Today's economies and rising tensions
January-March 2014
By: David Kennedy

What is the relationship between peace and development, and what might be done to ensure that the achievement of either does not impede progress on the other? Let's start with an observation about the international situation within which the potential for peace and development must be considered: the striking emergence of political/economic questions as central axes for struggle, both within and between countries. The central questions today are not political, if by that we mean able to be ad­dressed by governments acting alone at home, or by the normal routines of diplomacy. Nor are they economic, if we mean problems to be addressed by market forces operating in the shadow of wise regulation.

The prospects for peace and development must be considered against the background of this transformation. The globalization of production, distribution and finance has reduced the policy au­tonomy of national authorities to address either economic or politi­cal questions within the domain of their territorial jurisdiction and mandate. As a result, the most significant strategic issues are both political and eco­nomic, and are being fought out nationally and internationally at the same time.

How will economic growth be distribut­ed within and between nations? How will the gains and vulnerabilities that come with trade be distributed? In today’s massive global value chains, how will the opportu­nity to generate and retain rent, and to “up­grade” to higher value modes of production be distributed?

In this, classic “economic development” questions have become those of everyone. The central questions for policymakers in the developed world should be familiar: identifying a national economic strategy for participating in the global economy, mobiliz­ing resources for competitive advantage in a global economy and managing the internal and external imbalances that result, to avoid being undermined by social instability or vi­cious cycles of economic dualism.

These are not struggles between “busi­ness” and “government” or “public” and “private.” The axes of conflict run orthogonally to these ideologically freighted alterna­tives. Governments are diverse, divided. All are available in some way to instrumentaliza­tion by economic players. Public forces are as prone to shield private action as to regulate it, and business is also diverse and divided. Upgrading here or defining the market stan­dard “my way” means someone else’s com­petitive advantage has eroded.

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