The Last Empires

This chapter draws from a well-established Foucauldian literature and emphasizes the applicability of his thinking to governance issues emerging acutely in the twenty-first century. It draws particularly on his ‘archaeology’ of the nature of social truth and ‘genealogical’ analyses of interactions among disciplines as key elements of his biopolitical approach to understanding social progress. All forms of organized society, from ancient times, he argues, have had to achieve a balance between ideas and power that involves (i) the evolution of state sovereignty; (ii) sovereign surveillance and control of social institutions; and (iii) free expression by individuals to state power. Thus, ideas of truth must engage with power and across social disciplines, and ‘truth’ in this sense is a social construct which is authenticated by social acceptance of practices and balances in the period under review; but social truth, like scientific explanation, is always open to question and change as understanding develops. Foucault’s concept of an ‘episteme’, which describes the fusion of ideas and power into practice, provides a deeper understanding of how ideas and power interact in society than narrower, but somewhat comparable, concepts of memes and paradigms provide. His engagement and eventual rejection of neoliberal ideas emerging post-WWII are discussed briefly. Much of Foucault’s overall approach is consistent with modern trends towards multidisciplinary convergence of social sciences; his framework provides a valuable guide to applying modern social sciences and disciplines to twenty-first century governance problems at all levels of society.

This chapter applies a Foucauldian-influenced analysis of the historical and socio-economic developments that led to the dominance of neoliberalism at the beginning of the twenty-first century and the necessity for government at all levels to look beyond commerce and tackle the formidable threats now facing society. These threats are due not just to potential economic slowdown and instability but are driven by growing biopolitical imbalances. The chapter reviews the growth of commerce and allied establishment of fiscal-military states and imperial expansion that dominated world development in the nineteenth and twentieth centuries. It draws on major historical studies of the period and links these developments to the emergence of neoliberalism and the more recent rise of populism. These ideological trends pose great dangers to an already fragile world order. The chapter focuses mainly on three areas that appear critical to ensure continuing global security and integration: first, the ambitious but faltering integration of Europe; second, the changed environment and opportunity for balancing hegemonic competition; and, third, remedying the marginalization of developing countries.

Economics has grown into the most influential of the social sciences; This chapter gives an overview of its development into a body of social theory and presents the main features of continuing debates within this framework. Its main focus, however, is on the ascendancy of market fundamentalist neoliberal ideology from the mid-1980s to the GFC: a period of initial economic hubris, but subsequent diminution of economists’ role in guiding political decisions. Neoliberalism has successfully diminished the role of government and encouraged replacement of publicly provided services with private providers, but often at the expense of the public interest element of these services and of the critical role of fiscal policy in responding to severe economic downturn. These developments may have set the stage for the rise of populism in the US and Europe. More critically to the overall message of this book, the preoccupation with commercial price signals has led to a stronger recognition of the need for all entities, government and private, to recognize their responsibilities for use of all forms of capital, including environmental and human capital. Economics must continue its critical role in guiding social and political development, but the linkages both within economics and between economics and other disciplines must be strengthened to enable government at all levels and markets to operate together to achieve the broader social good. This chapter focuses mainly on rebalancing macroeconomic policy and introducing more detailed strategies and actions for broader social policy, as discussed in the chapters of Part II.

Governance at every level should aim to improve the well-being of all citizens within its span of concern. But present GDP measures, based primarily on commercial financial transactions rather than social well-being, significantly limit the power of economic theory to explain or justify broad social policy. The chapter reviews major international reform programs including adoption of accrual basis accounts by many governments, and recent work on Integrated Reporting (hereafter, <IR>) by the International Integrated Reporting Council (IIRC) that significantly broadens the concepts of capital and value creation or diminution for both corporations and government entities. The chapter proposes systematic introduction of an integrated standards-based program to establish government balance sheet approaches and to introduce <IR> standards, combined with a revised and coordinated international program on government and enterprise accountability and risk management.

A second major weakness of traditional economic policy is the continuing lack of effective programs to make income distribution within and between countries fairer. Many distinguished economists and philosophers have strongly advocated action to target inequitable distribution, but their recommendations have made little headway against the resistance of political and practical status quo. Chapter 5 reviews the recently renewed concerns with inequality within and among nations, particularly focusing on the plight of developing countries. For advanced countries, rising inequality in recent decades has become more apparent and is problematic for all OECD countries. Some have implemented effective social welfare policies to counter these effects, but all must recognize and adapt to the global and national impact of technological change and globalization. The recent work of Thomas Piketty and Joseph Stiglitz arguing for this direction of effort is particularly important. Developing countries, particularly in sub-Saharan Africa, face much graver problems than OECD countries and have much less capacity to tackle them. The chapter makes the case that the driving aim of aid for less developed countries, regions and populations should be to promote PFM capacity and responsibility of national government as a basis for sustainable development and fulfillment of the UN Sustainable Development Goals, aimed among other things at alleviating poverty. But so far, aid under these initiatives has been relatively ineffective, Modern technology combined with application of international standards of PFM practice can do much to empower developing and emerging market countries. Ghanaian experience over two decades is used to illustrate both the severe problems and the possibilities of success within a national PFM reform strategic framework. Project and program failure in this area will have major consequences not only for the least developed countries but for global security and prosperity.

All human productive activity has some impact on the environment—magnified in recent years by population growth and industrial and domestic demand for energy. It can no longer be assumed that market operations and technology will resolve these huge emerging problems without serious consequences for humanity. This chapter focuses on the problem of global warming and the formidable political difficulties that continue to be experienced in establishing an effective program to bring greenhouse gas emissions under control. Climate change has been described as a ‘diabolically difficult’ problem of collective action. The chapter views it in terms of interaction among four main groups: current producers and users of fossil fuel energy, scientists and economists who have defined the nature and magnitude of the problem and proposed ways to resolve it; the broad public; and national politicians. Following the 2015 Paris Agreement (COP 21), many consider that political momentum towards limiting emissions has significantly increased, although it is acknowledged that even if all country commitments are fulfilled, the global target of limiting global warming to 2 degrees Celsius may not be achieved—unless overachievement by some (such as China) compensates for failure by others. Climate change thus constitutes a landmark case for both the necessity of measuring environmental impact in terms of likely global social costs and using economic instruments to guide behaviour in this area. The chapter includes an overview of climate policy development and political opposition in Australia to illustrate and emphasize the complex political dynamics involved at the national level.

This chapter draws from the preceding arguments to summarize the ways we have begun to understand and govern ourselves in modern terms. While influenced by Foucault’s perception of the desire for and emergence of social truth, it relies heavily on modern advances in social science. Social truth as defined by Foucault is not confined to understanding the physical basis of our world; it means coming to terms with our biological and social being. A model of social and philosophical dynamics is formulated to represent the way in which social knowledge in Foucault’s sense can be—and is being—developed, and how we can—and for our survival, must—learn to govern ourselves and others. The model illustrates how the Popperian/Deutschian ivory tower of deliberated conjecture and refutation, Kahneman’s ‘slow-thinking’ and Zaller’s model of political discourse relate to the social cauldron of ‘fast’ individual and social decisions. Society must learn how to balance these complementary mechanisms to achieve social truth. These propositions pose formidable problems and many are being challenged by contemporary politics. Can we begin to establish the basis for accurate measurement of social well-being and mechanisms to determine just policies to achieve secure and just social progress?