Ghiia Ionescu

Reading Notes, Winter 1991

Piercing Tunnels- Grotesque Agglomeration

of Transoceanic Turnabouts: GATT- The End of the Swedish Models

PIERCING TUNNELS

In terms of scientific and technological achievement, the first walk under the sea undertaken by two men, going from Britain to the continent of Europe and from the continent of Europe to Britain, does not of course bear any comparison with the first walk of the two American astronauts on the moon. That event still remains the greatest Promethean symbol of our civilization. But in its human significance the joy of the British and French advance guard, as they moved through the tunnel, finally pierced under the sea-bed, and shook hands, was incomparably greater than the sad realization by the astronauts that they found themselves on a bare and lifeless planet - thus confirming that God had given life only to Earth. On Earth, even under the sea-bed, man met man and each understood the other.

It was with obvious prescience that in Greek mythology Hermes was designated as the god of communication, trade, and politics, notably international politics. Communications are now open - and trade is unconditionally transnationalized. It depends on the practitioners of the art of politics to show that they assess clearly the new possibility and priority. The mental tunnels between politicians should not prove to be more difficult to pierce than a tunnel under the channel. Yet ...

I ... Your duties [said Zeus to Hermes] would include the making of treaties, the promotion of commerce, and the maintenance of free rights of way for travellers on any road in the world. (Robert Graves, The Greek Myths, vol. I, Penguin, 1955.)

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G rotesque A gglomeration of T ransoceanic T urnabouts

. . .Yet, for students of politics - and their number is constantly growing to the honour of the profession - for whom the principal question about the future of politics is whether political judgment will be able to comprehend (in the double sense of the world) the myriad daily developments all over the world in one single interdependent interpretation and guide for action,2 the GATT conference, at the very beginning of December 1990 in Brussels, was the great test. Indeed great hopes had been rekindled by the demonstration of modern political intelligence expressed in the resolutions of the overwhelming majority of the member-states of the United Nations condemning the invasion of Kuwait, all of which understood only too clearly that Saddams bell tolled for thee. It was thus fervently hoped that the overwhelming majority of the 107 member-states of GATT would act in the same spirit of interdependence. The test of Iraqi defiance was met with the firm answer: no more aggression, GATT, as a corollary, should have provided the answer: no more obstructions to the communications of the world of interdependence.

Had it been so, the nations of the world would have proved that they had understood in both cases that national, or regional, interests are best defended by the subordination to their interest of the interdependent world as a whole, and by their cooperation in this sense. They would have finalized the Uruguay Round with a treaty which, for the first time in history would establish the few universal rules of freedom of trade required by interdependence, instead of leaving the negotiations, for the protection of their national interests, to continue in a veritable Tower of Babe1 of incoherence. Alas, this is indeed the not so unlikely result of the failure of the Uruguay Round, of the first failure in transnational trade negotiations since 1947, that is since the end of the war, which itself was caused in part by the protectionist policies of the 1930s.

Even if what will probably emerge from this collision of political shortsightedness will be the formation of five or more

See also, Government and Opposition, special issue, Modern Knowledge and Modern Politics, Volume 24, Number 4, Autumn 1989.

READING NOTES 103

protectionist regions: the United States, with its Latin American and CAIRNS alliances; Japan and the developing South East; the European Community, with Eastern and Nordic Europe, and possibly with the North African states; and the USSR and China, which in any case are not yet members of GATT - even in that eventuality all regions will lose and the world as a whole will be the greatest loser.

But, first the facts - and responsibilities. They are of two kinds: what actually happened in the negotiations, and what the leaders of the political world have done or not done, known or not known in those negotiations. What actually happened was that the Round which started with great fanfares four years ago in September 1986 in Punta del Este (Uruguay) was intended to finish on 1 March 1991 with a new treaty lifting tariff discriminations and protections in agriculture, textiles, services etc. The Uruguay Round was the eighth in a row since the Geneva agreement of 1947. Each of them, to the credit of GATT and of the world statesmen, had made more progress towards the liberalization of trade - thus justifying the hope that, once the cold war had ended, the moment for the establishment of a new trade order had come. What happened however in those four years since 1986 was clearly a scandalous waste of time - for which GATT itself, that big bureaucratic machine, has a share of responsibility, for failing to issue the warning in good time that no real progress was in sight, and that therefore the conference, as all could already see much earlier than 1989, was bound to fail.

