Every society should be subject to the rule of law. This is not the same as rule by lawyers. In its worship of law, the United States is both an example and a warning.
The Bubble of American Supremacy
by George Soros
Weidenfeld & Nicolson, 224pp, £12.99
Having made a fortune as a financier and then given much of it away in philanthropy, George Soros has embarked on a new career as a guru. He urgently wants to put his mouth where his money is. He looks at our arrangements for managing the planet and finds them sadly wanting. “The combination of financial markets and national politics,” he writes, “has created a lopsided system designed primarily for the production and exchange of private goods. Collective needs and social justice receive short shrift because the development of international institutions . . . has not kept pace with the development of markets.”
Once upon a time, business depended on trust. You trusted your partner or supplier not to cheat you. Why? Because you knew each other. Deals were verbal understandings: a man’s word was his bond. It was care for his reputation that kept the businessman honest: if he was known to cheat, he was finished. It was allowed to cheat a stranger, but not one of your own. Much of the world’s business is still done on this basis: in the mosque, the souk, or the banya.
Russian business has emerged from its semi-criminal, post-Communist origins: already films like Oligarch and Brigada look like elegies for a vanished past. Robber barons, grown rich on stolen state assets, talk the language of corporate responsibility; their children study ethics at American business schools.
One World: The Ethics of Globalization
by Peter Singer
Yale University Press, 235 pp., $21.95
Free Trade Today
by Jagdish Bhagwati
Princeton University Press, 128 pp., $35.00; $14.95 (paper)
The Chastening: Inside the Crisis That Rocked the Global Financial System and Humbled the IMF
by Paul Blustein
Public Affairs, 435 pp., $18.00 (paper)
World on Fire: How Exporting Free Market Democracy Breeds Ethnic Hatred and Global Instability
by Amy Chua
Doubleday, 340 pp., $26.00
Globalization was the most dramatic idea to emerge from the collapse of communism and the end of the cold war. Suddenly, it seemed, there was “one world.” US State Department official Francis Fukuyama said it first: there was now no ideological obstacle to the spread of markets and democracy. Further, it seemed highly plausible to suppose that the fall of political barriers to trade and the movement of capital would unite the world into a single economic unit. On top of this came the revolution in communications: cell phones and the Internet would, at the very least, speed up the emergence of a global consciousness. At the earth summit in Rio de Janeiro in 1992, a grimmer aspect of globalization was unveiled: “global warming,” or the threat to the world’s climate from carbon emissions. Common to all these perceptions was the thought that the traditional divisions of humanity into tribes, races, nations, religions, and cultures were obstacles to the “global” thinking needed to bring about prosperity, peace, and justice to all, or indeed to avert planetary disaster.
Put together a government with too little money and a private sector with too much money and you have the making of Public/ Private Partnership. In Russia today, government revenue comes to 19.3% of official GDP, or $85bn. If the black economy (estimated at about 40 per cent) is added on, government revenue comes to only 14% of GDP – between a third and a quarter of public revenue as a percentage of GDP in the European Union. With this sum, the Russian government has to build and maintain almost the whole of Russia’s public infrastructure. No wonder it is crumbling away.
Every time the dollar slides in the international currency markets, people predict the death of the mighty dollar. No one, they say, will want to go on investing in a depreciating currency. The age of the dollar has come to an end. Its successor will be a multi-polar currency system, with the dollar, the euro, and possibly the yen as the three competitive poles of attraction. How likely is this?