, bolsters growth, and reduces inequality. Five core ingredients are required. First, spend-ing on high-return public investments should be increased. Even if this wid-ens the deficit in the short run, it will reduce the national debt in the long run. What business wouldn’t jump at investment opportunities yielding returns in excess of 10% if it could borrow capital – as the US govern-ment can – for less than 3% interest?

Second, military expenditures must be cut – not just funding for the fruitless wars, but also for the weap-ons that don’t work against enemies that don’t exist. We’ve continued as if the Cold War never came to an end, spending as much on defense as the rest of the world combined.

Following this is the need to elimi-nate corporate welfare. Even as America has stripped away its safety net for people, it has strengthened the safety net for firms, evidenced so clearly in the Great Recession with the bailouts of AIG, Goldman Sachs, and other banks. Corporate welfare accounts for nearly one-half of total income in some parts of US agro-business, with billions of dollars in cotton sub-sidies, for example, going to a few rich farmers – while lowering prices and increasing poverty among com-petitors in the developing world.

An especially egregious form of cor-porate special treatment is that afforded to the drug companies. Even though the government is the largest buyer of their products, it is not allowed to negotiate prices, thereby fueling an estimated increase in corporate revenues – and costs to the government – approach-ing $1 trillion dollars over a decade.

Another example is the smorgas-bord of special benefits provided to the energy sector, especially oil and gas, thereby simultaneously robbing the treasury, distorting resource alloca-tion, and destroying the environment.

Then there are the seemingly end-less giveaways of national resources – from the free spectrum provided to broadcasters to the low royalties levied on mining companies to the subsidies to lumber companies.

Creating a fairer and more efficient tax system, by eliminating the spe-cial treatment of capital gains and dividends, is also needed. Why should those who work for a living be sub-ject to higher tax rates than those who reap their livelihood from specula-tion (often at the expense of others)?

Finally, with more than 20% of all income going to the top 1%, a slight increase, say 5%, in taxes actually paid would bring in more than $1 trillion over the course of a decade.

A deficit-reduction package crafted along these lines would more than meet even the most ardent deficit hawk’s demands. It would increase efficiency, promote growth, improve the environment, and ben-efit workers and the middle class.

There’s only one problem: it wouldn’t benefit those at the top, or the corporate and other special interests that have come to dominate America’s policymaking. Its compel-ling logic is precisely why there is little chance that such a reasonable proposal would ever be adopted.


DYSFUNCTIONAL governance is central to why some countries remain poor.

Since 1991 Europe has attempted to improve governance by promoting democratisation. Yet the distinction between democratic and autocratic regimes does not relate closely to that between good and bad governance. Whereas some autocratic regimes are plundering tyrannies, others are deliv-ering prosperity. Similarly, while some democratic regimes are disciplined by accountability, others are mired in populism and patronage. Democracies only work well under certain condi-tions. A good autocracy may be better able to put these foundations in place than a dysfunctional democracy. The path to a well-functioning democ-racy may not start from dysfunctional democracy, but from benign autocracy.

Europe expected elections to deliver legitimacy to government. Yet this cannot happen in societies that are deeply divided by sub-national identi-ties: in Iraq, the Sunni were not will-ing to accept rule by the majority Shi’a no matter what the vote. Without a

sense of common identity, elections degenerate into an ethnic poll. Take Kenya’s ethnically divided society. In the elections of 2008 over 40 percent of the Luo judged that the perform-ance of the economy had improved under President Kibaki. Yet only one-in-twenty of the Luo with this favour-able assessment actually voted for him: Kibaki was a Kikuyu. In such condi-tions the favours that a leader does for other groups are unappreciated, so he has little choice but to favour his own: identity politics breeds patronage systems. While dysfunctional democra-cies reinforce ethnic identities, some benign autocrats have had the vision to forge a common identity. In Tanzania, President Nyerere overcame tribal identifies through education, charisma and symbolism. In Indonesia, another autocrat, Sukarno, used similar tech-niques to forge islands into a nation.

