Saturday, 11 April 2009


There is nothing like a good crisis to get the adrenaline flowing and to focus the mind. So whereas previous meetings may have been little more than talking shops, last weekend’s Progressive Governance Summit seemed like a dress rehearsal for the G-20. Of course, the self-filtering nature of the event all but guaranteed that there would be broad agreement on both the analytical and prescriptive sides.

There was some. President Bachelet set the tone when summarizing the summit’s – and the progressive movement’s – priorities: using the present crisis to underscore the need to strengthen social policies, to build a new international financial architecture, to strengthen elements of the existing architecture such as the IMF and regional development banks, and to link recovery spending with environmentally-friendly and forward looking policies and programmes, so as to encourage a so-called “green recovery”.

In their statements, most leaders agreed that these were worthy objectives, and agreed that the G-20 would be the place to try to move forward on them, and on Thursday it appeared that some of those agreements indeed did manage to survive the trip to London. Yet there are some areas of discord which could end up being very annoying pebbles in the progressive shoe.

The first is the clear difference in progressive outlook. Whereas Vice President Biden emphasized the importance of markets, most of the others concentrated on regulation and other restrictions. The Americans are also lukewarm on talk of reorganizing the world’s financial system because for it to have any meaning at all, such moves would require an adjustment not only of the institutions themselves, but of the power structures behind them. Lula’s recent comments show that he is already pushing for greater BRIC presence in the international system, although the rhetoric he is using is unlikely to help the cause.

This is the toughest sticking point, because surely the United States will not give up its position without a fight. With its economic standing being threatened by China and others, and its military overextension, much of the political weight the USA still hold is wielded through IFIs and other international organizations. If the Lula thesis takes hold, the past mistakes of American (and to some extent, British) financial management disqualify it from holding on to its dominance of the international financial system.

It would be a shame if concrete measures to deal with the current crisis were not agreed because of political posturing or power politics. Yet at the Progessive Governance Summit these were the two axes of the discussion, which in turn lay bare the problem with ‘progressivism’ as a whole. While many viewed the summit as a clubby get-together of like-minded leaders, in reality there was quite a bit of disparity in political, ideological and economic styles. Mrs. Kirchner’s peronist populism has little in common with Lula’s peripheral ambition, which in turn bears little resemblance to Biden’s non-committal friendliness. Overseeing it all was Bachelet, who did a good job of chairing the meeting while wallowing in the reflected glory of Prime Minister Brown’s compliments and Jens Stoltenberg’s flattering tribute to Andres Velasco. “True courage”, he said “is not spending in rough times, but saving in the good times”.

Would all the leaders present agree with that? It’s not certain, because Chile’s past fiscal conservatism is the product of the market model these ‘We-were-right-they-were-wrong’ leaders were intent on criticizing, and perhaps replacing. That fundamental confusion lies at the heart of the progressive movement. Is it saving capitalism from itself, or socialism from itself, or both, or neither?