Science and Public Policy, volume 28, number 6, December 2001, pages 477479, Beech Tree Publishing, 10 Watford

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If I ruled the world
Christopher Freeman

I asked Christopher Freeman, shortly before his 80th birthday (on 11 September 2001), what he would do if he ruled the world. He was reluctant to take the question seriously. Finally, he produced this answer. A friend and colleague of Chris Freeman I SHALL ASSUME a (slightly) more realistic scenario. I shall assume I have become the first woman President of the United States in the election of 2004, after defeating Bush by a wide margin (including Florida). Between 2001 and 2004, the world economy has moved into prolonged stagnation/depression. President Bush and his advisors were even more disorientated than Hoover was in 1932 and the world is ready for a Global New Deal and no longer trusts neo-liberal solutions. International organisations In my first radio and TV broadcast to the world (with simultaneous translation into 20 major languages), I will announce that this new administration intends to act in a spirit of internationalism and not of American isolationism or triumphalism, I shall expect all the major international organisations to play an active and radical role in overcoming the world-wide depression, and invite all the leading countries to meet with me to discuss urgently the agenda for these organisations in 200408 within the overall framework of the UN. World-wide liquidity and the funding of new international programmes. This is now the most urgent problem as several major countries have exhausted

their drawing rights in the IMF (International Monetary Fund), and others have exhausted other private international credits and have defaulted. The UN is nearly bankrupt because of the failure of the previous US Government to pay its subscriptions and the high cost of peace-keeping. I would therefore propose an emergency programme to ensure world-wide renewal of economic growth based on the following measures: The Tobin Tax on foreign exchange transactions. I would urge Professor Tobin 1 himself, in consultation with the World Bank and IMF, to implement his tax proposal in all countries with major foreign exchange markets. This could reasonably be expected to raise more than US$500 billion a year at a rate of 0.5% and would be available to fund a variety of international programmes. It would help to stabilise international exchange markets (which have fluctuated wildly in the last year or two) as well as raising very large sums for the World Bank and the UN. The de-criminalisation of hard and soft drugs as proposed in The Economist magazine (28 July 2001). I would invite all countries to tax the regulated and legal commercial outlets for these drugs. I would join with the Colombian, Peruvian, Iranian and Pakistan Governments in diverting the present illegal and criminal drug traffic into legal commercial channels to be regulated and taxed like alcohol and tobacco. This would have many benefits for the world economy. An international levy could be used to finance the WHO (World Health Organisation) and other international o rganisations. The Colo mbian civil war will be brought to an end and the measure would also greatly reduce crime world-wide. Governments and international organisations could again

Professor Christopher Freemans address is SPRU, University of Sussex, Falmer, Brighton, East Sussex BN1 9RF, UK.

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If I ruled the world

Christopher Freeman was the founding Director of SPRU, the Science Policy Research Unit at the University of Sussex, UK, and subsequently Emeritus Professor of that same university. He is the author of The Economics of Innovation, the basic textbook in the field, and of the Frascati Manual, which became the standard method for measuring science and technology activities worldwide. He is a Fellow of the London School of Economics. He has been awarded the Bernal Prize (1987), the Schumpeter Prize (1988), the Prix International du Futuroscope (1993), the World Technology Network Award for Policy (2001) and honorary doctorates from five universities.

