Tom Griffin (London, OK): I am not normally fan of blog memes, but Guy Aitchison's appeal to the British blogosphere for suggestions that will change our democracy for the better has thrown up some interesting ideas.

For my submission, I want to put forward an idea that speaks directly to Power2010's remit to ensure that the next Parliament is a reforming one.

What's the Big Idea 

A compulsory register of lobbyists,  including details of who is lobbying decision-makers and how much they are spending on lobbying activities.

In the US, strict disclosure requirements have contributed to the downfall of corrupt lobbyists such as Jack Abramoff. In Britain, a coalition of civil society groups in the Alliance for Lobbying Transparency are campaigning for similar legislation. The idea has also been backed by the Commons Public Administration Select Committee and by over 200 MPs in two early day motions by Gordon Prentice and Michael Meacher.

It has nevertheless been rejected by the Government, in a response to the Public Administration Select Committee last week.

Why is this change important to you? 

The cash for laws affair has shown that the British Parliament is not immune to lobbying scandals, but it only came to light because of a journalistic sting operation. As MPs face a crackdown on expenses, there is a real danger that they will become even more susceptible to lobbyists' influence.

The Government is already backsliding on any commitment to reform in the  wake of the expenses crisis, as its preference for self-regulation of lobbyists shows.

The Conservatives take a traditional Westminster view that personal corruption is best dealt with through an election to cleanse the Augean stables. Yet there are worrying signs that the parliamentary clearout may leave us with even more MPs drawn from a homogenous political class.

The Tories themselves share Labour's preference for self-regulation, and some 28 current lobbyists will be standing for the party at the next election.

If we are to get a reformist parliament, it is up to us to ensure we elect one. An ideal way to do that is to include a lobbyists register among the five pledges that Power2010 asks all candidates to sign up to.

That's my Power2010 idea. You can submit yours here. 

I'm going to tag the following as five bloggers whose ideas as I'd like to hear:

Alex Harrowell - Yorkshire Ranter

Gareth Young - Little Man in a Toque 

Simon Dyda - The Dyda Dispatches 

Joan McAlpine -  Go Lassie Go

Mick Fealty & Co - Slugger O'Toole

 

Britain, as has often been observed (including, of course, in many articles in OurKingdom), is a country in the grips of a profound identity crisis. This is so much the case that it is even unclear, I would say, what and who we are referring to by the ‘Britain' that is in crisis: who are the British, and what is Britain?

For me, the crux of the issue is the splitting up of the old Anglo-British national identity that was at the heart of imperial Great Britain: the way in which the English have tended informally and instinctively to regard England and Great Britain as indivisible, and as interchangeable names for a single, unitary ‘nation'. Of course, the reality of imperial and pre-devolution Great Britain was never that simple, as Scotland, for instance, always retained many of the institutional trappings and the cultural identity of a distinct nation. But for the English, the English-national and British-state identities merged, making Great Britain (and later, the United Kingdom) to all intents and purposes the proxy-English nation-state.

Devolution changed all of that, once and for all. It was a definitive refutation of the ‘absolute' character of the Union, in both senses: not only the unitary character of the British polity but the ‘union' (merger, (con)fusion) within the English national identity between England and Great Britain. It was this cultural and psychological union that had sustained the political Union throughout its history, as it secured the loyalty and ‘ownership' of the greater part of the UK, which viewed Great Britain as ‘our nation' and the UK as "one of the great creations of this country", to quote Vince Cable's words at this week's Liberal Democrats' conference (The unconscious irony in Vince Cable's statement is that the UK is supposed to be ‘this country' not something that ‘this country' (England) has created!).

But as a result of devolution, it became possible, indeed necessary, to see the UK no longer as the seamless extension of English parliamentary democracy, nationhood and power. And, more fundamentally still, the English could begin to separate their English and British national identities at a subjective and psychological level, precisely because those identities had also been split apart at the objective, political level - with ‘great(er) Britishness' no longer being defined as a continuation and extension of Englishness but as a set of different national identities from which the English identity, too, was differentiated and distinct.

