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Sarkozy Wants G-20 to Reject 'Cult of the Market'
When the G-20 meets in Pittsburgh next week, French President Sarkozy will urge world leaders to make two moves -- one immediate and one long-term -- that have the potential to temper capitalism's worst abuses and reassert human values at the national and international levels.
Sarkozy's aides say he will walk out of the summit of presidents and prime ministers from the world's most developed countries if the leaders fail to endorse a plan to curb bonuses for bankers.
That's the immediate demand. And it is an important one, as it could put the G-20 in the unusual position of trying to tame -- rather than cheer on -- the banksters and corporate CEOS that have so unsettled the global economy.
But even more important will be the French president's push to "revolutionize" international definitions of development, progress and achievement.
In recent decades, those measures have pretty much begun and ended with the bottom-line details of economic growth and wealth accumulation.
But Sarkozy says he wants to use the G-20 gathering as the launching point for a "fight" against what he describes as the "cult of figures" and the "cult of the market."
"A great revolution is waiting for us. For years, people said that finance was a formidable creator of wealth, only to discover one day that it accumulated so many risks that the world almost plunged into chaos," argues the French leader. "The crisis doesn't only make us free to imagine other models, another future, another world. It obliges us to do so."
Sarkozy's "revolution" would still use measures of economic growth and contraction in the analysis of a nation's success. But the definition would be expanded beyond traditional gross domestic product (GDP) models to include measures of well-being and what Sarkozy describes as "the politics of civilization." These include environmental sustainability, the quality of public services and the amount of time citizens of a country have to meet family responsibilities -- which the French leader values as "personal services provided within a family circle."
Sarkozy, a conservative who was elected on a platform that promised to make the French economy more efficient and workers more productive, is not proposing some new-age fix for what ails the global economy. Rather, he is arguing that it is time to "refound" capitalism within what he describes as "moral" parameters in response to the now year-old global economic downturn and an equally serious decline in public confidence about the direction of nation states.
The broader measures are outlined in a report Sarkozy commissioned almost two years ago from a team of Nobel Prize-winning economists who have been critical of standard approaches to measuring the progress of nations, including American Joseph Stiglitz and Indian Amartya Sen, as well as Jean-Paul Fitoussi, the internationally-respected president of the French Observatoire des Conjonctures Economiques (OFCE).
The report from France's Commission on the Measurement of Economic Performance and Social Progress proposes a global "statistical system which goes beyond commercial activity to measure personal well-being..."
That's what Sarkozy will be talking about in Pittsburgh next week, as the G-20 gathers. And he won't be alone. Stiglitz will be in the city, as well, joining civil-society leaders and activists to discuss the development models and measures at a September 23 forum sponsored by The Nation, the Institute for Policy Studies and a coalition of grassroots groups.
Says Stiglitz, "GDP is an attempt to measure one part of what is going on in our society which is market production. It is what I call GDP fetishism to think success in that part is success for the economy and for society."
Stiglitz, the former chief economist of the World Bank, argues that, "While there is no single indicator that can capture something as complex as our society, the metrics commonly used, such as gross domestic product, suggest a trade-off: one can improve the environment only by sacrificing growth. But if we had a comprehensive measure of well-being, perhaps we would see this as a false choice."
Getting beyond false choices, contends the winner of the 2001 Nobel Memorial Prize in Economic Sciences, will allow for sounder policy-making on the parts of governments and global groupings such as the G-20.
"What we measure affects what we do," explains Stiglitz. "If we have the wrong metrics, we will strive for the wrong things."
Using sounder measures will also increase the legitimacy of governments in the eyes of citizens, says Sarkozy.
That's a message that could resonate with at least some G-20 leaders, especially if the French president delivers it in the terms he used in Paris Monday.
"For years, the official figures have boasted of more and more economic growth," Sarkozy said at the Sorbonne. "It now appears that this growth, by placing the future of the planet in danger, destroys more than it creates? All over the world, people are convinced that we are lying to them, that the figures are false, or worse, faked. Nothing could be more damaging to democracy."