Susan George: We are in the midst of simultaneous crises. We have the social crisis of increasing poverty and inequalities. We have the financial crisis. And we have the ecological crisis, which in my view is the most serious of all. These different crises reinforce each other. As all three are structurally linked, their solution can also be structurally linked.
Walden Bello: The dynamics of both climate change and the financial crisis stems from the drive of the system to create tremendous wealth as well as tremendous inequality, especially over the last 25 years. We have to confront the fact that this goes to the heart of the system that is dominant globally, which is global capitalism. ‘Neoliberalism’ has spurned the type of regulation that would have achieved more equality among countries and within countries, as well as a greater and a more sane equilibrium between the environment and society. This unregulated mode of production and consumption has basically led to the dead-end that we’re in now.
The financial crisis is a huge challenge, but we can go back and fix it. You can’t do that with nature
Susan George: What I am proposing is that we use these crises to get the banks under control. Also, that we get something in return for the trillions of dollars that the banks are receiving, with commitments that they must devote a certain proportion of their loans to green projects. The object is to transform the economy, using a kind of green Keynesianism (see box overleaf). Use the banks as public services – to invest in research and development in clean energy; in construction which is energy neutral; in retrofitting homes… a whole range of ecological activities.
I believe that it’s also the moment to talk about international taxation of currency transactions and corporate profits, closing down tax havens; to get rid of the debt of the South once and for all. All of these things have been proposed for about a decade by the organization in France of which I’m honorary President – the Association for the Taxation of Financial Transactions to Aid Citizens (ATTAC). At least until a couple of months ago, about $3.2 trillion [in currency] was being traded every day. You could start by taxing just those transactions involving the Euro, for instance. Say you tax them at a tenth of one per cent – nobody is asking for the moon here. When I worked it out once the revenue came to about $700 billion a year. The idea then is to apply those funds to protecting countries from the climate-change catastrophes that they’re likely to face. These are large Keynesian redistribution programmes: exactly what was done in the Second World War and the New Deal, which pulled the United States out of the Depression.
Walden Bello: This is a time when we have to combine principle with pragmatism and go beyond the old ‘isms’. A variety of systems should come out of this, with government regulation backed up by pro-environment and pro-equity coalitions in power. A private sector that’s decorporatized and relies on small and medium industries instead of those gigantic transnational corporations (both financial and industrial) that I think need to be dismantled. And then you really need, at both the national and the global level, a very active civil society that monitors and impacts on both government and the private sector. This third actor – civil society – is really the key. It is the force for democratization, both for politics and for the economy. Now, what do we call this? Do we call this ‘economic democracy’?
Susan George: ‘Revolution’ has too many connotations. Everyone immediately thinks 1917. Please tell me who is the Tzar that we’d have to overthrow and I’ll go with you. But I don’t see it. I certainly don’t want some command economy.
Walden Bello: Basically, I don’t think the title or the name is important. What we’re going to need – in both the advanced industrial world and the South – is electoral coalitions that bring into power people-supported groups and coalitions that would undertake this new agenda. We would bring citizens in to very active day-to-day decision-making over not only politics but key decisions affecting the economy.
Susan George: Let me introduce a word of caution here. The last financial crisis in 1929 eventually led to fascism and to war. Unless the Left is bold, gets its act together and, as Walden says, forms broad alliances and coalitions, we don’t know what’s going to happen – it’s uncharted territory. That’s why I’m trying this idea of green Keynesianism. Now, purists who have ‘isms’ on their agenda will not like this. They will say that this is giving capitalism a new lease on life. I plead guilty. That’s what it would do.
John Maynard Keynes
The British economist was the intellectual force behind the Bretton Woods conference in 1944. This conference (dominated by the US) attempted to sort out the worldwide economic chaos of the Great Depression during the 1930s and the World War that followed. Keynes argued that governments have a ‘counter-cyclical’ responsibility to regulate the ‘business cycle’ of economic bubbles and slumps. This meant stimulating ‘demand’ in a slump by redistributing wealth. To some extent, President Roosevelt’s ‘New Deal’ in the US (together with its ‘war economy’) had put related principles into practice. After 1944, The International Monetary Fund (IMF) and World Bank were intended to apply them internationally. However, when ‘deregulation’ began in the 1970s, these institutions came to see their role as promoting rather than restraining ‘free markets’. By the time they were finally joined by the World Trade Organization in 1995, corporate globalization and trade liberalization were an established economic orthodoxy. Today, with the economic meltdown and the threat of climate change, there’s revived interest in ‘green Keynesianism’ and a ‘Green New Deal’.±
± To view the Green New Deal from the New Economics Foundation visit www.neweconomics.org/gen/zsyspublicationdetail.aspx?pid=258
We have to think much more seriously about the market. The market can provide useful services. I don’t want to have an argument every time I go out and buy a loaf of bread as to what the price of it is. But there’s other things that it shouldn’t be asked to do – health, education, water and probably pharmaceutical research and a certain number of things which are now considered to be sources of profit for a very few individuals and major corporations. The market is unable to think about the future in any long-term way. But my main point is, let’s not have preconceived models but let’s have a lot of economic democracy, so that out of people’s interaction inside their own enterprises, in their towns, in their regions, we come up with a model which would probably be very different from one place to another. I’m not at all sure that in the Philippines you should have exactly the same models that you have in France.
Walden Bello: I agree. So, in this world that we’re moving into, there will be a great deal of diversity, and diversity is good. It’s precisely the kind of ‘one shoe fits all’ mentality that brought us both the centralized socialism that collapsed in the late 1980s and early 1990s, and the free-market model that has just collapsed after so many years of crisis.
Susan George: I was born before the Second World War. I remember very well a Sunday when I was with my father and we were going out to get an ice cream. And he heard on the radio about the the bombing of Pearl Harbor and he went absolutely white. This is my first historical memory. After that, kids like me were very much engaged in what was happening. They were buying war stamps to finance the military effort. The conversion of our economy took place in less than two years. It was absolutely astonishing. I lived in an industrial town which produced rubber goods and automobile tyres. Within a year it had completely converted to producing vehicles for the military at Detroit. The lipstick factory became a cartridge factory. It was done through a kind of social solidarity that the US hasn’t seen since and probably had never seen before. It was also the New Deal that contributed to this solidarity between people. I believe that to rein in climate change we need something on a similar scale.
Walden Bello: What we’re talking about is more and more popular control over many different aspects of the economy. Not only the public goods but also energy industries, aircraft industries, car industries – the kind of industries that are very central to the economy. As much as possible, bring into the arena of popular decision-making more and more areas of economic activity, and do not just leave them to the market.
Susan George: Let me point to one very tiny disagreement between us. I don’t know how far economic democracy can go; for instance, having ordinary people decide if we need a car industry and what it should produce. Oscar Wilde said: ‘Socialism is all very well but it takes too many evenings.’ Sometimes I wonder if people would really be prepared to go to all of the meetings that would be required of them if they were to take a serious interest in everything that they ought under this new system. Universal participation in everything? I don’t think so, because it would simply take too many evenings.
Walden Bello: My point is that people have been excluded from the whole economic sphere.
Susan George: I agree completely. And I would simply add that the financial crisis is a huge challenge, but we can go back and fix it. You can’t do that with nature. If nature is going off the track then it’s off the track, and humans have absolutely nothing to say about that. So I think that’s the most urgent thing we must address. That’s why I keep talking about using the financial crisis in order to get the ecological crisis under control. I don’t say it’s going to work. But I still have hope and I think that through publications like New Internationalist, little by little we can make this the obvious solution.
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