The conference was bound to fail in any case because, of all the three major problems, the one which was considered to be the touchstone and the preliminary question was that of agriculture. Here the European Community and the USA had stubbornly maintained the completely opposed positions they had taken ever since 1986. The USA stood for drastic liberalization of the Common Agricultural Policy, and was supported by the CAIRNS group of fourteen agricultural exporting nations and all the Latin American countries; the EC offered only meagre concessions. The differences of views were aggravated by the choice of representatives of the three sides, the EC, the USA and Japan. Mr Ray MacSharry, the Irish EC Agricultural Commissioner, was a doubtful choice from the outset, because of his anticipatory belief that we cant have an agreement at any price. While Mrs Carla A. Hills, the US representative, produced in this international gathering a repeat performance of Mrs Thatchers stubborn negativism at the EC summits to such

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an extent that one wondered whether women undertaking important international representations may have a tendency to exhibit a characteristically feminine obstinacy; and Mr Nabora Hatakeyama, the mysteriously smiling Japanese representative enjoyed the EC - USA conflict.

But on the one hand, spokesmen can only do what they are told to do; and on the other, even allowing for the immediate and formidable problems facing world statesmen now (the Gulf crisis for President Bush, the unification of Germany for Chancellor Kohl, the growing public protests and demonstrations for M. Mitterrand, the ghosts of Gladio and Moro haunting Sr Andreotti, not to speak of the difficult start for Mr Major!) the Round discussions had been going on for four years! Certainly the leaders and their governments had had ample time in which to determine the position their representatives were to take. We are then left with two hypotheses. One is that decisions had been taken in earnest whereby the USA, the EC, and Japan would rather be inclined now to consolidate their regional enterprises, paraphrasing the new slogan in the USA of Enterprise for the Americas. (Mr W. W. Rostow, who knows a thing or two about global trends, wonders whether the new economic paradigm would be regionalization .) President Bushs Latin American tour in the midst of the Gulf crisis, and the prompt withdrawal from the negotiating table of the US proposal for the global liberalization of services, could confirm this hypothesis. And the present initiatives of Chancellor Kohl and President Mitterrand to build up new political structures around the economic and agricultural structures of the European Community, could be taken as a sign that the European Community too may also prefer now to consolidate itself by itself, looking toward Eastern Europe and North Africa. As for Japan, for whose economy protectionism is second nature, the idea of sanctions and retaliation is deeply embedded in its customs. In between the less- and under-developed countries will suffer more than anybody else; and so will the world economy.

If this first hypothesis is confirmed it will only prove how slow on the uptake is the political judgment of present-day political leaders when faced with the real political problems of interdependence and of the information revolution. High tariffs, customs barriers and the whole panoply of fiscal, commercial and monetary weapons of the protectionist arsenal will have only costly, risky, and mutually damaging results. But in the end it will also be proved that interdependence will not even then be

READING NOTES 105

able to work. Multiregional (instead of multinational) companies, transregional (instead of transnational) linkages, and supra- regional (instead of supranational) organizations, will inevitably emerge from the unnecessarily damaged economies now pushed forward from the rear by global interdependence which, like the information revolution, knows no frontiers. In the meantime though, possibly yet another generation of human beings will have been diverted from the obviously normal course of events by the obsolete order ofpriorities of the world leaders.

The second hypothesis, desired by all men of good will in the world, is that the political leaders should still have a last-moment change of heart. After all, there is stiU time, say some, until the final deadline of 1 March 1991. And, say others, Herr Kohl has won the elections and could be less threatened now by the wrath of the German farmers (democracy, the crimes committed in thy name! ) and has enough influence on M. Mitterrand to make him face the indignation of the French farmers, so thoroughly spoiled by de Gaulle. The way the game has been played, the ball is now in the court of the EC, and the Community must be familiar with the French proverb: Cest le premier pas qui c6ute. Let the EC, even if it is pelted with potatoes, turnips, and manure, now take that first step. What will follow will be infinitely more rewarding than the dangers of protectionist politics. Nothing is lost for good yet.

THE END OF THE SWEDISH MODELS

The until now broadly sui generis Swedish state is another casualty of the universal sway of interdependence. In political rhetoric the Swedish model has been invoked as the ideal type both by the Left and by the Right: by the Left as the socialist model in which full employment and distributive justice were applied with visible success; by the Right, because it was such a prosperous European economy which kept well out of the European Community. Neither of these descriptions is valid any longer: the Swedish Socialist government now accepts unemployment as a fact of life in any industrial democracy, reduces taxation in its new fiscal policy, and is insistently asking for membership of the European Community. This is obviously not the place for a proper analysis of the Swedish crisis - but the last (December 1990) OECD survey of that country makes very complete, even if severe, reading.