Europe expected newly democratised governments to conduct elections hon-estly. Instead, incumbents rapidly learnt to win elections by means of illicit tactics. Ballot fraud, bribery, intimi-dation, and the exclusion of strong opponents have become the norm. Without prior checks and balances the chances of a clean election are negligi-ble, but whereas elections can be put together almost overnight, effective institutions take years to develop.

Europe expected elections to deliver social order and good economic poli-cies. Yet in low-income societies democ-racy is associated with higher levels of political violence. Elections can only

Paul CollierProfessor of Economics and Director of the Centre for the Study of African Economies, Oxford University

Development Models Revisited: European Democracy vs. Asian Autocracy

‘Whereas elections can be put together almost overnight, effective institutions take years to develop’


discipline governments into better economic policies if they are cleanly conducted. Further, democracies that inherit dysfunctional economic poli-cies often get stuck with them. Vested interests know that if they can inflict enough damage, the government will back off from change. In contrast, an autocrat can credibly assert that resist-ance would be futile. Europe expected elections to deliver social order.

Democracy indeed has its creden-tials. As per capita income rises above $2,700, democracy gains the edge over autocracy as a means of achiev-ing social peace. Once checks are effective, democracy also disciplines governments into better economic policies. The West’s goals for develop-ing countries have been right. But the revolutionary switch from autocracy to democracy in Eastern Europe was not an appropriate model for many low-income countries. Eastern Europe was already a middle-income region, it had a previous tradition of democ-racy, and it had the beacon of the European Union to anchor aspirations. In many smaller low-income societies a phase of benign autocracy may be useful to pave the way for democracy.

Autocrats set their own objectives. Chinese leaders want China to be a great power. Pol Pot wanted to turn Cambodia into rural primitive com-munism. The former goal is shrink-ing poverty, the latter generated mass starvation. Currently, Europe’s media and development agencies refuse to discriminate: they condemn autocrats in low-income countries regardless of their policies. The benign auto-crats should not be condemned and pressured into a rushed democracy. However much we might wish it to be different, democracy is not an essen-tial precondition for development.

While Eastern Europe is a false guide, history does have examples of evolutionary democracy. South Korea and Chile each went through a pro-longed phase of authoritarian rule

that, while an affront to human rights, was able to implement fundamental economic reforms that delivered rapid growth. In each society, rising pros-perity increased the pressure for the constitutional changes and institution-building that enabled a transition to genuine democracy. The subsequent democratic regimes have restored human rights, but have maintained the economic policies that delivered prosperity. We should at least enter-tain the possibility that although regimes such as Rwanda, Uganda and Ethiopia fall short by the stand-ards of democracy, they are following the path taken by Korea and Chile.


I AM GLAD AND honored to talk today about the Left in Europe, and what is

left of it. I would like to thank the French Socialist party in London, the Fabian Society and the Friedrich-Ebert-Stiftung for organizing this event. Before answering questions you may have about the current French political landscape, I would like to outline the perspec-tives and situations of Europe’s mainstream and Reformist Left parties, although I will at times discuss other forces of the Left, such as the communists and the ecologists (or greens).

This overview starts with a preliminary observation. There is clearly a paradox of European socialism. In the economic turmoil the world is currently undergoing, all the compo-nents for an ideological, and also a political domination of the Left are in place. After the conservative wave of the 1980s epitomized by ‘Reagonomics’ and Thatcherism, after the unlimited ‘financialization’ of the last decade (in which the free market increasingly dominated international eco-nomics and national policies), after the winning period of the Blairite ‘Third Way’ in Britain, and even after Lionel Jospin’s reformism in France (to which I contributed as a Minister for

European Affairs), new political realities and needs are emerg-ing. A return to Keynesianism is needed but with new per-spectives. According to many analysts, the time has come for a widespread rejection of the absolute rule of the market, for financial regulation and for a return of state intervention-ism. In other words, the time has come for renewed momen-tum of the Social Democrats.

