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Global Governance: A Recipe for Global Protectionism

By Deepak Lal

This speech was given by Deepak Lal, professor of economics at UCLA, in Seattle, Washington,
Nov. 29, 1999 at a conference on "Ensuring Open Trade for Global Prosperity."

INTRODUCTION

Numerous non-governmental organizations (NGO's) are currently in the forefront of various issues which impinge directly or indirectly on the international economy. Their locus standi they maintain is as representatives of a global civil society which seeks representation in the various transnational organizations such as the United Nations, the World Bank, IMF and the World Trade Organization, which they see as running the world. But whatever the merits of this claim -- which I will eventually examine critically -- at the outset it needs to be noted that, given their stand on various issues, they pose a serious threat to the prosperity of the peoples of the Third World. Thus the environmental NGO's are in the vanguard in attempting to stop growth (and the poverty alleviation it entails) in the Third World by seeking to limit their carbon emissions; the consumer NGO's -- not I hasten to add this one -- are seeking to prevent imports of goods from developing countries produced by means which do not meet their moral standards, in the name of ethical trading; the human rights NGO's are attempting to legislate a new extra-territorial principle based on western moral values categorized as 'human rights; the health NGO's have taken on a crusade against GM foods,which promise the same hope for the hungry of the world that the Green Revolution (which too was based on the genetic modification of plants) delivered in the last three decades.

And always joined with these well-meaning, though -- as you will hear repeatedly at this conference -- misguided, groups are the protectionist labor unions which have hobbled numerous economies where they have been allowed to exercise their power. In examining how all this has come to pass, and what it means for global peace and prosperity in the next millennium -- the subject of this lecture -- I want to begin with a cautionary tale from 19th century India.

With the establishment of the Raj and its policy of free trade, imports of cheap Lancashire textiles destroyed the Indian export trade in cotton textiles, and undoubtedly led to a reduction in employment in the domestic handloom industry, though not -- as many nationalists and Marxists maintained -- its total destruction. But, by 1850 a modern cotton textile industry was established based on Indian entrepreneurship and capital, and as it began exporting, in a few decades it had turned the tables on Lancashire. This led to repeated representations by the cotton-textile interests of Manchester to the Secretary of State for India "to apply British factory legislation en bloc to India so as to neutralize the 'unfair' advantages which the Indian mill industry was enjoying because of its large scale employment of child labor and long hours of work". They were supported in this by various well-meaning pressure groups. This led to the institution of the first of the Factory Acts of 1881, which had disastrous effects on the fortunes of the India textile industry and labor. By raising the effective price of labor they led to lower employment levels than would otherwise have been possible, and by hobbling the industry, made it inevitable that it too would ask in turn for protection from Japanese imports, which was granted and which subsequently led to growing inefficiency in this pioneering industry in the Third World. So much so that, for the last 50 years it has been one of India's sickest industries. Till today, these 19th century labor laws continue to harm both Indian industrial employment levels and efficiency. They have rightly been described by one historian as the result of agitation by "ignorant English philanthropists and grasping English manufacturers". But that is precisely the alliance we can see on the streets of this city. How has this come to pass?

The rational arguments against most of their prescriptions have no resonance with these groups, even when they claim they are concerned with alleviating poverty. Some sense can be made of their views if it is realized that they are the latest manifestation of the various secular religions in the West once the Christian God died for so many after the Scientific and Darwinian revolutions.

