Book Review: Consenting Adults? By William Bowles

18 June 2003

This month saw the publication of George Monbiot’s book ‘The Age of Consent: a manifesto for a new world order,’ and it’s a ‘call to arms’ or at least a call to consenting arms, as it sees itself as being in opposition to what Monbiot calls the ‘Age of Coercion’.

Capital which is global in scope, is able to move across national borders without let or hindrance, but that ‘democracy’ (where it exists) stops at national borders. And in an age of global capital, the nation state is incapable of dealing with issues that affect the entire planet. And nation states, driven by parochial interests, are incapable of making a break with the past or of challenging the power of the global corporation and the influence it has over the nation state.

This is an important book, not the least because it sums up processes which have been in ‘gestation’ since before the end of the Cold War but also, because it represents a radical break with the ‘marxist’ tradition but without denouncing it. It’s also important for another reason, namely, it’s not targeting your traditional lefty reader (if there is such an animal). Rather, it addresses people who have come into the anti-capitalist movement via the ‘‘anti-globalism’ struggles that started in the 90s.

Mercifully, it’s not written in the usual jargon of the left, rather, it seeks to unpack the economics of global capitalism, trade, aid, banking, the environment and so forth, in simple terms but without talking down to the reader or leaving out the awkward questions. This is also a book written as a user’s manual and critically, it contains no pat answers. Like all manifestos, the major element for its success is us. It challenges the reader to get involved not just to understand.

Monbiot calls for the creation of a ‘global parliament’, with each of its 600 ‘MPs’ representing about 10 million adults; a democratised United Nations General Assembly; ‘an International Clearing Union which automatically discharges trade deficits and prevents the accumulation of debt’; a ‘Fair Trade Organisation, which restrains the rich while emancipating the poor.’

It hardly seems credible that over 150 years ago, the International Working Men’s Association (IWMA) was formed by Karl Marx and others — the forerunner of the Internationalist movements of the various labour, socialist and later, communist parties — as a response to the rise of industrial and global capitalism. Predicated on Marx’s analysis of the rise of industrial capitalism, which he saw as sweeping the world, and creating what he considered to be the necessary pre-conditions for a world socialist revolution, the International finally saw itself being transformed by the USSR into a travesty of its original aims, being no more than a mouthpiece for the Soviet Communist Party and what were essentially, nationalist aims, the preservation of the USSR.

The idea of an international has never died but unfortunately has always been ‘owned’ by the various leftist factions, mostly of a Trotskyist flavour, who considered that the revolution had been betrayed by Stalin.

Where Monbiot makes a break with the past is the distinction he makes between internationalism and globalism, branding internationalism as reflecting relations between states and globalism as reflecting relations between people. He sees the global parliament as being in essence, a ‘pressure group’ that sits ‘outside’ the established centres of power and hence would not be subject to the control of states or corporations.

Perhaps the most powerful section of Monbiot’s book is the one on debtand the role of the International Monetary Fund (IMF) and the World Bank (WB) in impoverishing the developing world and enriching the IMF, the WBand private banks (and of course, us). He points out that:

‘[E]very year $382 billion…is transferred from the poor world in the form of debt repayments [which] is an obscenity which degrades all those of us who benefit from it.’

And this is a debt, now standing at $2.5 trillion, which the developed world now admits, is unpayable. Worse still, is the vast transfer of resources from the developing world to the developed, which if the system reflected the real value of resources would make the developed world the debtor nations. As with many of the ideas in ‘The Age of Consent,’ Monbiot stands the accepted call of renouncing debt, on its head. Instead, he argues that used correctly, this debt is a lever or a method of ‘blackmailing’ the developed world into altering the relations between debtor and creditor nation. Monbiot argues that as this debt is unpayable and that wholesale renunciation would lead to economic catastrophe, threats of its renunciation needs to be used in conjunction with a viable alternative. Enter the International Credit Union.

Monbiot proposes the creation of the International Credit Union, an ingenious system designed to ‘level the playing field’ between the rich and poor worlds. The ICU was the invention of John Maynard Keynes back when the IMF and the WB were being set up after WWII, largely to finance Britain, which was then the largest debtor nation (owing it all to the USwhich had bankrolled the UK’s war effort).

