Sunday, March 25, 2012

Lamy, Kim, and Gauck: Changes Afoot in the WTO, World Bank, and Germany

An optimist at heart, I always look for those bits of news that suggest positive change is afoot.  This week there were several.

Pascal Lamy, the head of the World Trade Organization (WTO), wrote a piece in The Globalist arguing that "Capitalism will not survive the [current] legitimacy test without stronger domestic safety nets and a more effective multilateralism."  If not quite Occupy Wall Street rhetoric, it is remarkable coming from the (albeit French) head of the WTO, which has long served as a strong proponent of open markets and free trade at all costs.  Economists going back to Adam Smith long assumed that more trade is always better--if it is free trade, both parties must come out better or they wouldn't engage in it.  But recent research in international trade recognizes that in fact there are often winners and losers as well as cases of clear mutual benefit.  This does not mean that markets are good or bad, just that they can be used towards many ends.  And the points Lamy raises lead us toward the moral and political decisions we have to collectively make if we are to structure markets to best promote overall wellbeing.

In other news, the International Herald Tribune reports that President Obama has nominate Jim Yong Kim to head the World Bank.  China, Brazil, Indian, Russia and other emerging powers are expressing a growing unrest with the standing informal agreement that Europe picks the IMF chief and the U.S. picks the World Bank head.  Putting that aside, though, President Obama's pick is remarkable for a couple of reasons.  First, he is an anthropologist, holding both an MD and a PhD in anthropology from Harvard.  Along with Paul Farmer, he co-founded Partners in Health, and his work has been at the intersection of health and development.  Anthropologists have been some of the most vocal critics of the Bank's policies in the developing world, and appointing Kim sends an important message about the institution's trajectory.

Finally,we have Germany's new president, Joachim Gauck.  The press here has played up the significance that (while born in Hamburg) Gauck was raised in East Germany; thus, along with Merkel, Germany is now led by two former East Germans.  This is a historic shift, but mostly because it doesn't seem to mean much for the workings of the country; perhaps the long discussed "normalization" is finally here, in the heights of government at least if not the unemployed youth of Brandenburg.  The other revealing aspect of Gauck's election also derives its significance from not creating much of a ruckus.  Gauck, a preacher, is married, but separated from his wife for years, and he will move into the presidential palace Bellevue with his long time partner, Daniela Schadt.  What would Rick Santorum say?

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