Adrian M.
“When the balance of power shifts, how does one engineer a peaceful adjustment of international order?” This is the question historian Adam Tooze, author of Crashed, poses in an interesting post (replying to this by David Adler and Yanis Varoufakis).
This question is often framed as an appeal for “a new Bretton Woods,” aka 1944’s @UNMonetary and Financial Conference. Tooze doesn’t like this historical analogy and spends some time dismissing it.
Instead he points to the founding of the World Trade Organization in 1995 as representing the idealised historical moment for those wishing to remake the international order. But he doesn’t develop this, saying simply that it represented a moment of unipolar geo-political power by US, and the defeat of organized labour.
The shift? The rise of China. Today’s talk of new international orders “is articulated above all around the Sino-US relationship. No new global order can emerge without at least the tacit consent of both of them.”
But then Tooze throws his curveball (previously thrown here)! The very idea of international order is incompatible with various types of global capitalism.
Returning to the Bretton Woods settlement, which he portrays as a unique zenith of governmental power, he notes that its collapse demonstrates “the gradual decay of the wartime regime of national economic regulation and the reemergence of private finance as a force of creative destruction after 1945.”
And to further make his point, Tooze notes that the response to the 2008 financial crisis reveals that, far from needing an international order, “the survival of oligopolistic capitalism requires adhocracy.
This is dispiriting news for progressives: “If globalized capitalism...is the only game in town, the majority of the population...may have an existential interest...in energetic and unprincipled discretionary action by technocratic crisis-managers, intimately connected to the business oligarchy.” Or as he puts it elsewhere: “an unmediated relationship between national central banks, global regulators and an oligopolistic cluster of giant transnational banks.”
Tooze is unimpressed by the ‘progressive’ call for a new international order, put by Adler and Varoufakis, arguing that “the International Monetary Fund and the World Bank, along with the International Labour Organization, should be repurposed as instruments for a global progressive agenda.”
“[W]hat, one must surely ask, distinguishes it from the voluntarism of the Davos crowd and their calls for a global gathering to shape globalization 4.0?”
The fundamental question for any group calling for a new international order : “Who does it imagine will convene that meeting and who will set its terms?” Progressives, alas, “are unrealistic in their conception of where power lies in the global system.”
“Is there an unspoken hope that India’s democracy or China’s authoritarian leadership will sign up to the agenda of global institutional change?”
Tooze ends with a warning for those invoking Bretton Woods to appeal for a new international order: “It reflects a deeply rooted unitary and centralistic vision of sovereign power.”
What then should progressives do? In his Foreign Policy article, Tooze concludes that readers should either be prepared for a new order to emerge from a power grab, or get used to what he calls ‘adhocracy’:
If history is anything to go by, that new order will not emerge from an enlightened act of collective leadership ... What will resolve the current tension is a power grab by a new stakeholder determined to have its way. And the central question of the current moment is whether the West is ready for that. If not, we should get comfortable with the new disorder.
Tooze ends by offering a concession to progressives looking for something more than weary acceptance of an imperfect status quo. He advocates Systemüberwindung through a Marsch durch die Institutionen: “to gain influence over the lower levels and mechanisms of power where what passes for the regulation and governance of global capitalism actually takes place.”
The conclusion? No new international orders thank you. Global capitalism is too big for governments to govern, instead progressives should infiltrate and scrutinise “the world of macrofinance and macroprudential regulation ... where truly consequential regulations are shaped.”
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