Towards Multilateralism: The Road Not Taken - A Conversation with Fabio Masini

In this episode of Planetary Choices, we talk with Fabio Masini, Professor of Theories and History of International Political Economy at Roma Tre University and Secretary General of the Robert Triffin International, to trace the long and unfinished arc of a world that has never quite managed to govern itself.

Fabio has spent decades studying why multilateralism remains more promise than reality. In this conversation, he takes us from the ruins of the post-war international order to the weaponization of the dollar, from the fractures inside the European Union to the quiet rise of regional monetary blocs across Africa, Latin America, and Southeast Asia.

And beneath all of it, one question keeps coming back: if sovereignty is the capacity to solve problems, and our problems are now planetary, what does that mean for democracy?

Academic Reference: 

Fabio Masini, Hagen Schulz-Forberg; Towards Multilateralism: The Road Not Taken - A Conversation with Fabio Masini. Global Perspectives XXX 2026; 7 (1): XXXX. doi: XXXXXX

This podcast was created and produced by the Research Center for New Critical Politics and Governance (CPG).

To watch the video version of this episode, please visit the link below:
https://cas.au.dk/en/cpg/podcast/mapping-the-planetary

Transcript

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Hagen: Welcome to this episode of Planetary Choices. Today with me is Professor Fabio Masini. Fabio is at the University of Roma Tre in, well, in Italy, of course, Roma Tre in Italia, at the Department of Political Science, where he is a professor of theories and history of international political economy. He is also a Jean Monnet Chair of European Economic Governance. He also finds the time of being the Secretary General of the Robert Triffin International Association, or is it an association or is it a think tank? We'll find out.  

Fabio: It's a think tank, but it's a strange thing. 

Hagen: And he has the time to be the editor of the journal, great journal, check it out, of the History of Economic Thought and Policy. And over the last years, he was also extremely busy, I presume, which is also why we'll talk here, because suddenly, magically, you managed to publish three books at the same time, which is a logistic masterpiece. These three books, Fabio, deal with the history of multilateralism, taking the long view from 80 years back until today. One of the books is your own, and two are edited volumes where you get together with a bunch of colleagues in order to understand what's going on and how we got where we are. So maybe we can start by talking about multilateralism today. What, according to you and all the work that you've been doing, is at the heart of this crisis?

Fabio: Well, thanks, first of all, for this conversation and for recalling also the three books. Actually, they are four, because in the last two years, I published four books, one of them is on the economic governance of the European integration, and the other three are focused on the global dimension of integration, multilateralism, the end of multilateralism, the history of multilateralism, or the history to establish a multilateral system and instead on the emergence of a hegemonic system based on the United States and the dollar, basically, and also to make some proposals, to collect some ideas for proposals, let's say, for reform. The first of the three books that you were mentioning were written actually before the advent of Trump. So Trump changed a little bit the situation in the sense that he accelerated some processes, of course, and he's made things a little bit more complicated, if you want. But basically, the idea behind the books is still the same. I mean, when I try to have a look at the international system, I try to understand which are the possible, let's say, problems, critical knots between economic relations, which are, by nature, multilayered, because they are from local to global, of course. Markets are local, markets are global. Economic relations can be very different in terms of dimension. And at the same time, the existence of national economic policy instruments, because still we are living in a world in which economic policy instruments are basically in the hands of national authorities. Of course, there are also international institutions, but they are increasingly delegitimized. And this is one of the problems that is emerging in the last few decades. And the other major problem is that, well, the same that Xi Jinping recalled to Trump a few days ago, which is the Thucydides trap. I mean, one of the few Thucydides traps that Thucydides named in his books, which is related to the emergence of a transition between some order that was before, then we can talk about what before is and before what, and something that came after or might come after. So we are living in a transition. And every kind of transition implies problems. The problem of how to govern this transition and how to not to be subject to this transition. And this is one of the main points that I tried to analyze in those three books. They are a little bit different. They are not exactly the same, because one is typically a history of economics perspectives in which I analyze, I am all the group that I, let's say, organize colleagues, yes, not just by myself, but also with Atish Ghosh, Atish Rex Ghosh, which is the historian of the IMF, the International Monetary Fund, we together try to collect this group of scholars that went back to the last 100 years, sorry, not certainly 1000, but 100 years. So before Bretton Woods, the ideas that came before Bretton Woods, the ideas that were discussed, and some of them discharged at Bretton Woods, and what were the directions not taken in the last 80 years. Because we think that from the directions not taken, we might take more inspiration than from the direction taken, because okay, the directions taken are under our, I mean, you open a newspaper and you see which direction have been taken. But going back to understand why some directions were not taken, why some crossroads were refused, might be inspiring for also, I mean, just to as a brainstorming session, let's say for the future. So coming back to your question, what is happening now? We are living in a transition and we are living in a weaponization, extreme weaponization of all the economic and monetary infrastructures.And this is very risky from the stability point of view, because the whole world is really a return back to imperial logics.And when they have imperial logics, of course, you can never know exactly how it will end. And this is one of the lessons that Thucydides did, it's told us a few millennia, in that case, ago. So the weaponization of currencies and of economic infrastructure is challenging the whole order that was before, before what? Before the last 25 years, more or less, 25 to 30 years, when China became a challenge to the hegemonic role of the United States, after of course, the financial crisis of 2007 or 2008, there was a weakening again of the position of the hegemonic position of the dollar,which was in a way reinforced at least temporarily by the intervention of the FED, the Federal Reserve. Because you should not remember that in that case, the lender of last resort was not made by the International Monetary Fund, which is supposed to be the lender of last resort in a way in case of major crisis,but it was made by the FED, the Federal Reserve. It was through the swap lines, the exchange of currencies between the FED and the other major central banks that the crisis was sold and the credit crunch was diluted and so recovered it could start. So it was the FED that again said, we are still the hegemon in the currency world, which does not mean only the currency world because through the currency, you control economy and you control the politics, which is connected to the economic infrastructure as of the whole world,which is also connected in a way to the instrumental use that until those years was made of new liberalism. I mean, the market forces, market forces are, I mean, there's a supremacy of the market. The market is superior to any kind of state intervention, but this is again functional to who is the leader in the market because the market is not an even playing field, but it's a sort of battle field in which there are many forces that struggle to impose their choices, both in terms of economic choices and also of political choices. 

