Writing the Rules for a New World

There is, of course, the age-old worry: that in times of transition, the world will get messy. Ever since Thucydides observed that the shift in power from Sparta to Athens was the fundamental cause of the Peloponnesian War, scholars have watched such moments with apprehension. But this time, if properly managed, the rise of the rest needs to be destabilizing. America is not sinking fast, about to be replaced by a single country. The Chinese economy remains one fifth the size of America's, and its military is even smaller. Most major powers share some basic interests and ideals with the United States. The real danger remains that Washington will overplay its hand, leading other countries to seek to balance it. The management of U.S. political and military power remains the single most important task for global stability. The United States must provide rules, institutions and services that help solve major global problems.

But common action—to create public goods—has become much more difficult today. Economic and social activity is global, but political power is local. Economic, social and political problems often spill over borders, yet the solutions tend to lie with national governments that jealously guard their sovereignty. Unless we solve this basic problem, we should expect more crises of various kinds. And we should expect responses that are ad hoc and ineffective. Eventually such clumsy responses may make countries approach things narrowly and nationalistically, creating more global instability and less peace and prosperity.

To illustrate this point, consider almost any serious problem; chances are it implicates more than one country. Terrorism, financial contagion, infectious diseases, energy, security—all these challenges require coordinated responses, and in some cases institutions that can implement them. Take a simple example like infectious disease. An outbreak today is almost guaranteed to quickly spread far and wide. That means we all have an incentive to determine the nature of the pathogen as quickly as possible, isolate the victims and work toward a cure. Ideally, the World Health Organization would be able to step in, require samples of the virus to be sent to it, make a definitive determination and set protocols to be followed. Unfortunately, it is underfunded, undermanned and lacks the authority to make rules that everyone must follow.

This mismatch between problem and solution has been remarked on by me and others for a while now. Somehow it has yet to move up the international agenda. Yet that may finally be changing.

Sometimes a crisis provides an opportunity. This past fall, several Western governments initially responded to the financial meltdown by trying to handle it on their own. They seemed to forget about globalization—and nothing is more globalized than capital. Money flows around the world with no barriers, demanding international policy coordination. Belatedly recognizing this, leaders held the G20 meeting in Washington, a good first step. But to seriously address the crisis, we must move beyond this one event to a systemic fix. The IMF, for example, needs to be revamped and funded far more generously to handle such panics in the future.

It has become conventional wisdom, even a sport of sorts, to blame the United States for a lack of leadership on these issues. There is some truth to this, and I certainly hope that President Obama will be far more engaged than his predecessor in tackling this agenda. But the problem is not limited to Washington. The problem also lies with Paris and Moscow and Beijing and New Delhi. European governments have been reluctant to cede power to the IMF and other forums. The United Nations is becoming increasingly irrelevant and antiquated, unable to adapt its structure to accommodate rising powers. Many emerging-market countries guard their sovereignty as jealously as does the United States, often even more so. Yet what alternative is there?

The point is that unless we find ways to expand and enhance the rules and institutions of global cooperation, the world will experience more and more crises and the government responses will be hasty and ad hoc, too little, too late. If, on the other hand, we come together and work together on the common problems of humanity, imagine the extraordinary opportunities it could create for everyone. Imagine if we created new rules of the road that allowed this extraordinary process of globalization and growth to persist and spread to every section of society, raising standards of living and health for the poorest of the poor, allowing more and more people to develop their potential.