The Rules-Based International Order and the Foggy Bottom Blues
EDITORIAL, 30 Jan 2023
The four words “Rules-Based International Order” (RBIO) are surrounded by controversies. I will review some controversies as a prelude to a proposal. The proposal will recommend discarding the currently dominant discourses that are, as Michel Foucault might say, the historical conditions of the possibility of RBIO discourse. I will recommend an “unbounded” attitude toward reinventing human life on this planet to cope with the physical reality that we are now an endangered species, and to cope with the social reality that we are now a species now so politically polarized that working together to take homo sapiens off the endangered species list is nearly impossible.
One controversy starts by asking, “What are the rules?” Quinn Slobodian, in his must-read book The Globalists: The End of Empire and the Birth of Neoliberalism, demonstrates that the rules referenced by the acronym RBIO when it was coined, are not the rules RBIO denotes in 2023.
Back then the prevailing social philosophy managed to reconcile, as Gunnar Myrdal did, the Enlightenment ideals of liberté, egalité, fraternité with economic orthodoxy. The RBIO promised a better future after a disastrous depression and a disastrous war.
Back then, the rules championed by the International Monetary Fund allowed capital controls. In 2023 for the IMF, the WTO, USAID and other leading think tanks and funders, capital controls are verboten.
The new name of the game is to reduce the political risk of investors to zero. Defending the free movement of capital in, and the free movement of profits out, appears to have become part of the core meaning of being rule-based.
Denying the right of sovereign nations to impose capital controls is a small sample of a big trend. Between the coining of the concept of a Rules-Based International Order and today´s blues at Foggy Bottom –Foggy Bottom is the neighbourhood of Washington DC where the U.S. State Department is located– the centuries old conflict in international law between the sovereign rights of nations and property rights appears to been resolved in favour of property rights.
During several decades of neoliberal advance and social democratic retreat radical neoliberalism has crept into international trade agreements capable of overruling the laws and policies of nations. In its strong and emblematic form, it is rooted in the jurisprudence of Carl Schmitt, who in turn derived it from Roman Law. On Schmitt´s view, the world has double governments. A map of our planet shows that each nation governs some part of the earth. The national governments correspond to the Roman Imperium, the authority of the Emperor, and, by extension, the authority of any nation-state. But there is another authority, Dominium, the authority of property. The jurisprudence of 2023´s global economy recognizes both. Imperium and Dominium. Obeying the rules means obeying both.
When democracy threatens property, then, according to radical neoliberalism, a state of emergency becomes a legitimate path to restoring respect for Dominium in its contemporary forms. Giorgio Agamben famously wrote that the true sovereign is whoever has the power to suspend the rules and declare a state of emergency. This is no joke when it translates into disappearances organized by the secret police and mass graves in the desert, as in the case of Chile, or into freezing the cash reserves of hungry nations held in New York and London banks, as in the case of Afghanistan. There are many other cases.
Separating Imperium and Dominium, and treating the second as more fundamental, hard-line neoliberals (notably some German ordo liberals) call for the politicization of the economy and no welfare guarantees. Milton Friedman is an example of a neoliberal whose views are comparatively moderate.
A second controversy surrounding today´s rule based international order questions whether the liberal world order created after World War still exists. In this context, the question whether the RBIO still exists or has already dissolved often equates to the question whether the USA is still the global hegemon. If American power has declined or vanished, then the RBIO has declined or vanished. If the RBIO still exists, so does American power.
Some say yesterday´s RBIO has already dissolved. With hope or with dread, or with both hope and dread, they try to imagine tomorrow´s new international order.
Others say the liberal RBIO must be defended at any cost to save civilization, implying that it still exists.
Alain de Benoist, the author of Carl Schmitt Today: Terrorism, “Just War” and the State of Emergency, is among those who hold a third controversial view. For Benoist, the RBIO never existed. The proof –and it is hard to doubt the facts de Benoist marshals to support his case—is that the w0rld, and especially the United States, plays Realpolitik. It does not play RBIO. The RBIO is, or was, a fiction, not a description.
I begin my proposal with a bit of autobiography, my damascene moment.
I was practicing law in California when it happened, specializing in representing debtors in bankruptcy. I was helping a client to reorganize his insolvent business under Chapter Eleven of the United States Bankruptcy Code. At one he spontaneously remarked, “Howard, I know am upside down, but I can promise you that if you can get me out of this mess, then I will never be upside down again.”
