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July 7, 2005 [LINK]

G-8 Summit tackles global issues

The series of terror bombings in London has cast a shadow on the G-8 summit in Gleneagles, Scotland, distracting Tony Blair, who serves as a unique "bridge" between the United States and Europe. He had pushed a reluctant President Bush to accept stronger action against global warming, to little avail. This is the sort of problem that is potentially very serious, but in which hysterical polemics undermine the effort to ascertain the true extent of the harm that is being done, or which possible remedies might be most efficacious. It is said that polar bear populations might decline by thirty percent over the next twenty years because of the (supposedly) melting polar ice cap. If the policy response is a set of national quotas for hydrocarbon consumption, à la Kyoto, I'm afraid nothing will happen. A consistent across-the-board tax on energy, similar to the BTU tax proposed by President Clinton in 1993, is the only way to restrain consumption without sacrificing personal freedom and national autonomy.

The other big issue at the summit is alleviating poverty in Africa via a huge transfer of cash and financing; that was what the "Live 8" concerts around the world were all about. Would increased foreign aid to poor countries really do much good? President Bush rightly pointed out that corrupt governments siphon off much if not most of the proceeds. James Shikwati, an economist from Kenya, pleads for an end to the counterproductive handouts in an interview with Der Speigel. (via Donald Luskin) That is much the same argument as British development economist W. Arthur Lewis (a Nobel prize winner) used to make. In other words, it's much like the welfare dependency controversy in this country, one of those hypersensitive taboo subjects.

Sad to say, these multilateral summits are becoming more of an empty public relations ritual every year. During the energy crisis of the 1970s and Cold War years of the 1980s, the G-7 played a vital role in articulating joint policy responses by the Western industrialized nations. Since the fall of the Berlin Wall, however, the G-7 nations have fewer common interests, as became painfully obvious in 2003. European nations have become stodgy and complacent, providing cushy welfare benefits for their citizens, funded implicitly by cheap immigrant labor from the Third World, many of whom are resentful Muslims. It is a socio-economic system that cannot be sustained. The inclusion of Russia a few years ago to create the G-8 has turned out to be a big mistake; Russia has turned sharply away from liberal democracy and capitalism, and is overtly hostile to the West and especially the United States. In my mind, the pointless expansion of NATO into former Soviet republics played a big part in Russia's reversion to a xenophobic foreign policy, but it's too late to change that. Last month the European Union leaders tried to patch over economic policy differences in order to salvage their march toward political integration, but they failed miserably. As a result, the mighty Euro has fallen sharply for the last several weeks. Jacques Chirac's insult about British cuisine (though perhaps not unjustified) created a diplomatic flap that reinforces the split between the continent and the Anglophone world. Another sign of such a split was that Tony Blair has begun to say nice things about economic freedom in recent weeks, hinting at a dramatic change of mind for this eager social democrat. Might he prevail upon his European counterparts to grow up and set aside their fond delusions about maintaining the status quo?

Posted (or last updated or commented upon): 08 Jul 2005, 12: 07 AM

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