TFR 28 – Democracy Must Work: A Trilateral Agenda for the Decade

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For the first time in history, a truly global world system is emerging. Jet travel, communications satellites and computers have shrunk the planet to an extent scarcely imaginable only a few decades ago. The opportunity for an entirely new system of global cooperation is there to be seized.

Yet, also for the first time, dangers of a truly global dimension now confront mankind. Broadly speaking, these dangers are derived from the unprecedented scientific-technological capacity now available for inflicting worldwide devastation and death; and from the risk that regional social and economic breakdowns will overload a still rudimentary structure of international cooperation, prompting massive suffering, political conflicts, and eventually global chaos.

Specifically, the principal threats confronting the global community can be considered in the following descending order of physical destructiveness, but in ascending order of probability of actual occurrence during the next decade:

1. Nuclear war, with its unprecedented capacity for limitless death and destruction, a catastrophe from which our globe might not recover.

2. Major social breakdowns in large portions of Africa, Asia and perhaps Latin America. Large-scale famines, massive population migrations, and chaotic violence could be involved, reducing prospects for democracy and enhancing the opportunities for extremists of the left and right to seize power.

3. Increasingly destructive regional conflicts, less and less susceptible to international containment, carrying with them the growing risk of East-West confrontations.

4. Significant deterioration in multilateral economic and political cooperation, rising unemployment, lower living standards and less democracy.

However, it would be wrong to draw only an apocalyptic scenario. Our era's future is ambivalent because the negative trends identified above conflict with significant opportunities. The more hopeful global trends include:

1. The beginnings of global strategies for international cooperation, including some cases of effective performance on the part of functional global institutions in economic development and peacekeeping.

2. The potential for a more intelligent management of global affairs through scientific and technical breakthroughs in medicine, communications, and nutrition, among others.

3. The decline in the appeal of the Soviet model of development, particularly in the Third World.

4. The compelling nature of freedom and of human rights.

In effect, the gradual degradation of international order, though possible, is not historically inevitable. If the 1980s prove to be a decade out of control, it will be because the trilateral countries will have failed fully to exploit the potential for progress that does in fact exist. Global anarchy and international violence will then be the inexcusable legacies of a failure of will on the part of the richest, the most productive, and the most democratic sectors of the globe,

When the Trilateral Commission was founded in 1973 with representatives from Western Europe, Japan and north America, the key issue was how to shape trilateral relations so that Japan could be integrated as a coequal partner with what until then had been largely a bilateral Atlantic relationship. This aim did not prove easy to accomplish. In Europe the objectives of the Commission were often misunderstood, particularly by the political left. In the United States, by contrast, the main critics were on the right. The European left saw it as aimed at protecting the capitalist military status quo, insensitive to North-South concerns, and resistant to easing East-West tensions. The American right saw the Commission's internationalist outlook as a threat to the assertion of America's nationhood. Above all there was in Europe at that time too little understanding of the potential and extent of the scientific and technological revolution that Japan was spearheading, which has now made her the world leader in many of the technologies of the future. The growing importance and influence in the United States of its southern and western states was also not foreseen early enough in Europe. These states, not as Euro-centered as the Eastern Seaboard states and historically more orientated towards Latin America and across the Pacific for their overseas trade, have become more significant politically and economically.

In the next decade, with the growing importance for the United States of the Pacific connection, and with Europe in grave danger of failing to develop its economic potential and political unity, the difficulty will be how to keep the Atlantic and Pacific connections in balance.

The problem is an acute one. Up to 1973 the European economy grew at a significantly faster rate than the American economy. But it has slowed down drastically in the last few years and failed to create new jobs. Between 1973 and 1983 employment in the European Community countries actually fell by 3 million whereas in the United States it increased by 13 million. Nineteen eighty-four looks like being the 12th consecutive year in which unemployment in Europe rose.

Wage-earners in Europe, despite the two oil shocks of 1973 and 1979, have managed to maintain the increase in their purchasing power, in spite of the slow-down in growth, far more than in the United States or Japan. But this European preference for consumption has led to low profitability, low investment and to the inhibition of economic growth. There is also a growing technological gap between Europe on the one hand and the United States and Japan on the other. Meanwhile, the cost of social services in Europe has been rising considerably faster than national income.

The European Community needs to find a way out of this vicious circle without delay. Many of those to whom we have talked in the course of preparing this report take a gloomy view of Europe's future, arguing that apathy and fatalism are gaining ground and that there is too little willingness to make the effort to put things right. We think that this view is too pessimistic, and that given the will Europe has the capacity to play a full role in the new technological age. But a fundamental part of our analysis is that Europe cannot recover by itself. It needs the stimulation of a coordinated international recovery as part of a comprehensive global economic, political and strategic reassessment.

