Rise of the Rest III: Climate Change, Energy, and Global Governance after the Financial Crisis

Mar 17, 2010

This panel focuses on global governance since the financial crisis, in particular on climate change, energy security, and issues of consensus, common ethics, and trust. 


DEVIN STEWART: I'm Devin Stewart, from the Carnegie Council. Welcome, everyone. Welcome, friends and colleagues and supporters.

This is the "Rise of the Rest III." We started this theme in 2007 at The Nixon Center with Nik Gvosdev, who is right here, who is now based in Newport, Rhode Island. We have people coming from all over the country on this panel. I'm just so excited about this.

Actually, I teach at NYU part-time, and I named my class after this panel, which is the theme that Fareed Zakaria came up with to describe the rise of China and India—the so-called BRICs. Now the BRICs include Indonesia, so it's the BRICIs.

So this is really cool and I just can't wait to have this exciting panel here.

I want to make a quick plug and turn it over to our new colleague here, David Pratt. If ethics matter to you, please support our program here. This is an ongoing program. We are really cutting-edge and are pioneering ethics and international affairs. Nothing quite like it. So if you feel good about supporting ethics, this is definitely a sound investment.

Here is David Pratt. Thank you very much.

DAVID PRATT: Thank you, Devin. I'll be really quick.

As Devin said, my name is David Pratt. I am the Carnegie Council's new director of development. It's great that Devin talked about supporting us. That was the perfect segue.

We are offering some brand-new ways to support us, by co-hosting, hosting, or dedicating events like this—dedicating as in honoring someone with an event like this. We have at long last come up with the answer to the question, "What do you give the person who has everything?" You give them an event at the Carnegie Council, which might involve a speaker you are particularly interested in or they are interested in, subject matter that they are particularly interested in, and so on.

I also have information on our newly formed Friends Committee, which is a kind of inner advisory circle that Joel will be working with in the years ahead as we move toward our centennial and expand our programming for that.

Here's some of that programming now. Thanks to everyone on the panel and everyone who has come here today. Have a terrific time.

DEVIN STEWART: Thank you very much, David.

I'm going to pass the baton over to the other David on the Carnegie Council staff, David Speedie, Senior Fellow, the Global Engagement Program.

David, take it away. Thank you.

Thank you very much, Devin. Let me join Devin and the other David in welcoming everyone here. It's always a pleasure to see a mix of old and new faces at the Council, especially the new, I have to say. Anyhow, welcome, everyone.

I will be brief, because we have a truly formidable panel here and, of course, all too little time. But let me just say that, as Devin said, this series of "Rise of the Rest" goes back almost three years to an event in D.C., with at that time an even more dramatic title than we have today. The title then was "A World Without the West." In a related article at that time in The National Interest, Steven Weber, the director of the Cal-Berkeley Institute for International Studies, said, "U.S. and European officials and experts tend to see the rest of the world's policy choices through the distorted lens of U.S. hegemony, so they have failed to give proper consideration to significant developments elsewhere."

Our "Rise of the Rest" series, of which this is the third iteration, has examined both sides of that rather dramatic proposition: first of all, the emergence, which seems reasonable, of an important group of states for whom Western ideas have little resonance or relevance; and, perhaps even more dramatic for us sitting in New York, the decline of U.S. and Western influence, the corollary of that proposition.

Last year, Devin, in the second conference [2008], spoke of the different ways in which this could be termed—"The Rise of the Rest," "The World Without the West," "The Second World," or "The Post-American World." All of these are terms that we wrestled with and tried to parse. If we think this is overly hyperbolic or overdramatic—Devin, I guess this comes under the category of, "Success has a thousand parents and failure is an orphan"—the Financial Times actually gives the credit for the acronym "BRIC" to the chief economist of Goldman Sachs, Jim O'Neill. In this recent article in the Financial Times, it says that O'Neill has "redrawn the powerbrokers' cognitive map, helping them to articulate a fundamental shift of influence away from the Western world."

So this is serious stuff in the corridors of power. At the very least, what we're looking at here in this series is the proposition that the economic, military, political activity among non-Western states is increasing more rapidly than that between the United States and the West and those non-Western states.

Last year, in the last conference, we emphasized the economic activity. But clearly the economic rearrangements are being paralleled in security/political arrangements. I'll put in a little plug, if I may. If you check our website, we posted an article recently on the Shanghai Cooperation Organization—Russia, China, and four of the Central Asian states, with India, Pakistan, and Iran having observer status. This is clearly an organization that was regarded as a somewhat frivolous, if not irrelevant, organization when it was founded but a decade ago and clearly, we argue, is now somewhat more than that.

And so the conversation continues. Today we are gathered to discuss "Rise of the Rest III: Climate Change, Energy, and Global Governance after the Financial Crisis," which, I suppose, raises the question, what do we do after the first 20 minutes of this discussion? That's a fairly broad agenda.

We have a truly remarkable panel. I won't go into all the details of bios. We have a leading pollster, highly knowledgeable in such matters as failed states, religious extremism, inter-group conflict, democracy promotion, who has worked both for Bill Clinton and for Nelson Mandela. We have a professor of national security studies at the Naval War College and Senior Fellow of Strategic Studies at The Nixon Center in Washington. We have an author of six books on what's called the Second World and the head of the Caux Round Table, a network of business leaders.

So we have so many different interests and backgrounds represented here.

I would like to start with the end of the table, Nik Gvosdev, an old friend of this session. Nik is Professor of National Security Studies at the Naval War College, senior editor of The National Interest magazine, and a former Senior Fellow of Strategic Studies at The Nixon Center in Washington, D.C. Nik has been at all of these events so far. He's the continuity factor. I invite him to open our session.

Thank you.


NIKOLAS GVOSDEV: Thank you, David.

David mentioned the article in The National Interest from several years ago that got the ball rolling on this discussion. This is the third session that we are holding on this general topic. For those of you who were not here for our last session in July of 2008, if you give me a few minutes, I'll bring you up to where we were then and how it paves the way for our discussion today.

Starting with, it's important to look at the "World Without the West" thesis that Weber and his colleagues advanced. This argument has been caricatured a lot as the development of a large anti-American alliance in the world that would range against the United States and seek to counterbalance it. That wasn't the initial thrust of the argument. The thrust was, instead, not that countries are looking to oppose the United States necessarily, but they are looking for ways to route around the United States. They are looking for ways in which questions of global and regional concern could be discussed and settled without all roads having to lead through Washington, or perhaps not leading not only through Washington, but through New York and Brussels and London as well—that is, to have a greater convergence of the countries of the non-Western world, however we choose to define it, coming together and not necessarily having to accept the agenda as it was being set by the United States or by the United States and Europe.

Back then, this argument attracted a lot of attention. Then, between July of 2008 and today, we have had a number of developments in the world that led a number of people to say this argument of the World Without the West really didn't have any legs to it.

The first, of course, was the impact of the global financial crisis. What you had, particularly in Washington, were arguments that the problems being experienced around the world would cause other nations to re-appreciate and reevaluate the need for U.S. leadership, that there would be a return to American leadership in the global community of nations, and that the financial crisis would also take away some of the capabilities, some of the strengths that the countries that formed the World Without the West were beginning to accrue. Particularly, this was an argument focused on Russia, but to some extent on China as well—that the financial crisis essentially would be a devastating challenge to the resiliency of the political and economic systems of Russia and China and of some of the other rising powers, it would reiterate the importance of the Washington Consensus, and you would see a move away or back from state capitalism towards models that were then more in vogue in the West, the idea being that the financial crisis would kick in the door and the whole rotten structure of the World Without the West would come tumbling down and countries would sort of flock back to the Euro-Atlantic banner.

The second, of course, was that a lot of people predicted that the election of Barack Obama in the United States to the presidency was going to somehow reinvigorate American global leadership, that simply by the fact that you no longer had George W. Bush in the White House, this would cause countries around the world to reassess their attitudes towards the United States and global leadership, and all you needed was a fresh face at 1600 Pennsylvania Avenue and the World Without the West again would vanish away.

To some extent, there were some truths to this. The financial crisis did shake the economies and the political systems of the countries around the world, not simply the countries of the World Without the West, but also within the West itself. There has been a change of tone in Washington that has been appreciated in other countries, and that has borne some fruits. Finally, the outgoing George W. Bush Administration recognized the need to widen the circle and made a fateful decision in trying to cope with the global crisis, which was to dispense with the G-8 and substitute the G-20 as the premier forum for discussing key questions around the health and maintenance of the global economy. This process has been continued in the Obama Administration.

Another set of events that we used to have here was to always evaluate the impacts of the G-8 summits. Perhaps now we'll have a series of events looking at whether or not the G-20 will do a better job than the G-8 has done in terms of addressing some of these questions.

But it's also clear that, from our perspective here in March of 2010, the World Without the West idea, the post-American century, the Rise of the Rest—these processes have not been interrupted, that they are continuing, that they are ongoing, and that these are concepts we need to continue to tackle in the years ahead.

Sitting here in July of 2008 [Rise of the Rest II], I said that there were going to be four dialogues that were critical to how the world order would be shaped in the decade. I identified the four as being the U.S.-China dialogue, the dialogue between Russia and the Europeans, the dialogue between India and China, and the dialogue between the southern democracies among themselves and then the dialogue of the southern democracies with the others, with Russia and China, with the United States and Europe—and how these four dialogues worked out would do a lot to determine how the global order would evolve, how it would take shape.