I do not believe in any kind of fatal electoral regression of the Left, not at the local level nor at the national one. In France, for instance, opposition forces still have the potential to a majority government, even if they strug-gle to coalesce and work with one another. The French political landscape is one with an unpop-ular government supported by a narrow coalition, and disputed by a popular electorate consider-ably disappointed by Sarkozy’s presidency as it confronts sluggish growth, a high unem-ployment rate and exploding deficits. Beyond local defeats, the French Right should, logi-cally, like many of its European counterparts, be defeated at the next presidential and par-liamentary elections in 2012.

Yet, this apparently favora-ble situation has not translated to the European ballot boxes. On the contrary, the Social

This paper was drafted for a talk at a public conference organised by the French Socialist Party in London. My thanks go to Axelle Lemaire, the branch secretary, and to Mara James, for their helpful comments on earlier versions of this text.

Pierre MoscoviciFrench Member of Parliament

The Left in Europe: What Does the Future Hold?


Democrats went through a crushing and unprecedented defeat by the Conservatives in the European elections in June 2009. The only emerg-ing force were the Ecologists, whose breakthrough was in reality not as striking as it seemed to appear at the time.

As for national elections, despite the Socialist vic-tory in Greece and reelection in Portugal and Austria:

• The Labour party lost power in Britain recently to an entirely new Conservatives-Libdem coalition.

• The German SPD was severely defeated by Angela Merkel’s CDU-CSU in September of 2009, with its weakest show-ing since World War II.

• Last spring, the PvdA lost seats and influence in the Dutch Parliament while the far right had a spec-tacular breakthrough.

• In Slovakia, Robert Fico’s coalition, characterized by its populism, suffered a surprising defeat by a coa-lition of right parties.

• In the Czech Republic, the Socialist party, assumed to be the frontrunner, did not win the elections.

• In Hungary, Viktor Orban’s Fidesz, an ultra-conserva-tive party, overwhelmingly defeated the discredited Socialists, narrowly followed in the race by a far-right party.

• In Belgium, the autonomist party N-VA of Bart de Wewer became both the Flanders and the Kingdom’s first political party, making it extremely dif-ficult – some would even say impossible – for the Socialists (leading in the Walloon area), to make up a government.

It would be a complex enter-prise to discuss the situations in every European country, as national contexts can some-times be very specific, par-ticularly in the Netherlands and in Belgium. However, this brief overview demonstrates that the Centre-Left is on the defensive across Europe, and that it looks defense-less in the face of the Right.

Where do these difficulties arise from? In my opinion, the Reformist Left, torn between neoliberal temptations and its social democratic traditions, has not managed to reinvent itself. While this Reformist Left was dominating Europe, between 1996 and 2002, the Democratic Left did not set the construc-tion of the EU on a new course, in spite of its focus on enlarg-ing the EU to the Eastern and Central European countries, implementing the Maastricht Treaty and creating the euro.

Indeed, the Reformist Left was economically efficient. It achieved considerable reforms. In France, for example, the 35-hour week was implemented, an active policy for youth employment was created, and free healthcare was extended to people of low incomes. However, the Left did not deflect financial liberalization, and it did not pay enough attention to rising inequalities, whose first vic-tims are the working classes.

Progressively the Reformist Left ceased to represent an alternative and merely became, in the eye of many voters, a ‘bet-ter or improved Centre-Right’. I personally regard this analysis as rather unfair as the Left did fight to defend social benefits and public services, but it failed to lead the way to the much needed changes in the social safety net and the education sys-tem. To summarize, it appeared unable to represent its electoral base, unable to express a deep, genuine demand for change and overall, it appeared con-servative in its refusal to evolve. Consequently, voters kept the Left away from government for the following years and the era was dominated, on both ideo-logical and cultural accounts, by a Right that appeared successful in renewing and adapting itself to the modern world. The Left lacked creativity in its response to society’s new values and aspi-rations of mass consumption.