We cannot chart a coherent constructive path for the trilateral countries for the next decade without examining carefully the crucial trends which are at work. Just examining trends within the trilateral countries would be insufficient; we need to understand the trends which challenge all countries, not just our own. Some of these trends are economic, some social, and some political. Some are beneficial. Others are ominous. Some can be readily documented with statistics. Others are more elusive. But they are all of great importance. A few are to be welcomed and encouraged. Others threaten a slide into increasing misery and chaos unless appropriate action is taken in time.

Numerous reports and books have been written, and seminars held, foretelling the future in many of our countries, yet they have had little impact. There has been an initial flurry of publicity and apparent interest, perhaps, but little follow through or lasting effect. Doomladen forecasts, exaggerated language and an obsession with proposing new structures and institutions have meant that much wisdom and careful analysis have been lost sight of by key decision makers because of the atmosphere of unreality initially created which has allowed much good sense to be disparaged and defeated.

The task we have set ourselves is to analyze carefully the trends which can give a reasonable basis for projection over the next decade and to try to propose achievable objectives and realistic methods of modifying and building on those trends for the future. We propose global solutions but concentrate our attention on trilateral action, not because we believe that global action is not needed but because it is a formidable enough task to achieve a consensus on what the trilateral countries should do. It is also within these countries that this report has the greatest chance of achieving results. We have deliberately adopted an incremental approach, eschewing grandiose strategies, in the belief that a series of coordinated actions taken in good time can in combination provide a powerful agenda for the trilateral countries to contribute to the global good.

We focus our recommendations on the summits of seven trilateral countries. We think it best to consider a program covering the next several summits, with the hope of achieving a global recovery sustainable through the 1990s.

It is obvious that there will be differences of view even within the trilateral countries on what constitutes the global good. In our recommendations, we give the highest priority to the maintenance and the extension of democracy. In this report, we are concerned with the trilateral industrial democracies. We recognize that there are democracies in the developing world, but their capabilities and needs are quite different from those of the industrialized West, and thus are not specifically discussed in this report. We see the essential freedom of democracy to be broadly incompatible with a state controlled economy and we are not afraid to openly reject communism and to attempt to devise a global system where the communist philosophy withers and has no new converts.

For this to happen those who extol the merits of democracy have a special responsibility to ensure that democracy works: "works" in the sense that democratic government can be efficient in its use of resources, yet fair and just in the distribution of rewards; "works" in the sense that all the citizens who want to contribute to society by working, can work. That is not an easy combination to achieve. The market economy, though far preferable to the state-run economy, does need some degree of modification if it is to be successful in providing all its citizens with a reasonable standard of living and the opportunity to work. It must also display a greater degree of awareness of the economic and political needs of citizens in other countries.

In 1975 a report on the governability of democracies, The Crisis of Democracy, was presented to the Trilateral Commission. It talked of a consensus without purpose and said that without a common purpose there is no basis for common priorities. Nine years later, having survived many crises, we believe that the democracies have shown a remarkable resilience. We are not depressed about the governability of democracy. Our greatest concern lies in the inability of the democracies to share a common purpose in combining, coordinating and developing internationally.

Democracy does not work of itself but it provides the framework for society, the basic organization and structure within which individuals can live freely with the minimum of constraints necessary to protect the public good. At the same time, a democratic government must respond to the pressures which arise from the needs and wishes of its people.

One such pressure on democratic government is the old age dependency ratio which, while showing little change in developing countries, in developed countries is expected to rise by a third between 1970 and 2000; in Japan it is expected to double. The proportion of the population in developed countries aged 80 and over will also continue to rise sharply; in the twenty-four OECD countries there were 12 million people in this category in 1970, nearly 16 million in 1980, and will be nearly 21 million by 1990. This rising proportion of old people in the population will tend to raise transfer payments, such as old age pensions, and social service expenditures as a proportion of GDP in developed countries. Over the next decade or two the financing of these expenditures will become an increasingly critical issue.

Another serious problem is the present level of unemployment, particularly in Europe. Not only is this economically wasteful and socially disruptive; it also constitutes a political danger, a threat to the viability of democracy. It is necessary for those of us committed to democratic government to remember that communist countries, for all the inefficiencies of their economies, do provide more jobs for their citizens. These factors are dealt with in Chapter II, Employment and Equity.