The excellent Open Europe email service includes this item:

"French Foreign Minister suggests Blair is currently the only real candidate for EU President. In an interview with France Inter, French Foreign Minister Bernard Kouchner was asked if Tony Blair will become EU President if the Lisbon Treaty is ratified. He said, "In any case, Tony Blair is a candidate and people are talking about it a lot, yes."  Asked if there are other candidates, he said, "Not many."  Asked who, he said, "No, honestly", to which the interviewer replied, "So it's Blair then?"  Kouchner said, "At one point there was Verhofstadt.  Wait! There are others who will perhaps put themselves forward; it is not for straight away.  But for the moment, indeed..." Asked if he thought it is right that a supporter of the Iraq war should become the first President of Europe, he said, "He has given several speeches on Iraq for a long time; he has been a supporter of peace; he has been the representative of the Quartet for peace in the Middle East.  On the other hand, there will also perhaps be Mr. Rasmussen, the Danish President of the Socialist International who will put himself forward, but we don't know of any other candidate."

I'm not being rude or cynical. But diplomatic concern seems pointless. The UK needs some kind of Obama force that offers a significant and positive change of direction and draws on new energy but can deliver inside the system. This is hardly a revolutionary desire! The Lib Dems, with over 50 MPs, millions of votes, a party machine, young leaders, are in the perfect position to be this force.

Much more important, they call it right on issues that are popular. They got the economic crisis right and are believed, immensely important in terms of credibility and popular respect. They led on liberty where the latest poll shows overwhelming, eight-to-one support for the view that the state is taking too much power, a classic liberal view and a constitutional one. Nick Clegg denounced our "rotten" system in the most robust and systematic terms since he became leader. He made a great speech saying that the acuteness of the economic collapse in the UK was caused by the political collapse of Westminster, well before the expenses crisis struck. On the issue of the Iraq war, that gave Obama his original moral authority, the Lib Dems stood out from the crowd. And this is an issue that those who vote still care about.

Why then, when their answers are so often right, principled, consistent and popular are the Lib Dems so useless? Why aren't they at 30 per cent support plus? Why should they have to ask for a place in any television debate, rather than being the main contenders?

The answer seems to be: It ain't what you say, it is the way that you say it.

I recall watching what I think was their spring party conference. For a few flickering seconds, Clegg was in the top half of BBC News. We need an act of faith. It sounded good. It disappeared. I saw no other report. But who was to make the leap? He was calling on voters to bet their faith on him. But what he and his party need to do is to take a bet on the people. It is they who need to make the change, not the voters.

The party's body language is way too Westminster. When push comes to shove, the Lib Dems are reasonable. Their leather radicals in the Lords look forward to an increase in MPs that will make them the arbiters of a hung parliament and their advice stifles the party - they are the UK's last true Establishment.

Now Clegg has written a Demos pamphlet saying it is The Liberal Moment. It's "jolly good". You can hear the plaudits from the noble Lib Dem Lords being dripped into his ears. Their murmurings are poison! Labour displaced the Liberals a century ago because of organised forces outside Westminster, in the Trade Unions and the Co-operative movement. The reshaping of British society now, that Clegg writes about, does indeed undermine traditional Labour. But its institutional forms are in the Scottish and Welsh parliaments and the London Mayor and movements against the EU. There are potential networks across civil society that could and should support the Lib Dems. But the party has to make the first move, demonstrate a hunger for power on its own terms, appeal to these supposedly dangerous elements. Clegg celebrates citizens as unruly and not wanting to be controlled by the state. I agree. No, I strongly agree. But the way it is said seems patronising. The Lib Dems need to be the unruly party if they are to appeal to the unruly majority.  

The Lib Dems have got to start being different and stop playing the game in the same old way.

PS - James Graham from inside the party makes a parallel, thoughtful argument that ends with a call for a Liberal Democrat "movement" as he gasps for oxygen of life.

PSS - The is a response from David Marquand that takes the argument further into a full OK post here.

PPSS - Sunny is in on the act too HERE

Tom Griffin (London, OK): Last week, Home Office ministers announced they were abandoning a clause in the Borders, Citizenship and Immigration Bill that would extended immigration controls to air and sea travel between Britain and Northern Ireland. The climbdown came in the face of opposition from the Lords, where it was confirmed on Monday that new immigration spot checks on the Irish border will also now be shelved.

