A New Multilateralism for the 21st Century: the Richard Dimbleby Lecture

Delivered by Christine Lagarde, Managing Director, International Monetary Fund, London, February 3, 2014
tine Lagarde, Managing Director, IMF

tine Lagarde, Managing Director, IMF

Good evening. It is a great honour to be invited to deliver this year’s Dimbleby Lecture, and I would like to thank the BBC and the Dimbleby family for so kindly inviting me—and especially David Dimbleby for his warm words of introduction.

This evening, I would like to talk about the future. Before looking ahead, however, I would like to look back—for the clues to the future can often be read from the tea leaves of the past.

I invite you to cast your minds back to the early months of 1914, exactly a century ago. Much of the world had enjoyed long years of peace, and giant leaps in scientific and technological innovation had led to path-breaking advances in living standards and communications. There were few barriers to trade, travel, or the movement of capital. The future was full of potential.

Yet, 1914 was the gateway to thirty years of disaster—marked by two world wars and the Great Depression. It was the year when everything started to go wrong. What happened?

What happened was that the birth of the modern industrial society brought about massive dislocation. The world was rife with tension—rivalry between nations, upsetting the traditional balance of power, and inequality between the haves and have-nots, whether in the form of colonialism or the sunken prospects of the uneducated working classes.

Read full text of  Christine Lagarde’s Address and Video

15 thoughts on “A New Multilateralism for the 21st Century: the Richard Dimbleby Lecture

  1. Here is what LaGarde is saying, does it look familiar? The BU posse has been suggesting same for several years:

    Think about the growing power of multinational corporations, who now control two-thirds of world trade. According to some research, 12 multinational corporations now sit among the world’s top 100 economic bodies in terms of sheer size.
    Think about powerful cities—31 of them are also on that list of the top 100. And they continue to grow. By 2030, about 60 percent of the world’s population will live in cities.
    Think also about the rising aspirations of citizens who feel increasingly part, yet not quite adjusted to, our interconnected “global village”. By 2030, the global middle class could top 5 billion, up from 2 billion today. These people will inevitably demand higher living standards, as well as greater freedom, dignity, and justice. Why should they settle for less?
    This will be a more diverse world of increasing demands and more dispersed power. In such a world, it could be much harder to get things done, to reach consensus on issues of global importance.

    • The challenge therefore for a 2×3 country – how do we show leadership to carve out our path in the world in a sustainable way.

      The risk is of a world that is more integrated—economically, financially, and technologically—but more fragmented in terms of power, influence, and decision-making. This can lead to more indecision, impasse, and insecurity—the temptations of extremism, and it requires new solutions.

  2. Basically man needs to produce what he consumes/uses.What we need/want and cannot produce we need to trade something from our production for.
    Apparently we can not go back to basics because of the involvement of all the middlemen who do not produce.
    I think this is what you mean….David?
    So what do we do?

    • @Vincent

      Endless consumer consumption to the infinite degree is not a sustainable behaviour. Something has to give.

  3. So LaGarde provides another IMF sponsored dog and pony show to stave off having to admit to the pee-ons they’re screwed and that the sorcerer’s apprentices (AKA as bankers and economists) are absolutely out of options when it comes to providing a workable, long term solution to bring the world’s biggest ever Ponzi scheme to a graceful and pain free conclusion.

    The Smog of Fraud
    by JH Kunstler


    JP Morgan is one of the specially privileged “primary dealer” banks said to be systemically indispensible to world finance. Supposedly, if one of them is allowed to flop, the whole global matrix of global debt obligations — and, hence, global money — would dissolve in a misty cloud of broken promises. They are primary dealers to their shadow partner, the Federal Reserve, and their main job in that relationship is buying treasury bonds, bills, and notes from the US government and then “selling” them to the Fed (earning commissions on the sales, of course). The Fed, in turn, “lends” billions of dollars at zero interest back to the primary dealers who then park the “borrowed” money in accounts at the Fed at a higher interest rate. This is, of course, money for nothing, and even small interest rate differentials add up to tidy profits when the volumes on deposit are so massive.

