Emerging Markets and the International Financial Architecture: A Blueprint for Reform

If emerging markets are to achieve their objective of joining the ranks of industrialized, developed countries, they must use their economic and political influence to support radical change in the international financial system. This working paper recommends John Maynard Keynes's "clearing union" as a blueprint for reform of the international financial architecture that could address emerging market grievances more effectively than current approaches. Keynes's proposal for the postwar international system sought to remedy some of the same problems currently facing emerging market economies. It was based on the idea that financial stability was predicated on a balance between imports and exports over time, with any divergence from balance providing automatic financing of the debit countries by the creditor countries via a global clearinghouse or settlement system for trade and payments on current account. This eliminated national currency payments for imports and exports; countries received credits or debits in a notional unit of account fixed to national currency. Since the unit of account could not be traded, bought, or sold, it would not be an international reserve currency. The credits with the clearinghouse could only be used to offset debits by buying imports, and if not used for this purpose they would eventually be extinguished; hence the burden of adjustment would be shared equally - credit generated by surpluses would have to be used to buy imports from the countries with debit balances. Emerging market economies could improve upon current schemes for regionally governed financial institutions by using this proposal as a template for the creation of regional clearing unions using a notional unit of account

What Rendered Ancient Tyrants Detestable: The Rule of Law and the Constitution of Corporate Power

The phrase ‘‘corporate tyranny’’ might seem to be nothing more than empty rhetoric, a muscular slogan with a plausible ring, but one lacking principled roots in the great tradition of political language which it echoes. In this Article, I aim to show that, on the contrary, it is indeed meaningful to apply the term tyranny in connection with contemporary corporate power—meaningful, that is, according to the criteria governing the use of that term within the limited government tradition’s Rule of Law discourse. I also aim to demonstrate that, according to traditional criteria, certain terms used to lament the harms occasioned by manipulative state power—namely, arbitrariness, slavishness and corruption—might plausibly be employed against the large business corporation. The implications are significant. If the present constitution of corporate power were shown to be hospitable to those ills, then the legitimacy of corporate power would have been called into question on distinctive Rule of Law grounds. The notion that economic power is a limited government problem was a central and recurrent theme in public debates in the United States from the American Revolution until the middle of the twentieth century. Since then, however, the notion of ‘‘limited government’’ has become synonymous with the limitation of state, rather than ‘‘private’’, power; indeed, ‘‘limited government’’ has become a byword for the social philosophy that professes a belief in ‘‘small government’’—a philosophy which, in effect, supports corporate power. In the light of that received wisdom, it is not surprising that there has been little scholarly inquiry into whether, and if so, how, the underlying moral commitments of the limited government tradition are incompatible with certain forms of contemporary corporate power. Within the confines of this Article, there is not the space to do more than demonstrate that further inquiry in this area would be worthwhile