G-20: A Horse Designed by a Committee

By Hans Vogel

The news was brought to us with the usual hoopla: the affairs of the world would henceforth be managed by the world's twenty biggest economies. No wonder there were protesters out on the grimy, poorly paved streets of Pittsburgh, one of the many US towns ravaged by the recession and years of neglect and misgovernment. The fact the twenty nations appoint themselves to be a kind of world government, claiming primacy in economic decision making, can hardly be called democratic. With democracy supposedly still being the core value of most of the world's states, including most of the twenty leading economies, this decision is, to say the least, questionable.

Let us examine briefly some points that most news reports and analyses have so far been ignoring.

The selection of these twenty biggest economies is dubious to begin with. Some countries are represented twice, namely Germany, France, Italy, Britain, Spain, because they are also represented by the European Union, which constitutes the world's biggest economy. Why are the Netherlands (number 16), Belgium (number 18) and Poland (number 20) not official members of G-20? Because they are represented by the EU! However, with the European Union in G-20, there should be no place for the five big European states. Instead, in order to make G-20 at least a bit more representative, room ought to be made for the big economies that are not represented by the EU. Mind you, Argentina (number 30), Saudi Arabia (number 23) and South Africa (number 32), which have smaller economies than Poland, are already members of G-20. If these states are in, there is no reason at all to blackball countries like Switzerland (number 21), Norway (number 24), Taiwan (number 26), Iran (number 28) and Venezuela (number 31). But anyone can see that types like Obama and Brown would not want to hobnob with Ahmadinejad and Chávez.

The entire G-20 setup may soon prove to be an utter failure. Anyone who has ever attended meetings with twenty different people with different views and interests, can attest to the fact that such encounters are if not a nightmare, at least a tedious affair. It is almost impossible to work out a common conclusion that cuts some slack. Most conclusions to be reached will tend to be wordy, bland and weak, so typical of compromises that need to satisfy too many parties. Like the old story about the camel being a horse designed by a committee.

The G-20 has the same defects as the European Union: too many members. “Europe” will always be a weak construction for the simple reason there is no European state that by sheer demographic, economic or military weight can force its will upon the others. Historically, that is the only way political (and economic) unity can be attained.

Without Prussia's preponderance, Bismarck could not have achieved German unity in 1871, without Piedmont/Sardinia's weight, there would have been no unified Italy, without Ile-de-France no single Kingdom of France. There would be no Switzerland without the dominant canton of Berne and no UK without England. One could go on citing more examples ad infinitum, but the point should be clear.

Due to the massive looting of the US economy by ruthless Wall Street thieves and con-men, which began in earnest during the 1980s, the US economic dominance of the world has ended. During these past thirty years, the US has been successfully exporting its destructive economic ways. Thus, kleptocrats are now running most of the world's economies, wreaking havoc everywhere. Nowhere, however, are these kleptocrats so powerful as in the US.

The main result of these developments has been the relative weakening of the US. Today, it is no longer able to impose its will on most of the rest of the world. OK, in Europe, there are still many countries that meekly and cowardly accept US leadership. Even faithful Japan is now showing signs of taking its distance vis-a-vis the US. But with no nation present with either the weight or the prestige to enforce its will, the G-20 at this point looks more like a glorified debating club than a world government. By the way, what a comforting thought!

However, this is only a temporary situation. We are now witnessing an inexorable power shift towards the big Asian and Latin American economies: China, India, Brazil and Mexico. And do not forget Russia, the world's biggest country sitting astride the Eurasian landmass. These nations have become stronger as the US and the “West” became weaker. Sooner or later, it is these new powers that will be making the major decisions. The rest of the world will have to accede to their wishes. But that day has not arrived just yet.

The G-20 prospects for success do not seem bright. If it were an alliance against a clearly identifiable opponent, such as another state, or group of states of comparable strength, perhaps it might be successful. The opponent, however, is elusive. It is called “economic crisis.” The problem with economic crises is that one is wont to try to solve them with the help of experts, mainly economists. Now the problem with economists is that theirs is at best a “social science,” which is just a kind way of saying it is not a science at all. If it were, there would be no crisis, right? Trying to solve the current economic crisis with the help of armies of economists and bankers (!), is like trying to rebuild the Golden Gate Bridge with the help of a few clever boy scouts. So far the technical side of matters.

However, for the sake of argument, let us suppose the G-20 does manage to get off to a good start doing something about the crisis facing all of us. G-20 might pull it off, but one should always bear in mind that the bigger the group, the greater the chance of it breaking up. Surely, someone somewhere must have invented some formula predicting the speed and likelihood of the dissolution of groups, taking into account factors such as the number of participants (N), the importance of the issues it is dealing with (I), the time limits and deadlines it has to work under (TL) and the degree of mutual trust (TR). I bet you for the G-20 such a formula would predict big trouble down the road, very soon. The G-20 will not be able to survive the clashing interests of its most powerful members, such as the US, China, India, Russia, Brazil, Germany, France and Japan.

I have been looking for a historical precedent of a comparable group of states—none of which able to impose its will on the other group members—that was consistently successful in the mission it had defined for itself. The closest that comes to mind is the early 19th-century “Quadruple Alliance” (“G-4” in modern parlance) of European great powers (Russia, Prussia, Austria and Britain) that tried to prevent the ideas of the French Revolution from spreading and taking root among Europe's peoples. Founded in 1815, it became the “Quintuple Alliance” (“G-5”) in 1818 when France joined it at the conference held at Aachen (Aix-la-Chapelle).

At first it seemed this Alliance was succeeding admirably. Meeting annually, its members closely monitored the political arena in all European countries, alert at the very smallest indication of revolutionary fervor. But it is as futile an endeavor to try to prevent the spread of ideas, as it is to stop the spread of a serious economic crisis once it has manifested itself. This is what the Quintuple Alliance soon found out. When in 1821 a liberal revolution broke out in Italy, Austria sent a big army and succeeded in quelling it. Two years later, France received a mandate to carry out “regime change” in Spain and depose the liberal government. Afterward, the alliance became diluted when first its unofficial leader, Czar Alexander I of Russia, died in 1825 and when the revolutionary ideal went viral. The spirit of the alliance remained alive, however, as all European governments kept seeking to prevent revolutions. But they were unable to prevent the 1830 revolutions and the big one in 1848. Then as now, it is just impossible to prevent history from unfolding.

I wonder how many of today's leader fully realize they are up against something that is beyond control. At least, French president Sarkozy seemed to in his recent speech to the UN General Assembly.

I am afraid the G-20 may be giving off signs of hope to a world in despair, but nothing more. Perhaps one or two individual attendees may have some answers, or at least have an inkling of where to look for answers. But they will not be able to convince the others, nor will they be able to have their ideas accepted. All the other attendees, like most of us common mortals, are prisoners of their old beliefs.

There are going to be many unpleasant surprises still...

Hans Vogel

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Author`s name Dmitry Sudakov