I am also deeply convinced that the Left suffers from a defi-cit of credibility and of efforts to appeal to the public. This is a point that is often underes-timated by commentators: the European Left is confronted with a terrible leadership crisis. Its prominent figures – Tony Blair, Gerhard Schröder, Lionel Jospin and Romano Prodi, among oth-ers, have not been replaced. Most socialist and social

‘Progressively the Reformist Left ceased to represent an alternative and merely became, in the eye of many voters, a “better or improved Centre-Right”’


democratic parties are meeting difficulties at this level, either with questioned or question-able leaderships, with confused or disputed strategic orienta-tions, or with plain instability. This is occurring in spite of the fact that maybe now more than ever before, politics and policies need to be embodied by strong and assertive figures.

Lastly, in its response to the economic crisis, the European Left has been vague and slow to react, while the Right has seized the opportunity for ‘tri-angulation’: making Keynesian principles their own (at least artificially), calling for a return of the State, claiming to be in favor of public intervention and of ecology, without drop-ping its populist approach to win the electorate. Silvio Berlusconi and Nicolas Sarkozy are clear examples of this.

In addition, the Left still faces the prominent difficulty of synthesizing various politi-cal and historical trends, hybrid heirs of the reformist and the revolutionary factions. This is particularly true in France, but also in Germany where the impossible relationship between the far-leftist Die Linke with the Social Democrats forbids any full alliance of the entire Left. The European Left, theoreti-cally in a favorable position is, in reality, confronted with major challenges and is finding it dif-ficult to rise to the occasion.

Therefore is it right to assume, as many commentators sug-gested in the aftermath of the last European elections, that the socialist and social demo-crat parties in Europe are dead or dying out? The risk of fatal-ity does exist and it would be arrogant to deny it. Indeed,

political organizations do die. They are not gifted with immor-tality. In France, the Communist Party is not even a pale shadow of the political force it once was after World War II.

In this context, the Left has a duty to reinvent itself. If it fails to do so, if it falls into the trap of bureaucracy, if it does not support the emergence of the next promising generations, if it falls short of producing ‘fresh ideas’ and if it loses sight of the importance of unity, it will be swallowed up. There will be many candidates ready to fill the vacuum, between the anticapitalist parties, the progressive centrists, the new communists and the ecologists.

We should not, however, underestimate the strength of the traditional and mainstream political forces, both of the Left and of the Right. This is one of the difficulties of the current debate: distinguish-ing between the cyclical and the structural issues at stake. If what we are experiencing is cyclical, the recession of the Left would only be temporary. If this is structural, its decline would be a permanent one. My opinion is that the reality falls in between the two: the Left is in deep turmoil, but there exist ways toward a quick recovery.

One way to move forward is to break the taboo of wealth distribution. For decades, under the prominent hold of ‘supply’ side economics, the Left and the Centre-Left chose to forget about fiscal policies as a tool to fight inequalities. The belief that the only possible strategy was to lower taxes, that resources should mainly be allocated to capital investment and that soci-ety’s inequalities could be based

on merit, became widespread. The states remained complacent with ultra liberal capitalism and accepted the search for profit as the unique quality for gov-ernance. Taxation as a tool for redistribution became obsolete or at the least very tricky. The German governing coalition’s policy in favor of lowering taxes is one example among many.

Although it is not safe to base an entire political project on taxation, as some of my colleagues and counterparts are tempted to think, its use clearly has to be rehabilitated. The recent excesses of capital-ism, which have exacerbated revenue inequalities by expo-nential and insane proportions, and the newfound awareness of the unsustainability of such inequalities, make a new tax policy necessary and legitimate.

This is why in Europe as in the United States, the idea of the redefinition of a progressive, fair, inclusive tax for all incomes that requires more effort from the wealthiest is now a burning issue. This is one of the pro-posals included in the French socialist project ‘For A New Development Model’ that I have been asked to draft by the party leader Martine Aubry: a deep reform of the taxation system with a much more progressive and global tax that encompasses income and social contributions, with a pay as you go system. This is also why I am in favor of what some call ‘stakeholder capitalism’, that is, regulated capitalism that incorporates both the income issue – nota-bly with the minimum wage policy, but also the need for increased employees’ rights in businesses and companies. The time for income redistribution


is returning, and the Left must come back to lead this fight it gave up because it was too con-cerned with reinforcing equity to the detriment of equality.