realistically hope to regulate international exchanges and world-wide banking and to stop money-laundering Labour. The USA to request the ILO (International Labour Organisation) to prepare a World Charter for Labour Relations to regulate conditions of employment in all countries to ensure (i) proper recognition of trades unions in all countries; (ii) n egotiations with those unions to prevent the worst abuses of child labour whilst promoting the objective of full employment; (iii) a new i ternational convention on refugees n and immigration so that the present mobility of capital is matched by greater mobility of labour. The ILO to be responsible. I would invite Robert Reich2 to represent the United States in their negotiations. Global Recovery Programme. I would appoint James Tobin and Robert Shiller3 of Yale University to join the new US Council of Economic Advisors to be chaired by Richard Nelson4 (a former member of the Council). Tobin would become Secretary to the Treasury and handle negotiations with the World Bank for a world-wide Global Recovery Programme (GRP) together with Nicholas Stern5 and other experts of the World Bank; they would be required to submit a first draft GRP to a world (UN) economic conference within 3 months, embodying many proposals for worldwide investment in industry, health, education, renewable energy and infrastructures. They would also be asked to consider proposals for restructuring the World Bank itself. A revitalised World Bank for Reconstruction and Development (WBRD). I would ask our new Council of Economic Advisors to prepare proposals for a new WBRD with far greater resources and powers than the present institution. These resources would come in part from the new international taxes proposed, and in part from member countries increased deposits. The remit of the Bank would include not only a stimulus to world recovery and sustained growth but also a commitment to promote world-wide income redistribution and social justice (an objective recently endorsed by the President of the World Bank, James Wolfensohn6 ). The IMF would be placed under the general supervision and jurisdiction of the Bank to ensure
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that the responsibilities of creditor countries receive proper emphasis as well as those of debtor countries, as Keynes had so strongly insisted in the negotiations before and at Bretton Woods. Both the Bank and the IMF should become part of the UN family of international organisations. The WHO would be invited to submit new proposals for a major attack on AIDS, malaria, TB (tuberculosis) and other widespread diseases afflicting low-income countries. I would ensure that pressure would be exerted on all international drug companies to make their proprietary drugs available at low prices (existing legislation actually provides most of the necessary legal provisions for compulsory licensing of AIDS drugs and for mandatory price controls). Taxation in high price, high-income countries would be used to fund the cost of subsidising very low prices or free distribution in low-income countries. The Brazilian Government would be invited to prepare and monitor this international programme on the lines of the existing Brazilian programme. UNESCO (UN Educational, Scientific and Cultural Organisation) would be invited to set up a new subsidiary to promote world-wide computerised learning in association with various open universities and computer companies. The Indian Government would be invited to take primary responsibility for launching and monitoring this programme in association with the Japanese Government and IBM. New markets. I would invite Professor Shiller to implement some of his own proposals to promote financial stability in the USA by establishing a variety of new markets on the basis of public private partnerships. These would make it possible to insure against risks to which citizens of the United States and other countries are now exposed as a result of the world depression and its aftermath. In particular, they would be asked to handle the problem of pension funds, their finance, administration and regulation. Global security I would cancel Star Wars and negotiate with the Russian Government for further reduction of nuclear weapons. I would sign the treaty on Chemical and Biological Weapons. I would invite the Indian, Brazilian, Russian, Chinese and South African Governments and the EU (European Union) to join with the United States Government in a new and determined effort to bring peace to those areas of Africa, Europe, the Americas and Asia still afflicted by armed conflicts and terrorism. Together with these Governments I would submit proposals to the UN Security Council for a small but permanent UN Enforcement Agency to deal with these problems on an international basis. Global environment I would urge the Japanese to convene a new Kyoto conference to take account of
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what has happened in the period 20012004, and to overcome the damage done by the previous US administration. I would make it clear to Japan and other countries that the USA would now be ready to play a constructive role in preparing, signing and implementing a new Kyoto treaty. I would ask the National Academy of Sciences to convene an international scientific meeting to consider a world programme to accelerate the development and application of solar energy and I would urge the World Bank to give it priority with GRP. International trade The reform of the WTO (World Trade Organisation) would be an essential part of the GRP for the world economy. Such reform would have to take full account of the unequal bargaining position of many poor countries. It would also take account of the need for a level playing field on environmental issues and labour relations. I would suggest to the Chinese Government, as a major new member, to prepare a first proposal for reform of the WTO so that its primary objective would be world development (the GRP) as K eynes orig inally intended, and not some obsolete new-liberal ideology of the past. I would invite representatives of those organisations that took part in demonstrations in Seattle, Genoa and elsewhere to join other NGOs (non-governmental organisations) in the work of the relevant international organisations, and to present their views to future international conferences. Scientific research The long-term future of the world, its health, its prosperity and its quality of civilisation depend in part on the results of research. I would invite Professor Nelson, in association with the NSF (National Science Foundation) and UNESCO, to prepare measures for strengthening basic research world-wide and especially in the poor countries. I would invite Professor Keith Pavitt7 to enlarge his proposals for European research onto a world-wide scale. Speed and effectiveness If the international organisations move too slowly or too bureaucratically I would tackle the problems with selective international task forces. Confidence and hope All the measures that are proposed above are designed for practical implementation. All are quite feasible, but they are designed also to restore hope to the beleaguered world and especially to the wretched and poor of the Earth. To restore hope and belief in the future is the most essential measure in overcoming world depression, as President Roosevelt long ago recognised. It is also the best long-term solution to problems of terrorism.

