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Opinion: Global Justice Necessary For Lasting Peace

Jomo Kwame Sundaram is the Coordinator for Economic and Social Development at the Food and Agriculture Organization and received the 2007 Wassily Leontief Prize for Advancing the Frontiers of Economic Thought.

Jomo Kwame Sundaram. Credit: FAO

Jomo Kwame Sundaram. Credit: FAO

ROME, Sep 22 2015 (IPS) - Last year saw considerable reflection on the First World War, which began a century ago. In reality, it was very much a European war, but with nonetheless profound implications for the last century.

President Wilson’s League of Nations failed to secure the conditions for a lasting peace. With the benefit of hindsight, John Maynard Keynes’ essay on the economic consequences of the peace was remarkably prescient.

The focus this year has been on the end of the Second World War seven decades ago. The protracted demise of most colonial empires in the three decades after the Second World War promised a new era of global justice.

As the international community works to launch the post-2015 development agenda and to conclude a new climate deal at Paris, it is important to quickly learn a lesson from the recent failure to address tax justice in the recent Addis Ababa Action Agenda. With no progress on both aid and tax, it will be almost impossible to realize the ambition of the Sustainable Development Goals due to the lack of adequate financing.

Likewise, as pointed out by many world leaders, ranging from the Pope to former Irish president Mary Robinson, there cannot be any meaningful progress on climate if the Paris deal does not address the fundamental question of tax justice.

Post-War Consensus

On May 10, 1944, before the Second World War ended, the International Labour Congress adopted the historic Philadelphia Declaration, which recognized that “lasting peace can be established only if it is based on social justice”.

Similar concerns were behind the Bretton Woods Conference two months later in July. The conference committed to create the conditions for enduring peace through post-war reconstruction and post-colonial development with sustained growth, full employment and reducing inequality.

Bretton Woods created the International Monetary Fund (IMF) and the International Bank for Reconstruction and Development (IBRD). The IMF would help countries, not only to overcome balance of payments difficulties, but also “to direct economic and financial policies toward the objective of fostering orderly economic growth with reasonable price stability”. The IBRD, later known as the World Bank, was created to support long-term investment and development.

Labour’s share of output increased as other inequalities declined. This Golden Age also saw greater investment in health, education and public services, including social protection. The post-WW2 consensus endured for over a quarter century before breaking down in the 1970s.

America’s Finest Hour

At the end of World War II, U.S. Secretary of State General George Marshall announced a re-industrialization plan for war-torn Europe. Politically, the Marshall Plan was intended to create a cordon sanitaire to contain the spread of communism as the Cold War began.

This generous infusion of U.S. aid and favourable acceptance of, if not support for national developmental policies, ensured the rebirth of modern Europe. For many Europeans, this is still seen as America’s finest hour.

In the decades that followed, the Marshall Plan developed into what is probably the most successful economic development assistance project in history. Similar economic development policies were introduced in Japan, Taiwan and South Korea following the establishment of the People’s Republic of China and the Korean War.

This experience offers valuable lessons today. Europe and Northeast Asia industrialized with policies including government economic interventions such as high duties, quotas and other non-tariff barriers. Free trade would only be fair after international competitiveness had been achieved.

Marshall knew that shared economic development is the only way to lasting peace. He also emphasized that aid should be truly developmental, not piecemeal or palliative. The productive capacities and capabilities of developing nations must be nurtured.


Each era, no matter how successful, sows the seeds of its own demise. In the early 1980s, after the Western stagflation of the 1970s, the neo-liberal “Washington Consensus” – the economic policy consensus uniting the American government and the Bretton Woods institutions located in the U.S. capital city – emerged to lead the counter-revolutions against development economics, Keynesian economics and progressive state interventions.

A relentless push for deregulation, privatization and economic globalization followed. Such measures were supposed to boost growth, which would trickle down, reducing poverty – hence, we should not worry about inequality.

Macroeconomic policies became narrowly focused on balancing the annual budget and attaining low single digit inflation – instead of the previous emphasis on sustained growth and full employment with reasonable price stability.

But the ‘neo-liberal’ measures largely failed to deliver sustained growth. Instead, financial and banking crises have become more frequent, with more devastating consequences, exacerbated by greater tolerance for inequality and destitution.

Recent experience and analyses have disproved the previous presumption that progressive redistribution retards growth. Inequality and social exclusion have been shown to be detrimental to civil and social peace.

The new global priorities at the end of the Second World War remain relevant today. After the last three decades of regression, we have to recommit ourselves to the more inclusive and egalitarian ethos of the Philadelphia Declaration, the Bretton Woods conference and the Marshall Plan with a Global New Deal for our times.

For the U.N.-led international system and institutions to remain relevant, they must demonstrate continued relevance by reforming themselves with changing circumstances and challenges in order to better address contemporary and future global challenges. (End)

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  • Rokhaya Daba FALL

    I agree, ” Inequality and social exclusion have been shown to be detrimental to civil and social peace”. Thus, it appear to me that an Equitable Governance of global resources comes in the
    foreground measures to apply to ensure success of SDGs on 2030. the second important measure would be putting in place and ensure the functioning of mechanisms
    for the eradication of ethnic, racial or religious offenses .