The state as an active pro-tagonist must also be at the heart of any reform. Inevitably, views will differ on the exact role of the state within the vari-ous countries of the European Union. However the question is a common issue to all the Western states, the United States of America included, even if the prospect of the return of ‘big gov-ernment’ is not all that convinc-ing. Unprecedented stimulus packages were being introduced everywhere in order to save the financial system, but also to support production, industries, employment, and growth.

Industrial policies that have long been criticized are back on the frontline. Without gov-ernment plans in support of consumption – like ‘cash for clunkers’ programs – or in sup-port of production, the European auto industry may have dis-appeared, or at least been as shaken as General Motors has been. The French Socialist Party aims to create a national com-mission on industrial invest-ment to support companies and create long term strategies.

It could be argued that such strategies are not simply the prerogatives of the Left, as some right-wing govern-ments do follow them as well. But three differences between the Left and the Right can be underlined in this regard:

• The difference in analysis is that the Right has only dealt with the biggest companies, starting with the banks, but it did not go further into the

industrial fabric, for example, the equipment manufacturers in the automobile industry.

• The difference in intensity is that the Right does not really deal with the issue of temporary nationaliza-tion. Additionally, public services are under much scrutiny and pressure to meet financial targets.

• Finally, the difference in method is that, contrary to the Right, the Left would require compensation or some con-trol sharing in companies that have been bailed out, for example, by way of state participation in the executive boards. Meanwhile the Right, mostly concerned with help-ing an ailing capitalist system, remains ‘Lampedusian’. They wish to ‘change everything, so that nothing changes.’

I am deeply convinced that the era of nationalization is over, just as the era of massive pri-vatization is also behind us. It is time for a mixed economy. Public intervention is and will be necessary to prepare for the future in an array of areas. We need an organized and global green economy, promoted by governments as much as the defense or the nuclear indus-try currently are. The knowl-edge industry also needs state support through research and

development in universities but also in the entire economic sys-tem. Massive public works are greatly needed in transportation, in housing, and in city planning. Of course, the biggest challenge lies in the fact that these invest-ments will have to be funded without aggravating the preoccu-pying public debt. In this regard, the dedication of new resources, partly from the taxation of financial markets, along with the re-evaluation of some tax privi-leges, must be considered with-out any shame or apprehension.

Economic reforms are crucial but we also need to open up to the broader concerns of society. With this in mind, the PS mani-festo could be based on the idea of the ‘good society’. The Left has neglected this question, and consequently has become unat-tractive, boring, technocratic and unable to ‘enchant’ the world. The alliance between justice and wellbeing must be at the heart of the progressive policies. This means a focus on culture, edu-cation, sports, and on a lifelong and global work package that includes professional social security, working time, contin-ued training and retirement.

Giving priority to ‘being’ rather than ‘having’, and moving away from narrow materialism, is a good window of opportu-nity for a more creative Left. The ability to understand and

‘I am deeply convinced that the era of nationalization is over, just as the era of massive privatization is also behind us. It is time for a mixed economy’


target people’s new demands, participative democracy, far from being a gadget, can be a useful tool. Long-term strate-gies, elaborated with the citi-zens’ support, are needed on the frontline more than ever at a time where the European politi-cal systems’ representativeness and legitimacy are disputed. As for social policies that combat social segregation, in the sub-urbs or in gender inequalities, the local scale is at the heart of the Left’s future. This, along with an effort to strengthen solidarity must be reinforced.

