Barbadian Prime Minister Mia Mottley and French President Emmanuel Macron invited world leaders to Paris on Thursday and Friday last week to develop a new global pact to finance the fight against poverty and human-induced climate change.
All kudos for the ambition, yet few dollars were put on the table. To an important extent, the continuing global failure to finance the fight against poverty and climate change reflects the failings of US politics, as the US remains at the center of the global financial system.
To understand US politics, it is important to start with the history of the British Empire. As Britain became an imperial power, and then the world’s leading power of the 19th century, British philosophy changed to justify its emerging empire.
Illustration: Mountain People
British philosophers championed a powerful state: Thomas Hobbes’ Leviathan; the protection of private wealth over redistribution: John Locke’s right to “life, liberty and property;” markets over government: Adam Smith’s “invisible hand;” and the futility of aiding the poor: Thomas Robert Malthus’ law of population.
When humanitarian crises arose in the British Empire, such as the Irish famine in the 1840s and the famines in India later in the century, Britain rejected providing food aid and left millions of its subjects to starve, even though food supplies were available to save them. The inaction was in line with a laissez-faire philosophy that viewed poverty as inevitable, and help for the poor as morally unnecessary and practically futile.
Britain’s elites had no interest in helping the poor subjects of the empire — or Britain’s poor at home. They wanted low taxes and a powerful navy to defend their overseas investments and profits.
The US learned its statecraft at the knee of Britain, the mother country of the US colonies. The US’ founding fathers molded the new country’s political institutions and foreign policies according to British principles, albeit inventing the role of president instead of monarch. The US overtook Britain in global power in the course of World War II.
The lead author of the US constitution, James Madison, was an enthusiast of Locke. He was born into slave-owning wealth and was interested in protecting wealth from the masses. Madison feared a system of democracy in which people participate in politics directly, and championed representative government, in which people elect representatives who supposedly represent their interests. Madison feared local government, as it was too close to people and too likely to favor wealth redistribution. He therefore championed a federal government in a capital far away.
Madison’s strategy worked. The US federal government is largely insulated from public opinion. The public majority opposes wars, supports affordable healthcare for all and champions higher taxes on the rich. The US Congress routinely delivers wars, over-priced private healthcare and tax cuts for the rich.
The US calls itself a democracy, but it is a plutocracy — the Economist Intelligence Unit categorizes the US a “flawed democracy.”
Rich and corporate lobbies finance the political campaigns, and in return, the government delivers low taxes for the rich, freedom to pollute and war. Private health companies dominate healthcare. Wall Street runs the financial system. Big oil runs the energy system, and the military-industrial lobby runs the foreign policy.
This brings us to the global climate crisis. The most powerful nation in the world has a domestic energy policy in the hands of big oil. It has a foreign policy that aims to preserve US hegemony through wars, and it has a Congress designed to protect the rich from people’s demands, whether to fight poverty or to fight climate change.
The US leaders who attended the Paris Summit for a New Global Financing Pact — US Special Presidential Envoy for Climate John Kerry and US Secretary of the Treasury Janet Yellen — have outstanding ethics and long-standing commitments to fighting poverty and climate change. Yet they cannot deliver actual US policy. The US Congress and its plutocracy stand in the way.
The leaders at the summit recognized the urgent need to expand official development financing from the multilateral development banks (MDB) — the World Bank, the African Development Bank, the Asian Development Bank and others.
However, to expand their lending by the amounts needed, MDBs require more paid-in capital from the US, Europe and other major economies. Yet the US Congress opposes investing more capital in MDBs, and its opposition is blocking global action.
The US Congress opposes increasing capital for three reasons: First, it would cost the US money, and rich campaign funders are not interested. Second, it would accelerate the global transition away from fossil fuels, and the US’ big oil lobby wants to delay, not accelerate, the transition. Third, it would hand more policy influence to global institutions in which China participates, yet the US’ military-industrial complex wants to fight China, not collaborate with it.
While developing countries need hundreds of billions of US dollars in additional MDB lending each year, backed by additional MDB capital, the US and Europe are instead pressing the banks to lend slightly more with their existing capital.
The MDBs could squeeze out another US$20 billion in loans each year with their current capital, but it is a fraction of what is needed.
The exasperation of the developing world was on full display in Paris. Brazilian President Luiz Inacio Lula da Silva and some African presidents said that there are too many summits and too few dollars. Chinese Premier Li Qiang (李強) spoke quietly and courteously, pledging that China would do its part alongside the developing countries.
Solutions can finally be found when the rest of the world moves forward despite the US dragging its feet. Instead of allowing the US to block more capital for the MDBs, the rest of the world should move forward with or without the US. Even US plutocrats would realize that it is better to pay the modest price of fighting poverty and climate change than to face a world that rejects their greed and belligerency.
Jeffrey D. Sachs, a professor and director of the Center for Sustainable Development at Columbia University, is president of the UN Sustainable Development Solutions Network. The views expressed in this column are his own.
Concerns that the US might abandon Taiwan are often overstated. While US President Donald Trump’s handling of Ukraine raised unease in Taiwan, it is crucial to recognize that Taiwan is not Ukraine. Under Trump, the US views Ukraine largely as a European problem, whereas the Indo-Pacific region remains its primary geopolitical focus. Taipei holds immense strategic value for Washington and is unlikely to be treated as a bargaining chip in US-China relations. Trump’s vision of “making America great again” would be directly undermined by any move to abandon Taiwan. Despite the rhetoric of “America First,” the Trump administration understands the necessity of
US President Donald Trump’s challenge to domestic American economic-political priorities, and abroad to the global balance of power, are not a threat to the security of Taiwan. Trump’s success can go far to contain the real threat — the Chinese Communist Party’s (CCP) surge to hegemony — while offering expanded defensive opportunities for Taiwan. In a stunning affirmation of the CCP policy of “forceful reunification,” an obscene euphemism for the invasion of Taiwan and the destruction of its democracy, on March 13, 2024, the People’s Liberation Army’s (PLA) used Chinese social media platforms to show the first-time linkage of three new
If you had a vision of the future where China did not dominate the global car industry, you can kiss those dreams goodbye. That is because US President Donald Trump’s promised 25 percent tariff on auto imports takes an ax to the only bits of the emerging electric vehicle (EV) supply chain that are not already dominated by Beijing. The biggest losers when the levies take effect this week would be Japan and South Korea. They account for one-third of the cars imported into the US, and as much as two-thirds of those imported from outside North America. (Mexico and Canada, while
The military is conducting its annual Han Kuang exercises in phases. The minister of national defense recently said that this year’s scenarios would simulate defending the nation against possible actions the Chinese People’s Liberation Army (PLA) might take in an invasion of Taiwan, making the threat of a speculated Chinese invasion in 2027 a heated agenda item again. That year, also referred to as the “Davidson window,” is named after then-US Indo-Pacific Command Admiral Philip Davidson, who in 2021 warned that Chinese President Xi Jinping (習近平) had instructed the PLA to be ready to invade Taiwan by 2027. Xi in 2017