What is this ‘G-7’ anyway?

Willem Buiter gives the gathering of finance ministers of the so-called ‘G-7’ nations a very low grade for the quality of the decisions they made (or failed to make) during their meeting in Washington yesterday.
Buiter also raises some excellent and much-needed questions about this whole grouping called the ‘G-7’, which is considered by many in the west to constitute the either the leadership of the world or the leadership simply of the world’s financial system.
He writes,

    With a bit of luck we will in due course replace the current G-7/G-8, which is flawed both by errors of omission and errors of commission, with a new G-8, consisting of the USA, the EU, Japan, China, India, Brazil, Russia and Saudi Arabia, which includes all political-economic entities that have global systemic significance and which will meet regularly to address global economic and financial issues.

… As it happens, I’ve been reading Kishore Mahbubani’s excellent recent book, The New Asian Hemisphere: The Irresistible Shift of Global Power to the East, which has an excellent short section on the G-7…

As you may or may not know, Mahbubani is a high-ranking Singaporean diplomat and thinker who’s now head of the Lee Kuan Yew School of Government at the National University of Singapore.
I’ve been a fan of Mahbubani’s ability to analyze west-rest relations for quite a while now, and this latest book certainly doesn’t disappoint.
It’s notable that in the section on the G-7 he doesn’t even attempt to call it the ‘G-8’. Russia’s role in the grouping, which he briefly explains, was always by grace -and-favor of the other Seven, who are the USA, Japan, Canada, the UK, France, Germany and Italy. Indeed, that grace and favor have now been withdrawn, post- the Ossetian crisis; so Mahbubani called it right by calling it the G-7, all along.
He writes (pp.122-24),

    [The] perceived legitimacy of Western power may well be one of its greatest strengths. It is remarkable that even though 12 percent of the world’s population dominates global institutions and uses them to further Western interests (sometimes at the expense of global interests), this exercise of Western power continues most of the time to be perceived as “legitimate” in the eyes of the other 88 percent of the world’s population…
    One global process that illustrates well how the West dominates the world is the G-7 process. In theory, this group only represents a collection of seven of the most powerful economies of the world: the US, Germany, the UK, France, Canada, Italy, and Japan… When these G-7 leaders meet once a year, their meetings should be of interest only to the citizens of their own countries.
    Yet because of the Western domination of global media, each G-7 meeting is treated and reported as a major global event. Often the meetings accomplish nothing; nonetheless there are copious media reports of the statements issued and a tremendous amount of photo coverage…
    Any objective audit of the G-7 process will show that it has effectively done nothing to improve the state of the world. Indeed, the G-7 may have in some instances done some real damage by creating the illusion that they were actually tackling global challenges. Take the case of Africa…

Anyway, I’m hoping to write more about the book once I’ve finished it. In general, I think Mahbubani’s critique of the occidarchic era is spot-on.
Right now, though, it does seem clear that the wellbeing of nearly all the world’s peoples is being affected by the worldwide financial crisis that has been caused, overwhelmingly, by the greed, speculation, and selfishness of the heads and shareholders of western financial institutions. So we need a global response that coordinates the actions, in the first instance, of the governments of all the world’s major economic blocs…. But obviously, also one that keeps well in mind the interests of citizens of the world’s poorest and most distressed nations, too.
Buiter’s proposal to constitute an entirely new G-8– one that includes China, India, Brazil, Russia, and Saudi Arabia along with the US, EU, and Japan, seems like a good first step to take…

9 thoughts on “What is this ‘G-7’ anyway?”

  1. from USA Today:
    WASHINGTON — The G7 group of nations agreed Friday on what U.S. Treasury Secretary Henry Paulson called “an aggressive action plan” to combat a worsening global financial crisis. The five-point, single-page document gave evidence of a shared approach on the part of several of the world’s major economic powers, but the meeting ended with no specific new anti-crisis measures. . .The past month, the Dow has lost 25% of its value as markets grew increasingly worried about policymakers’ grasp on the crisis.
    In recent weeks, as the crisis spiraled, the U.S. enacted a $700 billion federal bailout and individual European nations moved to save embattled banks on a case-by case basis. Central banks in the U.S. and six other countries teamed for an unprecedented coordinated interest rate cut, hoping to stimulate lending. But so far, nothing has worked.
    the five-point “aggressive action plan”:

  2. Helena
    You may enjoy the very readable and influential Paul Kennedy in todays Sunday Times.
    As the man who predicted that achievement of global hegemony carries with it the seeds of its own destruction the article bears reading.
    His specualtion on the coming end of the dollar as a reserve currency is interesting.
    The accompanying reports of Senator McCain attempting to rein in his abusive runnin’ maid are indicative of his worry at the tide that may be unleashed by a sudden collapse of the US job market
    Maureen Dowd’s dog Latin piece in this morning’s New York Times speculates that the Republicans may attempt to field Paris Hilton as the presidential candidate in 2012.
    As David Brooks pointed out last week that would be the end of the Republican Party. They would descend into a sort of Trotskyite separation from reality similar to that of the the UK Labour party of the 1980s.
    You haven’t really lived (or perhaps prayed for Death) until you have sat though a meandering piece of uninformed nonsensical dielectic at a local ward meeting proposing to declare a small city in southern England a Nuclear Free Zone. Suddenly you understand what Franz Kafka was trying to tell us.
    Your project on Reimagining America has not only merit but urgency too.

  3. Don
    Have you noticed?
    No bishops have been reported as urging the faithful to pray for deliverance.
    Normally in the UK you know the Summer is coming to an end when the prayers for the end of the drought are brought on.

  4. Frank,
    I have noticed, but since bishops move diagonally they’re often hard to spot. In the present case we need deliverance from the flood of money that the financial wizards are transferring from national treasuries to their rich friends. Their cups runneth over, you might say. Who knew that Clinton’s “the end of welfare as we know it” would be the beginning of welfare for the rich?
    At least Noam Chomsky got published in The Irish Times on the subject. He can’t get published in the US, apparently.

  5. It is remarkable that even though 12 percent of the world’s population dominates global institutions and uses them to further Western interests (sometimes at the expense of global interests), this exercise of Western power continues most of the time to be perceived as “legitimate” in the eyes of the other 88 percent of the world’s population….
    Occam’s razor will make short work of the amateur metaphysician’s notion that there exists a REAL legitimacy in politics independent of perception.
    Trying to hide inside shudder-quotes cannot save such baloney from its predestined doom.
    Happy days.

  6. I did coin in, and what’s more, no-one else seems to have independently pre-coined it. I just Googled “occidarchy”– found nothing. Googled “occidarchic”– found one entry: this post.
    Thanks for the bouquet.

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