I also believe that the European Left must define its own concept of sustainable development. The ecologist movement can at times fall into the trap of green fundamental-ism that has at times argued against economic growth. On the other hand, the Right seeks to modify behaviors in a marginal manner rather than genuinely call into question the means of production and energetic consumption. It is up to the PS to elaborate a new develop-ment model in which we turn our backs to the sole search for productivity without giving up industrial excellence and inno-vation. It is a hard balance to find. Ecology can only be sus-tainable if linked consistently with the pursuit of social justice. Again, taxation could be one tac-tic, as sustainable growth can be

fostered by an ambitious and fair mechanism of green taxation.

This issue rests at the heart of the French Socialist Party’s national convention on a new development model that was recently conducted under my leadership: how to foster new ways of produc-tion and consumption that are more respectful of natural constraints, less greedy for energy and raw material, and stimulated by tax incentives.

We must also insist, in the face of the too often populist Right, on reasserting republican and European ideals. This stands at the top of the Left’s list of priori-ties. In France, this means reha-bilitating the principles of the French motto – liberty, equality, fraternity, to which I would add laïcité, or universal secularism.

Lastly, the European Left must reaffirm their solidarity with a common political, economic, social and environmental mani-festo for the European Union. Europe has been weakened by the social consequences of mas-sive unemployment and by the effects of enlargement to new countries based on a fragile institutional and political frame-work. But more than ever before, Europe appears as the only pos-sible answer to assert power and identity in a globalized world. Throughout Europe, right-wing parties defend the same val-ues and set up similar policies,

whereas political parties on the Left can hardly promote a com-mon program in spite of the generous efforts of the Party of European Socialists to lay down a shared manifesto. The Left is het-erogeneous in essence and split between different roots – social-ists, social democrats, laborists, social-liberals and democrats. However, the next European elec-tions in 2014 will be a milestone for the European Left: parties will have no choice but to get together and outline a program for a reuni-fied, reunited and active Europe, one that is able to move forward through reinforced cooperation, a common foreign and defense policy, armed with a sizeable budget to modernize the econ-omy and assist fellow European partners in their redevelopment. As the Greek crisis unfortunately brought to light, the European Left must also address the con-tinent’s blatant need for real governance of the eurozone.

So what does the future hold? Does the Left have a chance to get back to power in the near future, and above all to revive hope for policies that embody its core values? I do not believe in the end of the Left, nor do I think that what we are currently experiencing is merely a cyclical phase. The European Left is not bound to disappear, nor is the European Right bound to win, despite appearances. Take for example what occurred in Latin America: the Left, with all of its diversity, is dominant on the continent, in spite of the recent victory of the Right in Chile. The circumstances could paradoxi-cally be favorable to a swing of the pendulum. The economic crisis reinforced the Right, considered to be more reassur-ing and more credible. When the

‘I do not believe in the end of the Left, nor do I think that what we are currently experiencing is merely a cyclical phase’


crisis ends, hopefully in the next two or three years, we have the potential to see the awakening of the craving for redistribution, solidarity and fairness. It is up to the Left to meet these aspira-tions. To do so, it must draw up a blueprint of policy initiatives in which the ideals of social transformation are adapted to today’s modern realities.

Finally, let us not neglect the power of the political game. The modernization of political parties, the use of new forms of communication, and the creation of alliances that are attractive, must all be improved upon. One could indeed easily conclude that the weakness of the Left is not only ideological and intellectual but also techno-logical. There is no escape from catching up with the internet era, as the Democratic Party has with Barack Obama’s revo-lutionary electoral campaign.

The last European socialist and social democratic ‘wave’ occurred at the end of the 1990s, in a time of high economic growth and renewed politi-cal offer. This wave ultimately failed because it remained too conformist, and strayed too eagerly from its fundamentals. This failure shows us how to win back power, and what to avoid to ensure a victory in the near future. Tomorrow’s Left will not be a sequel to the ‘Third Way’. It will be a new way or it will not be at all.

The Left is at a crossroads with its destiny in its hands, particularly in France. Although the path toward renewal is going to be difficult, it is also possible, necessary, and ines-capable. It is my mission and that of the new generations to keep up to the challenge.