I. COSMOLOGICAL BELIEFS

In a recent book (Unintended Consequences) looking at the economic and cultural history of Eurasian civilizations over the millennia, I argued for an important distinction between the material and cosmological beliefs of different civilizations. In this context it is important to note that most of these NGO's (even when they have international collaborators) are Western in their origins, and that Western cosmological beliefs -- to the extent they are coherent and commonly shared -- are still deeply rooted in Christianity, particularly its theological formalization in St. Augustine's "City of God". There are a number of distinctive features about Christianity, which it shares with its Semitic cousin Islam, but not entirely with its parent Judaism, and which are not to be found in any of the other great Eurasian civilizational religions, past or present. The most important is its universality. Neither the Jews nor the Hindus or the Sinic civilizations had religions claiming to be universal. You could not choose to be a Hindu, Chinese or Jew, you were born as one . This also meant that unlike Christianity and Islam these religions did not proselytize. Third, only the Semitic religions being monotheistic have also been egalitarian. The others have believed in Homo Hierarchicus An ethic which claims to be universal and egalitarian and proselytizes for converts is a continuing Christian legacy even in secular Western minds, and is the basis for the moral crusades of these Western NGO's.

It would take us too far afield to substantiate this argument in any detail but since Augustine's "City of God", the West has been haunted by its cosmology. As I have argued elsewhere from the Enlightenment to Marxism to Freudianism to Eco-fundamentalism Augustine's vision of the Heavenly City has had a tenacious hold on the Western mind. The same narrative with a Garden of Eden, a Fall leading to original Sin and a Day of Judgment for the Elect and Hell for the Damned keeps recurring. Thus the philosophes displaced the Garden of Eden by classical Greece and Rome, and God became an abstract cause --the Divine Watchmaker. The Christian centuries were the Fall, and the Christian revelations a fraud as God expressed his purpose through his laws recorded in the Great Book of Nature. The Enlightened were the elect and the Christian paradise was replaced by Posterity (See Becker). By this updating of the Christian narrative the 18th century philosophers of the Enlightenment thought they had been able to salvage a basis for morality and social order in the world of the Divine Watchmaker. But once as a result of Darwin he was seen to be blind, as Neitzsche proclaimed from the housetops at the end of the 19th century, God was Dead, and the moral foundations of the West were thereafter in ruins.

The subsequent attempts to found a morality based on reason are open to Nietzsche's fatal objection in his aphorism about utilitarianism: "moral sensibilities are nowadays at such cross purposes that to one man a morality is proved by its utility, while to another its utility refutes it". Nietzsche's greatness lies in clearly seeing the moral abyss that the death of its God had created for the West. Kant's attempt to ground a rational morality on his principle of universalisability -- harking back to the Biblical injunction "therefore all things whatsoever ye do would that men should do to you, do even so to them" -- founders on Hegel's two objections: it is merely a principle of logical consistency without any specific moral content, and worse it is as a result powerless to prevent any immoral conduct that takes our fancy. The subsequent ink spilt by moral philosophers has merely clothed their particular prejudices in rational form.

The death of the Christian God did not however end variations on the theme of Augustine's "City". It was to go through two further mutations in the form of Marxism and Freudianism, and the most recent and bizarre mutation in the form of Ecofundamentalism. As both Marxism (in its post-modern form) and Eco-fundamentalism provide the ballast for ecological imperialism it is worth noting their secular transformations of Augustine's Heavenly City.

Marxism like the old faith looks to the past and the future. There is a Garden of Eden -- before "property" relations corrupted "natural man". Then the Fall as "commodification" leads to class societies and a continuing but impersonal conflict of material forces, which leads in turn to the Day of Judgment with the Revolution and the millennial Paradise of Communism. This movement towards earthly salvation being mediated, not as the Enlightenment sages had claimed through enlightenment and the preaching of good will, but by the inexorable forces of historical materialism. Another secular "city of God" has been created.

Ecofundamentalism is the latest of these secular mutations of Augustine's "City of God" . It carries the Christian notion of contemptus mundi to its logical conclusion. Humankind is evil and only by living in harmony with a deified Nature can it be saved.

