Gordon Brown, the former prime minister of the United Kingdom, suggested during a lecture he gave at the Institute of Politics last night that the solution to the global economic crisis is to create a global financial constitution and increase worldwide coordinated action.
Brown emphasized the urgency of developing this constitution while the financial crisis is still fresh on peoples’ minds, saying that once the problem is solved, people will begin to forget the issues and will never reach a conclusion on a global financial policy.
According to Brown, such a constitution would ensure that the situation that led to the economic crisis will not occur again.
“We need a global financial constitution that deals with the issues of fairness and responsibility, as well enterprise, competition, and risk,” Brown said. “Markets operate in a society and an environment where the values do not come from the market themselves; they come from people.”
In response to Richard M. Maopolski ’13’s question asking Brown to expand upon the specifics of this constitution, the former prime minister said that “you need to be absolutely sure” that your financial institutions operate in a fair way, have sufficient capital for the risks that they are taking, have the necessary liquidity, and that the different supervisors and regulators cooperate in their work.
Brown said he believes that increasing overall economic growth rather than simply focusing on eliminating deficits should be an essential part of the changes to the world’s economic structure. In particular, he noted that countries should rethink the current system in which Asian countries are primarily producers and Western countries are primarily consumers.
“If we simply think that each of us can export ourselves out of the current economic problems, and every country thinks they can export, then it cannot happen because someone has to import goods,” he said.
Brown was elected to Parliament in 1983 and served as Chancellor of the Exchequer from 1997 to 2007 while Tony Blair was prime minister. In 2007, Brown became prime minister and leader of the Labour Party. He resigned in May 2010 when the Labour Party lost the majority in Parliament. He remains a member of Parliament representing Krikcaldy and Cowdenbeath.
—Monika L.S. Robbins can be reached at firstname.lastname@example.org.