George Soros says we need a new world order.
After talking about the need for a new Bretton Woods conference to "establish new international rules, including treatment of financial institutions that are too big to fail and the role of capital controls," and the need for the IMF to "to reflect better the prevailing pecking order among states and to revise its methods of operation," he says:
World needs new financial architecture, by George Soros, Commentary, Project Syndicate: ...Reorganising the world order will need to extend beyond the financial system and involve the United Nations, especially membership of the Security Council. ...China and other developing countries ought to participate as equals. They are reluctant members of the Bretton Woods institutions, which are dominated by countries that are no longer dominant. ...
The system cannot survive in its present form, and the US has more to lose by not being in the forefront of reforming it. The US is still in a position to lead the world, but, without far-sighted leadership, its relative position is likely to continue to erode. It can no longer impose its will on others, as George W Bush’s administration sought to do, but it could lead a co-operative effort to involve both the developed and the developing world, thereby reestablishing American leadership in an acceptable form.
The alternative is frightening, because a declining superpower losing both political and economic dominance but still preserving military supremacy is a dangerous mix. We used to be reassured by the generalization that democratic countries seek peace. After the Bush presidency, that rule no longer holds, if it ever did.
In fact, democracy is in deep trouble in America. The financial crisis has inflicted hardship on a population that does not like to face harsh reality. President Barack Obama has deployed the “confidence multiplier” and claims to have contained the recession. But if there is a “double dip” recession, Americans will become susceptible to all kinds of fear mongering and populist demagogy.
If Obama fails, the next administration will be sorely tempted to create some diversion from troubles at home – at great peril to the world.
Obama has the right vision. He believes in international co-operation, rather than the might-is-right philosophy of the Bush-Cheney era. ...
What is lacking, however, is a general recognition that the system is broken and needs to be reinvented. ... Obama is preoccupied by many pressing problems,... reinventing the international financial system is unlikely to receive his full attention.
China’s leadership needs to be even more far-sighted than Obama is. China is replacing the American consumer as the motor of the world economy. Since it is a smaller motor, the world economy will grow slower, but China’s influence will rise very fast.
For the time being, the Chinese public is willing to subordinate its individual freedom to political stability and economic advancement. But that may not continue indefinitely – and the rest of the world will never subordinate its freedom to the prosperity of the Chinese state.
As China becomes a world leader, it must transform itself into a more open society that the rest of the world is willing to accept as a world leader. Military power relations being what they are, China has no alternative to peaceful, harmonious development. Indeed, the future of the world depends on it.