In Western democracies, where governments are bound by the rule of law, and required to seek re-election at fairly frequent intervals, an important aspect of the working of democracy is the relationship between the powers of the central government on the one hand and the powers of regional or local government on the other. Among the trilateral countries there are those such as the United States and Germany which have federal governments and those such as Britain and Japan which have unitary governments. But the essential tensions between central and local government between centralization and decentralization exist regardless of constitutional structure.

Over the past few decades pressures have developed in many democratic countries for a greater degree of decentralization. This was partly a reaction to the growth of the cost of, and interference by, central bureaucracies during the war and in some cases post-war-years; and partly a reflection of rising levels of income, education and leisure and the impetus this gave towards a greater degree of autonomy on the part of individual regions and localities as well as to greater control by individuals over their working lives and environments, leading to pressure for more industrial democracy and more say by local residents' associations in decisions which affected their locality. Although basically a thoroughly desirable trend, it must not be lost sight of that in some cases this decentralization of power has made it easier for particular interest groups to block progress

Over the next decade the devolution of power from the center will need to be consistent with another likely and desirable trend: a greater degree of policy coordination on economic matters. Governments that see the need to devolve more decisions to regional and local levels will need to ensure that this does not conflict with macroeconomic commitments to a better international economic order.

The last twenty years have witnessed a substantial increase in the interdependence of the world economy, with world trade rising considerably faster than world output, the external public and private debt of developing countries rising at a rapid rate, particularly since 1973, and the virtual absence of exchange controls in the main trilateral countries permitting short-term capital flows from one country to another which can overwhelm official attempts to maintain an orderly exchange rate regime. These issues are covered in Chapter III, Interdependence and Growth, where it is argued that if the trilateral countries can achieve a sustained growth rate this will make manageable the problem of indebtedness, and that in order to achieve this growth a greater measure of exchange rate stability would be helpful.

Yet despite increased interdependence, nationalism remains a potent force within many countries including some trilateral countries as minorities with a strong sense of religious or cultural identity have attempted to push the desire for devolution to the point of secession. Nationalism has also been fueled, as in the past, by economic depression, which provides an emotional cover for 'beggar-thy-neighbor' policies, and often feeds on an incipient militarism. Attempts to dilute the force of nationalism by establishing regional groupings dealing with economic, political or security cooperation have met with mixed success. Much the most ambitious attempt was the creation in 1957 of the European Economic Community. It still has not fulfilled the aspirations of its founders. Although the elimination of tariff barriers within Western Europe led to a rapid growth in trade and stimulated faster growth during the 1960s and early 1970s, divergence of national interests within the Community has resulted in it being much less effective in tackling the problems of the 1980s. Industries with large amounts of excess capacity, such as steel and shipbuilding, have been contracted only slowly and after much argument; the Common Agricultural Policy seems as far from radical reform as ever; and rivalry between the governments and big firms of the individual countries means that Europe is failing dangerously behind the United States and Japan in the development and application of the technologies of the future.

On the security front, the trilateral democracies have remained solid, despite the withdrawal from the NATO military organization of France a step perhaps more symbolic than real. But the cohesiveness of the West as a whole worldwide has been reduced, compared with twenty years ago, by the fading of the post-war American hegemony, the increasing economic frictions between the three trilateral partners, and growing doubts in Western Europe about American nuclear defense policies. These issues are covered in more detail in Chapter IV, Cooperation or Fragmentation, where the degree of security interdependence is charted both in terms of the trilateral countries and globally.

But if the world is to prosper, if the democracies are to flourish, and if more countries are to achieve democratic government over the next decade, then national governments, particularly those of the main trilateral countries, will have to take more account of the interdependence of their decision making. Closer coordination of macroeconomic policies is called for, along the lines attempted in one or two cases with considerable success at some of the annual economic summits held over the past decade. At the same time there is scope for more economic cooperation on a regional basis, of the kind now being explored among the Pacific countries. The Lomb Convention linking the EEC with a group of African, Pacific and Caribbean countries could be built on in a number of valuable ways.

Economic coordination is by itself insufficient. It has to go wider and involve security issues and in the case of the trilateral countries grapple with the implications of defense expenditure and the political buttressing necessary for the preservation of a reasonable military balance with the Soviet Union. Yet security is not solely a military issue. There are other problems too, not least the maintenance of political stability something that is itself strongly influenced by economic factors.

