Speakers:
Lord Desai, London School of Economics
Anthony Barnett, Open Democracy
Chair:
Sir Richard Jolly

Meghnad Desai said there were two approaches to global governance. The first model could be described as a 'concert of nations', an inter-state system, where the great powers looked after the world: the UN, with great powers as permanent members of the Security Council, was an example. The second model was more of a market model, with less institutionalised dominance and more competition: this had nineteenth century roots, but had been revived in the last ten years.

The first model, Lord Desai argued, was essentially inegalitarian. It could make weak countries (e.g. the FSU) very powerful. It impeded change. But change was needed in the world (for example on agricultural subsidies or textile trade). The second model could provide this, in a Schumpeter-like process of creative destruction. There would be losers - corporations, even countries, would be declared bankrupt - but the eventual outcome would be progress. A further point: democracy only came into being when there was a market. Thus, a market-based system of governance was the only true foundation of improved global governance.

Anthony Barnett doubted the value of this free market approach. He cited evidence that business leaders wanted more government activity and more management of the market, not less: business leaders wanted greater investment in education, health, and unemployment insurance, and also greater regulation. They were in favour of globalisation, and also in favour of stronger governance of the market.

Anthony Barnett argued that the current level of inequality in the world was unsustainable: the events of 11 September were one manifestation of this. Better governance of the market was needed now. However, a key issue needed to be kept in focus: accountability. He called for a new, accountable global politics.

A number of points were raised in the discussion including:

• A number of people commented that the market did indeed need to be managed, and cited instances: financial flows, security, global warming. However, this was not really the point. Lord Desai's key argument was that the current governance structures were inappropriate and impeded the fundamental changes needed. There were, for example, 'too many 1945 institutions around': the Bretton Woods Institutions, NATO, others. These were sustained by the inter-state system. Only a spread of market forces through this institutional world would 'bell the cat' and create the conditions necessary for reform.

• This led to a discussion about how institutional change could be achieved. The market was one option, as described by Lord Desai. Violence was another, as seen on 11 September. In a previous meeting in the series, George Monbiot had pointed to citizen action as the way forward. Was this a kind of third way, incremental approach? Opinions differed, but Anthony Barnett for one declared himself to be a radical incrementalist. The key was to know where we wanted to get to - and in that vision, accountability was central.