Hagen: Well, that was a great overview already and jumping back to a hundred years, you're talking about ideas that came up during the League of Nations that may inspire our views for today or help us learn something. It's always tricky to learn lessons from history as we know from Thucydides and the traps that we may fall into as we're managing transitions. Then you mentioned how the current institutional landscape is, let's say, decreasing in legitimacy. If I hear you correctly.

Fabio: Yeah, yeah. 

Hagen: Political legitimacy and probably also your narrative legitimacy or simply also in the scope of its power and the scope of its influence as other structures, as other alternatives are coming up, other ideas, different forms of institutions are coming up.And then you mentioned that at the heart of all of this is the currency, is the dollar domination of the global economy or the world economy, if we wish, because it seems to be more of world economy than an integrated global economy when there's so many deals between countries and this. And if you do this, then I'll get you my dollar. And if you stop using my dollar, I will stop having trade with you. So he really breaks up the idea of an integrated economy I find sometimes, but you know probably more about that than I do. And going back to these continuous negotiations of a bilateral nature in order to get the best deal he can, of course, I mean the Trump administration there. So, I'm reading off here because of what you said, but I would love to know a little bit more about the concrete issue here of the multilateralism and the crisis of multilateralism. So it decreases there and then there's the money issue. How do you relate the money issue with the geopolitical issue? Does it fall under the geoeconomic framework,which we're talking about so much these days?

Fabio: Well, I mean, there is a strong connection between money and power. Traditionally, money is an element of power, is one of the most important elements of power. It's money and army, basically, weapons if you want.They are the symbols of sovereignty. They have always been the symbol of sovereignty and they are still a symbol of sovereignty.This is one of the reasons why, I mean, they are so connected. So they are connected to the geopolitical balance of power, which is no longer the same as it used to be until 20 years ago. I mean, until 20 years ago, we had a sort of legitimization of the dollar hegemony, because in the background of the dollar hegemony,there was the ability and also the legitimacy, the authoritativeness of the United States who sold somehow, maybe not exactly with the most gentle or kind instruments, but it did function. It did manage to be effective. I mean, the United States were the guarantees of stability, a difficult stability with many conflicts, but still there was some kind of stability. And in case of major crisis, it was, again, the United States that managed to bring stability back to the system. Now the feeling is that is no longer the case. I mean, the United States are no longer able to restore stability, neither in terms of military power.

Hagen: In the global financial system.

Fabio: In the global financial system, but this has also implications for the global political system.This is the most important problem,because the perception is that the United States are no longer the hegemonic power in the world. And this has some, let's say, tentacles in terms of money, economy,and military consequences. And this is one of the reasons why Trump is behaving this way. I mean, he's not just crazy. He's also a little bit strange, let's say, in the way he behaves, but he's not crazy. He's perfectly rational. He's trying to bring back with the use of strength, the hegemonic position of the United States that is no longer there. And when he realized that it is no longer possible to restore the hegemonic stability that he had before, he's going to Xi Jinping because the only alternatives in his opinion, and maybe he's right, is to have a duopoly again. Like in the Cold War, there was Russia and the United States.The most important, the most likely alternative to the end of the hegemonic role of the US and dollar is to have a duopoly in the world, which is reassuring from a point of view, because in a way, like we used to know in the Russia, US confrontation, it was a sort of block. I mean, these two big magnets, which were very strong, both of them in terms of military power, not certainly of economic power, much less, but they managed to keep the whole world in a stable situation, although it was in a stable stability, because once, for example, in the 1980s, at the end of 1980s,when there is the collapse of one of these two big poles, of course, that the whole world changed completely. And we thought we were going to have the end of history, which also Fukuyama recently said, I mean, I was wrong. It was not the end of history. We are starting again with history. So it was not the end of history. And the Last Man, the book of 1992, I cannot remember, that was the first paper and then a book called in the same way between 1992 and 1993. But anyway, so the problem is that this coming back to the duopoly is very risky, also, especially for Europe, because Europe has always tried to be a model of integration for a different kind of how to live in the world. I mean, in the end, what we did in Europe in the last 80 years is just to show that we can overcome the idea of national exclusive sovereignties, that we can share part of this sovereignty, and we can jointly, collectively decide together, which would be very interesting and nice for the whole planet,but it's very difficult to make it at the global level.This is one of the reasons why the European experiment is so crucial and is so also challenged by the other superpowers. And we are seeing it now that the big target of both Russia and the United States, at least for the Trump administration, Xi Jinping is a bit more ambiguous from this point of view, is exactly the unity of Europe, because if Europe unites beyond the problem that it becomes an important actor at the global level, it provides a successful experiment of civil coexistence at the transnational level. So this is a big problem for the United States and for China and for Russia. So for the big three powers that now are, let's say, dominating the global stage.So basically, that's it. I mean, the change in the balance of power, in the general power, balance of power, is also reflected in the use of economic and monitoring structures.And monitoring structures are typically one of the key elements of how to exert power. I mean, we saw it in the 70s when there was the end of Bretton Woods and there was the attempt by the International Monetary Fund, you might remember that managing director of the International Monetary Fund, Johannes Witteveen at that time, tried to solve the problem of the Yom Kippur War and the oil shock with oil exporting countries that became skyrocketing in their GDP. They didn't know how to use their surplus in balance of payments. So he tried to recycle the surplus on the balance of payments at the IMF, so that the IMF could grow the money from them and channel it to the industrialized countries that were in need of this money because they were suffering balance of payment deficits. And what happened was that Kissinger basically weaponized the dollar and said, "No, you're not gonna do that at the IMF. We shall do it bilaterally." And from then we know the agreements, bilateral agreements with Saudi Arabia, with all the area of the Middle East and also with the European countries that accepted the solution, exchanging it with the defense of the United States in case of major conflict. So basically that was the case. And this is still the case.What Trump is doing is still this kind of a way of colonization of the dollar again. 

