Making sense of the global confusion

WORLD VIEW:CHINA'S PRIME minister, Wen Jiabao, always carries a copy of Adam Smith's Theory of Moral Sentiments (1759) when he travels abroad. It lays out the ethical underpinnings for governing societies and market economies, he explained in an interview published in this newspaper (February 2nd, 2009). "If the fruits of a society's economic development cannot be shared by all, it is morally unsound and risky, as it is bound to jeopardise social stability. If the wealth of a society is concentrated in the hands of a small number of people, then this is against the popular will, and the society is bound to be unstable," he said.

Wen Jiabao says this book of Smith’s is often overlooked by those who concentrate distortingly only on some passages of his better-known The Wealth of Nations (1776), particularly for its assumed justification of unregulated capitalism. The earlier book fills out Smith’s social philosophy and its approach is equally relevant for China’s internal policies as for the global distribution and control of wealth. So he can use Smith to criticise the West on its own turf, so to speak.

His remarks were worth recalling after hearing Amartya Sen, the Indian Nobel prize-winning economist, speak in TCD on Thursday. His subject, On Global Confusion, was highly topical in a week which saw the G8 summit struggling with the transition towards a more representative system of global leadership, Pope Benedict XVI publishing a new encyclical that calls for more global governance, and the United Nations secretary general Ban Ki-moon speaking in Dublin about greater global solidarity and engagement.

We are living through a remarkably interesting period of transition from international relations to global politics, according to the scholar Mary Kaldor. This brings us beyond the traditional model where politics operates only within state boundaries; strategy and diplomacy outside it. Now armies are deployed within states (as in China this week in the Xianjiang crisis which forced China’s president Hu Jintao to return home from the G8 summit).

And the huge growth in the number of non-state international actors helps to transform foreign policy so that, as Kaldor puts it, “globalisation (which is I think greater human consciousness) has profoundly constrained the possibility of atrocities and war”. (See www.theory-talks.org for this and other interviews with international relations scholars.)

Sen concentrated more on confused thinking about capitalism than on global politics. Should it be renewed, reformed or abandoned? Having just finished a book on the idea of justice, he is now editing a new edition of Smith’s Moral Sentiments. He drew on it to distinguish between the (mainly US) model of minimally regulated capitalism that gave us the current credit crisis and incipient depression, and a more classical European mixture of state and markets. He rejected a return to a state-owned Soviet system. He did not refer to more radical bottom-up alternatives. But definitions of capitalism vary so much between market, profitability, private ownership and extra-market welfare functions that the subject is inherently confusing, he said.

Smith did not use the terms capitalism, self-regulating or self-interest. Generosity, public spirit, trust, confidence, equality, public education and poverty relief loom larger than these in his moral compass. Thus his writings may be turned on the dogmatic market theorising he has inspired over the last generation, which convert theory into slogans. This crisis was waiting to happen, according to Sen and mainstream US economists like Paul Samuelson and Kenneth Arrow, whose work he invoked.

Sen’s own preference is for a mix of market function and public regulation, based on a sharing ethic and broadened out beyond state boundaries by a more encompassing and inclusive global politics. Turning more briefly to that subject, he spoke of the need for “a generally plural system of diverse institutions”. Democratic change must be based on discussion, in which states pay much more attention to each other, recognise their mutual problems and create more representative institutions.

But this comes along with different interests, so that including India and China more directly in world governance does not guarantee Africa’s concerns will be promoted and represented. And human rights and individual behaviour cut across state sovereignty to underwrite democratic accountability.

These stimulating reflections on our confusions are in keeping with Sen’s well-developed pluralist philosophy. It was spelled out in his book Identity and Violence (2006), in which he drew on his Indian background to argue against singular statist and communitarian accounts of collective identities which assume they are inherently unique and conflictual. Many multiculturalisms are in reality plural monoculturalisms. Rather, identities should be seen as complementary and multiple.

According to Ban Ki-moon, the same applies to state and security affiliations in this new global setting. Thus Ireland’s participation in EU military and civilian missions “is fully compatible with its traditional support of the United Nations. This is not a zero-sum game in which more support for one institution means less for the other. We are in this together. There is no competition between the two. We share values and objectives and are on a welcome path of ever-closer co-operation. ”

Such insights can help dispel this global confusion.