In the interest of time, I'm not really going to look at how dialogues one and two are shaping. If people have questions about that, we can entertain that in the questions and answers. What I would like to do is focus primarily on dialogues three and four, the India-China dialogue and the dialogue around the Southern democracies.

If we look at this, we can see that the World Without the West concept still has a number of legs to it. We saw this at Copenhagen, where the southern democracies lined up with China to stand against the consensus being put forward by the developed West. You had now what are called the BASIC countries—Brazil, South Africa, India, and China—working to set a common platform on climate change. You have Brazil emerging more as not only a regional leader, but beginning to take its first steps on the global arena. It's not automatically in line with what the United States expects.

If you look at the 2010 Quadrennial Defense Review that was just issued, there is an assumption that we have that southern democracies—India in particular, which is mentioned at several points in the QDR, but also other southern democracies, Indonesia, Brazil, and others—will somehow automatically line up with the United States when it comes to questions of global governance, that it's really a split between autocracy and democracy in the global arena. The realities are that the southern democracies are still, as Harry Harding said in the panel in July of 2008, the global independents. They don't really adhere necessarily to one side or the other.

Brazil has shown an interest. It works with the United States, but then took a lead in the summit that we just had in Cancun with the community of Latin America, in which the United States and Canada were specifically not invited to take part. To the extent that Brazil feels that the OAS [Organization of American States] process is deadlocked and has issues with the United States, it has been willing to route around the United States and to try to encourage other countries in the hemisphere to do the same. So it will be interesting to see what the trajectory of this new community will be.

Brazil and India, of course, have also worked to strengthen their relationship in a number of areas, which again points to their desire to see greater reform of global governance, more towards their concerns. The IBSA Forum, which, like the Shanghai Cooperation Organization, was usually dismissed a few years ago as something other than just window dressing or a nice photo opportunity—IBSA, which is the India-Brazil-South Africa Forum, not only is working to coordinate a common position on the Doha Round and on trade issues, but has taken its first forays into security policy, particularly with regard to securing the Indian and Atlantic Oceans, or at least having a role in keeping the global commons of that part of the sea space open, and working together and doing maneuvers and joint activities.

The BRIC: Even if Russia is seen by some as not fulfilling the criteria economically of being in the BRIC anymore, the BRIC summits continue. The next one will take place in April, in Brasilia. Brazil, Russia, India, and China will once again convene a summit meeting.

Again, looking at the BRIC, it's important not to fall into the trap of saying that if it's not a cohesive alliance where all four countries are in lockstep together, then it's not succeeding. Why the BRIC has been working over the last several years with these summits is not that all four countries line up and come to a common position, but it's the fact that they are coordinating their activities together and that they use each other as force multipliers to increase their collective bargaining position in institutions of global governance. To be able to put the four of them together, they recognized that that then gives them some clout at the table, because the BRIC essentially counterbalances the Euro-Atlantic World in terms of economic heft in the world, but also military and security power. When you see the four of them together, it enables them to make a claim to be able to credibly speak for half the planet, just as, traditionally, the G-7 group of countries usually spoke on behalf of at least half the planet. That forum continues. Certainly the Brazilian foreign minister, Amorim, has been one of the ones to really push this concept forward and to keep it moving forward.

So we have these embryonic groupings of countries which are saying, "Well, if the U.S. leadership doesn't produce the outcomes that we want or U.S. leadership is insufficient to breaking the deadlock in existing international groupings, then we can go around them." That has not ended or stopped as a result of the financial crisis. It has not needed or stopped simply because President Obama was elected. This is an ongoing process, and it continues. The reality is that, as we are seeing now and as I think we will see for the forthcoming future, it is beginning to realign the balance of power in global institutions to a point where the United States and Europe, which in the past had a sense that they could set an agenda and other countries would more or less have to conform to it—you are now seeing much more of an approach of horse trading, where the ability of Washington, Brussels, and then London, Paris, Berlin, and Tokyo, among others, to more or less accept that they can set a global agenda and that Beijing, Moscow, Brasilia, and New Delhi, Jakarta, and others will somehow have to learn to live with it is now becoming more, what can we trade, and how can we go back and forth? That will produce some challenges, I think, for those who expected that the Age of Obama was going to lead to a return to American global primacy, as it did in earlier eras.

DAVID SPEEDIE: Thanks, Nik. That was a marvelously comprehensive and concise assessment of the sort of rearrangement of the cards, as it were, and new alliances.

I think the important thing is this question you pointed out at the end: This is not some sort of cohesive alliance of countries working in lockstep. It's not an us-versus-them. Back to your point at the beginning, this is not specifically an anti-U.S. or anti-Western phenomenon. It's simply an evolving, emerging, embryonic—again to use your word—sense of a new world order that we pay attention to.

I am told that you do have this detailed list of bios, so I will not do what moderators usually do and say someone needs no introduction and then introduce them for 15 minutes. I'll merely turn it over now to Craig Charney, our good friend here at the Council. Craig is the pollster in our group.

Craig, how is this playing out?

CRAIG CHARNEY: I'm going to be speaking today, David, about four megatrends, really, that are helping to drive the processes of change that Nik was talking about. These are all around two basic themes: integration and disintegration. Specifically, I'll be looking at issues relating to democracy, connectedness, collective responsibility, and national power. All of these are playing out in ways that are helping to drive the Rise of the Rest and helping to shape it, as well as its interactions with the developed West.

So, to begin with democracy: Increasingly, it's quite clear, I think, that there is an international consensus among peoples themselves in favor of elected and accountable leadership of some sort. My firm and I have literally polled from Afghanistan to Zululand, and in the Far East and Latin America as well. We have asked a couple of questions, and we get very consistent answers.

One is, "What does democracy mean to you?" The answer is, almost everywhere, freedom or free expression.

The question is, "Why do you want to vote in an election?" This is particularly important because we make our living, in part, either in election campaigns or voter education campaigns. When we ask, "Why do you want to vote in this election?" people tell us, "To choose our leaders." That may seem awfully banal, but in places where people have not been able to choose their leaders, it is a big thing.

Even in a country like Saudi Arabia, for example—a rich society, a society where most people will tell you that the country is headed in the right direction, where the king is exceedingly popular—you will still have people tell you, by a very large majority, that they would prefer to live in a democracy to a country that is led by a strong leader.

At the same time, while this consensus is very broad, it is not very deep. It's what I might call a minimalist consensus in favor of democracy. The key, as I said, is some form of electoral accountability, the opportunity to choose leaders. By that standard, Russia, Afghanistan, Venezuela, and even perhaps Iran would all qualify, since most people in those places would say they did have a choice among leaders. In other words, it's not what we in the West would necessarily call a demand for free and fair elections or for full democracy and democratization. For example, in Russia, by more than a two-to-one majority, people, at least until recently, preferred the sort of strong leader that they had to a more democratic system, though there are some signs that that may be starting to change.

Still, the desire to choose one's own leaders is a very powerful trend at present.

Second, connectedness: Here I may be stating the obvious, but I don't think we think about the implications often enough. The first is TV and radio. These have become the integuments of the states of our time and across the states as well. In the case of TV, most people here have heard of Al Jazeera, which most people in the Arab world watch for their news. But even at the national level, TV has become a key factor in knitting nations together, whether you are to look at India, whether you are to look at Pakistan, where 65 percent of people watch TV nightly. Even if you look in a place like Afghanistan, where only the people in the towns get TV, 70 percent of people listen to the radio at least four times a week for their news, usually the BBC or Voice of America. Why? Well, in Afghanistan for the last 30 years, knowing the latest news has often been a matter of life and death.

To use Benedict Anderson's phrase, what we are seeing is the emergence of "imagined communities," both the reinforcement of national sentiment by stronger connections to electronic media—much stronger than those that print media exercised in their heyday, when Ben was writing about it—and of transnational communities that are emerging through transnational television systems like that of Al Jazeera.

However, even broader in its reach than the television networks has been the rise of telephones. Just ten years ago, in 2000, only 15 percent of families had access to telephones. That's 15, 1-5, percent. This year 70 percent of humanity lives in a family with a telephone. Obviously it has been driven by the rise of cell phones. But this is the fastest transformation in communications in the history of humankind. It means that people have myriads, literally billions of possibilities for communication which did not exist ten years ago.

The implications are staggering for collective awareness and action, whether we are talking about the flow of news, whether we are talking about markets, whether we are talking about the expression of social wants, the formation of social movements. Soon—certainly in ten years, probably in much less—the way most of the world is going to get on the Internet is not through wired machines, not even through Nick Negroponte's $100 laptop; it's through the machines you have in your pockets when they are sold and remaindered in the developing countries.

So connectedness is already tying people to their fellow countrymen, reaching across borders, establishing communities, and soon we'll have the whole world on the Internet.

Third, collective responsibility: The notion of global stewardship is a very important one, and I think one which is being driven in turn by the rise of connectedness. My colleague John Zogby has written, I think, very eloquently, in his book The Way We'll Be, about the emergence of what he calls global citizens. While he focuses on them in the United States, he and others have also written about their emergence in the Arab world, in Russia, and elsewhere. Here we're talking about the generation that's generally referred to as Millennials—young people who are less nationalistic or less tied to traditional loyalties, who are more liberal in their economic and political outlook, more multilateralist, and more concerned about global problems. To some extent, their views are echoed by the emerging middle classes, of whatever age, throughout the developing world.