Hagen: American politics, which is- 

Fabio: Power politics. Just power politics.

Hagen: But what does that have to do? Oh, how can we square that with multilateralism? Listening to you, it seems to be that yes, it's multilateral,but there's one big player in there who, the United States, who seems to misbehave and actually seems to look at it more from an imperial point of view or from a parabolic point of view.

Fabio: If you go through the three books, you will discover that I'm never, never, I'm talking about the return to multilateralism. I'm always talking about going towards multilateralism because we never experienced multilateralism. Maybe in some months of this whole story of  years, but it was just months in very small transitions. So the problem is not to return to multilateralism because we never experienced multilateralism, but to go towards some kind of multilateral, multi-polar if you want idea of the international economy and politics, because again, the economy and politics are going together under many respects. So the point is to start building poles of similar dignity. So not just the United States and China, or the United States, China, and Russia, but Russia is only crucial from the military point of view. I mean, the GDP of Russia is more or less the same as Spain. I mean, so it's nothing. Of course, they have many primary resources. So it is crucial also for this point of view, not just for side fuels, but also rare errors. So primary resources. So this is a big, of course, superpower. And sooner or later, Europe will also have to return to have a dialogue with Russia. Let me also add this, because Russia is here.

Hagen: Fabio, sorry. Yes. Could I just bracket something? Because I think it's important for the audience to understand that you are saying we never really had a multilateralism. So the history of multilateralism is really a history of something that never fully existed because it was dominated by the United States, or it was in the hands of superpower struggles, but it was never what one might really call a multilateralism. And you would argue, let's take this as a moment of recognition and move towards a multilateralism that deserves the name. Is that what you're saying?

Fabio: Yes, this is exactly my perception of the situation and of the history of the last 100 years.

Hagen: Yeah.

Fabio: I mean, we really never experienced a world governed by several poles with the same dignity or with similar dignity. And this is the direction that should be embraced sooner or later. Of course, I'm not seeing any possibility of changing completely the situation in two years or even maybe 10 years or 20 years, but this is the direction that we should embrace as human race if we want to have really a stable and peaceful world. So what is the point about how not to restore, but to go towards multilateralism? To create, to establish some kind of regional poles, regional integration areas, basically with continental dimension. So Africa, which has already started, I mean, it's a long process in Africa. We all know that the idea of an African Union started several decades ago when there was the movement against the colonial powers. So in the 50s, basically, or anyway, soon after the Second World War. And it was a very important movement, that one, in favor of Pan-Africanism. But we have to rethink also of the way Pan-Africanism can be thought of because Africa now has a huge potential. I mean, also the IMF, the latest release of the economic perspective of the IMF, testified that the most growing continent now and in the next future, in the near future, will be Africa, exactly Africa. So I mean, that is...that has a huge potential.The problem there is to let them understand that without any Pan-African umbrella, whatever kind of Pan-African umbrella we can start with, but we can return on this because this is a crucial aspect of the whole geopolitical problem in the world. Without anything Pan-African, they have no chance to defend from the influences of the big superpowers, which are no longer the old colonial power. Of course, they also have this problem with the old colonial powers, which are all European powers. But at the same time, I mean, the most important and dangerous influence that is impacting on African countries now is from the US, China and Russia, because they are the ones that are mostly influencing their countries. And they still do not perfectly understand this point. This is one of the reasons why, for example, I recently,you probably don't know this, but among the many things that I'm doing in my time, I'm at the head, at the helm of a consortium of universities in Europe and Africa to start a dialogue. It was a European project, a policy debate project, the "Erasmus+ Policy Debate" to establish a permanent, let's say, infrastructure for dialogue and analysis and policymaking and advisory, to jointly, between Europe and Africa, design our future. Because we have many reciprocal externalities, we have many interdependencies between Europe and Africa. I mean, not only for geographical reasons, but also for historical reasons, and so on and so forth. So this is one of the crucial aspects of the past that shall bring towards multilateralism. And the other two great areas of interest from this point of view are Southern America, which is, again, very much divided because of the interest of the United States there, and also Russia. We know that both Russia and China now, but the United States historically, have great influences and negative influences, from my point of view, in the making of a Latin America regional identity, which is also an important part of this multipolar, multilateral construction. And the other one is South-Eastern Asia, because of course they are under the influence of China and maybe Japan, but they should try to have more, let's say, independence, autonomy, at least from this kind of influences. So these are the areas that might constitute the regions, the poles of new infrastructures, of economic, monetary, also monetary, but maybe we'll return on this later, and political global order. 