The environmental movement (at least in its "deep" version) is now a secular religion in many parts of the West. The historian of the ecological movement Anna Bramwell notes that in the past Western Man was

The spiritual and moral void created by the Death of God is, thus, increasingly being filled in the secular Western world by the worship of Nature. In a final irony, those haunted natural spirits which the medieval Church sought to exorcise so that the West could conquer its forests, are now being glorified and being placed above Man. The surrealist and anti-human nature of this contrast between eco-morality and what mankind has sought through its religions in the past is perfectly captured by Douglas and Wildavsky who write: "the sacred places of the world are crowded with pilgrims and worshippers. Mecca is crowded, Jerusalem is crowded. In most religions, people occupy the foreground of the thinking. The Sierra Nevada are vacant places, loved explicitly because they are vacant. So the environment has come to take first place"(p.125). The guilt evinced against sinning against God has been replaced by that of sinning against Nature. Saving Spaceship Earth has replaced the saving of souls!

But why should the rest of the world subscribe to this continuing Augustinian narrative cloaked in different secular guises?

II. TOWARDS WORLD DISORDER

There are ominous parallels between the last decades of the 19th and the present century. In both periods it seemed that a world increasingly closely knit through foreign trade and capital flows would bring universal peace and prosperity. This dream came to an end on the fields of Flanders. The First World War (which has been aptly described as a wholly unnecessary war) put an end to the first Liberal International economic order (LIEO) created under British leadership. It took nearly a century to resurrect a new LIEO under the US. One of the causes of the First War was the imperial competition for colonies. This imperialism was fuelled by the territorial imperative as well as the "white man's burden" -- to save the heathen souls. In 19th century India, as Stokes demonstrated, there was an unholy alliance of Evangelicals -- with their belief in the Gospels, and Utilitarians and Radicals -- with their faith in reason, who believed in the superiority of Western ways -- religious and secular. Their attempts to transform Indian "habits of the heart" led to the nationalist backlash of the 1857 Mutiny. Today we see a similar alliance between some scientists and the eco-fundamentalists with a similar imperialist form though differing content. But history never repeats itself. Whereas the 19th century battles for "hearts and minds" were fought within and between 'nation-states' the arena for today's imperialist project are various transnational organizations. It is instructive to see how this has happened and its likely consequences.

Stephen Toulmin's brilliant reconstruction of the origins of the "modernity" project, provides the necessary clues. Toulmin argues that there were two strands in modernity. The skeptical humanism of the late Renaissance epitomized by Montaigne, Erasmus and Shakespeare, and the rationalism of the late 16th century epitomized by Descartes search for certainty, which underpinned the triumphs of the scientific revolution as well as the methods of mechanistic Newtonian physics as the exemplary form of rationality. Toulmins's most original insight is that the rationalist project was prompted by the Thirty Years War that followed the assassination of Henry IV of France in 1610. Henry's attempt to create a religiously tolerant secular state with equal rights for Catholics and Protestants mirrored the skeptical humanism of Montaigne. Henry's assassination was taken as a sign of the failure of this tolerant Renaissance skepticism. With the carnage that followed the religious wars in support of different dogmas, Descartes set himself the project of overcoming Montaigne's skepticism -- which seemed to have led to such disastrous consequences -- by defining a decontextualized certainty.

This rationalist project, which created the scientific revolution, found resonance argues Toulmin in the coterminous development of the system of sovereign nation states following the peace of Westphalia. The ascendancy of these two "systems" continued in tandem till the First World War. But chinks were appearing in the armor of the rationalist Cartesian project with its separation of human from physical nature with the developments in the late 19th century associated with Darwin and Freud. Despite the replacement of Newtonian physics by the less "mechanistic" physics of Einstein and his successors, the political disorder of the 1930s led as in the 1630s to a search for certainty and the logical positivist movement was born.