We see this coming through in very interesting ways if we look at issues, for example, like global warming. In countries like Russia and India and China or in countries like Pakistan and Egypt, the public is way ahead of their government on environmental issues. For example, in all the countries I mentioned, more than four-fifths of the public say that they are very concerned about pollution and over two-thirds in each country see global warming as a serious problem.

Even more startling, in these countries, substantial majorities would accept reduced growth and employment in order to solve environmental problems. So we see that this is actually starting to translate into a consensus in favor of environmental action, one that has not fully been implemented by governments, obviously, as the chaos at Copenhagen showed, but one for which there is a growing and increasingly important audience.

Now, there are limitations to this. There are limitations to how far people would be willing to pay higher prices, for example, in order to support environmental action, abroad as well as here. But it's real.

Finally, national power: At various places, people always say it is national power, national jealousies, national rivalries, national economies that matter the most. Certainly jealousy over sovereignty remains a defining feature of the 21st-century world. So does lingering anti-imperialist resentment in many developing countries. Something that we see this reflected in is the changing international pecking order—if you prefer, the changing international balance of power. This is partly reflected in the Pew polls. Andy Kohut has spoken from this platform on how different nations are regarded.

If you look at the most recent poll, some of the findings are quite striking. In Western Europe, for example, the United States is more favorably regarded than either China or Russia, although, interestingly enough, in Spain, the EU is preferred to the United States, and in the U.K., China actually edges out the EU in terms of regard, which might amuse some British eurosceptics. Latin Americans tend to view the world a bit like the Europeans. They, too, prefer America to either China or Russia or the EU.

On the other hand, if you look at some of the developing countries, things look a bit different. Thus, for example, China is preferred to both Russia and the EU and is seen more favorably than the United States by more than two-to-one in Egypt. Similarly, in India, while attitudes towards the United States are very positive, China is considerably better viewed than is the European Community.

So we see that there are some very important differences in the way the rise of China has impacted perceptions and international admiration—soft power, if you will.

On the other hand, if we disaggregate the question of international power, things do look a little different. If you ask people what it is they admire about China, you hear things about their rapid development, increasing economic power, and national pride. On the other hand, if you ask people—interestingly enough, even people who, on balance, are unfavorable to the United States—what it is they admire about the United States, you get a rather long list: science, technology, education, the economy, the legal system, the work ethic. The United States is the country to lead the global fight against global warming. Our movies and culture are widely appreciated, even by people who formerly looked down on them.

Indeed, I remember once watching a focus group in Morocco where a group of older men were disparaging American movies and culture as trash, and then one of them turned to the others and said, "Let's get serious. Is there anyone here who would really want to go watch a French movie instead of an American one?"

Much as I have to admit that I have had a crush on Gong Li for years—I hope my wife's not watching this—I think, if one was honest, one would have to say that Meryl Streep has a much wider global audience.

In addition, though, to the changing national balance of power, there's also the importance of the national identity and its protection. These figures from the most recent Pew survey are very interesting, when it comes to the protection of national identity, specifically the protection of our national way of life against foreign influence. Sixty-nine percent of Russians say that that's important to them. Interestingly enough, the same proportion of Americans do: 69 percent. The figures, however, are even higher in some of the emerging powers. Eighty-one percent of Chinese, 93 percent of Indians, 83 percent of Mexicans, 78 percent of Indonesians express anxiety for the protection of their national culture against the globally integrative influences.

The phenomenon of rallying around the flag is one we have seen very powerfully, whether it occurred during the Russian invasion of Georgia two years ago or the incidents in China of mass protests after the United States accidentally bombed the Chinese embassy in Belgrade in 2000 or, more recently, the clash over the forcing-down of a U.S. surveillance aircraft.

I'm not trying to suggest that any of these forces are linear or all point in the same direction, or even that integration will necessarily win out over disintegration or vice versa. But I think the four forces I have just spoken about—namely, democracy, collective responsibility, connectedness, and national power—are four of the key variables that are going to help drive the dynamics of the countries and the systems that Nik was talking about and that are our subject today.

Thank you, Craig. We native Brits are just malcontents, as you know. So the data you mentioned—it's just a protest vote. Don't take it too seriously.

I hope that in the Q&A, perhaps, this question you spoke of, soft power, Chinese soft power—I hope that comes up, because clearly it's a very relevant topic here.

Parag Khanna is director of the Global Governance Initiative at the New America Foundation in Washington. Parag, you were here last, I think, to talk about your book, The Second World. Welcome back.

PARAG KHANNA: Thank you very much.

In fact, Nik's remarks made me very nostalgic. Back in 2004, before we talked about the Rest or the World Without the West or the BRICs, I was already very uncomfortable with the assumption of American primacy and continued hegemony, and so on a modest budget from Random House, I set out to travel through many of the countries that come up when we talk about the Rest. The result is the book The Second World, which profiles about 35 of them.

Really, the focus was to emphasize the connections among them that are taking place, without the supervision or control of Washington, London, Paris, Moscow, and so forth. What I really wanted to get at there is this multi-alignment. Multi-alignment is this practice of everyone making connections with anyone, however they can, to advance their own interests, irrespective of any deference to American authority or dominance. That really is the diffusion of diplomacy, and the diffusion of diplomacy away from traditional either state or intergovernmental institutions and structures is the crisis of global governance. Now I want to bring this to that level of what we think about when we talk about global governance today.

That crisis of global governance really predates, of course, this financial crisis. If anything, if you think about it, having everyone tuning in to the G-20 summits that have taken place over the last year and a half, those summits are the ones that have given people hope that there can be some functional global governance. Some people say the sherpas of the G-20 are the ones who saved the world from financial collapse by negotiating the global bailout packages and so forth. Yet, still, of course, global governance is very much in crisis. I'll come back to the G-20 later, because I certainly don't agree that it is going to be able to govern the world.

The crisis of global governance, very fundamentally, that we have been in and continue to be in is a crisis of power, a crisis of norms, and a crisis of institutions.

It's a crisis of power because these rising powers—again, whether you call them the Second World or the Rest or emerging markets and so forth—they do not have the voice in the existing structures that we think of as being the global governors. Take the UN Security Council, for example, and the debate over the need to expand it, but the lack of expansion of that body. To this day, on the 38th floor of the United Nations, there is no good proposal that has substantial buy-in as to how and when to expand the UN Security Council. Take the International Monetary Fund. In the voting shares and rights on the board of the IMF, also very slow progress on that. I'll come back to the IMF in a minute as well.

Again, the crisis of global governance is also a crisis of norms. What should the rules be? Intellectual property rights? Well, now that China has joined the WTO, good luck. Democracy as a priority for global institutions to pursue, and even for American foreign policy? Very much in debate. Now we talk about state capitalism as a rival model and China as being the strongest embodiment of that. What about humanitarian intervention versus sovereignty? Again, very, very strong ideological debates around that as well.

So the crisis of global governance—a third argument—is also a crisis of institutions. How or why can we even continue to have central institutions? When people think about the future of global governance, they are incredibly unimaginative, to be honest. If all we're talking about is reforming the post-World War II architecture, how does that capture the diffusion of diplomacy that I was talking about? It doesn't and it can't. That is the point that I think really needs to be addressed. That's what I would call meta-global governance, thinking about how we think about global governance rather than assuming the existing architecture just needs to be tinkered with a little bit.

Is it even possible? I'm not even so sure. If you look around the world at what successes do exist in transnational governance, the highest level you can really point to across a robust set of issues would be the regional level. Of course, you would point to the European Union first and foremost. The European Union works for Europe. A lot of people think it could potentially work as a larger model. But there are no structures for that. But you do have efforts in Asia to create the ASEAN [Association of Southeast Asian Nations] Plus Three, ASEAN Regional Forum, East Asian Community. Some even talk about an Asian Union. In Africa they are calling it the African Union; in Latin America, the Union of South American Nations.

The usage of the word "union" is not accidental here. There is an iconic sort of dimension to the way in which the European Union has succeeded, even though no other region will probably ever come close to what they have achieved. The fact is, the efforts at diminishing conflict, at addressing regional issues of concern through regional institutions is far more successful than most of what we could point to on the global level.

Global mechanisms may be desirable. It brings a certain simplicity and parsimony that we're all looking for when we want to say, "That's global governance, those guys there in that room." It doesn't work that way anymore. I would say climate change is perhaps the best example from today's world of how that's just not happening. Again, Kyoto, Bali, Copenhagen, later this year Mexico City—if you want high emissions, high-polluting climate tourism, no better way to go about it than to take the standard global governance track of climate diplomacy. It's not working. Instead, there is a robust set of activities going on at the regional, the inter-regional, the bilateral levels, public-private partnerships—all sorts of things that you can't just grab with one hand and say, "Aha, this is the global governance." In my opinion, that's okay.

In poverty, also it's very much the same. Chanting about global poverty, as many people do when they want to raise mega-funds at the United Nations to deal with the crisis that poor countries face, is a very simple way of pretending that you can have a central solution. But it doesn't really work and it doesn't really motivate. In fact, there is a Latin American variant of the poverty problem, an African variant, a South Asian variant, and so on. They are all very different.

There are certain triggers, let's say, or levers, like the issue of subsidies, farm subsidies, and trade restrictions and so forth, that, if managed right, could have a global impact on poverty. But it's exactly in that domain where there's no movement whatsoever. When was the last time that you heard Europeans or Americans say that they were really going to cut their subsidies to a substantial degree?