Hagen: Okay, so when you're saying this multipolar and multilateral, where's the difference in that vision? 

Fabio: Well, I mean, multipolar is very clear. You have poles, different poles with the similar dignity and... 

Hagen: Africa, Latin America, Southeast Asia, Europe... 

Fabio: This is the idea of, yeah, exactly, this is the multipolar idea. The multilateral, at least in my understanding of the differences between multipolarity and multilaterality, is a matter of the weight that such of these poles bring with them. So of course it's very different, because poles should be more or less with the same dignity. Multilateral means that you try to have a common idea of what is going on at the whole level, at the global level, but at the same time it's a sort of diplomatic forum. And you know that in diplomatic forum, in the end, who emerges as the winner is the strongest. So it's a matter of diplomatic strength in the multilateral system. In a multipolar system, you assume that you have poles with similar dignity. So this is basically the difference in terms of more democratic, if you want, if you want to use this abused idea of democracy, which is we don't no longer know what it is exactly, but the idea is to have a more democratic system rather than a more power-centered system. 

Hagen: Okay, so multilateralism would then emerge between equally valid poles. So this is the idea. To avoid that the institutional frameworks that emerge or the platforms that we build, the bridges that we build between those poles fall back to a pure power game, which is what we have observed over the last decades. 

Fabio: Exactly. I mean, you also, the United Nations is a multilateral institution. But it's not a multipolar institution. Definitely not. We don't have a representative in the board of Africa or Latin America. We have the five powers that won the Second World War. So I mean, that is multilateralism. But at the same time, do we want that kind of replication of institutional setting also in the economic system? I mean, this is not what we should aim at, at least. Of course, we might have this, but that's another issue. I mean, what comes out is not exactly the same as what we should aim at, at least as citizens. 

Hagen: Let's take a jump back. I think this is a good point to maybe zoom back to what you talked about, historical examples and inspirations. First, I thought, what will you talk about when we talk about money? A road not taken. Shall we now go to the real Bancor, which was never established back in the system? So Bretton Woods was never a Keynesian, fully Keynesian, right? Because the Bancor was never there. So the question that comes from there is, is that road not taken an alternative for today? And what is the Bancor in that new world of multipolar respect on which a multilateral institutional platform sits? And then it needs a financial governance system. That would be one question. And the other it sounds a little bit like almost like Coudenhove-Kalergi with the continents and the Pan-European Union idea that what about the nation states? What about sovereignties and the role of nations within what sounds like a multilayered, you used that word before, multilayered federal system?

Fabio: Okay, so let's start with the first and then let's go to the second, which is also quite big, let's say, as a question. 

Hagen: I'm sorry. 

Fabio: No, no. That's nice. I mean, it's nice to talk about the big questions. So let's start with the money; money first. So you know that Bancor was an idea apart from how it emerged. The idea behind the Keynes reflections was that we needed some kind of autonomous global money. Our global institution, at least to issue liquidity and to grow liquidity also in case of different dynamics in the world system. Of course, in 1944, when I mean the Bretton Woods Conference, most of the countries needed liquidity because there was I, mean, we were close to the end of the Second World War. So trade was going to increase, of course. I mean, it was easy to expect. And there might be problems of balance of payment adjustments. And the idea of Keynes was, okay, we can do it with the cleaning union because basically that was the first idea of the Bancor. So the Bancor came from the cleaning union, the cleaning system in which you don't need to solve every day the problem of your balance of payment adjustment, the paying gold, because basically gold is the was the only currency accepted. The sterling pound was no longer that much accepted. The dollar was starting to be accepted. But anyway, gold was the true money in 44. So the problem was to avoid that any kind of adjustment that you required in your balance of payment, which would be huge balance of payment adjustment, would be settled bilaterally at each day. In that case, you would have an impact on your own domestic circulation, which would be huge. And this is not, of course, what Keynes had in mind, because it would bring instability in national systems and would imply that you could not, for example, manage a demand with this kind of external constraint. So the idea was to have this cleaning union. The second idea was to regulate this kind of accounts, so virtual accounts, not just the exchange of money, but virtual accounts in a book through the Bancor. So an international money currency created by the international monetary fund or the World Bank by the group, let's say, autonomous from any national currency. And this is exactly what's White, the competing plan. Said no, of course not, because we want to control everything. So it will be made through the dollar. So, again, this is still the problem that we are still having now. And that was made very clear by Robert Triffin in 1959, when he went to the Congress of the United States and said, we have a problem here. Yes, we know it's the scarcity of dollar. No, the problem is that we might have too many dollars. What do you mean? I mean that you are going to give dollars to keep up the global system, but at the same time you are losing... 