The early 1970s witnessed an upsurge of anxiety about the prospect of a rapid depletion of the world's limited stock of minerals and fossil fuels. This anxiety might seem to have been justified by the rise in oil prices over the subsequent decade from around $2.50 a barrel in 1972 to $34 a barrel in 1982. But the fear of exhaustion of mineral resources soon came to be seen as misconceived, and even the dramatic increase in oil prices fell into perspective, as in large part a telescoping into a few years, as a result of the sudden consolidation of the power of OPEC, of increases in the real price of oil which should have taken place gradually over the previous two decades. Moreover, in the early 1980s, the twin forces of recession and energy conservation put severe downward pressure on real oil prices.

Nevertheless, the oil is beginning to run out. Within the next couple of decades it seems likely that oil production will have peaked and started to fall, and although natural gas production will go on rising for somewhat longer, the likelihood is that world energy demand will increasingly have to be met by coal and nuclear power. The very long lead-times involved, and the irreversibility of the build-up in the atmosphere of the carbon dioxide that results from the burning of fossil fuels, and of the danger represented by the increasingly widespread use of nuclear particularly breeder reactors make the question of a global strategy to develop inexhaustible energy sources such as solar power an increasingly urgent item on the international agenda. Haunting the necessary development of civil nuclear power is public concern over the building of such plants, and the reality of the increasing number of nuclear weapon-capable states despite the existence of the Non-proliferation Treaty.

Other very serious environmental problems loom. By the year 2000, 40 percent of the remaining forest cover in developing countries might disappear as a result of the desperate search of their inhabitants for fuelwood and more agricultural land. Such deforestation would lower the planet's ability to absorb carbon dioxide, reduce the quantity and quality of water supplies, and thereafter the genetic base of many of the world's crops and livestock. Another problem is a loss of cropland and degradation of the soil which may destroy more than a third of the world's arable land within the next twenty years. Another is the visible destruction of forests, and the damage done to lakes and rivers, by acid rain.

Problems such as these are not yet in the forefront of the consciousness of voters in the trilateral countries, and are consequently in grave danger of being neglected by politicians until it is too late. Yet they represent a set of trends of which a responsible political agenda for the trilateral countries must take urgent account in the choice of social, economic, political and strategic priorities to make democratic government work both efficiently and humanely in the decades ahead.

The history of the summit process involving discussion amongst heads of government is worth recalling in order to chart a strategy for the future. Early in 1973 the finance ministers of the United States, Britain, France and Germany, the so-called 'Library Group,' began to meet informally to discuss economic problems. Evolving from this the first summit of these four countries, Japan, and Italy took place in Rambouillet in November 1975. Summits have been held every year since, with the Prime Minister of Canada attending from 1977 and the President of the European Commission from 1978.

The utility of the summit process is difficult to assess. There is the usual problem of not knowing what would have happened in the absence of summits. Nevertheless there do appear to have been some achievements. One can perhaps distinguish between the achievements of the summit process as a whole, and the achievements of particular summits.

On the former, there is widespread agreement, for example, that the regular restatement of the May 1974 OECD pledge to maintain free trade has been a factor in holding protectionism at bay. The limited nature of the import controls imposed by the British Government in December 1975 has been attributed to the Rambouillet summit the previous month; the London summit of May 1977 seems to have given a crucial impetus to the Tokyo round of multilateral trade negotiations; and the approach of the Bonn summit in July 1978 helped again to overcome protectionist sentiment. In short, summitry has succeeded in helping the West hold the line on protectionism.

On the achievements of particular summits, the July 1978 Bonn summit was the most ambitious. Most of the participants pledged themselves to take action they probably would not otherwise have taken provided that the others did the same. This is described in more detail in Chapter V, Tasks and Trade-Offs. Various people, depending on their economic philosophy and political position, tend to ascribe success or failure to Bonn. But if the oil price rise of 1979 had not occurred it is possible to argue that the Bonn decisions would have averted the economic depression of 1980-82. What Bonn did above all was to demonstrate that only in a climate of political trade-offs can the summit process produce coordinated action.