So all of the success is happening around what we think of as the legitimate existing global governance architecture. The crisis of global governance is definitely one of "globality," the notion that there is a "global" that is really working and motivating and pushing people.

The central institution for decades in the debate about global governance has been the United Nations. But as I have described with the proliferation of regionalism and all of these other mechanisms, clearly multilateralism is not synonymous with the United Nations. Beyond that, the United Nations is no longer one monolithic entity. It never really was, but people were able to say, "Ah, let's go back to the United Nations"—I think you heard Barack Obama say that during the presidential campaign—as if it were so simple. They say, "Aha, we'll just go back and channel our diplomatic influence and we'll partner with the United Nations." But there is no one United Nations. It depends, really, on what you want to get done, whether or not the United Nations is going to be helpful to you, or some part of the United Nations is or is not going to be helpful.

There are the core organs—the UN Security Council, the General Assembly, the Secretariat—that most consider utterly dysfunctional and beyond repair. Ban Ki-moon, in his diplomatic way, has more or less said that, even on the record. He even said about the Secretariat, "No one is quite really sure what it does." That tells you something. If the main bodies that most people do identify as being representative of the United Nations are completely beyond repair, that's a bad sign.

But I wouldn't throw the baby out with the bath water. I would say that there are functional agencies of the United Nations—UNICEF, the World Food Programme, and others—that really shine through. They really get the job done. They are a last line of defense. There are more peacekeepers active under United Nations auspices today than ever before. They do prevent thousands, millions of unnecessary deaths. They are very important. They deserve the Nobel Prizes that they have won over the last 50 years.

There are also the Bretton Woods bodies, which people don't think of necessarily as belonging to the United Nations, even though they were created around the same time, the IMF and the World Bank. Sure, you can put more money into the IMF. You can put more money into the World Bank. But are they really the central organs of governing global financial management or dealing with economic development? No, not really. You are only as powerful as the money that you have. Who has the money makes the rules. For the IMF, most of its clients are European, and for the World Bank, most of its clients are, of course, in Africa.

What is global governance, based on this fragmentation and diffusion that I'm describing? Global governance is the sum of multilateral bodies (so the United Nations and Bretton Woods and so forth), the proliferating regional mechanisms that exist (African Union, European Union, and so forth), the inter-regional functional activities that are out there, the number of different bilateral climate treaties and cooperation, the Proliferation Security Initiative to counter the spread of nuclear material, or the Anti-Piracy Task Force that has assembled, with dozens of countries, in the Indian Ocean. Those are also examples of this ad hoc functional multilateralism that is part of global governance. Then there's this huge, utterly unquantifiable array of public-private relationships. You think of the Gates Foundation, of the Open Society Institute, the World Business Council for Sustainable Development, the World Economic Forum, Amnesty International. The list goes on and on and on. All of those entities and actors form partnerships with each other, with governments, with international agencies. That, too, is part of this new multi-multilateralism that really constitutes global governance.

So global governance has no center. What you have to turn on its head is this notion that, because we are talking about global governance, we are talking about some central institutions. In fact, for global governance to work in the future and to be able to capture the totality of globalization and how globalization has empowered all these different actors, you have to think about global governance as being radically decentralized.

Where does that leave multilateral organizations, the ones that we do think of traditionally as part of global governance? They have to really just find their niche. Development institutions, like the World Bank, in my opinion, really need to focus, not on having offices in Brazil and Russia and countries that are trillion-dollar economies, but—and this is sort of a paternalistic kind of term—on adopting the countries that are orphans, that are not getting foreign investment, that don't have robust aid programs from bilateral donors, that, quite simply, do not have the resources of their own to develop themselves.

On climate, as I mentioned earlier, we should be letting 1,000 different instruments bloom, in a way, because you are not going to have global regulation handed down from the Copenhagen process. It will not happen. If you wait for it, the world will end.

Then, to bring it to the final issue and to bring it back to the G-20, global financial management: The G-20 is good, but it's definitely insufficient. It isn't the so-called steering committee for the world that many people make it out to be. It can at best manage to maintain some consensus among 20 or more key economies on reining in protectionism and on maintaining fiscal stimulus, to the extent that that is a good thing, to keep the global economy stable. But it cannot solve the Iran issue, the Israeli-Palestine issue, climate change, and everything else that many people would now like to dump on its agenda. It isn't qualified or capable to do that.

There is a difference between international cooperation and international coordination and collaboration. The G-20 is not a legal body. It is an informal coordinating platform. That's all it is. It cannot make legally binding decisions, and we have to be mindful of that.

I would certainly suggest that we try to form more networks of sherpas, of diplomats, who are the key figures and key experts and have the ear of national leadership on climate, on poverty, on nuclear proliferation, and so forth, and get those going and try to make progress on those issues. It wouldn't necessarily be the same G-20 countries. You don't need Argentina at the table when you're talking about nuclear proliferation. But you do need Indonesia there, as it is in the G-20, when it comes to climate change.

So these ad hoc sorts of networks are most certainly the way to go. But we shouldn't confuse that future with just assuming that the G-20 is the new United Nations, the G-20 is the new steering committee for the world, the G-20 can run the world. I think that would be grossly misunderstanding what globalization has done to global governance, and therefore charting the wrong path forward.

Thank you.

DAVID SPEEDIE: Thank you, Parag. I was particularly struck by your "let 1,000 instruments bloom." I guess it's contaminated by my background as a foundation program officer. We always tend to want to glom things together. Again, perhaps in conversation with the audience, we can get into the question of a more ad hoc, informal network of sherpas and so on and so forth. It's a very interesting conceptual challenge as we face this new world order.

Batting cleanup—only in the baseball sense, I would add—we have Stephen Young, global executive director of the Caux Round Table, a principled approach to global capitalism. Steve will tie all this together and give the ethical grounding to all of this discussion.

Thanks, Steve.

STEPHEN YOUNG: My challenge in this Council for Ethics in International Affairs is to be ethical, right? Which briefly reminds me of a story. Hal Berman, one of my professors at the Harvard Law School, did some marvelous work on the intersection of law and religion. He has two books—I commend them to everybody—on how, basically, so much of our modern law, secular law, was derived, first, from the Gregorian reforms in about 1100, secondly, from the Protestant and Lutheran reforms in the 1500s. Anyway, the story was that some first-year law school student at Harvard at one point didn't like the outcome of a particular torts case. He puts up his hand. The professor, a Kingsfield type, says, "Yes?"

He says, "But, sir, it's not just."

The professor says, "Ha! Young man, if it's justice you want, go to the divinity school."

So I'm going to try to do something here—and I apologize. I'm going to just give you the tip of the tip of some icebergs. Hopefully, I will be succinct, but not simplistic.

Let me start with a reminder of Marx's "Theses on Feuerbach." I think it was Thesis number 29, where Marx said, "Up to now, philosophers have only interpreted the world. The point, however, is to change it."

I think my colleagues have given us a theme—and you were all sort of sitting there, and my sense is that you were becoming disheartened and disenchanted as the conversation went on—that we live in a period of deep fragmentation. Other things were said, but let me pick that up as a theme to which I can try to respond.

We have a crisis of power and a crisis of norms and a crisis of institutionalization, as Parag said. Let me suggest very briefly that institutions arrive when power is subordinated to norms. The problem is, we have no norms. The problem is, we have no leadership. One of the truisms in the study of leadership and in the study of ethics is that leadership and values are umbilically united; they are Siamese twins. I heard the other day that something like $8 billion is spent every year in the United States on leadership training and coaching and mentoring. I suggested at a meeting in St. Paul the other week of a bunch of coaches and mentors that the reason why they are doing so well is that we have no leaders. The interesting thing to me was, nobody argued with me.

We focus on leadership. We don't focus on values. Let me say, that is where we should turn our attention. I will get to my little chart on the table in a second.

Let me pass over some aspects of my background—fundamentally, lots of time in Asia. I spent the summer living with the Zinacantecos in Chiapas speaking Tzotzil, which I can no longer speak. I spent another summer living in Ban Chiang in Northeast Thailand. I still speak a little bit of Thai. I have done a lot of work in Southeast Asia. I was a young member of the Council on Foreign Relations. I actually came up with the solution, Parag, of the UN administration to solve the war in Cambodia, manipulating various concepts of mandala, Theravada Buddhism, China, Vietnam, stuff like that.

So my thinking has evolved out of some of those kinds of—oh, by the way, I worked very closely with Bill Colby on counterinsurgency, village development, pacification in South Vietnam, which was a very successful program, by the way.

But what I would say underlies, in a deep conceptual way, the fragmentation of the world—let me submit that the epistemology of modern civilization is a fundamental nihilism. When you are fundamentally nihilistic, there are no norms. There are no values. The only thing you have is power, and power is something that fragments, unless you have somebody who is more powerful than the others. Therefore, I suggest that a large part of our implicit cognitive thinking is Hobbesian. In the tradition of China, it would be Mozi [Mo Tsu]. It is the kind of social Darwinism that we saw with George W. Bush and Dick Cheney—kill or be killed, eat or be eaten. It's a Spencerian vision. And so therefore, we worry a great deal about the loss of American hegemony. Query: Did we ever really have hegemony? Did Roosevelt have hegemony over Winston Churchill or, dare I say, Charles de Gaulle in World War II?

So the Rise of the Rest or the decline of the West becomes very relevant in a world where there are no values, where there is only power.

