Gearing Up for a New Global Order

Roberto Mangabeira Unger

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Revision of the current global order must be a major ambition of the BRIC countries, so it is time to pool their resources and efforts.

The world is restless under the yolk of the dictatorship of no alternatives. The BRIC countries and their movement offer one of the best prospects we have in the world today for the overthrow of this dictatorship. In the creation of alternatives of interest to all humanity the BRIC countries include four of the five largest and most significant countries in the world. Each of them is a potential source of resistance to the now prevailing orthodoxies. Each of them has the spiritual and practical resources to imagine itself as a different world. If the BRIC countries make common cause they can do immense benefit not only to themselves but to the whole world.

I propose to approach the task before the BRIC countries from two complementary angles. One perspective is that of their internal projects, and the other is the perspective of the revision of the global order. The most widely professed goal in the world today is the organization of socially inclusive economic growth, economic growth which is anchored in a sustained broadening of economic and educational opportunity, capable of providing equipment to the mass of ordinary men and women.

Today this goal must be pursued in a particular context. The context is the emergence throughout the world of the new style of production, a style that lies beyond the limits of traditional mass production. This new form of production is characterized not simply by the accumulation of technology, capital and knowledge, but also and above all by a new set of practices of production. It attenuates the contrast between the supervision and the execution of productive tasks. It mixes cooperation and competition in the same domains, and it transforms all productive activity into a form of permanent innovation in such a way that the best firms become more like the best schools.

The problem is that this new economy, as we sometimes call it, or post-Fordist style of production (as it comes after mass production), is characteristically isolated in narrow productive vanguards, weakly linked to the remainder of our national economies. The vast majority of the labor force in the richer countries, as well as in the major developing countries, remains excluded from these advanced sectors of production, and this exclusion has become a vast source of inequality in the world.

The traditional devices for the moderation of this inequality, such as compensatory redistribution through tax and transfer, and the defense of small business against big business, are inadequate to the task. What we need is to open the gateways of access to these new advanced sectors of production and in this way get practical content to the goal of socially inclusive economic growth. That means today in our countries, in the major BRIC economies, a reinvention of industrial policy. The most important agents in our economies are the multitude of small and medium-sized firms that are responsible for the preponderance of output, and the great majority of jobs. If we could equip even some of these firms with the instruments of access to the advanced forms of production, we would create an inclusive productiveness; we would bring about a revolution in the broadening of economic opportunity.

This new industrial policy which our countries can help create and disseminate throughout the world must have as its primary addressees not the traditional big businesses but the small and medium-sized firms. The method should not be the subsidization of credit, but rather the opening of access to credit, technology, knowledge and advanced practice. It is a project that cannot advance unless we begin to innovate in the institutional arrangements that shape the relations between governments and firms, as well as the relations among firms.

The Third Model

There are today in the world two main models of relations between states and businesses. There is the American model of arm’s-length regulation of business by government, and there is the Northeast Asian model of the formulation of a unitary trade and industrial policy imposed top-down by the bureaucratic apparatus of the state. What we need is a third model – a form of strategic coordination between governments and firms that is decentralized, pluralistic, participatory and experimental, to the end of disseminating the practices of the new economy through large sectors of the society.

This decentralized strategic coordination must have as its counterpart support for regimes of cooperative competition among the small and medium-sized firms, so that they can continue to compete against one another but at the same time pool certain commercial, technological, or financial resources, and through this pooling achieve economies of scale. On this basis we can begin to give an example to the world of how the new economy can become the fugleman of a new style of socially inclusive economic growth.

Now, such a domestic project – a project to be carried out within our countries – has as its counterpart a revision of the global order, and such a revision must be a major ambition of the movement of the BRIC countries. Ever since the Second World War what has prevailed in the world has been an overarching project attempting to impose on all of humanity a certain institutional blueprint as a condition of access to global public goods, or political security, and economic openness. What we want in the BRIC countries is a new global order that is more hospitable to alternatives, to divergence, to experiments, to heresies.

This overarching project has been realized very unequally in different domains. It has been less successfully implemented in the domain of political security. It has been implemented in a very limited fashion in the international monetary arrangements for which there is now no generally accepted regime, ever since the collapse of the original Bretton Woods system in 1971. Where the project has been implemented most vigorously is in the regime of world trade. The world trade regime established under the WTO treaties is the most consummate expression of this attempt to impose a blueprint on the world. A generative principle of this world trade regime, which we should resist, is the attempt to define free trade as an end in itself, the maximization of free trade. But free trade is not an end in itself; free trade is simply a means to an end.

B20’s Recipe of Constant Transformation

Roberto Magabeira Unger, Professor at Harvard Law School, is the academic leader of the B20 Taskforce “Innovation and development as a global priority”. The Business 20 (B20) group is an informal gathering of business associations that joined their efforts to maintain a constant dialogue between the business communities, the governments of the G20 countries and international institutions.

In 2012, Viktor Vekselberg, President of the Skolkovo Fund and Chairman of the Board of the Renova group of companies, was invited to put together and chair a taskforce that would focus on innovation and development as a top priority. His co-chairs are the founder and Chairman of the Board at Infosys Chris Gopalakrishnan, President and CEO of Schneider Electric Jean-Pascal Tricoire, Head of the Research Programmes at Johnson & Johnson and Company Group Chairman of Global Pharmaceuticals Paul Stoffels and the CEO of ENEL Fulvio Conti.