The final dismantling of the scaffolding of the rationalist project begun with the peace of Westphalia, according to Toulmin, occurred in the 1960s -- with Kennedy's assassination being as emblematic as Henry IV's. With many hoping that Kennedy was about to launch a period ending the Age of Nations and beginning one of transnational cooperation through transnational institutions. Thus since the 1960's the world has been trying to reinvent the humanism of the Renaissance that was sidelined by the rationalist Cartesian project of the 16th century. As he writes:

He then goes on to argue that the post war generation was the first to respond: "because they had strong personal stakes in the then current political situation." The Vietnam war

There are various more complex reasons -- which we cannot go into on this occasion -- why the moral authority of the center in many Western states has been undermined. This has given rise to sources of moral authority outside the hierarchical structure of the nation state, which echoes a return to pre-modern Western medieval forms. As Toulmin notes:

With the undermining of the moral authority of Western nation states, this moral authority is increasingly being taken over by NGO's like Amnesty International, and in many cases the environmental NGO's. This unravelling of the Westphalian system and a partial reversion to the world of the Middle Ages, poses in my view the real threat of an ethical imperialism, modelled less on the model of the 19th century scramble for Africa, than the Crusades.

For whilst the West may be turning its back on modernity and its associated untrammelled sovereignty of nation states, the Rest have no intention of giving up the latter and are eagerly seeking to adopt the technological fruits of the former, without giving up their souls. Hence even religious fundamentalists in the Rest recognize the need for economic progress, if for no other reason than to acquire the ability to produce or purchase those arms which they feel are essential to prevent any repetition of the humiliation they have suffered at the hands of superior Western might in the past. As the Indian defense minister is reported to have said when asked about the lesson he learned from the Gulf War: "Don't fight the United States unless you have nuclear weapons" (cited in Huntington, p. 46). Numerous developing countries for good or ill have, or are rushing to acquire this new countervailing power. The attempts by the eco moralists to curb their development of the industrial bases of this power, to save Spaceship Earth will be fiercely resisted.

This has ominous consequences for the various transnational organizations like the United Nations and the World Bank. As Huntington notes currently:

The World Trade Organisation being a treaty bound organisation where decision making is consesual is by contrast a genuinely democratic organisation where national sovereignty is respected. Moreover its dispute settlement system provides a means for the weakest to be protected against the blandishments or threats of the strong.

Given the global reach of these international organizations, it is not surprising therefore that these moralising NGO's should seek to influence their agenda. But as I have argued given, the globally divisive nature of their own agenda, how long will it be before the frictions it causes will destroy these institutions?

Equally serious is the danger of international disorder flowing from the essentially incompatabile "value systems" of the Western moral imperialists and the Rest. It is particularly ironic that just as some in the West are repudiating its rationalist past and in particular the technological artifacts it produces, the Rest is taking to at least the latter with gusto. Moreover, outside Islam the Rest is not faced with the crisis of values that the death of God engendered by rationalism has led to in the West, one of whose byproducts as I have tried to show is the rise of this new ethical imperialism. For along with Islam most of the West belongs to people of the Book. With the death of God partly resulting from the rationalist Cartesian project, the cement of their societies has been eroded, as the attempts to provide a secular morality based on Reason rather than the revelations of the Holy Book have failed for a variety of complex reasons. The only credible alternative left for many is the bizarre eco-morality which values Nature above Man.

This pathological response to the death of God is less likely in the non-Semitic civilizations e.g., the Sinic or Hindu. Their religions unlike the Semitic ones are not religions of the Book. They have no organized churches and their "religions" are more "ways of life". Their cultural processes of socialization are therefore unlikely to be undermined by the death of God, which is likely to accompany their increasing though reluctant modernization. They are unlikely to succumb to eco-fundamentalism when God is dead.

But this makes it more likely that as they increasingly acquire the sinews of power they will be forced to counter the eco-fundamentalists of the West. With the growing economic and military power of these non Western countries, they are likely to resist any attempt to discharge a green variant of the white man's burden, through direct or indirect imperialism. This in my view is where the most important long term fault line lies in the future of international relations. Unlike the picture presented for instance in Huntington's account of an antediluvian Rest set against a liberal "modern" West, this ironically casts the two in exactly the opposite roles. This in turn reflects the crisis of "values" in the West and its peculiar disjunction of what should have been the complementary aspects of the humanism of the Renaissance from the rationalism of the Scientific Revolution. Eco-fundamentalism and the other forms of ethical imperialisn are the inevitable mutant, which will continue to cause the world a good deal of grief for some time to come.