I had always thought that the Swedish socialist state was not the most satisfactory example of state socialism (as the USSR was the most perfect example of state communism), because in the

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first place it had not nationalized most of the means of production even in industry, let alone in agriculture; secondly it meticulously observed the laws of a constitutional monarchy and of a representative government; and thirdly, the government itself manned, it is true, since 1932 - with a hiccup in 1978- 79 - by the Socialist Party, together with the represen- tative government, parliament and government together, played a rather more intermediary than commanding role in the policy- making process. Since the 1930s and during the best years of the Swedish economy, before, during and immediately after the Second World War (for the present crisis has been increasingly evident since the mid- 1960s) the government allowed the major socio-economic groups to prepare between them, in a clearly neo- corporatist way, the economic and social policies which it afterwards made them implement. Especially in the relations between employers and labour, since the Saltsjobaden agreements, the SAF (Swedish Employers Confederation) and the LO (Swedish trade unions), institutionalized together in the National Labour Market (SAF-LO), agreed between them on the main lines of the industrial and social policies for the next year. The government and parliament intervened only in order to reconcile the contradictions which might have arisen and then enacted the corresponding legislation. Protected by neutrality which, during those troubled decades, presented obvious advantages, and protected also by a shrewd protectionist foreign trade policy and fiscal policy, the governments instrument for distributive justice escalated both in the absolute volume of the sums to be distributed as well as in the severity towards higher incomes. By the 1980s, taxes reached 60 per cent of the GDP, while the public sector last year took up 59 per cent of the GDP.

But as the winds of interdependence blew more strongly and in favour of the Common Market, the Swedish economy, heavily hampered by the rise in the costs of the public sector to more than 65 per cent of the GDP began to show distressing symptoms. Inflation reached 11.5 per cent, the highest among the main industrial economies, while the current account deficit is heading for 4 per cent of the GDP; and last year, for the first time ever, industry invested more abroad than in Sweden.3 The Socialist government, still assisted by the Communist Party, was now forced to commit two cardinal sins against its socialist principles: it reneged on the principle of full employment: unemployment is

The Economict, 17 November 1990.

READING NOTES 107

still very low but is expected soon to rise to 4 per cent; and it applied for membership of the deliberately capitalist European Community.

Swedish accession to the EC will take long to materialize - especially as the Community has firmly decided not to consider any of the applications of countries queuing up to join (Austria, Norway, Turkey, not to speak of Hungary, Poland and Czechoslovakia), before the European Single Market is well and truly launched and tried out. But on the other hand, that might help Sweden to get accustomed, morally, politically and societally, to the standard position of the fifteenth or seventeenth member- state of the European Community. The adaptation of the strongly regulated Swedish economy to the essential liberalism of the Common Market might prove to be particularly traumatic as Swedens whole political culture has grown in a direction so different from, if not opposed to, that of the European Community.

TWO DEATHS

The sad news of the death of Michael Oakeshott, one of the earliest contributors to our journal, reached us just when this issue was going to press. We have thus only enough time and room to express our sorrow for the loss of an old master and to promise that in its next issues Government and Opposition will take its share in the long overdue reassessment of his work.

Also Today, 10 January 1991, I was informed of the death on 7

January 1991, at the age of forty-nine, of Jose Guilherme Merquior, one of my dearest and truest friends.

Ambassador of Brazil to Unesco and former Minister in London, Merquior, the youngest member ever elected by the distinguished Brazilian Academy, was one of the greatest animators of what in this context can truly be called world culture.

Apart from his fundamental literary and historical work in Brazilian, his books in English, The Veil and the Mask (1979), Rotlsseau and Weber (19801, his masterly study on Foucault (1985) - translated into most languages of the world - and the extraordinarily prophetic Western Marxism (1986) are soon to be followed by a study in French on Le libei-alimte.

Remembering him as one of the most active and fraternal members of our Advisory Board, our journal now wants, in this very first moment, only to express to Hilda Merquior and their son and daughter our deepest sorrow, while in the future we shall keep the influence of his mind as present as ever in our pages.