What he meant by being upside down was that his payables exceeded his receivables. What he meant by never being upside down again was that in the future his receivables would always exceed his payables.
That was when a question came to me, and with the question, its answer. The question: What would it mean for everyone to succeed in business, or to succeed in life, by always having more receivables than payables? The answer: It could never happen. For the simple reason that one person´s receivable is another person´s payable. A receivable and a payable are the same thing, seen from two different points of view. Summed over an economy, receivables equal payables, as debits equal credits. If somebody is going to come out ahead, achieving more receivables than payables, somebody else must come out behind, suffering like my client with more payables than receivables –or, to mention one of many possibilities, dropping out of the economy, sleeping on the sidewalk, dumpster diving for food.
With the passage of time, I have integrated my personal experience in a law office in California into a cosmology, as follows:
- Think of life as a phenomenon known to exist on only one planet.
- Think of human life as a subsystem of nature, a product of millions of years of evolution.
- Think of culture as the ecological niche of the human species, enabling both continuity and innovation. Every culture has one or more basic structures. They are called basic because they organize provision for meeting basic needs.
- Think of the core of culture as norms guiding behaviour, sometimes called rules, morals or ethics.
- Think of law as that subset of norms enforced by public authority (in the few cultures that recognize a public/private distinction).
- Think of economic growth as a threat to ecological and social sustainability.
I have come to believe that when you start with the premise that markets are inhabited by Marcel Mauss´s échangiste, who must sell something to get money to be able to buy, then you constitute a game whose rules guarantee that there will be losers like my client. You necessarily get an unstable economy, as Hyman Minsky demonstrated. The history of markets generating inequality and unpayable debt, as they have done since long before capitalism, as David Graeber has recounted it, becomes intelligible.
My damascene moment bears a family resemblance to Keynes´ remark that when orthodox economics is denied Say´s Law (simply put, the law that every seller will find a buyer) orthodoxy´s other basic tenets become untenable, including: “…the social advantages of private and national thrift, the traditional attitude towards the rate of interest, the classical theory of unemployment, the quantity theory of money, the unqualified advantage of laissez-faire with respect to foreign trade and much else which we shall have to question.”
Keynes´ General Theory demonstrates the existence of two staggering facts. That they are consequences of modernity´s basic échangiste cultural structure is my frosting on his cake. One is the chronic weakness of effective demand. The second is the chronic weakness of the inducement to invest. The first implies the second whenever expectations of sales determine decisions to invest.
Keynes´ identification of the chronic weakness of the inducement to invest as the economic problem leads to explanations of the decline of social democracy and of the rise of neoliberalism.
The conscious, intentional efforts of the Mont Pelerin Society played a role. Physical reality played a role. The advance of technology played a role.
I suggest that basic cultural structure played a bigger role. Within the confines of the mind-set established by what Margaret Archer calls “modernity´s man,” the neoliberals are more right than wrong. “Keynesian” policies really do raise taxes. They really do motivate industry to move elsewhere. And so on. That social democracy does not work is the bottom line within the confines of that mind-set.
Hence in 2023 unbounded thinking and organizing –and similar roses named by other names—have become the starting points of paths to solidarity and survival.
The neoliberals advocated deconstructing what the rules-based international order used to be. Their major premise was true: The social democracy envisioned by the Universal Declaration of Human Rights of 1948 was based on a false “Keynesian” optimism about the long term funding of welfare states.
The neoliberals advocated changing the rules-based international order from what it was to what it has become. It now includes a concerted effort to reduce the political risk to investors. Within their mind-set they are right. Because the evidence on the whole shows that: (1) Economic growth is a function of investor confidence. (2) Reducing poverty and increasing welfare is a function of economic growth.
However great the human suffering, neoliberal policies claim to strengthen the confidence of investors. True. But it is also possible to deliberately decrease excessive reliance on investors; to practice gift economy, work with investors with a track record of commitment to human rights and circular economies, support cooperatives and worker ownership, crack down on tax evasion, and so on. The alternatives are innumerable.
Looking now at the practical side of philosophy, I recommend supporting growth points where viable alternatives are already being created.