Book Review

A JourneyTony BlairHutchinsonISBN-13: 978-0091925550

REPLETE WITH THOSE demon eyes, ‘New Labour, New Danger’ was the Conservative’s ill-

judged attack on Tony Blair’s fresh and imposing opposition in the approach to the 1997 general election. It was ill-judged because the message that Blair had been at pains to promote since his elevation to leader in 1994 was that Labour really had changed; what he represented was something very new. The Conservatives then were, very helpfully, confirming this message. Nevertheless, and with the hindsight we now enjoy, there is some raw truth in the slogan. How Blair went from a popularist and popular political figure to someone many British people openly despise is undeniably the journey, on which Labour’s most electorally suc-cessful prime minister embarked. (Indeed, initially the book was to be called the more messianic The Journey). This is his story; a long awaited and eagerly devoured account of what became a controversial political career. ‘My aim,’ he states boldly in the intro-duction to this 691 page tome, ‘was to write not as a historian, but rather as a leader... There is only one person

who can write an account of what it is like to be the human being at the centre of that history, and that’s me.’

This book is not, of course, a piece of reliable history – though historians will pore over each and every page. It is, like almost all autobiographies, a defence of actions and an effort to influence the judgement of history. Most attention so far has been paid to the treatment of Blair’s relationship with his one time friend turned bitter rival, Gordon Brown, and the ‘in his own words’ account of the decision to invade Iraq. Of the former, little new light is shed on the fractious dealings between the two men who forged New Labour, in their decade in government together. The rows, sourness and vitriol were a secret kept from no-one. In his version, Blair balances almost every criticism of Brown with a reminder of his ‘enor-mous ability’ but also confides his view that, ‘I discovered there was a lacuna – not the wrong instinct, but no instinct at the human, gut level... Gordon is a strange guy’. By the end of Brown’s own premiership, that was no secret either.

On the latter, the sections which deal with Iraq contrast a little with other subjects. The book is (sometimes far too) candid when it comes to the likes of love making with Cherie or even toilet privacy of PMs, but it is very difficult to pin him down on this issue by which his term in office came to - and possibly his place in history will - be defined. What is presented is a familiar defence but one of some-times consequentialist proportions

Stephen BarberSenior Lecturer at London South Bank University, Senior Research Fellow of the Global Policy Institute (London Metropolitan University) and Book Review Editor of Social Europe Journal

Justification and Lament


(for example a comparison in raw numbers of casualties at the hands of the allies or as a result of inva-sion against atrocities committed by Saddam himself). He does, nonethe-less, spend some time exploring his feelings about the adventure couched between regret, anguish and responsi-bility. Like the gossip over Gordon, it does not add significantly to the debate.

There is, though, a more intriguing story to be teased out of these pages. The ‘New Danger’ which Blair seems to have presented as he stole his party leadership before breezing into Downing Street, was not so much in his beliefs but rather his loose ideological attach-ment to them. Blair, it should be remem-bered, has led a charmed life. He has rarely struggled to achieve his great ambitions. Privileged schooling and university led to the law where he was fortunate enough to meet his two close advisers and future Lord Chancellors in his boss Derry Irvine, a mentor and well connected Labour figure, and flat mate Charlie Falkner (not to mention love in the left leaning Cherie). Young Tony was soon selected for his safe Sedgefield seat, which he won in 1983, at a point where Militant had infiltrated many other Labour constituency parties; he was promoted rapidly to the front bench alongside Gordon Brown who represented the senior partner in the two man relationship (perhaps because he was, as he puts it at one point, ‘one of the few members of the Shadow Cabinet who could safely be left alone with business types’); as Gordon’s star fell, Tony’s rose when as Shadow Home Secretary, his ‘tough on crime, tough on

the causes of crime’ maxim caught the public mood when tragically the toddler Jamie Bulger was murdered by boys not very much older. In retrospect, Blair criticises his younger self’s conclusions but admits ‘politically, there was a big impact on my standing, which rose still further.’ A year later John Smith died of a heart attack and as Mo Mowlam point-edly said to Blair, ‘It’s got to be you.’