Let me suggest, however, a second point. I will challenge the thesis that we are going to some stage of human history without the West. I would argue that the Rise of the Rest is because they westernized. If we were having this conversation in this room—or, better yet, at the Council—in the 1950s or 1960s, our discussions would probably be about industrialization, modernization. The term that used to be used, but which is now no longer politically correct, is "Westernization"—creating many problematics for, say, Japanese, Chinese, Muslims, et cetera, et cetera. It goes back to one of the key theses of Max Weber—several of his key theses. Can you industrialize, can you modernize without Westernizing—Westernization being interpreted as a certain kind of secular rationality within a range of expressions from, let's say, the English Revolution of 1688 to the American Revolution and the French Revolution. So you have a more sort of extreme rationalistic size, the French Revolution, et cetera, et cetera, et cetera.
My argument is that we would not have China in position today, et cetera, without some form of Westernization.

How many of you, by the way, have been to the new airport in Beijing? That is not an expression of Ming-Qing culture. You couldn't have built that thing without a lot of very Western engineering and mathematics and physics and stuff like that, which were not homegrown in China.

What we are talking about, underlying all the discussions here, is the convergence of all these societies at various levels to what? OECD [Organization for Economic Cooperation and Development] standards of life and physical infrastructure, economic systems, political systems, et cetera, et cetera—however, with caveats, because not everybody is necessarily happy with the value fallout of this Weberian thesis.

What are the two great worries that we have, which are very difficult to talk about? One great worry is, will the Muslim community, will the ummah of Muslims, ever finally make it into our world? Our world is secular rationality. That's a big thing they debate all the time. They are talking about secular rationality being not necessarily a good thing.

The second thing we worry about is, what about all the people in sub-Saharan Africa? Are they going to make it into our world, in some sense?

So let me say that what we're really doing is discussing a new phase, a new era in the rise of the West, which has created more power around the world. But something has happened. We have lost our notion of core values. We have lost our norms. Therefore, we are left with power, and therefore we are left with not only a range of unethical behaviors, but we are left with the challenges that my colleagues have spoken about.

Is there an alternative? Let me be very provocative here and suggest, yes, there is. In this is the next phase, let me say, in the rise of the West, which includes the Rest. This gets to that little chart that we worked on at the Round Table. Very briefly, on that chart you will see the seven normative principles of the Caux Round Table ethical principles for business, the six key stakeholder groups, coming out of business ethics or corporate social responsibility, aligned with 11 different religions, in a matrix chart, and every box is filled in.

We have also since then done a 12th one of these things, which is the Serbian Orthodox Church, because when we were in Serbia, our Serbian colleagues said—you know Serbs; they don't like the Europeans, they don't like the Americans—they said, "We're Serbs. We're the best people in the world, and if anything is going to happen in Serbia, it has to have Serbian values behind it."

I said, "So what are Serbian values?" So I'm introduced to a bishop, who gives me a book, gives me a long, long thing to read about St. Sava, who was the son of a great Serbian king who left that to found the Serbian Orthodox Church, in about 1100. He gets a special dispensation from some patriarch somewhere to call the church the Serbian Orthodox Church, because this is a way for the Serbian people, as a privileged, chosen people, to have their own relationship with God and—may I be unfair to any Serbs in the audience?—have something really special above all these other people.

Of course, the Serbian sense of who they are really locked in when the Turks arrived.

The point is that, with all these different religions—by the way, the idea for doing this came from a colleague, Tom Dunfee, who was at the Wharton school. Tom passed away about two years ago. He was pushing me for years to do this. I said, "Tom, I can't do it." But part of me was still that old anthropologist, and he put me to work. Lo and behold, this thing emerged.

What's the implication? The implication is that there are core human values which are the same everywhere. That's a radical proposition. Let me try to give you several instances.

One, when I go to China—I have done this several times—I present the Caux Round Table ethical principles and good governance and transparency and accountability, not as American creations, not as coming from the United Nations, not as invented by Alice Tepper Marlin here in New York, SAI-8000, stuff like that—none of this anti-Chinese stuff. Lo and behold, all these things I'm talking about actually come from Confucius and Mencius. I quote them.

So we have an Islamic setting in various places. What do we do?

I give the whole spiel and I say, "Here are the parts of the Qur'an," and say, "This is really good Qur'anic guidance here."

"Oh, really?"

"Yes. I just happen to be an American."

Thailand—I was just teaching in Bangkok and I had my MBA students do an assessment of four big Thai banks for CSR [Corporate Social Responsibility] variables in line with principles of Theravada Buddhism, which his majesty the king is talking about. The students go out and they do this analysis. They come back and they get number results. They are measuring the same things that you and I talk about here. We can talk in very Enlightenment, rationality kinds of terms or the best standards from the National Association of Corporate Directors or you name it.

If it is true that there are some core values, then that gives hope and optimism to what I think Parag was on the edge of recommending, not merely describing. I think I was hearing you, Parag, saying this is a good thing, this fragmentation, this decentralization, because it has created this "globality." What we are lacking in globality is a sense of a core set of norms so we can actually get some leadership, so we can do something about climate change, about energy, about governance, about the fiscal thing.

Okay, climate change and energy: Let me suggest that a better alternative to Copenhagen is a movement. How many of you were in the movement of the early 1960s? Anybody remember that? The movement? That was the Civil Rights Movement. That was a movement. We had songs. We had all kinds of things. People got out there and they did stuff. We marched from Selma to Montgomery and stuff like that.

We have a movement. It's the stuff that's going on. People can act either in an individual capacity, a neighborhood capacity, a city capacity, a corporate capacity, et cetera, et cetera, to do something about this intersection of climate change and energy. We can conserve more. And a lot of people in the environmental movement have been promoting this for 40 years now. So you could do that.

Global economic governance: What went wrong? There are several different issues, but let's focus on the key thing that went wrong, which is the financial crisis and—may I say it here in Manhattan?—the death of Wall Street. The enormity of what happened in October 2008 I don't think has sunk in, particularly among us Americans. What happened was that the institutions which made America, which made global America, which made our hegemony possible, died. There is no longer any investment bank that started after the Civil War that made American capitalism so good. They are all gone—some of them really gone, like Bear Stearns and Lehman Brothers. The others are finagling new kinds of legal relationships. Why? Because they need access to the Fed. Why? Because they are turning over huge—what is Goldman Sachs these days? Goldman Sachs is not an investment banking house that built up our great corporations. Goldman Sachs is a trading machine. Read the FT [Financial Times] and see how many profits it makes every day executing hundreds of millions of trades at nanosecond speed to make .0001 cent per trade. If you do .0001 cent per trade over 100 million, you make a lot of money, ladies and gentlemen, and you can pay out a lot of bonuses—$16 billion. That's not J.P. Morgan. That's not Andrew Carnegie putting together U.S. Steel. That's not the old Harriman doing railroads and stuff. That Wall Street which built us up is gone, it's dead, and it's never coming back, for a number of reasons.

What killed it off? The quick answer is greed. The deeper answer is imprudence, mispricing, mispricing of assets, excessive risk taking, miserable risk management.

Therefore, what's the solution? Oh, and by the way, ladies and gentlemen—I haven't seen very many people talk about this at all, from our distinguished adviser in the White House to our knowledgeable secretary of the treasury—the same thing has been happening since 1636 on a regular basis—exactly the same thing. There is no fundamental difference between what these guys in New York, our best and our brightest, the graduates of my schools, Harvard, Chicago, Wharton, all these places, being paid millions and millions and millions of dollars—they were doing the same thing that those dealers in tulip bulbs were doing in Holland in 1636. They got the prices wrong, they fed into an asset bubble, they borrowed all this stuff, and it all collapsed. And a whole lot of ordinary poor people were hurt. The wealthy people who had taken the cash out early—not so bad.

In 400 years, we haven't learned how to deal with this thing? Not very reassuring.

So the issue comes, how do you get a handle on prudence and risk management in financial markets?

  • One, you promote CSR, which is values-based.
  • Two, you use the sort of core values to come up with either a global standard or country-by-country sets of corporate governance, standards for corporate governance, and methods of measurement, coming out of the quality movement. It's not rocket science.
  • Third, we have to do something about the pricing mechanism. Here we probably need some sort of state intervention. The solution to the problem is very simple: Those who create risk have to shoulder the cost of risk. So as you are issuing more and more financial instruments for other people to buy, you have to put more and more money into the pot. Your first tranche of SMOs or CDOs or something like that you can issue is all profit. Your 15th tranche, you're going to buy an insurance policy, which is going to eliminate all your profits. Once your profits are eliminated, what are you going to do? You're not going to do it.

So we can dampen volatility in private markets using private governance mechanisms.

But all of this, I suggest to you, depends on having some set of core values. May I also suggest that those core values are out there in humanity?

Thank you very much.

DEVIN STEWART: One of the themes, based on Harry Harding's eloquent presentation a year and a half ago on this theme, the Rise of the Rest—he put it as, "The world is now two political parties, one that likes status quo in the international system and democracy at home and the other party that likes just the opposite: democracy in the world and status quo at home."

I asked him, "Are these two parties going to cooperate or what?"

He said, "What you mean is, is bipartisanship possible?"

So I would like to continue on that theme, based on the diverse opinions on this panel. As power, I would say, converges in the international system - or harmonizes or however you want to put it - is cooperation possible?