Hagen: They're going to have dollars in their reserve. 

Fabio: Exactly. You would lose the parallel. You would lose the parallel with gold. So convertibility will be put in question. And this is exactly what happened in 1971. So the idea now is not to return to gold, of course, as many say, even now, or as Rueff, Jacques Rueff said, and France said in the 1970s, at the end of the Bretton Woods idea era. The idea is to go again to try and establish a currency, an international currency, which is not dependent on any national monetary authority, because this creates what Triffin called the dilemma, what she scared the stand called the exorbitant privilege and what the Miran, Stephen Miran, and then let's say the president, the council of economic advisor of Mr. Trump says it's an onus. I mean, because it's true also that it's an onus in the sense that it's a problem for the United States. I mean, it is true in a way, but it's it was not a choice from the rest of the world. It was a choice made by the United States to have this problem because that problem brought also the control over the whole economy. The whole world economy. So I mean, Stephen Miran idea that we are living in a Triffin world, as he said, in November 2024. I mean, it's true. We are living in a Triffin world still. And this is a major problem. But the solution is not to come back to the hegemony of the dollar. The solution will be to come to another system in which we have an international currency, which is only issued by an international authority, which can provide liquidity in times of crisis, in times of crunch, credit crunch, and can draw liquidity as it's written in the articles of agreement of the IMF. Because the articles of agreement of the IMF said exactly this, that SDRs, because we already have this kind of SDRs.

Hagen: Can you tell us what SDRs are? 

Fabio: The SDRs are special drawing rights and it's the currency, like a sort of currency. It's a reserve asset issued by the IMF, which is a basket currency of five major currencies: the dollar, the renminbi, the euro, the pound and the yen. And this is one of the reasons why in one or maybe two of those books, we talk about the role of SDRs, because, okay, SDRs are not the solution. And we all know that they will not be the solution, at least not the way they are conceived now for two main reasons. The first is that it's a basket currency. It's not a currency issued by the IMF on its own. So being a basket currency constrains all the underlying hard currencies, the five hard currencies, to manage their economic policy in a cooperative way, which might be a problem, of course. Of course, it's also a resource because, I mean, if you use more, if you increase the use of SDRs, you constrain those five central banks to cooperate instead of having a weaponization of their currencies. So this is, of course, an important issue. 

Hagen: Could I ask, how do you weaponize currencies so that people understand what you mean? 

Fabio: Weaponized currencies means that, for example, if you cannot have access to the infrastructure of payments in dollars, you are out of the world trade or you are out of the trade with the United States, Europe, Australia, Canada, Japan and so on and so forth. So all the G countries, which means quite a lot of trade, it's out of your possibilities, which is the same that has been done with the SWIFT. 

Hagen: Yeah.

Fabio: I mean, the SWIFT is the Infrastructure for Payments in the Western Hemisphere and which prompted the creation of an alternative infrastructure of payments based on the renminbi. Because, as I said at the beginning, let's not forget that, I mean, the world is changing. We are in a transition. We have no longer the possibility to restore the hegemonic stability based on the dollar because we have the BRICS now. The BRICS, they are infrastructures, they appetize the ambitions of the renminbi to provide an alternative to the dollar. I mean, it will never be in the short run an alternative to the dollar because it's an opaque market, because it's not convertible, because of several problems, internal domestic problems. I mean, even China doesn't really want to renminbi to become an international currency because it has no interest now to let it become an international currency. But it's very interested in letting it become a part of the world international currency. So for the BRICS countries and for payments with other countries, for example, in Africa, because, as you know, probably in Africa now, they have strong links with the Chinese infrastructure, payment infrastructures. So, for example, some of them are starting to pay in renminbi or they accept, anyway, payments in renminbi, although it's not convertible. So this is, I mean, this is the way currencies is made a weapon in power politics. 

Hagen: I get it. And hopefully everybody else, too. Thank you. So I'm sorry I interrupted you here.

Fabio: But I was saying something else about the SDR, but I cannot remember now exactly. I was....

Hagen: You were saying that the SDR is not a currency on its own. 

