On the political economy of world government: a short discussion of the role of the World Economic Forum and the World Social Forum and indicating the possibility of a World Parliament

Rational agents would opt for world government, properly defined. Without world government, dealings between sovereign states are not only affected by the military and economic power of those states and by the international bodies that they agree upon to wield and control their power, like the United Nations (UN), Worldbank (WB) and International Monetary Fund (IMF), but also by the flux of world opinion. Many branches in economic theory tend to accept wants as 'given' but these wants are observed to develop over time and some branches of economics can study those changes. The economic theory and practice of marketing is explicitly directed at influencing consumer choices. There is a similar situation with respect to world opinion. The media report about activities at the World Economic Forum (WEF, annual meeting January 26- 30 2005, Davos, Switzerland) and the World Social Forum (WSF, convention January 26-31, 2005, Porto Alegre, Brazil). What are these forums, should economists pay attention ? Can these forums affect the stock markets, the oil price, exchange rates, labour relations, migration and tourist flows, consumer boycotts, (inter-) national decisions ? We see that institutions like the UN, WB and IMF have some dealings with WEF and WSF, but what are those dealings and what do they mean ? Reports on these forums can be hopelessly confused. A clearer scope of their objectives and limitations helps the interpretation of these forums and the results reported. Basically, each forum is only a market place and any result reported depends upon the very source of it. The place where a result is presented only adds flavour - but flavour sells to a target audience, and repells to some other audience. The WEF is a non-profit institution and it can be observed to seek the approval and participation of the powerful, rich and famous. The non-profit status still allows perks like good salaries and good hotels in luxurious resorts. The WEF can freely use the term 'economic' since there is no scientifically guaranteed protection of that label. The WEF claims to be a socially responsible activity. The WSF originated however as a social protest and countervailing activity to the WEF. It can freely use the term 'social' since there is no scientifically guaranteed protection of that label. The WSF can be observed to seek the approval and participation of the 'grassroots', the powerless, poor and unknown billions, but it is caught in the paradox that it has to be economically financed nevertheless, with its participants requiring a source of income, while it will have to develop some power if it is to have the effect that it wants to have. The discussion of these aspects helps to clarify that economics is a social science quite related to ethics. From this point of view, the WEF and WSF are merely different brands. A suggestion is to create a World Parliament (WP) by an open political process.