There is a real sense from these pages that Tony Blair enjoyed being popu-lar. It is even reflected in the way he writes; an informal ‘here’s the thing’ celebrity manner which means that so familiar affected voice echoes, annoy-ingly, in the reader’s head. And his willingness to bend toward popular-ity was a feature of his early period in office. Part of his appeal was that, like Bill Clinton, ‘as a political class act I deferred to the master’, his adapta-tion in the face of public opinion (and sophisticated techniques to ascertain just what people thought) was as slick and professional as was the ease with which it was prosecuted. In this mem-oir of a man who has travelled, Blair is far from uncritical. In one telling moment looking back on the early days of government, he writes, ‘there was a naivety about my belief that merely by adopting an approach based on reason and the abstinence from ideological dogma, hard problems could be solved, complex issues unravelled, divergent propositions reconciled.’ What hap-pened to jolt him out of this view and into a different style of governing was Iraq: a policy escapade in which he did believe, perhaps dogmatically.

Even so, the ‘Blair Doctrine of the International Community’ of liberal interventionism was there for all to see. Set out very clearly in an address to the Economic Club of Chicago in 1999 was ‘a very simple notion: inter-vention to bring down a despotic dic-tatorial regime could be justified on grounds of the nature of that regime, not merely its immediate threat to our interests’. It worked to popular acclaim

‘There is a real sense from these pages that Tony Blair enjoyed being popular. It is even reflected in the way he writes’


in Kosovo it should not be forgotten. But then, was it ideological implemen-tation which meant he lost popular approval? It might be necessary to read George W. Bush’s memoirs to ascertain the degree of intellectual agreement but there was certainly a fierce col-laboration of the Blair Doctrine and the US President’s brand of shoot-from-the-hip, Wild West conservatism.

It meant this popular British prime minister became one of the most divi-sive politicians in contemporary his-tory. While Margaret Thatcher was deeply unpopular with great swathes of the British people (and divisive in the extreme), she remained respected even by her opponents. The hatred for Blair is expressed most strongly by those who had believed in him and his message in 1997 and who feel betrayed. For his last two years in office, Blair ‘was trying to wear what was effectively a kind of psychologi-cal armour which the arrows simply bounced off, and to achieve a kind of weightlessness that allowed me, some-how, to float above the demonic rabble tearing at my limbs.’ It is an abrupt turnaround and a difficult journey.

The ‘New Danger’ which Tony Blair represented in 1997 was not the one which the Tories wanted to promote (‘they knew if I turned out to possess the genuine article, with the abil-ity to wear it so it fitted, they were sunk.’) In retrospect, Blair was dan-gerous because he had yet to find the policy in which he really believed, irrespective of the consequences.


Endnotes

Social Europe Journal (SEJ) is the first quarterly journal, delivered electronically, addressing issues of critical interests to progressives across Europe and beyond. It was founded in late 2004 and has been continuously published since spring 2005.

SEJ is above all a forum for debate and innovative political thinking. We not only deal with social democracy and European economic policy but also use ‘Social Europe’ as a viewpoint to examine issues such as globalisation, political economy, industrial policy and inter-national relations.

Primarily as an electronic journal, we encourage interactive communication between editors, authors, and readers. It is our goal to make as many readers as possible active participants of SEJ. By providing opportunities for the exchange of ideas, SEJ is the pio-neer of a new form of European public realm – a public realm that grows and is shaped from the people up; driven by citizens.

We are committed to publishing stimulating articles by the most thought-provoking authors. Since its founding, SEJ has published writers of the highest calibre including several Nobel laureates, international political leaders and prime ministers as well as some of the best young talent.

All the views expressed in the articles of this issue are those of the authors and do not necessarily represent the views of Social Europe Journal.

All rights reservedSocial Europe Journal© 2011

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