Wednesday, February 17, 2016

Power should be shared globally

Before I answer the question raised in my previous posts whether Varoufakis and Dijsselbloem are demagogues in their defence of the euro (just like Triffin called his friends who defended the US dollar dominated international monetary system, demagogues), I would like to put the European debate on the euro in a broader international and historical context.

Six years ago, on 26 January 2010, in an exchange of e-mails between Fondad Network members, I wrote about that wider context in a letter to Andrew Sheng, Wing Thye Woo, Zdenek Drábek, Charles Wyplosz, John Williamson and Dani Rodrik.

I said the following:

Some Western European powers (including the Netherlands to a minor extent) and in particular the UK dominated the world during a couple of centuries. After WW2 the US was able to dominate the world during a couple of decades, partly thanks to NATO and maintaining the dollar as the key currency. This domination is likely to end, prompting the US to seek alliances with emerging world powers like BRIC. 

During many centuries the Chinese and Arabs (and others) were much more important in the world economy (and culture) than the Europeans, while the US was still territory of the Indians (coming from Asia) in those days instead of European immigrants. I can imagine that "the" Chinese see European and US domination as a short interval in world history and are certain (if it were only because of their number of people) that they will become more and more important (together with Indians-India and other developing nations).

Will that be the end of Western Democracy as Dani fears? I don't know, I have the feeling western democracies are themselves undermining their democracies, inter alia by using voters for legitimizing the rule of small and powerful interest groups. How many people in "the West" still have confidence in their rulers? And if they have it, what does it mean in terms of the functioning of their democratic systems?

It is useful to speculate about the future of Western Democracy in its different features and "led" by its different politicians (e.g. Berlusconi, Blair, Bush, Balkenende), but rather than looking at the possible negative influence of China's rise as a world power, I prefer to look at what NATO countries do themselves to their democracies -- I feel they are not taking seriously the precious aspects of democracy thus allowing the rise of dangerous demagogues who remind me of Hitler and Mussolini (different characters), but I hope the demagogues will not be able to rise to the same "fame" as these two men (H&M) who both emerged in western democracies.

Maybe cooperation with China and other emerging economies will help prevent that from happening. But, first of all, citizens in western democracies should make an effort to improve the functioning of their democracies and stop seeing their interests as determined by the power of their nations in the world. Power should be shared globally and not enforced from one of the world's power centres -- be it the US, China, Japan or Europe.

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