Remarks at strengthening democracy in the global economy: an opening dialogue in New York city

Weekly Compilation of Presidential Documents, Sept 28, 1998

President Clinton. Thank you very much, John. I would like to thank you and the NYU School of Law, the Progressive Policy Institute, the World Policy Institute, and the New School University - all of you - for your support of this endeavor. And especially, we want to thank NYU Law School for hosting this.

I'd like to thank Hillary and the people on her staff and others who worked with you to conceive and execute this remarkable meeting. I want to thank all the participants here on the previous panels. I have gotten a report about what you've said, and I will try not to be repetitive. I would also like to thank Prime Minister Blair, Prime Minister Prodi, President Stoyanov for being here and sharing this couple of hours with me. I want you to have the maximum amount of time to hear from them.

If you listened to the people in the earlier panels today, you know kind of how this so-called "third way movement" evolved, beginning in the 1980's here, in Great Britain, and in other places. If you look around the world, there is an astonishing emergence in so many countries, and obviously in different contexts, of people who are trying to be modern and progressive. That is, they're trying to embrace change; they re trying to embrace free markets; they're trying to embrace engagement in the rest of the world. But they do not reject the notion that we have mutual responsibilities to each other, both within and beyond our national borders.

Most of us have very strong views about the role of government. We believe that the government should support a pro-growth policy but one that is consistent with advancing the environment. And that's the other thing I know you've heard before, but there are hard choices to be made in life and in politics. But not all choices posed are real.

One of the things that paralyzes a country is when the rhetoric governing the national civic and political debate is composed of false choices designed to divide people and win elections but not to advance the common good once the elections were over. I think that, more than anything else, that feeling that I had many years ago back in the eighties got me into trying to rethink this whole notion of what our national political principles ought to be, what our driving platform ought to be.

I think that we have found that yes, there are some very hard choices to be made, but some of the mega-choices that people tell us we have to make really are false, that you can't have a growing economy by pitting working people against business people, you have to get them to work together. You can't have a successful economic policy over the long run unless you improve the environment, not destroy it.

It is impossible to, anymore, have a clear division between domestic and foreign policy, whether it is economic policy or security policy, and I would like to argue, also, social policy. That is, I believe we have a vested interest in the United States in advancing the welfare of ordinary citizens around the world as we pursue our economic and security interests. And of course, that brings us to the subject we came to discuss today, which is how to make the global economy work for ordinary citizens.

I would just say, I'd like to make two big points. Number one is, the rest of us, no matter how good our conscience or how big out pocketbooks, cannot make the global economy work for ordinary citizens in any country if the country itself is not doing the right things. And I think it's very important to point that out. Second, all the countries in the world trying to do the right things won't make sense unless we recognize that we have responsibilities, collective responsibilities that go beyond our borders, and I would just like to mention a couple of them.

First of all, we have to create a trading system for the 21st century that actually works to benefit ordinary people in countries throughout the globe. That's what all this labor and environmental conditions and letting all the interest groups be a part of the trade negotiations - all of that's just sort of shorthand for saying, "Look, we've got to figure out some way that if wealth increases everywhere, real people get the benefit of it, and it's fairly spread, and people that work hard are rewarded for it."

Second, I think we simply have to realize that while the IMF and the World Bank and these international institutions have proved remarkably flexible and expandable, if you will, over the last 50 years. We are living in a world that is really quite different now with these global financial markets and the increasing integration of the economy. And while, again I say, in the absence of good domestic policies, there is nothing a global system can do to protect people from themselves and their own mismanagement.

The world financial system today does not guard against that boom/bust cycle that all of our national economic policies guard against. That it does not reflect the lessons that we learned in the aftermath of the Great Depression of 1929 nationally. It does not reflect those lessons on an international scale. And I believe that the most urgent thing we can do is to find a way to keep capital flowing freely so that the market system works around the world but do it in a way that prevents these catastrophic developments we've seen in some countries and also may prevent an overindulgence of giddiness in some places where too much money flows in in the beginning without any sort of proper risk premium at all on it.