Ways of global governance

Global governance systems are incapable of uniting nations to solve global problems. Democracy is non-existent at the global level. The financial and trade war after Russia’s invasion of Ukraine is justified by the NATO powers as a defence of democracy. Though they represent less than 10% of global citizens, these rich nations are taking unilateral actions that harm the poorer 90% the most. Within democratic countries, disillusionment with institutions that should improve their well-being is pervasive — elected parliaments, political parties, even the media.

For inclusion in growth, innovations are required in enterprise designs to create more businesses of the people, whereby producers become owners too.

Humanity is potentially nearing the edge of extinction with environmental degradation and weapons of mass destruction. The UN Sustainable Development Goals will not be achieved even by 2082 unless we radically change the ways we are going about it, according to Social Progress Imperative, a Washington-based think tank. A nonviolent movement for transforming global governance is essential to save humanity.

Power is concentrated in all socio-economic systems through a process of cumulative causation. Those who have power use it to perpetuate their power. They frame rules that they justify for the stability of the system. Like the nuclear non-proliferation treaty and the Security Council; historical systems of property rights; and the caste system within India. Even the colonial idea that it is the responsibility of experts to govern ‘uneducated’ masses.

Fundamental change must come from outside the established institutional structure. The question for institutional reformers is: How can people outside powerful establishments bring about change nonviolently? This was Gandhi’s question.

Genuine democracy runs on the principle of human rights, that every human being who is a part of an enterprise has an equal vote, whether the human being has a billion dollars of wealth or none. This principle works only up to the ballot box in practice. It does not apply in the governance of most institutions that govern citizens’ lives where the principle of property rights takes over. Those who have more wealth influence politics to preserve their wealth and power.

Real democracy runs on the principle that government must be of the people, for the people, and by the people too. Elected governments are governments of the people and must perform for the people. But this falls short of the full definition of democracy if government is not by the people too.

Citizens must govern their own affairs much more than they are. This is the rationale for local self-government in India’s constitutional framework; it was Gandhi’s mission too. However, India’s political as well as business leaders embarked on a different path for the development of the country after Independence — a path of building the ‘commanding heights’. They were not alone: even in Europe after the War the need was felt for centralised planning to marshal resources for the reconstruction of battered economies. While the Indian economy has been liberalised, political power is being recentralised, ostensibly to improve governance and national security.

The concept of a ‘circular economy’ is being promoted to manage environmental sustainability. It is a way of managing material and energy resources through their life cycle. There are similarities in structures of the material economy and the financial economy. In the material economy, solid waste is generated during production. It accumulates in some places, choking up rivers and oceans. In the financial economy, financial capital is generated from the real economy and accumulates in the financial sector.

The democratic principle that should apply in political institutions must apply within economic institutions also. Business institutions must be not only for the people (providing them innovative goods and services); but also they must be of and by the people. New forms of business institutions must evolve as alternatives to limited liability corporations owned by investors, which is the engine of growth in the capitalist system, and which has resulted in enormous increases in the wealth of investors of capital in the last 50 years.

New production models must provide more jobs so that business is not only for the people but also by the people. Whereas employees of enterprises owned by others can have incomes, they cannot share in the creation of wealth, which accumulates with investors. For inclusion in the benefits of growth, innovations are required in enterprise designs to create more businesses of the people, whereby producers become owners too. Such ‘enterprises’ cannot be state owned. Workers in ‘public sector’ enterprises can be as remote from their institutions’ governance as are workers in investor-owned enterprises.

Institutions are not made by written constitutions. Institutions are formed with ideas and are based on social norms: ‘unwritten rules’ of the ways in which a society conducts itself. Institutional reform cannot be achieved by electing yet another party to power. It must be a process of transformational change in society.

Leaders of movements of transformational change need good models to guide them:

n A model of the system in which they want to bring about change. Societies and economies are complex, self-adaptive systems, not machines to be redesigned by powerful people above.

n A model of how the system changes. Complex human societies and environmental systems can (and must) reform themselves with local system changes made by communities cooperatively. Because solutions must be locally adapted to be practical; and locally owned too.

n A model of how leaders catalyse the building of others’ capabilities to achieve their aspirations. Less command and control to coordinate; more guidance to people about how they can coordinate and cooperate with each other harmoniously.

Transformational leaders don’t build large organisations. They multiply leaders and enlarge movements. Leaders of transformational movements are those who take the first, risky steps towards something they care about, and in ways that others wish to follow because they care for the same cause.