The ICU works as follows:

The ICU would issue its own currency, called a bancor, which was exchangeable at fixed rates of exchange with national currencies and would be the unit of exchange between nations. It would be used to measure a country’s trade surplus or deficit.

Every member country would have an overdraft facility equivalent to half the average value of its trade over the past five years. As the sum of global deficits and surpluses have to be equal to zero at the end of the year, overdrafts would have to be equal to the surpluses.

Hence, ‘[A]ll members of the Union would discover that they had a powerful incentive, by the end of the year, to ‘clear’ their bancor accounts; that is, to end up with zero, meaning that they had accumulated, when everything was added up, neither a trade deficit nor a trade surplus across the year.’

Why? Because ‘any central bank[that is, a nation’s bank] using more than half of its overdraft (in other words, going too far into trade deficit) would be charged interest on its overdraft, which would rise as its overdraft rose. It would also be obliged to reduce the value of its currency by up to five percent (making its exports more attractive) and to prevent the export of capital. These are conventional means of discouraging excessive debt.’

‘Keynes’s key innovation [was that] nations with a trade surplus would be subject to almost identical pressures. Any member nation with a bancor credit balance which was more than half the size of its overdraft facility would be charged interest on that account at a rate of ten percent. It would also be obliged to increase the value of its currency and to permit the export of capital…. If…its credit balance exceeded the total value of its permitted overdraft, the surplus would be confiscated [and] be placed in the Clearing Union’s Reserve Fund.’

In simple terms, Keynes’s system changes the way nations with trade surpluses operate in relation to nations with deficits. The net effect would that nations in surplus (the developed world) would have to spend their money in nations with deficits (the developing world). Keynes’s system eliminates the vicious cycle of debt that ‘turns temporary debts [into] permanent debts, and small debts…to big ones, credit and debit would cancel each other out by the end of every year.’

Keynes’s ideas were received with enthusiasm everywhere in Europe. ‘[H]e had, for the first time in history, devised a distributive system which increased the general prosperity, while leveling the power of nations.’

Predictably, the only country to oppose the ICU was the US, as it was the world’s largest creditor nation and hence had everything to lose and nothing to gain from the ICU. Moreover, by insisting that national debts be paid in gold and a rate fixed to the dollar of $35 to the ounce, the US guaranteed that the dollar would be the currency of exchange between nations. Hence the ICU was never adopted by the World Bank or the IMF.

There are moreover, other tangible advantages to something like the ICU:

‘One of the implications of this system is that nations will need to trade less in order to stay afloat. A self-balancing international trading system is likely to bring to an end to desperate overproduction by the poor and (because commodities are, as a result, so cheap) massive overconsumption by the rich.’

This would lead to less environmental pressures and contribute toward reducing the rate of climate change.

Monbiot also sees the ICU, using its Reserve surplus as the means by which to pay for the global parliament.

I’ve focused on the ICU because it’s one of the ideas he explores in greater detail, which leads me to my criticism of ‘The Age of Consent’ namely, that it makes a lot of assumptions about our ability to change institutions, for example the UN, but doesn’t say much about how they could be transformed or perhaps more importantly, if it is realistic to assume that they can be. He doesn’t moreover, go into an examination of his key proposal, the Global Parliament; for example, what kinds of structures would we need to implement it?

In many ways, the proposals contained in ‘The Age of Consent’ are a bit like Rubik’s Cube, each facet depends on all the others; fail to solve one and the others are left hanging. But ‘The Age of Consent’ doesn’t offer quick fixes, there are no miraculous cures. This is not a coffee table book for after dinner conversations. I for one, was inspired by it to contemplate what I could I do, in a practical sense to implement the ideas contained in it.

This is an important book, that anyone concerned about the future of the planet and looking for practical ‘advice’ on directions and strategies, needs to read. It doesn’t contain pat answers, indeed it incites the reader to get involved, which if it has a central ‘message’ at all, this is it: Get involved!”

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