Although the government remain committed to the planned changes in principle, it looks as if the Common Travel Area is safe for the moment. As Slugger's Brian Walker has noted, it's a pragmatic arrangement supported by all sides in Ireland, if not always for the same reasons:

The particular Irish (north and south) interest in the Bill was to avoid the unique status in Britain of Irish people becoming downgraded more or less by accident because of new restrictions on foreign immigration. “British Unionists” of course are Siamese twins with southern Irish passport holders because of the facts of geography. The Irish, note, are not regarded as foreign in the 1949 Act, passed when the Republic cut its last links with the Commonwealth. Since then , tightening up through the British Nationality Act and successive anti terrorism Acts have pulled away from British- Irish exceptionalism, while the GFA has pulled in the opposite direction, towards interchangeability of citizenship.  

 

 

With Parliament shutting down until the 12^th of October, 38 Degrees is launching a new campaign, MP Holiday Watch, to find out how exactly MPs spend their time. The usual story is that MPs spend this time getting back to their constituents and catching up on case work, but though this might hold true for some, the truth is that we just don't know what our MPs are up to. How many take well paid second jobs or spend most of their time holidaying in the sun rather than dealing with their constituents' issues?

Some suggest that asking MPs to divulge details on how they spend the summer recess is intrusive and a needless violation of the privacy of our hard-working elected representatives. But, as David Babbs points out, these arguments sounds more than a little familiar when one considers the rationale for not investigating MPs' expenses for so long… While there might be a case to be made about protecting privacy if 38 Degrees were demanding detailed holiday plans and day to day movements of MPs, the short survey they suggest MPs take 10 minutes filling in seeks simply to build up a picture of how they will spend the recess – how many weeks on constituency work, how many weeks (if any) on a paid second job, and so forth. Requesting a breakdown of how our representatives spend the 82 days they do not have to be at Westminster is simple enough, and doesn't require the exact address your constituency MP will be staying at in the south of Spain, nor whether the kids will be going too.

A crisis in the US real economy marked by growing unemployment and failing businesses is not a product of the current financial crisis. In fact, the financial crisis was but a symptom of a long brewing systemic crisis in the real economy. These claims are made separately by economists Richard Wollf (Univ. of Massachussetts, Amherst) and Ravi Batra (Southern Methodist University, Dallas). They propose an alternative diagnosis of the current economic crisis. If their analysis is correct, fixing the financial system might just deal with one of the symptoms but not the root cause of a deeper economic malaise. Given the amount of public money being thrown at fighting the economic downturn, it is crucial to consider alternative explanations of current economic problems in order to devise strategies that make the best use of scarce resources.

Housing Bubble
The most widely accepted diagnosis of the current financial and economic crisis is that it started with the housing bubble in the US. This in turn resulted from irresponsible sub-prime mortgage lending coupled with unregulated and reckless financial engineering. When the housing bubble burst, banks found themselves holding heaps of unsecured debts packaged into complex financial products that could no longer find new buyers. Financial institutions suspected each other to be in a precarious financial position similar to their own and inter-bank lending came to a halt. Several of these institutions went bankrupt or would have gone down that route if public money ($2.98 trillion at last count) had not bailed them out.

Wage-Productivity Gap
Wollf and Batra do not deny the role of housing bubble and financial malpractices in triggering the financial collapse. What they seem to suggest is that there is a need to explore the chain of causation further. Doing so in their analysis reveals that a wage-productivity gap since the last three decades in the US created a systemic imbalance between aggregate demand and aggregate supply in the economy. Since the early 1970s wages of employees in the US have not risen at the same rate as their productivity (output per hour). In fact, real wages of roughly 80% of the US workforce have been stagnating for more than three decades. On the other hand, productivity has been increasing rapidly due to technological innovation and improvement in human skill levels. Now, wages are a key lever for creating demand in the economy whereas productivity drives the increase in supply. In other words, workers' wages need to increase in order to absorb the increase in supply of goods that results from increased productivity. Yet, the wage-productivity gap has now existed for nearly 35 years.

