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The Fantasy of American Government and Why People Cling to It

Governing the World: The History of an Idea
By Mark Mazower
(Penguin Press, 475 pp., $29.95)

WE HAVE PASSED, Mark Mazower writes, “from an era that had faith in the idea of international institutions to one that has lost it.” Mazower, a prolific professor of history at Columbia, has written a challenging and thought-provoking history of that arc of disillusion. We certainly have reason to be disillusioned. The European Union is floundering, the United Nations is marginal at best, global climate change negotiations are going nowhere, and protectionist pressures are bearing down on the international free trade agreements that have helped all economies to grow.

A dwindling band of liberal internationalists still keep the faith, but an unlikely convergence of left and right has emerged to leave them isolated. Conservatives believe that international institutions such as the United Nations are anti-American and anti-Israeli cabals. Progressives do not like the economic medicine that the International Monetary Fund (IMF) and World Bank force down the throats of developing countries. This alliance of opposites leaves the American constituency who still believes in international institutions weak and exposed.

The question that opponents of global organizations need to ask is whether a world that ignored or abolished them would manage global problems any better. The toughest problems we all face are transnational: tidal waves of capital and debt careening through national markets, a global recession that stubbornly resists strictly national solutions, climate change that is making extreme weather the new normal, and transnational agitation that can turn a miserable piece of anti-Muslim propaganda into a global maelstrom.

Not even the United States actually wants to confront these problems on its own. Even the world’s most powerful state has persuasive reasons, in Democratic and Republican administrations alike, to work with other states to cope with transnational problems. What is dire about the Republican mantra of American exceptionalism is its fanciful exaggeration of American power coupled with the delusion that “leading from behind” in collaborative cooperation with others is always a sign of weakness. And equally dire is the glib liberal confidence in the promise of global governance. It is a delusion popular at Davos, and in a fair number of graduate public policy schools, that the world needs ever more global governance by cosmopolitan experts.

In fact, nobody likes being bossed around by a foreigner whose only legitimacy is an advanced degree and a big job in the IMF. Latin American anger at IMF conditionality in the 1990s and popular fury at the EU’s “internal devaluation” in southern Europe today make clear that people don’t trust the medicine when they don’t trust the doctor. If the medicine appears to be killing the patient, people will stay in the streets until the doctor changes the prescription. Greeks put up with foreign doctors only because they have lost all faith in their own physicians. In this case, international governance flows into the power vacuum left behind by the disgrace of national political elites. Sooner or later, however, the peoples of southern Europe will want their economic sovereignty back. Better rule by your own fools than someone else’s.

Europe’s crisis lays bare just how quickly feckless public finance and reckless banking can destroy sovereignty. But it also shows that sovereigns must hang together or they will hang separately. The solution to the southern European crisis appears to be “more Europe”: more transnational regulation of banking, markets, and budgets. Without fiscal integration, the bond markets will pick off the weaker sovereigns before moving on to the stronger ones. And the message of the European crisis is not being lost on the United States. However deep the disagreement over facing up to the “fiscal cliff,” everyone agrees that no one wants to end up being Greece. Not even a superpower can hold onto its economic sovereignty if it fails to get its fiscal house in order, and no one needs a well-regulated international economic order more than the United States.

MAZOWER'S HISTORY gives welcome emphasis to these economic dimensions of the search for a sustainable international order, but he does not distinguish clearly enough between governance and government, between fantasies of technocratic rule beyond the sovereign state and practical schemes by accountable sovereigns to solve the problems they have in common. The first may be a delusion, but the second is desperately needed. Effective coordination by sovereign governments is essential for sustaining democratic sovereignty itself.

Right now, we are living with global institutions that are relics of the cold war and with sovereigns the leaders of which cannot think beyond the news cycle of their own domestic politics. We will get to a better place only with sovereign leadership. Leadership turns out to be critical. Imagining a just world, or at least one that is less chaotic, “isn’t hard to do,” as John Lennon put it. But getting there takes more than vision and more than protest from below, crucial as that can be. Justice doesn’t come into the world without the exercise of power, and that means state leadership from the top.

Mazower’s history of international global governance includes all our hopes and prayers for a better world, from Kant’s vision of perpetual peace through republican government to Marx’s vision of the workers of the world uniting and blowing up the global order of capitalist states. Mazower is a fine intellectual historian and he shows, for example, that Jeremy Bentham was the first person to coin the word “international” late in the eighteenth century as that new space beyond the nation-state first came into view. Mazower charts the history of all the efforts to bring order and justice to that new space.

Mazower’s history has an ironic lesson: utopian visions of a world order beyond the state only pass into reality when they are adopted by states. In the twentieth century, the leadership that turned utopia into institutions was American. First at Versailles in 1919 and then at San Francisco in 1945, American presidents, backed by the British, offered the world a vision that reconciled state sovereignty and imperial power with collective security. While millions of people believed in that vision because it seemed to point to a world beyond states and their empires, Mazower shows that international organizations such as the U.N. were created not to constrain powerful states but to allow them to internationalize the costs of their own hegemony:

If the British supported the League of Nations in 1918 as a means to ratify a new territorial dispensation in Europe and thus save their empire, the Americans for their part engaged to build up its successor in order to preserve the Great Power understandings reached during the Second World War and to provide a framework for diplomacy that would make world leadership acceptable to an American public always suspicious of lasting entanglements beyond the nation’s shores.

American conservatives who denounce the U.N. and its agencies fail to understand that “the blisteringly fast emergence of American global power after 1945,” as Mazower puts it, would have been unimaginable without the international institutions that allowed it to share burdens of global order.