Some other summits such as the San Juan (Puerto Rico) summit of June 1976, and perhaps the Venice summit of June 1980 are generally reckoned to have achieved very little, though Venice, like the Tokyo summit the year before, did make a contribution to oil conservation policy. Others are less easy to evaluate. The 1977 London summit was important for starting to resolve U.S. anxieties over nuclear reprocessing and non-proliferation priorities and the French and German resentment at U.S. interference with their own decisions over their civil nuclear power programs. The Ottawa summit of July 1981 tends to be regarded as a failure; but it did permit a free discussion among the participants about the pros and cons of each other's policies, and particularly what were sometimes seen as the long-term benefits but short-term costs of American anti-inflationary policies. Even the Versailles summit of June 1982, usually regarded as little short of a disaster, seems to have had one important result: the communiqué called for a process of multilateral surveillance of exchange rates in cooperation with the IMF by the five countries Britain, France, Germany, Japan and the United States, the Versailles Group whose currencies determine the value of the Special Drawing Right (SDR). A number of informal meetings of the finance ministers of this Group of Five, and the Managing Director of the IMF, have been held since. The importance of these meetings whose continuation was endorsed at Williamsburg could be considerable. The importance of the Williamsburg summit of May 1983 was that for the first time the seven countries endorsed a mutual strategic objective, namely the need to respond to the Soviet missile program, and particularly the SS-20 deployment.

Unfortunately, there is a negative side to summits as well: they are becoming more like events devised for the media. Nevertheless, they do ensure a series of private and informal discussions among the heads Of government on their own, for which they all have to be fully briefed. The benefits of such discussions, and the briefings of heads of government which he behind them, may be difficult to identify, but real enough nonetheless.

Different people have different conceptions of how summits ought to work. Two particular views can be clearly distinguished. One is that summits should be occasions when a few heads of government discuss problems informally, with few if any aides present, and with a minimum of preparation and documentation on the part of their national bureaucracies. Moreover, such meetings should not necessarily be held regularly, but only when particularly important problems have arisen which might be resolved by such discussion.

The other view is that summits should represent the culmination of intensive discussions and negotiations both within and between government machines. Leaders should sign a pre-negotiated communiqué which sets the seal on months of hard bargaining on a variety of issues.

There are also different conceptions of how summits actually have worked. One view is that they have turned out to be a mixture of these two basic concepts. Another view is that the history of the summit process has displayed a kind of entropy: there has been a transition from candid and informal discussions, through institutionalized bureaucratic negotiations, to media occasions aimed mainly at the television cameras; the implication is that this degeneration is inevitable. A third, and even less favorable, view is that because attitudes to economic policy-making differ so widely among countries, the main value of summits lies in their public relations or confidence effects; and that nothing much more can be expected of them.

We believe that one can only develop a coordinated program if plans are laid for two or three summits in sequence and that such a building block approach has the best chance of achieving success. In that building process there is a place both for the informal spontaneous exchange and the more formal preplanned agreements. Diary problems alone make it inevitable that dates are fixed well in advance and we see no alternative to retaining a fixed annual cycle.

We are convinced that the necessity for strategic leadership in the world requires that the summits of the seven trilateral countries develop urgently the political dynamism and action orientation that they have hitherto lacked. Economic problems should not be discussed at heads of government level in isolation from other, often interrelated, political, military and strategic concerns. By restricting the agenda of the trilateral summits to economics there has been a considerable limitation on the scope for trading off individual countries' policy options across a wider agenda. Thus security issues should be of critical importance in planning future agendas.

In the rest of this report we discuss the main issues in more detail. Chapter II deals with Employment and Equity, Chapter III with Interdependence and Growth, and Chapter IV with Cooperation or Fragmentation. Finally, in Chapter V, we focus on the essential Tasks and Trade-Offs which the summit process should address to make democracy work.

Authors

David Owen, Member of British Parliament; Leader of the Social Democratic Party; former Foreign Secretary
Zbigniew Brzezinski, Herbert Lehman Professor of Government, Columbia University; Senior Advisor, Georgetown University Center for Strategic & International Studies; former Assistant to the President for National Security Affairs
Saburo Okita, Chairman, Institute for Domestic & International Policy Studies; former Japanese Foreign Minister

Michael Stewart, Reader in Political Economy, University College, London (Associate Author)
Carol Rae Hansen, Department of Government, Harvard University (Associate Author)

Table of Contents

I. Dilemmas of the Decade

II. Employment and Equity: The Social Response

III. Interdependence and Growth: The Economic Response

IV. Cooperation or Fragmentation: The Political Response

V. Tasks and Trade-Offs: The Trilateral Response

  • Topics: Economics, Energy, Trade, Security, Multilateral Cooperation
  • Region:  North America, Europe, Middle East, Africa, Pacific Asia
  • Publisher:  Trilateral Commission (New York University Press)
  • Publication Date:  © 1984
  • ISBN:  0-8147-6161-5
  • Pages:  88
  • Complete Text: Click here to download
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