Igor Drozdov, Senior Vice President and Chief Legal Counsel at the Skolkovo Fund, and Alexey Ivanov, Director of the Fund’s Legal Policy and Public Development Department, joined the Taskforce as sherpas. The group that is currently made up of 40 leading international companies opened its inaugural session on 12 December 2012 with Professor Unger invited as a guest of honour.

It was thanks to the consultations held with the professor that the group participants managed to develop a unique agenda and draft recommendations for the G20 political leaders in three different dimensions: Energy, biotechnologies (including food production) and information and communication technologies – all in the context of innovation and development. The Taskforce’s core priorities are as follows: Simplifying the transfer of technologies to stimulate growth and overcome imbalances in the global economy as well as providing an enabling environment to foster fair competition and cooperation on the global level.

At an expanded session of the working group that took place during the International Economic Forum in January 2013, members of the group decided to continue their discussions during the BRICS Summit in Durban that they were invited to attend by Zola Tsotsi, Chairman of the Board at Eskom Holdings – South Africa’s largest energy company.

The international institutional order should be transformed taking into account the interests of the BRICS countries and the rest of the developing world and not just those of the developed Western nations. During a meeting that took place behind closed doors in London on 26 April this premise was supported by the co-chairs of the working group. “Transition” is the operative word and concept that was identified as top priority for the group of CEOs representing leading international companies. The term refers to a process of constant transformation in key innovative sectors of the economy in all parts of the globe.

“Members of our group are developing a set of measures that would not only meet the interests of all nations but also help to bridge the gap between the developed and the developing world. What is more, this process should be primarily driven by a global enabling environment fostering economic growth in developing countries through constant innovations and not by some mundane redistribution of resources,” noted President of the Skolkovo Fund Viktor Vekselberg.

The shared position that begins to emerge today among the BRIC countries is that the goal should be defined as the creation of an open world economy that is hospitable to the coexistence of different national strategies of development and different experiences of civilization, a form of economic openness that allows divergence rather than imposing a compulsive convergence in institutions and practices.

Similarly, the established world trade regime is now being designed under the aegis of the principle of institutional maximalism. It requires adherence not just to the market economy, but to a particular version of the market economy. It wants to outlaw, under the label ‘subsidies,’ all the forms of strategic coordination between governments and businesses that the countries now rich used to become rich. And it wants to incorporate into the rules of free trade the intellectual property regime established at the end of the 19th century that leaves many of the technological innovations of greatest interest to humanity in the control of a handful of big private multinational businesses.

We should want a revision of this order, a pluralistic globalism, a globalism that allows each of our countries to engage the world economy on terms that are favorable to our national construction so that two parts of this BRIC agenda, the domestic part and the global part, are just the reverse side of each other and together they will allow us to overthrow the dictatorship of no alternatives, to the benefit of humanity.

South Africa and the World

With its immense dynamism and its diversified economic structure, South Africa can make a vital contribution to the movement of the BRICS. Not only can it disseminate progressive alternatives on the African continent, but it can exemplify for Africa and for the world many of the alternatives that are of greatest interest to us.

I think especially of four domains in which South Africa has the materials with which to make a distinctive contribution: first, in helping to equip millions of small entrepreneurs and would-be entrepreneurs who are struggling to open and to maintain small businesses in the country. If some of these people can be given the requisite economic and educational equipment, South Africa can bring about a productivist revolution that will serve as an example to Africa and to humanity.

In the second place, South Africa can show how this structural transformation can touch the future of agriculture. There is no reason to distinguish family agriculture and entrepreneurial; family-scale agriculture can acquire entrepreneurial characteristics. South Africa can demonstrate how to avoid the contrast between an empty countryside and cities full of workers without jobs, by promoting a form of rural industrialization that attenuates the contrast between town and country.

In the third place, South Africa is now focused on the educational imperative. What we want in our countries – an inclusive productivism – cannot be brought about without a radical transformation in how students learn and teachers teach. We need a form of education that is analytic, questioning, cooperative and dialectical, rather than informational, authoritarian and dogmatic. We need to place an analytical general education on a continuum with a new form of vocational training that emphasizes generic, practical and conceptual capabilities, rather than job-specific and machine-specific skills. And South Africa is one of the most promising terrains in which to demonstrate the potential of this educational revolution.

A fourth area in which South Africa can make a huge difference is the organization of a new form of democratic politics. What we now mainly have in the rich North Atlantic world is a kind of sleepy democracy, a democracy that is organized to make change depend on crisis. And what we want is a high-energy democratic politics that does not need trauma as the condition of transformation. A series of constitutional innovations is already being debated in South Africa that would heighten the level of popular engagement in public life; that would create constitutional mechanisms rapidly to overcome impasse between the political branches of government; and that would exploit the potential of federalism to create counter-models for the future. The country can take a decisive path, but at the same time allow certain sectors or places to hedge their bets and show a different way into the national future.

This is the South Africa that we want and need, and this is the South Africa that can arise in the near future – the South Africa that exemplifies for Africa and for the world the path of an inclusive productivism, and a deepened energetic democracy.

This article is based on an address to BRICS business captains delivered during the deliberations of the B20 task force entitled
‘Innovation and Development as a Global Priority,’ at the BRICS Summit in Durban, South Africa, on 27 March 2013.

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