STEPHEN YOUNG: I think, Devin, the response has to be case-specific. I don't think we can talk about general norms or general patterns à la Hans Morgenthau or something like that. When I'm listening to you, my response is—is cooperation possible within a range of political communities in the Islamic world?—I would say, yes, but things have to happen in terms of ideas and engagement and things like that.

Is cooperation possible with China? Yes, but I think we non-Chinese have to engage the Chinese people, over the heads of their government, around the issue of what Chinese identity is. What do they want in the world? Where are they going in the world? I think that conversation can happen and it needs to happen, but it needs to be engaged in by us, who are non-Chinese, with a sense of understanding and respect and depth for a variety of Chinese traditions and a range of answers among the Chinese as to what China is and where they are going.

I could go on from there.

I think, fundamentally, if I am right, if there is a core of decency to human beings, if there is a core set of values, then obviously cooperation has to be in the cards.

NIKOLAS GVOSDEV: This touches on one of the four dialogues, and that gives us a good answer to the question, which is the dialogue between the United States and China, particularly over the last year. The record there is mixed. It shows, I think, that China and the United States have shown an appreciation that there are problems that both of them need to be involved in, in order to solve, but that there is still deep-seated reluctance in both Washington and Beijing for what, to use Harry's term, bipartisanship would entail. From the Chinese side, this would mean that China would have to assume more of the risks—if we take this theory that if you create risks, you assume more of the burden of the risks.

The United States has an interesting problem with this, which is, first of all, the extent to which we have conceived of dialogues as, we have a vision, we go to another country, and we modify our vision slightly for that other country to buy in, but it's not really a give-and-take, and the real reluctance that we have in this concept of the G-2, which would be that America's global priorities are not China's global priorities, are not Brazil's global priorities, are not India's global priorities, necessarily. If you want another country to take your top five priority issues, what are you prepared to concede? There has been a real reluctance to do that at this point.

The other question—this is from the security side—is, bipartisanship is possible, but then what sort of world of the future do you want? This is something that comes up when we talk about greater burden sharing for global security. On the one hand, we want more countries to do more in the world. We take the piracy issue. We want more countries to deploy navies, to take over responsibility for patrolling. On the other hand, we look askance at the idea of China and India developing aircraft carriers, building blue-water navies, because the same capabilities that can be used to cooperate with us could also be used to hinder us.

So we have a real issue at this point, which is that we want more global cooperation, we want more burden sharing, but we're reluctant to lose some of the advantages that we have accrued, in the security sense, because if an India or a China or a Brazil—Brazil is going to launch its own nuclear submarines; India will launch its own nuclear submarines—if these capabilities are diffused and spread throughout the world, then what happens if those countries don't always choose to see eye to eye on the relationship?

I think Secretary Clinton's visit to Brazil, which got some coverage in the American press, but perhaps not as much as it should have, really shows some of the limits that we have in how we're reaching out in terms of the dialogue with some of these other rising partners.

It fundamentally comes down to what it is that we want. If we don't know what we want, it's harder to say what we're prepared to compromise on in order to get that cooperation.

So bipartisanship, in theory, is possible, but both the last and the current administrations haven't really laid out a compelling vision which has been able to produce a reciprocal effect in some of these other states.


CRAIG CHARNEY: I'm cautiously optimistic, for slightly different reasons from Nik and Stephen. I think the key factor is having the emergence of a dialogue, not so much identity, because I don't think it's our business, really, to tell the Chinese what their identity is, but rather about shared interests. It has been said, with great power comes great responsibility, to quote that famous philosopher, the amazing Spiderman.

But one of the consequences of the desire for recognition as an emerging power, as a great power, is precisely the need to accept responsibility as a stakeholder for the international order. We see this increasingly among the Millennials, among the emerging global citizens that I spoke about. We see this in terms of the sort of environmental sensibility, as well as sensibility on issues like global poverty, armament, and the like.

We also see this beginning to influence national leaders. I think the great significance of Copenhagen, as we will see when we look back on it in 20 or 30 years' time, is ultimately not that it didn't produce a treaty, but rather that the U.S. president—ultimately, the leader of the indispensable nation—was able to bang heads together and produce a rough consensus, which included both the largest developing powers agreeing that they have a responsibility to reduce emissions and the richest developed countries agreeing that they have a responsibility to fork over, not billions, not tens of billions, but hundreds of billions of dollars of time in order to make this feasible.

I think we are going to see—indeed, we already have seen—the emergence of a discussion of things like the Tobin tax. One of the Security Council powers—France, admittedly, but nonetheless on the Security Council—has already endorsed this idea. I think that the notion of global bargains, of global institutions, in the sort of rough coordinating way that Parag described rather than in a supranational parliamentary way, is possible.

On the other hand, there's also a danger, and that remains—the same exacerbated nationalisms that turned the 20th century into a century of bloodshed. The notion of the two world wars as a response to a sort of rear-end collision between emerging Germany and the existing powers doesn't, I think, require a rehearsal for a group like this. The question as to whether or not that will be the history of the 21st century or whether the same kinds of ties, at a person-to-person, group-to-group, and country-to-country level, which are incomparably stronger than they were in 1914—which of these will prevail is going to shape the history of this century.

PARAG KHANNA: I'll just make a quick comment on Devin's point about this tension between status quo and democracy. I think the net-net on that is going to be a world which you might describe as "to each his own." You will see more and more of what Charles Kupchan of Georgetown calls the autonomy rule—engaging with other countries in such a way that one can't push too far beyond the extent to which one is really respecting their own autonomy and self-directed evolution. I think we'll see more of that.

I think that's a good thing because it allows nations to become more confident, not feel at risk of American intervention or manipulation, and develop their own confident set of values and priorities and interests. I don't believe that countries will engage, whether on the values level, as Stephen is recommending, or on the interest level, as Craig is recommending, unless they first have that confidence in their own autonomy.

But then, at that point, you can start to experiment with these kinds of G-20-plus-or-minus kinds of mechanisms and get coalitions of the willing, in the good sense of the term, not necessarily the Rumsfeldian sense of the term, around the table as and when necessary.

So I am hopeful, cautiously, but not because we are forcing international cooperation, but we are allowing it to more organically sort of germinate.

Questions and Answers

QUESTION: I had understood that this meeting was on climate change. Am I mistaken in that understanding? I was the author 40 years ago, as a member of Congress, of the Environmental Education Act, the purpose of which, you will tell from its name, was to give federal support to schools and colleges and universities to teach about the environment. I do not know to what extent environmental education is provided in the United States today, because I have been occupied with other matters.

But I was given to understand that the subject of this meeting was climate change. Have any of you any comments to make about the state, in the United States or elsewhere in the world, of education about the environment?

I yield back the balance of my time.

DAVID SPEEDIE: In true parliamentarian diplomacy. Steve?

STEPHEN YOUNG: Mr. Congressman, just two quick personal anecdotes. One is, my observation, raising children and seeing grandchildren being raised since 1972, that there was far more systematic discussion of the environment, of sustainability, projects—little third-graders doing things about turtles or trees—than I ever had. So I would say that something changed.

Secondly, and in support, I think, of a blend, Craig, of both interests and values, in the last two years, I have just felt, everywhere around the world, that something has happened and there has been a shift around the words "sustainability" and "green." I'm not aware of any particular trigger. With all due respect to former Vice President Gore, I don't think it was his movie. Maybe it was that people had hotter summers or something. The acid test, it seems to me, is in corporations. Around the world, where "sustainability" and "green" were received with the same enthusiasm as ethics and CSR and other stuff, now you can get everybody standing up and waving flags among businesspeople, if you talk about sustainability and what we are doing in reducing our carbon footprint.

As I say, I can't tell you why, but the consciousness about these issues is a lot higher all around the world than it has ever been.

DAVID SPEEDIE: Anyone else? Craig?

CRAIG CHARNEY: John, I think you succeeded beyond your wildest dreams in that sense. I remember the first Earth Day in 1970, going with high school friends to meetings, then seeing Earth Day in 1990, when Broadway was packed with people who were attending. Part of that reflects the sort of environmental education program Stephen was talking about.

I think another important factor is the communications revolution that I was speaking about as well. Particularly for adults, for people who are out of school, media discussions of issues like global warming have been one of the key consciousness-raising factors. The fact that so many people are plugged into media across national lines and the fact that media read each other across national lines I think have also been key factors in developing this awareness.

QUESTION: Parag, I just wanted to ask a couple of questions relating to your thesis regarding the crisis of global governance and how that relates back to the climate change debate. I had the misfortune to participate as a negotiator in Copenhagen and in the lead-up meetings. I would argue that rather than a crisis of governance, really what we had was a crisis of confidence or a lack of trust between the big players around the table, a lack of trust in the developed world that it would make good on its historical responsibility for the problem, a huge part of that being the failure in Washington to enact climate legislation that would allow the United States to come on board with a binding target, and also a crisis of confidence the other way, in that the big developing countries would take up their responsibility and put forward some mitigation actions that would help get the world on a sustainable pathway.

It's clear to all that Copenhagen ended up being an economic debate, an economic negotiation, about share of development in atmospheric space. We didn't really see the regional groupings that you were talking about, but rather groupings based on confluence of interests—for instance, the major developing emitters, the BASIC countries, the Coalition for Rainforest Nations.

