global Keynesianism at the United Nations (1) - UNDP

["g kohler" <kohlerg@xxxxxxxx>]

Keynes is still remembered at the United Nations Development Programme
(UNDP).

Some Post-Keynesians agree with some parts of the UNDP text (below), as
follows:
(a) bancor - Wray in Deprez and Harvey (1999)
(b) IMF wretchedness - Stiglitz at LBO radio (2002)
(c) full employment as a global goal - Singh and Zammit in Michie and Grieve
Smith (1995)
(d) hunger/nutrition - Amartya Sen (1990s)

Gernot Köhler


---------- UNDP text ------------------------
source:
UNDP [=United Nations Development Programme],
HUMAN DEVELOPMENT REPORT 1999, chapter 5, page 98

[quote]
BOX 5.1
Keynes's vision for global governance

The architecture of international governance set up after the Second World
War was in several respects more advanced than that of today.

. There was an integral view of the United Nations and Bretton Woods
institutions, working together as part of the whole UN system.

. Economic and social rights were key objectives. The UN Charter emphasized
that conditions of stability and well-being are necessary for peaceful and
friendly relations among nations" and "all members pledge themselves to take
joint and separate action in cooperation with the organization for
'promoting' higher standards of living, full employment, and conditions of
economic and social progress and development."

. The International Monetary Fund and the World Bank were to be complemented
by a third body, an international trade organization.

. Full employment was a basic goal, to be supported in all international
economic operations.

Keynes went much further than the governments of the time were prepared to
accept. He proposed a fund with access to resources equal to half of world
imports. The IMF today  controls liquidity equal to less than 3% of world
imports. He envisaged the IMF as a world central bank, issuing its own
reserve currency (Bancor). In the 1970s the IMF was permitted to create a
limited amount of special drawing rights (SDRs), but these constitute less
than 3% of global liquidity today.

Keynes placed the burden of adjustment on both surplus and deficit
countries, even envisaging a penalty interest rate of 1% a month on
outstanding trade surpluses. In practice, deficit nations (mostly developing
countries) have had to bear the main burden of adjustment-except for the
United States, which can avoid adjustment because its deficit serves to
supply dollars needed for liquidity by the global system. The IMF now
exercises some monetary discipline only on developing countries, which are
responsible for less than 10% of global liquidity.

The international trade organization, as envisaged by Keynes, had functions
far beyond the present World Trade Organization. Keynes's international
trade organization was not only to maintain free trade but also to help
stabilize world commodity prices, essentially through buffer stock
arrangements.

Keynes went even further. He recognized that the long-term international
prices for commodities must be fixed in relation to both the economic
conditions for efficient production and the human conditions for proper
nutritional and other requirements to ensure a decent standard of living
among primary producers (a principle that Keynes recognized would also apply
to producers of manufactured goods).

Direct concern for nutrition and decent living standards has yet to be
incorporated into the principles of international trade.

Source: Keynes (1980)
[sc. = reference to: Keynes, John Maynard. 1980. The Collected Writings of
John Maynard Keynes. Vols. 25-27. London: Macmillan.]
[end quote]
--------- end UNDP text ----------------------