Interim If I were in a position to become the first woman president of the United States in 2004, I would begin campaigning to introduce many of these proposals already in 2002 or 2003 to avoid the stagnation and depression from taking hold. I would also be forming working groups to prepare detailed proposals for all the above and to do the necessary research. However, I am sufficiently realistic to recognise that the world is going to face very difficult times, despite our best efforts before 2004.

Notes
1. James Tobin is Sterling Professor of Economics Emeritus at Yale University and Nobel Prize Laureate in Economics. He proposed an international tax on foreign exchange transaction known as the Tobin tax (see Mahbub Ul Haq, Inge Kaul and Isabele Grunberg (editors) (1996), The Tobin Tax: coping with financial volatility (Oxford University Press, Oxford)). Robert Reich is Maurice B. Hexter Professor of Social and Economic Policy at Brandeis University. He served as the nations 22nd Secretary of Labor during President Clintons first term. Under Reichs leadership, the Labor Department moved forward on several initiatives to build the skills of American workers. He has written extensively on the global economy, the changing nature of work, and the centrality of human capital. Reich is the author of The Work of Nations: Preparing Ourselves for 21st Century Capitalism (Alfred A Knopf, 1991). Robert Shiller is the Stanley B. Resor Professor of Economics at Yale University. He is author of Market Volatility and Macro Markets , which won the 1996 Paul A Samuelson award. In his book Irrational Exuberance (Princeton University Press, March 2000; Broadway Books, April 2001) he offers an unconventional interpretation of recent US stock market highs, and shows that Alan Greenspans term irrational exuberance is a good description of the mood behind the market. In contrast to many analysts, Shiller stresses circumstances that alter investors perceptions of the market and cautions that a market that is overvalued by historical standards is inherently precarious. Richard R Nelson is George Blumenthal Professor of International and Public Affairs at Columbia University. His central research interests have been in long-run economic change, with a particular focus on technological advance and the institutions, including business firms. Professor Nelson served with the Council of Economic Advisors in Washington. He is co-author with Sidney G Winter of An Evolutionary Theory of Economic Change (Harvard University Press, Belknap Press, Cambridge MA, 1982). Nicholas H Stern has been World Bank Chief Economist since July 2000. Before that he was Chief Economist at the European Bank for Reconstruction and Development and Professor of Economics at the London School of Economics. James D Wolfensohn has been the World Bank Groups President since 1995. He initiated the Heavily Indebted Poor Countries Initiative as the first comprehensive debt-reduction programme to a ddress the needs of the worlds poorest, most heavily indebted countries. Mr Wolfensohn has been a strong proponent of designing a digital development architecture to harness knowledge and connectivity to leverage development, and to close the digital and knowledge divides. Keith Pavitt is R.M. Phillips Professor of Science and Technology Policy at SPRU, University of Sussex. Professor Pavitt has published widely on the management of technology, and science and technology policy. He is the main editor of Research Policy. For his proposals on European research funding see Why European Union funding of academic research should be increased: a radical proposal, Science and Public Policy, 26(6), December 2000, pages 455460.

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