     This “carry trade” was started because the primary dealer banks were functionally insolvent after 2008 and needed to build “reserves” up to some level that would putatively render them sound. But that was a sketchy concept anyway since accounting standards had been officially abandoned in 2009 when the Financial Accounting Standards Board (FASB) declared that banks could report the stuff on their books at any value they felt like. In short, the soundness of the biggest banks in the USA could no longer be determined, period. They were beyond accounting as they were beyond the law. At the same time, the banks began the operations of shifting all the janky debt paper, mostly mortgages and derivative instruments (i.e. made-up shit like “CDOs squared”), value unknown, from their vaults to the a vaults of the Federal Reserve, where it resides to this day, rotting away like so much forgotten ground round in the sub-basement of an abandoned warehouse of a bankrupt burger chain.
     All of these nearly incomprehensible shenanigans have been going on because debt all over the world can’t be repaid. The world’s economy, as constructed emergently over the decades, can’t function without repayable debt, which is the essence of “credit” — the fundamental trust implicit in banking. You have “credit” because other persons or parties believe in your ability to repay. After a while, this becomes a mere convention in millions of transactions. What’s happened is that the conventions remain in place but the trust is gone. It’s gone in particular among the parties deemed too big to fail.
     Everybody knows this now and everybody is trying desperately to work around it, led by the Federal Reserve. Trust is gone and credit is going and debt is sitting between a rock and a hard place with its grubby hands pressed together, praying that it will be forgiven, forgotten, or overlooked a little while longer. By the way, the reason trust and credit are gone is because oil is no longer cheap and world economies can’t grow anymore. They can’t afford to run the day-to-day operations of a techno-industrial society. They can only pretend to afford it. The stock markets are mere scorecards for players who can only lie and cheat now to keep the game going. Somewhere beyond all the legerdemain and fraud, however, there remains a real world that is not going away. We just don’t know what it will look like when the smog of fraud clears.


  4. We have ‘watched’ Lagarde, not because we though she would offer any departure from established norms but because we wanted to benefit from a broader interpretation of both her nonverbal and nonverbal vocal communications. There is nothing here. She seems to believe what she is saying, even misguidedly so.

  5. The war machine to create money, jobs and the super wealthy was the second phase of greed re-established in 1914, now on to the 3rd phase one hundred years later. The banks will fund it as they have been doing from the 1800’s, their imps will implement it and here we go again.

    • Comment received by email:


      BARCLAYS IS SLASHING 12,000 JOBS. Add these to the 145,000 that David Cameron and George Osbourne axed last December 5, and the thousandssssss  a couple years prior.

      Hey, so Barbados is not alone!   A company or government does what it has to do to effectively manage its finances and turn around unsatisfactory situations. Read below. The story is also on the BBC’s website.

      Barclays is to cut up to 12000 jobs in 2014 by Karl Flinders Tuesday 11 February 2014 11:50

      Barclays bank is cutting 7,000 jobs in the UK as part of a reduction of up to 12,000 jobs globally this year. The bank announced between 10,000 and 12,000 cuts globally this year, with the majority to be axed in the UK

      Barclays, which announced profits of £5.2b for 2013, would not go into more detail about where cuts will be made. However, IT has been hit hard by recent job cuts.

      According to a Computer weekly source, Barclays is planning to reduce VP level staff in its Global Technology Infrastructure Services(GTIS) by cutting heads in London and Knutsford, with more functions moving to Lithuania.

      Barclays Bank has also said it will cut 1,700 frontline jobs across the UK as part of a strategy to reduce the number of branches as more and more customers use technology to do their banking. Reports said up to a quarter of the branches could be closed.

      In 2013, Barclays cut jobs in the UK as part of a total reduction of 3,700 staff, after reporting a substantial drop in profits for the last 12 months.

      One CIO-level source in banking IT professional said the trend of banks reducing IT headcount is continuing and creating serious business risks.

      “They keep cutting people and outsourcing IT roles. This is making technology problems more common and harder to fix.”

      He added that morale is low in banking IT departments. “When you cut half a team the other half have to work twice as hard. They begin to look for new jobs and up for the current job anymore.”

      Barclays is investing in technology as part of its Transform project. “Other Transform costs of £356m were primarily driven by investment in technology and process improvements that will reduce future operating costs and enhance customer and client propositions,” it said in its results.

  6. and yes christian the only ones that are coming together are the 1% who control the wealth while they drift further and further away from the 99% ,,there will always be tensions as long as income inequality remains the norm and considered way of doing business…. the solutions is a fair equal share of the pie for those who have sat on the bottom for too long of this two layer pie working their ass off only to receive the crumbs that fall to the ground,, yes that is the real problem….. asking people to come together is not what it is all about but what they will received when the pie is being divvy up,.,,,

  7. This is not very good at all. What makes worse is the lack of available tallent with the skills to steer Barbados through all of this … This is so not good at all

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