Future of globalized markets will depend on institutions capable of sustaining them, says Soros
| Pages | 349-350 |
Page 349
On October 25, financier and philanthropist George Soros came to the Institute for International Economics in Washington armed with a draft report on globalization and a message: if global markets are to prevail, there must be international institutions capable of sustaining them.
The draft report, which focuses on globalized markets, provides a follow-up to Soros's earlier book Open Society:
Reforming Global Capitalism, but with a greater emphasis on prescriptions. His audience of current and former policymakers in international and national organizations, think-tank analysts, nongovernmental activists, and others was invited to comment on his diagnosis-a globalization process imperiled by its imbalances-and his remedies, which emphasized carrots rather than sticks. The gathering provided the spirited exchange he was looking for.
Soros opened his remarks with a cautionary note. If the nineteenth century is any guide, the heady globalization of financial markets over the past two decades is not impervious to reversal. Globalized markets have accelerated economic development-but at a cost. A sharply lopsided development has, in Soros's view, created three key imbalances: considerable private wealth but limited public goods; international institutions constrained by national sovereignty and crucially unable to deliver global public goods; and arrangements that favor established markets (the "center") at the expense of emerging markets (the "periphery").
This lopsidedness, Soros argued, is no accident. The political forces driving globalization over the past two decades are working to reduce the influence of the state and curb its intervention in the economy. A more balanced system, however, could use globalization's substantial benefits to correct its drawbacks, and international institutions can play a crucial role in this regard.
But Soros fretted that an unwitting alliance between the far right and the far left seems intent on sinking or shrinking international financial and trade institutions.
"My aim," he said, "is to create a different coalition" to bolster globalization by strengthening existing institutions and creating new means to provide global public goods.
Atop his "to-do" list are three goals that Soros himself labeled controversial-addressing unstable financial markets; leveling the playing field for emerging markets; and improving governance...
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