The consequence of this imbalance is that demand for goods and services required to keep up with supply is created in the short term by creating new debt. The housing bubble was a product of this demand-supply disequilibrium. Since real wages are not rising in step with productivity, people could only consume the increased supply of goods and services by taking help of cheap and easy credit. But after the housing bubble burst, credit is no longer easily available and levels of debt have been exposed to be unsustainable. Businesses realize that their goods will not be sold, profits will decline and they are laying off employees and in many cases closing shop. Due to the wage-productivity gap, this economic decline may have happened even in the absence of a mortgage driven financial crisis. Then again, the housing bubble may have simply postponed the real economy crisis that was imminent, and in the process exacerbated the systemic tensions between demand and supply in the economy.

Where did the profits go?
So why have wages not kept step with productivity despite a "golden era of profitability"? Where have the profits from the productivity growth gone? A paper by Gordon and Dew-Becker, economists from Northwestern University, found "that over the entire period 1966-2001, as well as over 1997-2001, only the top 10 percent of the income distribution enjoyed a growth rate of real wage and salary income equal to or above the average rate of economy-wide productivity growth...[whereas] the bottom 90 percent of the income distribution fell behind or even were left out of the productivity gains entirely" (italics in original). Additionally, the wage share of national income is declining in the US, while the share going to corporate profits has increased from 17.7% in 2000 to 20.9% in 2005. The European Trade Union Congress complains of a widening wage-productivity gap in the eurozone as well.

It appears that "the killing fields of inequality" (as Göran Therborn puts it in his recent piece) and the relentless pursuit of profits by many businesses are critically undermining the primary source of demand in the economy - its workers' wages. As more people lose their jobs in the recession, there is further downward pressure on consumer demand. Making credit available to businesses alone is not likely to reverse the unemployment trend since businesses will invest only when they have confidence in potential returns on their investment. Lack of demand for goods and services in the economy, however, does not give that confidence. It is a vicious cycle but one that can be broken by restructuring the economic system to distribute the wealth more equitably. And unless this fundamental factor is addressed, according to Wollf and Batra, it is hard to see a long term economic recovery.

What is Mandelson up to now that he has seized higher education as well as business? The philistines are through the gates. But where next? My first reaction is that Blair's aim is to become President of Europe, as has been widely reported in our ever revealing press and broadcasting media. To achieve this they have to keep Brown in control of the UK vote. Once Blair has the job he'll appoint Mandelson as a special advisor on a euro-salary and Brown can... 

But now I suspect that Mandelson is considering other options as well. After all the Commons is now in complete disrepute. There are today seven peers in the Cabinet. Why not go the whole way. As Brown crumbles Mandelson can replace him - picking up from Lord Salisbury who was our upper chamber's last PM. Why not? The demeaning PMQs are replaced by polite exchanges. The wretched Commons is moved into deserved second place. There is far more wisdom among peers than MPs. The New Labour project was to place government in the hands of specialists.What better way to achieve this?

I have a different take on David Cameron's speech to Iain Dale's celebration. He wants to modernise parliament but not really democratise it or our politics. There are some good ideas. Unlike Stuart White's otherwise excellent analysis of the Tory leaders 'populism' I think open primaries are much better than the closed system of selection we have - think Obama. But overall, there is not a chance that he is going to "give power to the powerless", his market model ensures otherwise. What is missing is any inclusion of deliberative institutions that really would be a check on Prime Ministerial dictatorship. No mention of an English Parliament (Iain himself excellent on this) or replacing the Lords (with either election or sortition) and a ludicrous caricature of PR. On one issue where he could have been decisive, fixed term parliaments, he equivocated. Iain greets the signs of movement as mana:

I am delighted that he has come round to the idea of Fixed Term Parliaments. In October 2007, together with several others, I set up the Fixed Term website as a reaction to Gordon Brown's dithering over calling an election. We put the case for fixed terms, and if this has been accepted by David Cameron, it's a real step forward. I remain of the view that it is totally improper for a Prime Minister to call an election at the time of his or her own political convenience.

