University of Toronto

G20 Summits |  G20 Ministerials |  G20 Analysis |  Search |  About the G20 Research Group
[English]  [Français]  [Deutsch]  [Italiano]  [Portuguesa]  [Japanese]  [Chinese]  [Korean]  [Indonesian]

Munk School of Global Affairs

G20 Information Centre
provided by the G20 Research Group

Pessimism of the Intellect, Optimism of the Will

Sylvia Ostry
Acceptance speech on receiving the
2010 Couchiching Award for Public Policy Leadership
79th Couchiching Conference on “Watershed Moment or Wasted Opportunity,”
Geneva Park, Ontario, August 7, 2010

One day, when I was a graduate student at Cambridge, during a long, complicated session, my supervisor said to me, “Sylvia, why do you find pessimism so exhilarating?” I was taken aback and muttered some garbled statement that optimists were so boring and then shifted to our ongoing lesson. But I never forgot the question. Then, many years later at a conference, a brilliant political economic analyst cited the philosopher Gramsci’s definition of leadership: “pessimism of the intellect: optimism of the will.” That is the title of my talk. I am over-exhilarated by pessimism in today’s fearful new world and will briefly review some issues. And maybe this “watershed moment” can be captured by some optimism of the will. But whose will is not clear. Since this will be a brief talk, I want to introduce only a few issues concerning the transforming globalism.

Global Governance

A key feature of globalism today is, we are duly aware, a shift in power — a new global governance. Of course this is not the first time. The pervasive shift in power from the United Kingdom to the United States characterized the post–World War II 20th century and the construction of the architecture of international cooperation. But today’s shift in power is profoundly different. I have a favourite quote that captures the essence of the 20th-century brave new world: “In Washington, Lord Halifax whispered to Lord Keynes / they have all the money bags / but we have all the brains.” Now that is a bit much — Keynes hated Halifax — but the new governance was based on the same set of values of Western civilization stemming from Judeo-Christianity and the Enlightenment. Adam Smith and Karl Marx were both children of the Enlightenment, and the Cold War debate involved the same “codes,” so to speak.

Today, an important new player is a religion — Islam. There is no resemblance with the central role of the individual and the rule of law embedded in that religion. Lord Halifax learned how little we knew about this country and its civilization. The new concept of a Beijing consensus is just part of a flood of studies, but it makes sense to me that “market authoritarianism” is an appropriate term for this consensus. And Chinese foreign policy of building coalitions around the world, not just to buy up natural resources and build infrastructure, but to play a more and more important part of multilateral institutions. In the July-August edition of Foreign Policy, China’s position on human rights in the United Nations is reported as being supported by 74% of the member states, and includes many of China’s commercial partners. The same formula is being deployed in the World Trade Organization to kill the Doha Round, although some international companies are now criticizing China’s actions in its domestic economy as discriminatory. The Chinese reply seems to be “so what?!”

While the rise of China is usually regarded as the key factor in the new globalism, it is important to stress other changes in the transforming scenario. The international institution — the G20 — is acclaimed by some as the new “international steering committee.” It includes the developed countries of the G8 and a number of large, emerging, market economies from around the world. It is a blend of historical power, current economic heft and geography. Trust is not an ingredient in the G20 mixture, though it was key to the creation of the economic summit in 1975. There are no criteria for membership. Just the luck of the draw. While it proved a useful coalition for discussion and action on the financial crisis during the past two years, it will require some significant changes in structure and process in handling the ongoing global economic challenges. A number of suggestions are being discussed by think tanks, and we do not have time to consider them here, except to mention the rumour that at the U.S. summit the year after next, the Americans would get rid of the G8 and reduce the membership of the G20 to move to a more manageable number. Should Canada be worried?

Let’s focus on the Toronto G20 Summit. Most experts note that its one accomplishment was agreement on halving the fiscal deficits by 2013 and aiming for sustainable debt reduction by 2016. But most experts are also skeptical and doubt that the fiscal agreement will be observed. There is an ongoing but unsettled transatlantic debate, termed by the Financial Times “stimulus versus austerity.” The next G20 meeting in Korea in November will no doubt be full of polite chatter on deficits, debt and all that sort of thing. But what is needed is genuine confrontation of the impending fiscal crises in a number of G20 members, including the U.S., that demand a new institution for handling sovereign debt restructuring. The International Monetary Fund alone will not do.