MAZOWER’S history needs a theory of why sovereigns sign up to global multilateral organizations in the first place. Small states signed up in order to check the strong, while the strong created these organizations to mutualize the costs of their own hegemony. Hegemons shoulder burdens and they are easier to shoulder when shared with middling or emergent powers. This is the fundamental logic that led the United States to be such an enthusiastic champion of international organizations after World War II. For this grand design, they had the support of waning European powers.

What Mazower’s history does show is how this logic changed as power shifted. Imperial powers may have thought that the United Nations would safeguard their own hegemony, but the first twenty years of the U.N.’s history saw the collapse of their empires and the emergence of more than a hundred new member states. Many of these new states were either too small or too poor to be effective sovereigns, but international organizations gave them a platform to constrain the strong. Once ex-colonial states gained a majority in the General Assembly, the United States liked the United Nations less and less. The global body became a forum for denouncing America and attacking allies such as Israel. From the 1970s onward, the United States merely tolerated an institution that it had helped to found.

But when the cold war ended, liberal American faith in the United Nations revived. It seemed as if humanitarian intervention would become a global norm, mandating troop deployments where sovereigns massacred their own citizens. U.N. and other multilateral peace-keeping missions snuffed out conflict in Bosnia and Kosovo and contained East Timor, Darfur, Congo, and south Sudan, where the United States had no interest in sending in the Marines. Multilateralism spread the cost of keeping order from the hegemon to middling and rising powers.

AS KENNETH ANDERSON has pointed out in an acerbic essay called “Living with the U.N.,” the United States after 1945 offered the world two global public goods: the collective security guarantee managed through the U.N. Security Council, and its own security guarantee managed through alliances such as NATO and treaties with friends like Israel. Both global goods are now fraying at the edges as America struggles with relative decline and the U.N. battles irrelevance.

The United States has lost the appetite to intervene, and Russia and China will not ratify interventions even in the charnel house of Syria. Russia and China challenge American hegemony wherever they can, while free riding on such global order as American leadership in the international order still provides. We are, in fact, in the middle of a long interim in which America is still leading but unable to impose new structures of transnational coordination, and the emerging powers—China, Russia, Brazil, and India—are not ready or willing to assume leadership roles. The price that we are paying for this is especially evident in the current global economic crisis. Small tails (such as Greece) are wagging enormous dogs (such as Europe) because sovereigns seem incapable of working together to contain the market risks that threaten each.

Mazower’s history illustrates how risk-averse we have become in facing up to transnational economic challenges and how ambitious global leaders used to be. It took the cataclysm of war to make leaders think big, and they were staggeringly ambitious in their vision of the postwar global economy. The Bretton Woods conference in 1944 created a new transnational architecture—capital controls, convertible currencies at fixed exchange rates, an IMF to tide countries over balance-of-payments problems, a World Bank to finance reconstruction and development, an international organization to promote free trade. Bretton Woods—the collective sovereign regulation of global capitalism—was a triumphant success, giving the world thirty years of sustained growth. Instead of eroding sovereignty, these transnational institutions helped the states to become stronger.

In the 1970s, as the oil shock unraveled Western economies, international institutions signed on to a neo-liberal economic creed and began to tell sovereigns to cut back on the size of their governments. As Mazower shows, in an especially interesting analysis, the first time the IMF began to dictate conditions to a sovereign government came in the British sterling crisis of 1976. The Labour government had lost control of the economy: industry was failing to compete, energy prices were soaring, the pound was falling, and the country’s trade balance was in the red. The government was forced to accept IMF help, but accepting it was so humiliating that it contributed to Margaret Thatcher’s election in 1979. She then led the deflationary and monetarist turn to the right, smashing union power and slashing back the welfare state.

As Mazower writes, “once the IMF had tasted the power of ‘conditionality,’ there was no turning back.” In the 1970s, 26 percent of its loans had conditionalities attached; ten years later, the figure had risen to two-thirds. Conditionality accelerated globalization. Countries that accepted IMF loans had to open their markets, cut back their welfare states, eliminate subsidies to local producers, and privatize state-run monopolies. Once freed from government subsidy, economies became more efficient, but also more dependent on foreign capital. In turn the international financial system as a whole became more vulnerable to the impact of global capital flowing into states with weak governments and poor financial regimes. From the Mexican debt crisis of 1982 to the Asian economic meltdown of 1997 to the Lehman catastrophe of 2008, international liberalization of sovereign economies has accelerated global growth but at the cost of making growth more unstable.

International organizations such as the IMF, the World Bank, and the World Trade Organization have integrated the global economy, but at the price of exposing sovereigns to external shocks. Weak sovereigns export their troubles to strong ones, and strong ones such as Germany discover that weak ones like Greece can drag them down. Sovereign economies have become terrifyingly interdependent, but without the multilateral institutions to contain the risks that bear down on each of them. They want help from fellow sovereigns to manage these risks, but they have swallowed enough bad medicine from international institutions to have reason to be wary of global remedies.

Mazower’s history of the idea of global governance has a paradoxical message. Sovereigns matter, but they can preserve sovereignty only when they collaborate. As Mazower says, the enduring political dream that most ordinary citizens have is not “global governance,” but simply a “world in which economic forces would be guided and controlled by man rather than dominating him.” Not even the most powerful country in history even partly delivers on that dream. The United States has had a chastening experience with its own inability to master economic forces beyond its borders. Big and small states alike have a shared interest in safeguarding and strengthening their sovereignty, but even the biggest ones need credible, non-dogmatic, well-funded international organizations to coordinate sovereign action, so that the struggle for survival does not turn into a deadly game that we all will lose.

Michael Ignatieff teaches human rights at the Kennedy School and the University of Toronto. This article appeared in the December 20, 2012 issue of the magazine under the headline 
The One and the Many.”