A missed opportunity to meet the real problems

June 27, 1996|By William Pfaff

PARIS -- The Group of Seven meetings of rich-country leaders began in 1975 as a private chat among heads of state and prime ministers. This was the idea of France's then-president Valery Giscard d'Estaing, who invited six colleagues to go off to the country for a weekend.

The potential for personal and national ego display was so great, however, that the gatherings were soon turned into competitive demonstrations of national glory. At them, leaders talked less to one another than to the press of their own countries, exploiting the world stage for political profit.

This again was begun by the French, with Francois Mitterrand's display of quasi-monarchical grandeur at the palace of Versailles in 1982, with twilight ''musical rides'' by the Republican Guard, dinner in the Hall of Mirrors, and an extravagant fireworks display. The United States struck back with the elaborately orchestrated Williamsburg summit, in 1983.

Less pomp, but less work

Now the G-7 series has entered a new phase. There is less national pomp and entertainment, provided at public expense, but also less serious work. The previous summits produced some positive decisions of international cooperation, particularly with respect to monetary stability.

The draft final communique for the forthcoming meeting in Lyon, in central France (for many years now the final communique has been written before the meeting starts), consists in a series of platitudinous recommendations and observations. From the viewpoint of an American taxpayer, their publication scarcely justifies the transport of hundreds of White House officials and other civil servants from Washington to Lyon, to accompany Mr. Clinton -- not to speak of the hundreds more reporters who make the trip.

Mr Clinton's intention, his aides say, is to ''tell his European allies about Washington's success in creating jobs and reducing deficits.'' This message is unlikely to move his auditors, who have heard it before. Its real audience will not be present in Lyon, but in the United States. This, for Mr. Clinton, is another campaign trip.

It is to be regretted that the G-7 opportunity has been so squandered. Edouard Balladur, the former French prime minister, remarked earlier this month, at an Italian-American workshop involving officials and businessmen, that whatever the formulas and organizations of international cooperation, the world system is and will continue to be run by a directorate of the most powerful nations. That directorate's members are the G-7 nations.

This is not cynicism but realism. It is how the world works. The G-7 meetings could have become a serious forum not only for ''running'' the world -- which is to say, taking basic economic decisions -- but for anticipating the problems of the future. They started out with that intention.

This meeting in Lyon comes at a time when the process of economic globalization needs critical oversight. The international monetary system remains unstable; the Bretton Woods system that underwrote three decades of postwar growth in America and western Europe awaits its replacement.

There is growing divergence not only between the rich and the poor inside Western societies, but between the power of the rich versus the power of the rest. Employees, organized or not, have less power today than for many years.

Globalization has exercised extremely powerful downward pressures on wages and is making employment more precarious than at any time since the early decades of the industrial revolution, before the emergence of the trade-union movement in the mid-19th century.

Living standards

This is very important for the future stability of the industrial nations. The governments of the Western democracies confront future problems which require public cooperation for their solution. What now is being done to the living standards and economic security of workers makes that cooperation increasingly unlikely.

Take the problems of social security and welfare. The demographic evolution of the mature industrial countries is producing a dramatic change in the ratio of earners to the retired. In the United States, 40 years from now, there may be as few as two -- perhaps statistically fewer -- taxpaying workers for every retired person. The former are going to be asked to pay for the latter.

The banker and former Secretary of Commerce Peter G. Peterson wrote in The Atlantic in May that the United States may be in a worse position than Europe in this respect, as the European countries ''enjoy long-term defenses that we lack.'' The Europeans budget public spending on health, tax welfare benefits as income, and have high household saving rates.

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