There are ways to jump on bandwagons that are already going somewhere. To evaluate a bandwagon (a potential growth point) ask whether it is sending messages people will understand. There is no point in talking to ourselves. If people cannot understand a message they cannot possibly act on it. A second step in finding or creating a growth point is to select from the many things that people understand the themes that have legs. Where is there energy for change? What initiatives are attracting resources? There is no point in me constantly pushing my own pet idea if I am not getting any uptake showing that I have found a growth point that moves the energies of others. The third and most important question is whether what you can do or support is really making a difference to solve the problem.
We are not necessarily contributing to structural change just because we get a large grant, or win an award for being an outstanding citizen, or get rave reviews from people who say coming to our workshop changed their lives. All of the above may be indicators that we are meeting a need and performing a useful social function. But the physical bottom line questions are: Are we really meeting needs? Are we really helping our culture to function sustainably and joyfully in its physical environment? Are we moving toward a fully nurturing society where we align across sectors for the common good?
A Short Introductory Bibliography on Unbounded Organization
Anderson, G. (2022) Concepts of Unbounded Organizing
Andersson, G (2018): Unbounded Governance: A Study of Popular Development Organization Amazon Books.
Andersson, G., & Richards, H. (2012). Bounded and unbounded organisation. Africanus, 42(1), pages 98–119.
Andersson, G., & Richards, H. (2015). Unbounded Organizing in Community. Lake Oswego OR. Dignity Press. This is a practical step by step guide to doing unbounded organizing in community development.
Gavin Andersson, Raff Carmen, Ivan Labra and Howard Richards (2018). Organisation Workshop. Beyond the Workplace: Large Groups, Activity and the Shared Object. Mind, Culture and Activity. Volume 25. Pages 86-90.
Raff Carmen and Miguel Sobrado (editors), A Future for the Excluded: Job Creation and Income Generation by the Poor, Clodomir Santos de Morais and the Organization Workshop. London: Zed Books. 2000.
Richards, H. (2019). Moral (and ethical) realism. Journal of Critical Realism, Volume 18, pages 285–302. https://doi.org/10.1080/14767430.2019.1618623
Richards, H. Modernity’s ‘other’ and the transformation of the university International Journal of Development Education and Global Learning 7(2):6-25 Volume 7, (2015) pages 6-25.
Richards, H, (2013). Unbounded organisation and the future of socialism. Education as Change 17. 229-242.
Richards, H. (2014) Unbounded Organization and the Unbounded University Curriculum. In Patricia Inman and Diana Robinson (editors) . University Engagement and Environmental Sustainability. Manchester: Manchester University Press.
Richards, H. (2021). The Theory of Small Wins. Live Encounters Magazine. https://liveencounters.net/2021-le-mag/10-october-2021
Richards, H., & Andersson, G. with the assistance of Malose Langa, Foreword by Evelin Lindner. (2022). Economic theory and community development. Lake Oswego OR. Dignity Press.
Sewchurran, Kosheek, Plumbing the Depths of Leadership. Cape Town: Artistry in Everydayness, 2022.
Organising for Good: The Story of Westonaria´s Transformation
Prof. Howard Richards is a member of the TRANSCEND Network for Peace Development Environment. He is a philosopher of social science and Research Professor of Philosophy at Earlham College, Richmond, Indiana, USA. He was educated at Redlands High School in California, Yale, Stanford, University of California at Santa Barbara, University of Toronto, Harvard and Oxford. He currently teaches in the University of Cape Town`s EMBA programme. His books include: The Evaluation of Cultural Action, a study of an application of Paulo Freire´s pedagogical philosophy in rural Chile (London Macmillan 1985); Letters from Quebec; Understanding the Global Economy; The Dilemmas of Social Democracies; Gandhi and the Future of Economics; Rethinking Thinking; Unbounded Organizing in Community; and The Nurturing of Time Future. His new book, written with the assistance of Gavin Andersson, Economic Theory and Community Development: Why Putting Community First Is Essential for Survival, is now available from the publisher, Dignity Press, and from Amazon and other major booksellers, as a print book and as an eBook. email@example.com
Tags: New World Order, RBIO-Rules Based Internationa Order, World Order
This article originally appeared on Transcend Media Service (TMS) on 30 Jan 2023.
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