The specific question that I have is, will the regional approaches or the informal networks that you talk about deliver the renewal of global and mutual confidence that we need to address climate change? Will we not end up with a cycle of regional emissions, reduction goals, and border tax adjustments that will lead to a very inefficient way to tackle climate change? And if it's not the United Nations, then what other forum could you envisage that would allow a voice for those countries that are most impacted by climate change, such as the island states that I was negotiating with, to have their concerns addressed?

PARAG KHANNA: I'm sure others will probably want to speak on climate change as well, but I'm glad the question was raised, because I was going to offer a slightly different interpretation from what Craig said earlier.

First, on the crisis of confidence and trust, I most certainly agree with that. I think there are two things going on in the dynamics of summit diplomacy that we need to be aware of. Both are very cynical points.
The first is that each country can see what is happening at home in the other countries. The Chinese diplomats don't need to go to Copenhagen to know, just from what their embassy tells them in Washington, that the United States is not really serious about this and that legislation is not going to be nearly as robust as what this global confidence standard would require.

The second is the need to save face in the media and so forth. The insider accounts of what happened there, not only amongst the lobbying pressures and momentum and the movement of smaller, more victimized states, but the account of what was really happening in that small private session where Obama, as Craig said, sort of knocked heads together, are really quite different from that. It was about, how can China and India and others get away with the absolute bare minimum? And when this summit fails, how can the failure be hung around Obama's neck and others, and not theirs?

Those two dynamics—again, as I gave you the caveat, very cynical—that's exactly what is going on in the nations' capitals around the world, without a doubt. You have seen it firsthand because you were there.

So how do you get from there to a more positive dynamic?

First of all, the lofty goal of re creating—again, to the extent there ever was one—an atmosphere of global confidence and trust is something that you don't aspire towards. It can happen if certain other things are done. I think we should be focusing on those other things, some of which include regional trends. If you look within the European Union, they have seen that cap-and-trade hasn't been as successful as they thought. They have seen emissions going up as the economic crisis has hit hard. But they have responded by saying, "We're going to redouble investment into clean energy or invest massively more in it. We're going to strengthen carbon tax regimes, and so forth." So you have within at least one regional theater efforts to maintain and to set global standards, irrespective of what's happening at the international level.

Then you are going to have your ad hoc mechanisms. What Sarkozy is likely to do, in fact, next year, as France chairs the G-8 and the G-20, is to push a clean-energy free-trade area, which is a form of soft protectionism, basically saying that countries that subsidize fossil fuel will simply not be allowed to trade in this market. This is somewhat cynical, but it represents the factual development of more and more cross-border sorts of schemes that are trying one way or the other to reduce emissions, but in a way that at least is still aligned with national self-interest.

Yes, there are, of course, many coalitions out of the regional sphere. That's why at least one can still argue that climate is this one truly global issue. For example, Nik used the term "global security" earlier. I simply deny the existence of any such thing, other than in the nuclear sphere. There's no such thing. If we really thought there was global security, then we would invest so much more effort into reconstituting this Global Security Council. The truth is that China and others want to be the policemen of their own neighborhood, and they are perfectly comfortable with being regional hegemons, and global security be damned, whatever architecture it has or doesn't have.

You can't say that about the climate. So there is still some hope that if we experiment in lots of different ways—I didn't speak enough about the public-private partnerships that are out under way, but that's an arena where American clean tech companies, European wind and solar and other companies are actively moving into the emerging markets and helping them to reduce their carbon footprint in an affordable way, such that one day they can confidently show up at negotiations and say, "We have the technology and access to technology to reduce our emissions. Therefore, we can negotiate in much better faith and trust."

QUESTION: As the grandfather of a recent Berkeley graduate in green engineering, the problem is that the way engineering is being focused on in the job world, the green part is a secondary factor. Right straight across the board, how do you move the competency of engineering and meld it with the green, so you get things done?

I'll ask Stephen Young. By and large, the green part is not being valued in the job market.

STEPHEN YOUNG: May I expand the challenge to all professional schools, dropping in, just briefly, law schools and business schools? What I would argue is that in law schools these days the notion of being an officer of the court is long since gone. We have been a business for 30 years now. Show me the money.

MBA, financial crisis, ethics, et cetera—need I say more?

I think here we have very serious problems with disciplines and with incentive systems. The challenges are, to what do we look? Do we look, à la Adam Smith, to self-interest and market incentives and an invisible hand or do we look to some sort of more ideologically, intellectually, rationally based vision, ideal, that we are then going to try to implement?

I go agnostic. I can give you a case in our own work with Caux and things like that. Sometimes this seems to work better; sometimes that works better. Building on what Craig was saying, is it values or is it interests? The two have to come together and reinforce each other.

If you are going to go out and save the world and you studied about being green or you have taken all the business ethics courses and you can't get a job, this is a disincentive on a number of levels. So I think one of the great changes for markets and for capitalism is, where are the points of leverage and change, so that incentives begin to change?

Where my thinking is going—and it's sort of daunting and depressing, because it leads to a huge scale problem—is that you have to go to the ultimate customers, because they drive the system. If the buyers out there want green, the sellers will then produce green. In order to produce green, they are going to have to hire engineers and architects—this is a living issue for my son, too, who is an architect in San Francisco - then they will produce green. If the ultimate buyers don't give a rip whether it's green or not green, it's not going to flow back. Ultimately, if the business needs to deliver it, they will go back to the schools. As the former dean of a law school, I can tell you, we are very worried about where our graduates go, because if we can't place our graduates in high-paying jobs, we don't get them in the front end.

How, then, do you get the word out there? This is a sort of background to my notion that you get a movement going. If somebody will not buy a house because it doesn't have LEED certification—does everybody know what LEED certification is? It's state-of-the-art, which is probably not that great—but it's better than others—in terms of energy efficiency and things like that. It costs more money. You are starting to see companies—also NGOs are sort of doing this—pay more money to get a LEEDS-certified building and then they tout this. Macalester College in St. Paul just did a big, fancy new building for Global Citizenship. It's big-league. It's all over the place. They are pretty much convinced that that is going to get them more students, the kind of students they want.

If companies will do LEED certification and then that will give them better customers or something like that or it's easier to hire the kind of knowledge workers that they want, I think that's the way to go. It combines values and interests. But how do you get out to all those potential purchasers?

QUESTION: In 1963, President John F. Kennedy said that the United States has only 5 percent of the world's population and we cannot automatically expect an American solution for the world. I'm wondering if in 2010, and the U.S. with 5 percent of the world's population, would the world be better off if the United States had a lower profile? Why, when President Obama says we are broke, are we spending a lot of money in Iraq, in Afghanistan, concerned about Pakistan, concerned about Iran? Vice President Biden is in the Middle East. Wouldn't the world perhaps be better off if the other 95 percent of the world took responsibility for the future, rather than this over-reliance on the United States?

DAVID SPEEDIE: Well, there's a small question.

Parag, why don't you start?

PARAG KHANNA: I think it's important—and I think this was one of the great strengths of Stephen's comments at the beginning of this discussion—to point out that it should be less about where the ideas came from than what the idea is. I think you did a very good job of pointing out that, hey, you're just an American there, but these principles are embedded deeply on Confucianism.

What are you trying to push here, an American solution to climate change or the technical, scientific, mechanical, engineering solutions that are necessary? I think the latter is more important than the former—however those get spread, the better. But I think Stephen is right that a light footprint approach—and I think this might be what you're implying as well—is better than one that has a certain national taint to it. Functional problems don't need national solutions as such. So I think you both have the right gist there.

I would distinguish those from some of the political questions that you are talking about. There are places in the world where, if the United States were not playing a certain role, behind the scenes or overtly, as a geopolitical balancer, things would look even worse than they do right now. There are parts of the Middle East that are like that, parts of the Far East that are like that. Even as someone who has written a book attacking some of the perverse effects of American military power around the world, I would have to say that we shouldn't overlook that. It would be factually incorrect.

That doesn't mean that you're not right. I would still agree that we could be more judicious in where we are. But it's only to say that the fact that American leaders somehow always feel compelled to be out there in the world providing American resources or asserting themselves is not solely because that's an American way of being. There is a certain supply and demand, there is still a certain demand for American leadership in many parts of the world.

DAVID SPEEDIE: As I recall, two years ago, Flynt Leverett made the point of distinguishing between the relative decline in other spheres and America's continuing military preeminence, as one way of putting it. But there is this dichotomy that's clearly part of this discussion.

CRAIG CHARNEY: I would add something to that. There are two things to keep in mind. One is that we may be broke, but there is what Colin Powell called "the Pottery Barn theory of international relations." When it comes to Iraq, Afghanistan, and even Pakistan, it can be said that we broke it and we own it and we have to fix it. I think Parag is right that we'll be more judicious in our use of military power in the future. I also think he's correct in saying that there will be more regional and local solutions in the future.

Nonetheless, I think there remains a profound truth in what James Chace said in his notion of America as the indispensable nation for solving many problems. It reflects the combination of power, because, while we may not be hegemonic, we will still be the leading force for a good many decades to come. We are the only major power, for instance, that is going to gain population over the next few decades, until we reach the level of 400 million to 500 million by mid-century. We are also the only one which has a self-concept, a set of values, and a set of institutions which have enjoyed a kind of global popularity and continue to enjoy global prestige. I think we remain the only actor that will have the kind of convening power—and, occasionally, coercive power—that is necessary to lead when it comes to many of the key issues that face the international community.

