Statesman’s Guide to the Economic Future of the World

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A common approach between governments and central banks is essential to tackle many global issues. And yet, the danger is clear that massive purchases of government bonds by central banks will eventually nationalize financial risks and widen the gap between rich and poor. This is just one of the thorny dilemmas exposed by Gordon Brown, former British Chancellor of the Exchequer and Prime Minister, in an ambitious new book pleading for governments to step up global cooperation to build a post-pandemic world.

What Brown calls “welcome temporary central bank interventions to stabilize the economy” have obscured “vulnerabilities at the heart of the global financial system.” The result is “a new source of moral hazard” since “the business world is assured of support”. Stock markets, Brown points out, exploded during the Covid-19 crisis “as the real economy is in recession”. He intelligently debates “the appropriate role of central banks – where their responsibilities end and where direct government responsibilities begin.” Independence does not mean “the freedom of central bankers to do exactly what they want”.

This summary of the risks and rewards is dear to Brown’s heart, as a central player in global efforts to tackle the 2008 financial crisis, and a concerned viewer in the next in 2020-2021. It is one of dozens of sets of complex analyzes in Brown’s narrative. Although now outside the mainstream of British politics, this former Prime Minister turned United Nations Special Envoy for Global Education has never left the international political fray. Seven ways to change the world is a staggeringly far reaching work by a restless and grossly underrated Labor icon displaced after the 2010 election by Conservative governments he holds in little disguised contempt.

This 504-page tome, filled with 30 pages of notes, is Brown’s fourth complete book since he left office. Its production includes an account of the financial crisis, an autobiography and a call for a pre-2016 referendum to keep the UK in the European Union. In between, in 2014 he played a huge last-minute role in persuading Scots to stay in the UK during the independence referendum.

The book can be read at three levels. First, it is a lexicon of seven interrelated aspects of the evils that plague the world. It tackles with gusto and insight – and sometimes an overdose of statistics – the demands to prevent pandemics, revitalize economies, forge a zero carbon future, bring education to all, solve global poverty, abolish tax havens and eliminate nuclear weapons. Each of these chapters would serve separately as a practical manual for politicians and public officials today, as well as a valuable overview for the general reader.

Brown describes how a more equitable system of global burden-sharing could help alleviate health problems associated with present and future pandemics and achieve greater equality in global development. The man who in 2004 was lucky enough to become managing director of the International Monetary Fund suggests thoughtful ways to reform international financial institutions.

The IMF should become more of a bank than a fund. To improve crisis prevention and resolution, “the IMF must closely coordinate the many financial surveillance organizations that already exist but too often work in silos.” And it presents a sensible five-point plan for global cooperation to meet binding commitments for a zero-carbon world. In the need to exploit “scientific and technological breakthroughs,” he likens the campaign to the American wartime Manhattan atomic bomb project.

Second, it is a manifesto to persuade readers to commit to achieving “a well-run world”. Among his list of quotes is Leonardo da Vinci – “Realize that everything connects to everything else”. Brown proclaims: “Populist nationalism can be disarmed and defeated if we are able to show that international cooperation can bring … peace, stability, social justice and a healthy environment … Such reforms are not aimed at shutting down the state -nation but to connect nations together. ‘ Brown ends the book with a direct exhortation: “to convey a sense of renewed hope for the future and the role you can play in it.”

Third, he gives some personal insights into the use of power, the limits of the US-British “special relationship” during the Iraq war, and regrets his failure to correct his somewhat distant technocratic image. This was a major factor in the electoral defeat of 2010, when Labor suffered severely from the consequences of financial upheavals. The contempt for the politicians who succeeded him is not difficult to discern. The following three British Prime Ministers – David Cameron, Theresa May, Boris Johnson – are not named by name: Brown refers to the “leaders” of the Conservative-Liberal-Democrat coalition that replaced him. Donald Trump, on the other hand, returns more than 30 times, mostly as a living exhibit of an imperfect presidency.

During the financial crisis, Brown blames himself for not developing a “narrative” to illustrate to voters how Britain’s problems could only be solved with larger budget deficits. He should have explained this “as another reasonable everyday form of family budgeting … But I was so busy finding technical solutions to the crisis … I fell victim to the power of other people’s stories.”

As a final touch to the framework of the book, Brown develops his own thesis on China and the international system. He rules out “at least for now” any resumption of the Cold War, supporting the line of former US Treasury Secretary Hank Paulson – “problem-by-problem cooperation that will demonstrate the benefits of working under the order. rules-based international “. ‘. He competently deals with the internationalization of the renminbi. He predicts that Beijing will push for an improvement in the Special Drawing Right and for countries to use Chinese currency in their reserves and in government borrowing and lending.

In addition to all this, it sets parameters on human rights, Hong Kong and Taiwan. Brown evokes the intriguing prospect that one day China, as the largest economy and largest shareholder, will push for Beijing to become the headquarters of the IMF. It would be a supreme test for the art of governing the United States – and not the least of the puzzles posed by a retired politician who can now claim to have written a statesman’s guide to the world’s economic future. .

David Marsh is President of OMFIF.

Seven Ways To Change The World – How To Solve The Most Urgent Problems We Face, Simon & Schuster, London

Image source: Getty Images Europe; Roberto Ricciuti


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