We need a word to describe the dark mood, felt by many, of loss of hope for the world. The German Weltschmerz (world-weariness) almost covers it, but perhaps stronger: Welt-Verzweiflung (world-despair) – that feeling that the biggest challenges we face are global in nature, beyond the control of mere citizens or nations, yet that nations have become so unco-operative, disorganized and combative, their international institutions so impotent and dysfunctional, that there is no chance of solving anything.
Climate change – not just the emissions contributing to it, but the big investments needed to allow us to endure it – has failed so far to find the international agreement it so badly needs. Same with the much-discussed crisis of income inequality and slowing social mobility. Ditto international extremism, Russian expansionism, absolute poverty and food shortages. We look at these challenges and give up.
But we shouldn’t. This may very well be the best moment the world has ever had for international co-operation around big problems. If you’re looking for a golden age of internationalism, this might actually be it.
Don’t believe it? Think back five years. At the worst moment of the economic crisis, when it seemed very likely that major economies, banks, currencies, governments and safety nets were going to collapse, something happened: Those dysfunctional institutions started to function. Feuding nations started to co-operate, in surprisingly effective ways.
U.S. political scientist Daniel Drezner tells the story in his tellingly titled book The System Worked. “Despite initial shocks that were more severe than those of the 1929 financial crisis,” he says, “the global economy bounced back from the 2008 crisis with relative alacrity. Compared to crises of this magnitude in the past, the world economy did not suffer as big an economic hit, and growth resumed more quickly than was expected. This is in no small part because global economic governance supplied the necessary public goods to prevent worst-case scenarios from being realized.”
- The United States, after faltering, proved to be a leader. China, as Mr. Drezner notes, “acted like a supporter rather than a spoiler.” The European Union and the European Central Bank, after blowing it badly for years, got their act together. None of them acted perfectly: The U.S. was far too generous to its banks and Europe maintained its crippling imbalances – but the worst was avoided.
- More than that, the past five years have seen international co-operation work to solve big problems in a way that simply never happened in the old superpower-dominated world:
- After the crisis, new internationally agreed-upon banking regulations (Basel III), requiring much larger deposit reserves to prevent over-leverage banks from failing, passed with record speed.
- The Chinese currency imbalance (remember that?), in which the renminbi had been kept artificially low to boost export sales, build up huge currency surpluses and hamper the world economy, came to a head at the 2010 Toronto G20 summit (remember that?), where the major economies virtually begged Beijing to do something. To the surprise of many, China responded by doing exactly what everyone wanted: It raised the value of its currency by 5 per cent each year for three years, to the point that by 2013, its mountainous foreign-exchange reserves had stopped growing and The Economist declared that “the world has rebalanced.”
- Long-hated postwar economy-rescuing organizations, such as the International Monetary Fund, were reformed so they would be controlled far more by developing countries, have much larger funds to rescue countries in trouble and loan conditions that were far less damaging to the political and social structures of client countries.
- The very serious problem of offshore banking, in which trillions of untaxed earnings were held in secret foreign accounts, was tackled in an international effort, spearheaded by the United States, that now makes it much tougher for wealthy individuals and corporations to hide money from government.
- International piracy, another huge threat of five years ago, was confronted by a 25-country coalition (including Canada) guided by two United Nations Security Council resolutions. Their actions have turned it from a major crisis into a minor issue.
As a result of these actions, however awkward, late and half-hearted they were, ultra-nationalism, extremism and trade protectionism didn’t erupt. In fact, protectionism is at a lower level than before, trade is more open and extremism is less of a threat. This unprecedented wave of international co-operation didn't make the world a utopia - far from it. We face enormous problems. But it did prevent the very worst from occurring, and created an environment where larger problems can, with sufficient will, be solved.
Our many serious problems may be hard to address, but it’s not because of a lack of international co-operation. The instruments for co-operation are there; we, as citizens, need to press our governments to use them to our advantage. Globalization, it turns out, has become not a problem but, if we can seize it and use it to our advantage, the path to a solution.