There are a number of other international economic issues that an international steering committee would have to handle in cooperation with multilateral institutions as well as ad hoc regional and global structures directed at specific objectives. At the forefront are the global imbalances in the international economy, especially between China and the United States. China’s minor change of its currency value just before the G20 meeting was perhaps an example of its contempt for the institution — or, rather, the G20’s lack of leadership. The growing global imbalances must be moderated and reduced or will generate a dangerous flood of protectionism.

Of equal importance for the G20 is the growth in the world income polarization, or the gap between the richest and the poorest. There has been endless debate on the extent of between-country inequality, and it varies depending on the measure. But more advanced recent studies make clear a widening dispersion since the 1980s. The growth of income inequality between and within countries (most spectacularly in the U.S.) should not be brushed aside by the G20.

I could add to this economic list, but I have gone on too long. And the global scenario involves many other issues that must be confronted by an international leader. Most urgent — and largely ignored by the G20 — is climate change. There are few issues less contentious at present, but any international steering committee will not be able to ignore over time. So let me provide a brief account before I conclude my talk.

International environmental policy is just over 20 years old and is governed by the United Nations under its 1992 Framework Convention on Climate Change. The one major achievement was the Kyoto Protocol of 2005, a world treaty dealing with environmental deterioration. The U.S. did not join and the current failure to pass a new energy bill suggests that it is unlikely to change. The treaty embeds a deep North-South divide now led by China.

The European Union has been very supportive of enhanced policy, but to no avail. The recent “climate-gate” scandal and the Great Recession contributed to a decline in public support for climate policy. Recent governmental and academic reports support climate science, but it is not clear whether public opinion will change sufficiently to affect policy in the U.S. and have an impact on international policy. In December 2009, the meeting of the UN climate policy plenary — the Conference of the Parties — or COP — in Copenhagen, was chaotic and the next meeting in Mexico is unlikely to be better.

Since this is not a climate conference, you must be wonder why I am going on about the chaos of Copenhagen. Actually, it is Gaia I should be talking about. A new global movement has nothing to do with that guy Karl (who?), but with the role of capitalism in destroying the world’s environment. It began with the trade institution, the General Agreement on Tariffs and Trade (GATT), in the early 1990s, over a dispute concerning how Mexico tuna fishing harmed dolphins. I remember the massive posters of “GATTzilla” plastered on the streets in Geneva and the new slogan, “GATT: Guaranteeing a Toxic Tomorrow.”

There is a lot more to be said about trade and the environment, but there is no more time. And trade is no longer the centre. The new movement is entitled “Climate Justice Now,” a coalition of an enormous amount of networks of non-governmental organizations covering a vast range of subjects from around the world. The idea of a new social movement was debated in a number of different left-wing forums, including climate conferences in Bali and Bangkok. A major objective is to organize large-scale disruptive actions at policy conferences to make a mark on public opinion. The long-term objective is to eliminate capitalist production and over-consumption and, as the lead intellectual Warren Bello asserts, adopt a low-consumption, low-growth development model and the elimination of fossil fuel. The next COP is to be in Mexico this December and I expect the Climate Justice activists are brimming over the optimism and loaded with will. I expect they have read the recent address of incoming head of the UN climate change secretariat, Christina Figueres.

Just one quote will do, “I do not believe we will ever have a final agreement on climate change, certainly not in my lifetime.” ’Nuff said. Even I don’t find so much pessimism exhilarating.


So let me conclude with a suggestion for the next G20 meeting, and the slogan I invented some years ago: where there is a political will, there is a policy way. Canada should invite the two previous G20 hosts and the Republic of Korea to cooperate in creating an Eminent Persons Group (EPG) this September. The task would be to propose a five-year G20 agenda and proposals for institutional cooperation, both governmental and civil. Canada could lead the presentation of the EPG proposal at the Seoul meeting as the Korean host takes over the next stage of the G20’s international steering of globalism. Canada played a leading role in a similar process that launched the Uruguay Round of trade negotiations in the 1980s. Indeed, the economic summit itself was launched by two middle powers, France and Germany.

One of the main assets of the G20 is the opportunities it could offer to middle powers and not only to the powerful. That is the political will for the policy way. Watershed moment? In an emerging, mulitpolar world, with a rising hegemon whose “codes” differ from the West’s, Canada’s opportunity as a middle power may lie in pushing for a forum to frame a pragmatic agenda to forge the way ahead.

[back to top]

This Information System is provided by the University of Toronto Library
and the G20 Research Group at the University of Toronto.
Please send comments to:
This page was last updated August 10, 2010 .

All contents copyright © 2017. University of Toronto unless otherwise stated. All rights reserved.