I'm one of those "several". Indeed I am the site's facebook administrator along with Iain - who did totally all the work - and Stephen Tall. As you can see Cameron has not actually committed himself. He says he is worried about what happens with a hung parliament. But a few seconds research would have led him to the German model, where the term is fixed for four years unless a motion of no confidence is passed. This would take the decision out of the hands of the PM but allow parliament as a whole the flexibility to go to the voters in an impass.

The main thing I want to say about Iain's post however is that he should not go on about how hard reform is and how radicalism runs into the sands of procedure. Not unless you want it to, it doesn't. Blair's talk of the "forces of conservatism" was blather. This is what Iain worries about:

Can you imagine how difficult the crusty clerks in the House of Commons will make it for him? They will resist any change to their centuries old traditions and find 20 good reasons why something cannot be changed. So will the whips. So will the civil service. So make no mistake, David Cameron will have a fight on his hands if he is really determined to effect such radical changes.

I recall how Robert Hazell of the Constitution Unit went on about how long Labour's legislation on a Scottish Parliament and a Welsh Assembly would take, not to speak of the Human Rights Act, etc. Derry Irvine just blasted it through. A clear aim, a bit of a bully, and those traditions and clerks prove to be smoke without mirrors. You could not have found an expert in the land who would have said that Labour could have passed the amount of very far-reaching constitutional reforms it pushed through in its first term. What matters is the will to change. That's why Cameron's careful let-out clauses speak louder to me than the fine words. 

 

Many of the sessions at the convention here today are about the state of our politics. We have had 30 years of governments who talk the talk of Liberty. They have presided over an era of centralisation, nannyism, a drip-drip erosion of civil liberties and a perpetual disregard for the spirit of democracy? What can we do about it?

In this context, a session on "Love and Liberty" may seem strange, almost an embarrassment to bring "love" into play at a political convention. The proposition we are exploring -- even proposing -- here is that "love", somehow understood, is a critical missing ingredient in our attitude towards the social and political world, and that without it we have no foundation for civil society or for the true flourishing of humanity that is at the heart of liberty.

Our four panelists will all bring a different interpretation of what that "love" is. For Mike Edwards, thinker, writer and development expert, there are personal attitudes and dispositions of care and friendship which can build mutually reinforcing cycles of political and personal change. Sheila Rowbotham, historian and philosopher of feminism, describes in her recent biography of Edward Carpenter a life that seeks to unite "inner" and "outer" democracy, making a politics out of the everyday experiences of work, sex, home and community. Marina Warner, cultural critic and feminist writer, highlights the importance of the imaginary and the aesthetic in shaping political possibility. Satish Kumar, a spiritual voice of ecology, brings the love of nature and the change of consciousness it requires to centre of building a good, just and sustainable world.

So what has love got to do with it?

For the very radical early nineteenth century Jeremy Bentham, a world ordered by the calculation of utility---the greatest good for the greatest number---is one that has at its core all the natural sympathy and egalitarianism that progress requires. Social problems become technical problems of calculation; society is a causal and computational nexus of utilities. Utility was a kind of civic religion.

However, the "short 20th century" was marked by the horror of the hubristic, dehumanising reason that this sort of technocratic view eventually produces. We should remember Hannah Arendt's view of totalitarianism: it is not evil that creates horror, it is action in the absence of thought. Much of the loss of civil liberty that forms a reason for our coming together can be seen as excused and caused by that view of politics as "the rational adminsitration of things" (in the words of Saint Simon, strange John the Baptist for the database state). Security and efficiency, all go with discretionary executive power.

We will be exploring the role of the emotional, affective, aesthetic, personal, cultural and dispositional in creating another sort of politics, one which really can deliver a modern liberty. There is a long tradition of the serious examination and analysis of "civic religion" -- of the types of consciousness that society must make possible in order to be a good, just and free society. From Rousseau through JS Mill, as well as later in the syndicalist and anarchist traditions, there is a sense that the emotional attachments to society matter to politics. This is what this session is about.

I've just completed my second turn on the front page rota, handing over to Kanishk tomorrow, who hands over in turn to David, who hands over to Tom, then Rosemary then Susan. The system is getting a little less hectic, both in terms of my own preparing for the weekbut also with all the sections on the site getting used to highlighting material that should be considered for the front page. The goal is to make a distributed publication with components all sharing a "family resemblance" that amounts to the openDemocracyy core brand and values. It requires a trade-off between control and freedom that proving exciting to experiment with.

