How are rogue protesters and rogue bankers alike?
Both generate a lot of newspaper headlines.
Both cost taxpayers money, either in security against thugs who hurl rocks and smash windows, or in bailouts for misbehaving banks and governments in a finance-driven economic crisis.
Both types of rogues are a challenge to the G20 group of nations. Political leaders tackle the financial crisis, while local police tackle protesters, in Toronto this past weekend, and previously in Pittsburgh and London.
Do the similarities end there? It’s actually easier to see how these rogues differ.
Compare a Black Bloc hooligan lobbing an incendiary bomb into police cruiser, during the Toronto summit, to a Wall Street investment banker tossing a collateralized debt instrument based on flimsy mortgages into the investment system. Both devices explode. But there’s no confusing the two people in a police line-up.
One obvious difference is in fashion – black hoodies versus Armani pinstripes.
A second difference is the damage they cause. I don’t know what it costs to replace all those burned-out police cruisers and broken shop windows.
But I doubt the bill will come close to the cost of cleaning up the world’s financial crisis, estimated by the International Monetary Fund to be $11.9 trillion.
Despite the differences, you can find further parallels in the debates about how to respond to rogues, whether the bandana or Gucci variety. In both cases, we need to think about trade-offs between rights and responsibilities.
For example, Toronto Police Chief Bill Blair took heat for being both too lenient and too tough with protesters. After the first melees, critics of the summit-security tab asked why $1 billion didn’t buy protection from blatant vandalism. Yet, after police detained 600 protesters on Sunday, civil libertarians said pre-emptive arrests violated the rights of the innocent. We’re asked to ponder the balance between public safety and freedom of expression.
World leaders face a similar dilemma in stopping vandalism of the financial system.
Should banks come under a common system of regulation, with unified standards on capital guarantees, so the loans they make are backed by a safe level of cash in the vault? Should the new Financial Sustainability Board, created by G20, have real teeth?
Some countries balk at new multilateral bodies having power that might interfere with their own sovereignty. They want global rules to be voluntary.
On this issue, former Canadian prime minister Paul Martin said recently: “If there is anybody who thinks that the voluntary subscription to global standards will be sufficient, then I’d like to introduce them to the tooth fairy.”
Calling for mandatory worldwide regulation, Martin described sovereignty as having a flip side. “The definition of sovereignty today must now include sovereign duties, and the responsibility of nations to each other.”
Does that sound like police chief Blair’s view of rights? Protesters are free to send a message, he said, as long as they observe their responsibility to the safety of their fellow citizens.
There’s the rule, in a nutshell. Your right to extend your fist extends only as far as my nose.
Same on the global scene, as a rule for financial regulation. We live in a seamless world, where capital flows freely across borders. So your right to permit the operation of crazy cowboy banks – institutions that create billions in loans, but have thin underlying capital or gamble heavily on exotic derivatives – extends only as far as the risk to my taxes, my economy, my job, my pension, even across the border.
Two very different kinds of trouble, a few parallels. Now try this two-second quiz: First, which kind of rogue is a bigger threat to quality of life around the world today? Second, which kind commanded more of your chatter, this weekend?
Fred Kuntz is Senior Director of Communications and Public Affairs at The Centre for International Governance Innovation.