Fabio: Yes. I know the second point about SDRs is that I mean, until now, the SDR is considered a reserve asset. So it is only conceived as an instrument which might be part in the reserves of national central banks. The big challenge is to transform this reserve asset into sort of fiscal money that you can use for whatever you want. Not maybe for whatever you want, but for specific goals, for specific objectives. This is one of the reasons why, for example, maybe you don't know, but I made the policy paper in 2021 in which I suggested that you probably know that in 2021, there was a big issue of SDRs, the first really big issue of SDR, $650 billion in SDRs after the COVID pandemic. It was August 2021. So the problem with this money is that it's a huge amount of money. For example, Europe received 150 billion euros in terms of SDRs, but we don't use them because we don't have problems of balance of payment in Europe. And we are compelled, we are constrained to keep them in the reserves because we cannot do anything with them. So the idea was to mobilize this kind of money and make this asset reserve, reserve asset money into a fiscal money. So my proposal was we collect the European, the issues of SDRs given to European countries. We pull them together. We give them to a multilateral development bank, the European Investment Bank, which is a prescribed order of SDRs, which means that she can do something with SDRs. She can trade SDRs, she can exchange SDRs with other hard currencies and so on. So we give them to the European Investment Bank, a multilateral development bank. And through the African Development Bank, we give them to Africa. To do what? To design all together Europe and Africa, a next generation Africa. Because if you use one 150 billion euros as the collateral to issue on the market, the standard proportion is one to five, one to six. So you can raise 750 billion euros on the market with the collateral of the SDR in Europe. And you give them to Africa to design the 10, the next 10 years of development for Africa together with them. I mean, this is exactly the same amount as we received as a next generation Europe. So that's why I called it next generation Africa. So through the use of multilateral development banks channel this SDR, which are otherwise part in the reserve or the central banks, to become something useful for development as a fiscal money. But this has problems in terms of theoretical use of reserve assets as a fiscal money, as a policy problem, because I mean, the European Central Bank in November 2021 said you are not going to use your SDRs because remember they were supposed to be a reserve asset in case of emergencies. I mean, yes, but I can understand it in 2021, but no longer now. I mean, we don't have any kind of problem of this kind. So why don't we do or didn't we do this kind of thing? Because there are theoretical policy problems and politics problems, because, of course, European countries, as usual, pretend to have their own power politics also towards Africa. And they refuse to think in terms of regional trans-regional cooperation. But that's something usual. It is one of the critical aspects of the European Union, why it's not working. I mean, it's not working as it might, but it could be another. It seems that's another issue, let's say. 

Hagen: Seems to be something that you need to talk about and put pressure up, build pressure up with your consortium of universities there. And that's a good idea. That's a very productive idea, as far as I understand it. But I can also see why it's not coming about. There are many arguments to why people say, oh, this is a lot of money. We should keep it. There will always be someone saying, oh, let's let's be on the safe side. You know, yeah. Well, could we maybe go back to your idea of an institution that issues an independent global currency? How do you imagine that process? What kind of currency should that be? I guess it's not Bitcoin, but it should be. What is it? And how do you envision the sub global? So the regional banks, the regional monetary union. Are they regional monetary unions who would then kind of.. how do you imagine that system? So there's a global currency. And then is it another clearance union or what is it? 

Fabio: Okay, this requires, still requires quite a lot of inquiry because it's not a very easy problem to solve. My perception is that like exactly like in the construction of the political architecture, a multipolar political architecture, which should first move to some kind of multilayered financial architecture in which, for example, each region has its own financial safety net, which is not just the IMF, which is the global should be because it's not, as I said, it was the FED who provided the lender of last resort. I mean, it was not the IMF. So the first of all, the idea is to transform the IMF into a proper financial institution, which acts as a lender of last resort. But together with this, we should construct, we should build, establish some regional safety nets. And this is something that is already starting to be established because we should not forget, first of all, that in Europe we have something different, but also similar in a way. European stability mechanism, it can be thought of as a sort of financial safety net for Europe. Although, I mean, although this is I mean, the European stability mechanism is something outside the treaties, you know, I mean, it's a public company made of the governments of the euro area. So it's something outside the treaties and the logic of the Aquis Communautaire. But still it's Europe and it worked for Greece, for example, because it was crucial for the saving of to save Greece from the financial distress. So we have something similar in Europe. We have something similar in East Asia. We should not forget that after the crisis of 1997, when there was the attempt of the Japan to establish an Asian monetary fund and the United States again said, no, you're not going to do that. But China in 2001, the Chiang Mai Initiative started this process together with Japan and they created the Chiang Mai initiative, which is actually now a multilateral swap agreement. So it's basically a financial safety net at the regional level. And they were smart enough as to understand that this was not to be a substitute for the IMF, but a supplement to it. So the Chiang Mai initiative, which has become something more institutionalized because they have a fund of more or less billion dollars, more or less of firepower, they can intervene in case of transitional problems instead of going to the IMF, which requires a lot of conditionality, as you know. And so it's a little bit different. But at the same time, when you have major structural problems, not just transition, conjunctural problems, you have to have already an agreement or a stand by agreement with the IMF. So this means that the East Asian area already understood that we have to construct this kind of at least two levels of financial safety net in which you have at the global level, the IMF and at the regional level, something else, which can be the Chiang Mai initiative in East Asia, which can be the European stability mechanism in Europe, which can be the Banco do Sur, the old proposal, the Banco do Sur in Latin America, which can be a financial safety net in Africa, which can be several things. So one of the- 

Hagen: regional monetary... 

Fabio: Safety nets, just financial. Okay. It's a financial stability platforms at the regional level. 

Hagen: Yeah.