The week had some excellent reflections on the Iranian revolution (I particularly liked this). We carried a lot of material on civil liberties---a current focus given our sponsorship of the Convention on Modern Liberty---for example these posts on the disturbing question of the UK as a torturing state, and a long, three part piece that I have been working on for a while about the relationship between technology and liberty (here, here and here). The Russia section is producing a lot of excellent material, for example distressing piece on the economy of the regions.

We had just under 110,000 page views this week on the main site - that excludes forums and the wiki (about 15,000 pageviews on top) but includes the sections. The most popular articles are shown in the picture here:

If the crisis turns into a new Great Depression, it will most likely be due to a breakdown of cooperation among the major economies. But sustaining international cooperation requires domestic support; ignoring the demands of poor and middle-class citizens for relief will inflame more extreme anti-globalisation views, making international cooperation much more difficult.

 

If the current crisis turns into a disaster on the order of the Great Depression, it will most likely be due to a breakdown of cooperation among the major economies. The history of the modern world economy - and especially of its collapse in the 1930s - makes clear that the principal powers have to work together if they are to maintain an integrated international economic order.

International cooperation needs domestic support for openness

Yet governments are only able to make the sacrifices necessary to sustain international cooperation if they can rely, in turn, on domestic political support for an open world economy. National publics unconvinced of the value of international integration will not back policies - often costly and difficult policies - to maintain it. This can lead - again, as in the 1930s - to a perverse process in which global economic failure undermines support for economic openness, which leads governments to pursue uncooperative policies, which further weakens the global economy.

On both dimensions, international and domestic, we are in trouble. So far, despite high-sounding internationalist rhetoric, governments have responded to the crisis with policies that take little account of their impact on other nations. And the crisis has dramatically reduced domestic public support for globalisation, and for national policies to sustain it.

Why reasonable governments do unreasonable things

On the international dimension, the threat is not so much of explicit protectionism but rather of nationally specific policies that impose costs on others, directly or indirectly.

These beggar-thy-neighbour policies are not normally the result of some inexplicable bloody-mindedness on the part of venal governments, or of purposeful antagonism toward rivals. They are, instead, desperate attempts to defend national economies from gathering storms. But they impose negative externalities on other countries, and in so doing can provoke hostile reactions that can drag all parties concerned into bitter conflict.

Not out of arrogant nationalism but out of domestic desperation

The early-October Irish blanket deposit guarantee, implemented with the perfectly understandable goal of avoiding a bank panic in a small and vulnerable economy, nearly induced a run on British banks as British depositors rushed to transfer funds from British to Irish banks. The current American financial bailout is drawing capital from the rest of the world - including from emerging markets that urgently need it - not out of arrogant nationalism but out of domestic desperation. And the buy-American provisions of the current stimulus package demonstrate the ease with which well-intentioned policies can turn into uncooperative predation.

The range of policies of this type - sincere national initiatives with counter-productive international implications - is virtually endless.

Negative externalities galore

Support for troubled national firms can turn into anti-competitive subsidies to national champions. Currency depreciation, a common recommendation for difficult times, can put competitive pressure on trading partners, leading to round after round of "competitive devaluations." Debt-averse governments can limit the size of their fiscal stimulus, thereby free riding on the deficit spending of neighbours. Countries with intolerable foreign debt burdens can seek debt write-downs that further cripple creditor-country financial markets. And all of these can interact to create powerful protectionist pressures. One country's fiscal stimulus can "leak" into a neighbour, draw in a surge of imports from the neighbour, and provoke a bitter protectionist backlash.

Even with the best of intentions, governments can act in ways that drive wedges among countries, block cooperative responses to the crisis, and ultimately make everyone worse off. And despite today's flowery rhetoric, there is little evidence that national policymakers are willing or able to take into account the international implications of their actions.

If this pattern continues, it will be a major obstacle to a rapid recovery.

Will anyone speak for the rest of the world?

National governments rarely consider global consequences, because their constituents are domestic and national publics are very sceptical about the contemporary world economy.

