Human ingenuity has delivered an integrated global economy, weapons of mass destruction, and threats to the biosphere on which we rely. Yet human nature remains that of an instinctively tribal primate. This contradiction is becoming more important than before, as interdependence deepens and superpower rivalry grows.
This raises a sobering question: is it possible for a divided humanity to provide essential global public goods? Since Xi Jinping, leader of the country with the largest emissions of greenhouse gases, has decided not even to attend COP26 in Glasgow, the answer does not appear encouraging.
The core global public goods are prosperity, peace and protection against planetary disasters, such as climate change or serious pandemics. These goods are interconnected: without peace among great powers, prosperity is at best fragile; and neither peace nor prosperity will last in a world ravaged by environmental catastrophes.
States exist to provide public goods and even so often fail to do so. But no global state exists. Instead, global public goods must be provided by agreement among some 200 sovereign nations, especially competing great powers. This leads to freeriding and disputes over whether planned burden sharing is fair.
After the second world war, global prosperity was underpinned by a patchwork of rules and institutions designed and run by western powers, led by the US. Meanwhile, the Soviet Union chose to stay outside the new system. The rules governing trade were built on the mercantilist principle of reciprocity. Meanwhile, after the collapse of the Bretton Woods exchange rate regime in 1971, currencies and capital flows were unmanaged. Migration has also been left to decisions by individual states.
Meanwhile, global peace was maintained by a balance of terror between the contending nuclear-armed superpowers. But this did not preclude proxy wars and very dangerous moments, notably the Cuban missile crisis in 1962.
Finally, action on the global environment and even pandemics has been limited and ineffective, apart from one great success, the agreement on the Montreal Protocol on Substances that Deplete the Ozone Layer of 1987. We have now been engaging in discussions of the threat of climate change for three decades: emissions have continued to rise throughout.
Alas, our ability to provide global public goods, modest in the past, is likely to shrink still further as rivalry between the US and China grows. True, China is not promoting a global ideology, as the Soviet Union did. Nevertheless, China and the US are very different countries, one a centralised despotism, the other a crumbling democracy. Unlike the Soviet Union, China has a dynamic market economy highly integrated into the world economy. It is also central in resolving global environmental challenges. Managing the global public goods of prosperity and protection of the planet — in addition, evidently, to peace — cannot be done without China.
So, how might this work, not just over the next few years, but over what is likely to be many decades, possibly generations? The short answer is: with difficulty. The longer answer is: by being ambitiously pragmatic. We need to accept that we share our planet and interact with one another too profoundly to avoid co-operation, however much we may dislike one another. What we must do is define and internalise the fundamental interests that unite us.
What might this mean in practice?
On prosperity, the most important requirement is for every country, especially the superpowers, to define the freedom they need to protect their desired economic, political and security autonomy, while sticking to the commitments that make their actions predictable.
On peace, the objective must be transparency about each side’s objectives and capabilities, with a view to avoiding military or related surprises. This will require deep engagement between Chinese and western military and civil establishments, across the board.
On protection of the planet, among the most important challenges, it is essential to agree on how to mitigate threats to climate. The outcome of COP26 will provide a compelling indication of whether this is possible. But greater capacity to manage pandemics is also urgent.
We are at a hinge moment in history.
The old western-dominated economic system is not going to develop into a more ordered global system, as some hoped in the 1990s. Meanwhile, the great challenge of securing peace in a nuclear age remains and the newer challenge of protecting the biosphere is becoming ever more urgent.
We must not abandon attempts at global co-operation. That would be a catastrophe imperilling peace, prosperity and planet. We must focus, instead, on defining and then making workable the minimum co-operation we must now have if humanity is to achieve what we will all need.
This will involve sitting down with one another to establish or renew: first, institutions and practices for promoting prosperity that can offer economic development, debt management, and liberal and predictable trade; second, institutions and practices for protecting peace that will deliver transparency and credible security to all; and, finally, institutions and practices for protecting the planet that will deliver a habitable Earth for us and our fellow creatures.
None of this will be easy. Yet we have reached a point at which the alternative to rising above our limitations is catastrophe. If we are to enjoy peace, to prosper and to protect our planet, we must agree to disagree, while still co-operating.
No reasonable alternative exists.
martin.wolf@ft.com
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Source: Economy - ft.com