Fabio: But not to be understood as a substitute for the IMF, but as together…

Hagen: Modular…

Fabio: Exactly as a multilayer is a two layer system, because this also legitimized the IMF to become the lender of last resort in case of major worldwide financial crisis. The second point that you asked before, and I did an answer, was about this multilayer system. How do I understand and see this multilayer system and the role of national sovereignties. Because this is a key aspect, of course, of the current narratives, because current narratives are very much based on the role, the critical role, the crucial role of national sovereignty. So we have to come back to national sovereignty. OK, this is basically the idea. And we in Europe are very well aware of the problem and also of the solution, potential solution. Because in Europe, we exactly started this journey eight years ago. I mean, I used to use this metaphor of the river that I also wrote some somewhere I cannot remember where, but some time ago. So  years ago, more or less after the Second World War, we understood that, I mean, the bank of the river in which we were staying was a conflictual one which was made of which was made of national self-referential sovereignties, national sovereignties, exclusive sovereignties, which means that if I'm Italian and you are Danish, it means that we are enemies in the end. In the last resort, if there is a conflict, if I'm Italian, you're Danish, we have to fight each other. But if we understand that there are common problems that we have to solve together because otherwise we will not be able to solve them. Anyway, this means that part of us can share very small but important part of our sovereignty. Sovereignty is not a monopoly of the nation state. Sovereignty is the ability to solve problems. This is the important concept. Sovereignty is the capacity to satisfy the needs of people. And this not necessarily requires, actually does not require one monopolistic center of governance, which is the nation state. This requires understanding that there are several layers of government which reflect several layers of collective problems. This is something that we tried to tackle in the early 50s, late 40s and early 50s. We already started before on the point of the intellectual debates, as you know, that we started making it some concrete steps towards this. So we understood that we had to leave the bank of national sovereignty and cross the river towards the other bank of shared sovereignties. The problem is that this river is very big. And history was sort of keeping the level of water in the river very low when there were the two blocks. Because the situation for Europe was you have all the time you need to go to the other side. No problem. We are still stuck in this very dangerous but still it's stable international framework. After 1989 and with the several changes that happened in the world from 1989, since 1989 until now, I mean, the water is here. So I understand that when people see that the level of the river is here and you don't exactly know what is on the other side and when especially you arrive there, you start to look back. So I perfectly understand people that think about national sovereignty as a possible outcome of this situation. Because it's fear that brings you to look back to the national stuff. You know that it doesn't work, but still you know that it helps you survive at least. You have some chances to survive. 

Hagen: There's of course also political discourse or you know call it populist that would capitalize exactly on the fear of sharing more sovereignty or blaming the fact that we had globalization, we've given up too much of our sovereignty and look what we got. We have transnational markets taking away our labor, making it all much more expensive. And so we need to return to sovereignty. 

Fabio: It's easy to explain. But I mean, I can understand it psychological from the psychological point of view. Although of course I know I don't share this view, but it's from the psychological point of view, I can understand that people are tempted from this kind of messages which are crazy, but still I understand them. So we cannot think that people are just crazy because they vote for Trump or for whoever brings about the idea of bringing back sovereignty from whoever, even the AfD. I mean, I can understand it. I don't share their views because I think it's just crazy. It's conflictual. We are going to have a mass suicide, but still I can understand them. So we cannot just dismiss this kind of idea as crazy or as a pathology, let's say. 

Hagen: There's also so many gaps that you try to fill both with your ideas that, but there's so many gaps in the imagination of the political order today that it's easy to fill this. It's a great political opportunity to come up with these more populist exclusionary ideas. 

Fabio: So let me conclude, Hagen. 

Hagen: Yes, sorry. 

Fabio: So if this is the case, so if you cannot put the blame on those who call for the return to national exclusive sovereignties, because you can understand people, it's up on us who don't share that view to provide a clear picture of what is on the other side of the river, on the other bank, and exactly when we shall arrive there. This is the reason why I'm still struggling as a scholar and as an advocate for this kind of federalism, which means shared sovereignty, that we have to struggle to make people understand what is there and to struggle to make it come soon, not sooner or later. Soon, because otherwise, I mean, people will start getting back and returning on their way back to the banks of national sovereignty. So the idea is that, I mean, in a way, international relations, as you know, have been dominated by three main ideas. One of them is Hayek idea. Hayek idea is that we have to detach the political dynamics because it's potentially degenerated political dynamics from the economy. The market has to be saved from politics. So that's why you need to have a technocratic institution at the international level, because they are detached from the national centers of powers. Then you have a sort of Keynesian idea, in which you say, okay, we have to have cooperation, because this is the only way to deflate the whole economy and this is the only way to avoid, let's say, a shrinking of the system, of the economic system. But again, this is methodology and nationalism, as Urich Beck would have called it, because the idea is that only nations can have the monopoly of power, of democratic legitimacy, which is even worse. And the third one is Robbins. Robbins say the very easy thing. 

Hagen: Economy is Lionel Robbins, I assume. 