Even before the crisis hit, there had been real erosion in popular support for globalisation. Economic integration has come to be associated with job losses, competitive pressures, and a worsening of income distribution in developed and developing countries alike. Nearly universally, the lower registers of the income distribution are most dubious about the benefits of international economic integration, and these doubts are particularly widespread in more unequal societies.

The crisis has heightened suspicion of a world economy that appears to be the source of much of our current predicament. There is increasing resentment that the expansion of the past ten years primarily helped the wealthy, while the poor and middle classes are being asked to sacrifice to deal with the hangover of the binge. This is coupled with similar resentment that governments appear to privilege the concerns of international banks and corporations. There is an advancing popular view that insulation will help reinforce national attempts to deal with the crisis.

National publics will increasingly resist making national sacrifices in order to honour international economic obligations. Meanwhile, concentrated interests who support globalisation - such as the international financial and corporate sectors - have been undermined by international economic weakness. Broad popular sentiment is increasingly widespread and powerful that national responses to the crisis must take priority over international obligations.

Attention must be paid: Crisis's impact on income distribution

The impact of the crisis on income distribution cannot be ignored, for it will determine much of the politics of government responses to the crisis. Ignoring the demands of poor and middle-class citizens for relief will inflame more extreme anti-globalisation views, making international cooperation that much more difficult.

These two dimensions, the international and the domestic, are closely interrelated. The less domestic support there is for globalisation, the harder it will be for national governments to reach cooperative agreements with partners. The less international cooperation there is, the greater the likelihood of a deterioration in the global economy. As in the 1930s, beggar-thy-neighbour policies, distributional conflicts, and international economic stagnation could feed on each other in a downward dance.

Into the maelstrom?

Governments have to act consciously to counteract this dismal possibility.

• At the domestic level, governments need to work out an equitable and politically sustainable allocation of austerity across the population. This means ensuring that those sectors of society hit hardest by the crisis are not also the ones asked to bear the stiffest sacrifices. Societies with existing social safety nets will have to expand them and make sure they work for wider segments of the population than they were planned. Countries with weak or non-existent social programs for the victims of crises such as this will have to create them, and quickly. By the same token, basic principles of equity - and even more basic political realities - demand that those who received the main benefits of the boom have to bear their share of the costs of the bust. Governments that ignore the social and distributional implications of the crisis are likely to find themselves either driven toward extreme and counter-productive policies, or swept away. Even sustaining existing social programs is extraordinarily difficult in such hard times. This is true of all governments, which face powerful fiscal pressures as tax revenues dry up and demands for spending soar. The difficulties are especially challenging for developing countries, many of which have lost whatever access they may have had to external sources of capital. Yet governments that do not provide effective relief to those hardest hit by the crisis face the prospect of dramatically increased social and political strife, which will only deepen the disaster.
• At the international level, governments need to work just as consciously to coordinate not just words, but actions. This will not happen of its own accord. So far, the solidarity of OECD central bankers has been impressive. However, this builds upon a long-standing tradition of the solidarity of central bankers, and upon decades of institutionalised collaboration, and can only take us a very short part of the way. There is nothing analogous on other dimensions.

The free interplay of government policies will not spontaneously bring forth international cooperation
Jeffrey A Frieden is Professor of Government at Harvard University. This article is based on a column in Vox. Additional material by Dennis Nottebaum
Collaboration among governments has to be intended, designed, and monitored. This almost certainly requires some international institutional framework, some set of agreed-upon rules and ways of enforcing them. The governments of the major economic centres need to consult regularly on the international dimensions of the crisis, and of its resolution. They need to hold each other to account, and they need some reasonably independent mechanism to identify policies that risk driving governments toward conflict rather than mutual assistance. Other foreign policy goals can and should be linked to supportive efforts on the economic front.

Conclusion

If governments do not pay real attention to the domestic distributional impact of the emergency, and to the international implications of their national policies, the current calamity will feed on itself. The Great Depression of the 1930s was more a failure of national policy, and of international cooperation, than it was a failure of markets. Success in confronting the current crisis will similarly depend on socially responsive and viable national policies, and on globally responsive and viable international cooperation.