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To: PaulM who wrote (33111)	5/4/1999 10:45:00 AM
From: Alex	Read Replies (1) \| Respond to of 117072

Not out of the Bretton Woods yet This economist supports capitalism, but says it needs controls. HELEN TRINCA speaks to a conservative with some radical ideas. IN A couple of weeks, Lord Robert Skidelsky will book into the Mount Washington Hotel at Bretton Woods, where the world's best-known meeting of economists was held in 1944. He has asked for a special room - the one where John Maynard Keynes slept during the conference that changed the postwar economic architecture of what people back then liked to call the free world. Skidelsky is finishing the third and final volume of his biography of Keynes and reckons he had better try to soak up the atmosphere of the small New Hampshire town that hosted the brains behind the new world order. And Bretton Woods is not just part of history for Skidelsky who, as academic (professor of political economy at Warwick University in Britain) and politician (the Conservative Party's main spokesman on Treasury affairs in the House of Lords), is calling for the same sorts of curbs on global capital debated more than 50 years ago. In Australia for a series of public lectures, Keynes's biographer, who was appointed a life peer by John Major's Government, says we need a new Bretton Woods to devise some new rule - like fixed but adjustable exchange rates and controls on flows of speculative capital. This brings him into the company of many trenchant critics of globalisation and capitalism itself, but Skidelsky is a defender of the market and the economic freedom that followed the collapse of communism. It is just that he is "enough of a Keynesian to know that markets are not inherently stable". "For economic freedom to survive we need to avoid the economic equivalents of earthquakes," he says. Capitalism needs controls, even if it is likely to take another couple of financial crises like the recent Asian collapse to encourage the US to move. And markets must be moderated at home too - by morality - if freedom is to survive. Skidelsky, somewhat reluctantly for an old-style liberal, has decided we must put marriage and the family at the centre of policy if we are to maintain a set of values. "People are very troubled by signs of apparent social breakdown," he says. "A lot of the old leftists would say this is just the market and that we must do something to restore communities and families. That particular left-wing strand meshes with a right-wing moral authoritarian strand. "I am torn," he says. "I am instinctively a liberal on all these issues but I know that societies require institutions." Skidelsky admits that 20 years ago he would not have been calling on governments to "privilege" families by policy support. Now, he says, families must be at the centre of policy. And given that it is parents, not the state, who develop morality, they must have complete choice in the schooling of their kids because the moral values passed on in the state system are vacuous "and amount to nothing at all". Skidelsky realises he is begining to sound like "an old fire and hell person" but argues many parents are feeling short-changed by the state education system. It boils down to the fact that the state can't promote values as it might once have been able to do when we were building nations or defending them from wars. That role must be taken up by other institutions. Nor can nations impose their values on other countries, as NATO is trying with its spot of "ethical cleansing" in Kosovo. Skidelsky argues that, historically, world peace has depended not on a common set of ethics, but on agreements between the great powers about the principles of non-interference. After the end of the Cold War such agreements were never going to be based on the same value systems around the world, and yet NATO had broken out and intervened in Kosovo. Extending this "ethical imperialism" further as the British Prime Minister, Tony Blair, appeared to be suggesting, would only threaten world peace. "Any attempt by the United States and its allies to impose their values on the rest of the world will inevitably lead to the break-up of the world policy and with it the break-up of the world economy," he says. But Skidelsky, rather like those who gathered at Bretton Woods half a century ago, remains optimistic. The next millennium will be moulded by intelligent government, he suggests, and is not "structurally predetermined". Robert Skidelsky will give a public lecture today at the American Club in Sydney. Inquiries to (03) 9600 4744. smh.com.au