I think what happened in the room in Copenhagen is an interesting example. It may well have been that the Chinese and the Indians were trying to avoid losing face. The fact is, though, that it was an American president who was able to get them into the room and get something out of them. I think that's likely to be the case for a long time to come.

STEPHEN YOUNG: A very quick comment, if I may, because I think there's a values perspective to what you say, too. What bothers me is the shrinking of our intellectual capacities about how you do things. One, the concepts of partnership, being a fiduciary, being a steward are no longer so current. They are no longer taught in law school. They never come up in business school. The whole concept of being a partner, being a fiduciary, being a steward is working with others who are different from you, but whom you respect, and you need to work together.

I sense less and less in our rhetoric across the board, whether you're a Democrat or a Republican or something, a notion that an American way in the world is a way of being a steward, a fiduciary, a partner, the office of a friend—an old, 18th-century expression we have lost. We think in terms of zero sum and power, and we are ethically shrunk. I think you're on to something there.

DAVID SPEEDIE: Nik, did you want to add something?

NIKOLAS GVOSDEV: Just briefly. It's interesting. As Devin reminded me, that question came up at the first of these panels back in 2007, and the issue about whether or not a pullback, having the United States be a bit less involved, would also be a way to focus on issues at home and to spread some of the burden-sharing around.

I think this touches on another question, too, which is, if you look at the last successful major international coalition that the United States put together to tackle an issue, if we can conceive of the First Gulf War as that coalition-building exercise, it doesn't mean that America provides a solution, but it was a situation where America, in order to get a certain outcome, was willing to walk away or backtrack on some of the things it might have preferred to have happened, but didn't see as essential to happen. That's how you could put together a coalition. And you saw the result, which is George Bush and James Baker and others were attacked for that—"you should have done this. You should have stood up for going all the way to Baghdad and doing this and that"—even though the coalition that they put together paid for the war, was not a burden on the United States. Actually Flynt Leverett referenced it as the last time that the United States actually made a profit, if we can be so crass to mention that. It paved the way for the Madrid Peace Conference to begin hopefully moving the Middle East forward. They could say that was a stillborn process.

But it was one where the United States went in and there was a give-and-take relationship. There was a deal-making approach, and it was about making sure that others were invested in the solution.
You contrast that with the coalition in 2003 going into Iraq. You contrast that with current efforts to put together a sanctions regime on Iran. You just don't see that same kind of international buy-in. It's either other countries refusing to help, giving minimal compliance, or otherwise just simply not being that cooperative.

I think Kennedy had it right. It's not going to be an American solution, but American leadership may be critical to getting a solution through. But you also have to have leadership in the United States that is willing to make compromises and is willing to defend those compromises and is not going to fold at the first sign of congressional protest or bad reaction in the media, that can make an argument for why you do that.

Going back to the climate change thing and interconnectedness, people now know that what happens in Washington is not a secret. People knew that the president, going in, had no clout on the climate issue because he couldn't get something through Congress. You could see how Congress was going to stymie it. That undermines the leadership that the United States can provide. A willingness to say that these are things that have to happen and these are compromises that have to occur, that's really going to be a challenge that we're going to face in the future.

Well put.

We have time for one last question.

QUESTION: My question relates to existing global institutions and the diffusion or decentralization of diplomacy that has been discussed. In a conversation I had a couple of weeks ago with the lead negotiator for the G-77 in China, in Copenhagen, he basically said that the outcome was exclusively defined by the division within the G-2.

My question is, is the global legitimacy of global governing arrangements significant, an important issue for those doing the deciding? This is an issue that has arisen in the United Nations. It has arisen with non-BRIC members, new members of the G-20. It arises with Greece and its debt crisis. It has to do with how to ensure legitimacy. Is there the possibility for creating a constituency system? If so, how would it work? What is the role of the United Nations? What is the role of the IMF in propositions such as Mervyn King's, the head of the Central Bank in the U.K., to merge the G-20 with the IMF?

I would like your reflections on any of these questions.

STEPHEN YOUNG: I'm tempted to say, being cheeky in responding to that, and given what Parag is saying where I'm coming from, who cares? Let's have 6 billion flowers bloom. Somehow some process of decentralization, of engagement of leadership across the board, based obviously on some sense of core values which most of us would accept as constructive and leading to well-being of the planet and people—let's do that. Let's not play Inside Baseball with G-2, G-20, G-8, this group, that group, because that, under current circumstances and power dynamics and interests, ain't getting us anywhere.

PARAG KHANNA: When you spoke of global legitimacy and then immediately switched to a discussion you had with someone from the G-77—we should never conflate the notion that something is legitimate with whether or not the G-77 or some other group has signed off on it. Clearly the G-20 came into existence, and there are many G-77 members that are very concerned about the fact that they are not vested in or included in those discussions. Yet it goes forward, and the G-20 is as close as anything we have today to a universally recognized forum that people perceive as being legitimate. So I think we have to pull these terms apart.

The G-77 also is this incredibly antiquated, legacy sort of group. India, which is a traditional leader of the G-77, is much more interested in climbing into the higher echelons—and more closed-door, narrow tables—than in leading this so-called G-77.

So I would say that the legitimacy of the G 77 is more in doubt than anything else.

I think, clearly, what the G-20 proves is that you can move ahead through ad hoc mechanisms and focus on efficiency and delivery, and that that has a legitimacy and a currency unto itself that the notion of just going through existing institutions does not have.

I think one of the supreme ironies of global governance today is that you enhance your legitimacy by circumventing the existing architecture because the existing architecture is so incredibly slow and inefficient. And the impatience that animates so much action today really speaks to that. People say if you want to get something done, go around the United Nations, go around the Security Council, but then you'll be legitimate because you got something done. One of the first examples of that was the Kosovo War. That was in the security sphere. Now we apply that same principle to everything, whether it's climate or poverty. To go out and do something, as Steve would say, earns you legitimacy much more than being diplomatic for the sake of it.

The point I would make, briefly, is that the growth of connectedness and a sense of collective responsibility also establishes new possibilities for legitimate action. Globalization has helped to create these. I'll cite the example of clients of ours, the World Wildlife Fund. We work with them to help publicize stakeholder dialogues about aquaculture. These involve negotiating a set of standards between producing nations in Northern Europe, South America, and Southeast Asia and companies that purchase seafood and their own buyers, and the NGOs concerned with them, in Northern Europe and the United States, so that the salmon, when it is sold in a store here, will have a stamp indicating that it was raised in conformity with certain environmental standards.

It's not even a public-private partnership; it's a private-private partnership, and one that is essentially market-driven by the increasing environmental consciousness of consumers in the developed world.

This sort of thing is unimaginable before an era with the degrees of connectedness and collective consciousness that we are speaking about. I doubt the problem of nuclear weapons will be solved in this way. But there is a myriad of issues which may well develop solutions that don't even pass through governmental channels. The key factor that makes them legitimate is simply that the key stakeholders find ways to talk to each other and find ways to achieve a solution they think is legitimate.

So in that sense, if you think this issue of global governance is all a bit fishy, I would say that might be an optimistic thought.

NIKOLAS GVOSDEV: Just to close on this idea of the personal ties and stakeholders talking to each other, what will be, I think, important to monitor and keep an eye on in the coming years is which stakeholders are talking to whom, in what fora, and what kinds of relationships they have. Right after we had the last of these sessions, there was one of these BRIC summits. A photograph that I have seen reproduced a lot, and in a lot of Brazilian, Indian, Chinese, and Russian media, was of Hu Jintao, Dmitry Medvedev, President Lula, and Prime Minister Manmohan Singh coming together. It sent an image of, well, this is the globe, and it had that kind of—I don't want to say "Rainbow Coalition" look to it, but it did have a kind of look that said this represents the world or this is more universal, in a way, than when you look at photos of the G-7 summits or things like that.

Then the question will be, which presidents and prime ministers are meeting with each other? Which companies? Which partnerships are developing? Are they more likely to be between us in the United States and the rising world or are they between each other, which was Weber's original thesis? What about bureaucracies and stakeholders within each country? Where do they see the future value?

I find it interesting to monitor, say, the Russo-Indian relationship. It's not simply that Prime Ministers Putin and Singh have a good relationship, but that their bureaucracies get along with each other, in contrast to Putin and Bush, when both were presidents. They could have great summit meetings, but then their bureaucracies stymied everything that they tried to do.

So the question is, where is that interconnectedness? Where are those things developing? David raised the Shanghai grouping. People say the Shanghai grouping isn't really serious. Well, it's serious when Indian, Chinese, Russian military forces decide to do a joint peacekeeping operation and they get to know each other and they get to experience each other's presence. Do they have these or don't have these options with the United States?

Then, of course, there is how long this lasts. Can you take personal ties between leaders, between business leaders, between leaders in movements, and do they end up enduring over time?

Just to conclude on that, I think, Devin, we'll have to do another one of these panels, and we'll just have to keep addressing the issue.

DAVID SPEEDIE: In the beginning, I expressed trepidation in covering the agenda implied in this title, but we have indeed. The security, economic, governance, and—yes, John—environmental issues have come up. For that, we owe a big thanks to you, the audience, for your great questions, but especially to the panel. I would say, to echo Nik, in the week of the Oscars, in good Hollywood fashion, we will have "Rise of the Rest IV" at some point.

So thank you to this remarkable group.

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Rise of the Rest

The Council's "Rise of the Rest" project focuses not on decline of existing powers but on the emergence of others. The U.S. should accept ...

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