Fabio: Lionel Robbins, yes. Non Tim Robbins. No, because when I said, I remember some years ago when I was giving lessons, I was giving class, and I started one of the lessons saying, I mean, I guess you all know Robbins. And one said, yes, Tim Robbins, of course. And okay, so it was not Tim Robbins, it was Lionel Robbins. Lionel Robbins was an important economist and policy maker also, and public servant and civil servant, let's say. He was also part of Bretton Woods negotiations. He was also at Bretton Woods, and he was in the work cabinet of the Great Britain. He was president of British Petroleum. He was editor of several things like the Financial Times, for example, I mean, he was many things. He was the one also who made the university law in Britain in the 1960s, which changed completely and democratized the access to universities in Great Britain. People might not remember this, but he was the main protagonist. He was the one who wrote it and imposed in the Chamber of Lords. But anyway, in the 30s, Lionel Robbins, when there was this big discussion between neoliberals and Keynesians, so neoliberals and new liberals, Lionel Robbins provided another, a third alternative, which is, I mean, very simple. You have public goods, collective goods, and each collective good, each dimension of collective goods requires a collective institution. I mean, if you have a market without the regulation necessary to govern that market, you have chaos, you have anarchy. And he was a master in analyzing how, for example, classical economists were indeed anarchists from the point of view of international relations, of course, or reasons of historical context, but still they were anarchists because they relied on just trade and the and the gold standard to solve problems of international peace. But of course, it was just a very naive idea especially after I mean, in the 19th century and also of course in 20th century. So the idea is, if you have a multilayered system of collective goods and need, you have also to have multilayered institutions. So you have to have collective institutions with the side for the market at the local level, the regional level, at the national level, at the continental level, at the global level, because also at the global level you have some kind of problems which are for the whole humankind. I mean, we know now that, for example, some of these problems are just global in nature. In the last 30 years, there is an increasing literature talking about global public goods. I mean, and we know how many global public goods we are facing today, climate change, for example, although there is somebody who says there is no climate change. But anyway, the problem of global pollution, climate change, resource exhaustion. I'm not talking about the limits to growth on . The left-held model, Nordhaus called it the left-held model, the Club of Rome report on the limits to growth. But then talking about primary resources, access to primary resources, peace of course is another global public good because you cannot solve it at the national level. I mean, so either you have an international institution who provides this kind of thing or you don't have it, or you have an under provision of this public goods, let's say, this collective goods. So the idea is to have a vertical division of power and institutions which are related to the dimension of goods, of public goods, of collective goods that you are experiencing in your daily lives. And this is the third alternative that was never attempted in history. 

Hagen: I see that this is what you are inspired by very much. 

Fabio: Yes, well, this is one of the key points of my interest. Yes. 

Hagen: That's very interesting. 

Fabio: Well, I mean, my interest is in trying to understand why we didn't manage interdependence because we have many externalities, if you want to call them in a standard microeconomic language. We have many reciprocal externalities. And the problem is that we fail to govern externalities because we don't have institutions that can internalize this kind of externalities, especially at the two-pranational level. So we have to govern them somehow. And the failure to govern them brings problems because externalities create problems, of course, if you don't manage them, if you are not able to internalize them into an institution. So basically, this is what is my main interest as a scholar, let's say. 

Hagen: Yeah, it's fascinating that, you know, Lionel Robbins is, of course, a fascinating figure, beginning in the seminar rooms of von Mises and being an Austrian theory-inspired scholar, then very much also giving his lectures in Geneva and very influenced by Keynes and the war, and then kind of amalgamating all of these views. So that's a very inspiring idea that we should probably read him in a different light. I would like to address one final question because we have to come to an end, or let's say, knowing your ability to answer one final field with which I would like to talk. You mentioned the word legitimacy. Now, in your view, if we have such a system, a multi-layered, multi-polar system, how do we get the political legitimacy? Where do we get people to formulate those ideas to reach the other side? How do we get that clear view? What is the role of legitimacy in it, and how do we get there? 

Fabio: Well, first of all, let me be clear. I'm not a political scientist, and this is a question to be addressed to political scientists. 

Hagen: Okay, well, you give it a shot. 

Fabio: No, no, I have some ideas, of course. I mean, this is a problem of how to rethink and reshape and redesign democracy. 

Hagen: Okay. 

Fabio: So the idea is that democracy until now, in the last two centuries, at least, was thought of as a national process. We have to rethink democracy and the democratic process at the multi-layered levels. So... 

Hagen: Multi-layered democracy.

Fabio: Multi-layered democracy. Exactly, a genuine multi-layered democracy. But the problem is, how do you make it? I mean, again, there are several ideas in the literature. Some of them are interesting, some of them are just hints. One of the most interesting, in my opinion, hints, comes from Kenneth Boulding. You probably know Kenneth Boulding was an eclectic economist, a United States economist. 

Hagen: I'm not too familiar with his work, no. 

Fabio: Anyway, in 1946, if I'm not wrong, I must have it somewhere, but anyway, so I think in 1946, he wrote a book that I have somewhere here, in which he talked about the need for, I mean, we were just coming out of the war. So every country was writing again, most countries were writing again their constitutions. So his suggestion was that each country should put in their constitution a declaration of interdependence, which is interesting because in those times, everybody was talking about the declaration of independence. And now we will be celebrating the the th anniversary of the US independence, the 4th of July. But maybe we should think about promoting the idea of a declaration of interdependence. And what he suggested in terms of concrete democracy building was to add one chamber of representatives of the other countries with which that country writing the constitution had or at that time had most relations of reciprocal external effect. So that there might be an influence, although he conceived that also only as an advisory, of course, chamber, but still that would be a sort of game changer. Think of example, for of Italy, if you add another chamber made of representatives of the European countries, and maybe of China, or a representative from Africa, Latin America, or United States or Canada, that would be a game changer for the political discourse. So I mean, these are very long processes, they are cultural processes that require quite a lot of time. And also political processes that still also require quite a lot of time. But changing the mind of people is prerequisite for this kind of changing the architecture of also democracy in itself. So I think there might be some interesting proposal that might fit into the idea of creating something new, and also creating this kind of multi-layered democracy. Towards multi-layered democracy. 

Hagen: Towards multi-layered democracy. Thank you so much, Fabio. 

Fabio: Thank you very much. 

Hagen: This was an incredible tour de force, and very inspiring, brilliant. Thank you for opening up your brain and your ideas to us and to our audience. 

Fabio: Thank you. 

Hagen: Hope to see you soon. 

Fabio: Sure. Bye bye.