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Cool Change 2 — Democracy meets the market

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Climate change can change the world

Adjusting to climate change means many changes: cutting back on oil and consumption; getting the globe to agree on a direction that will benefit everyone and adopting a creed other than greed. Suddenly changes for which rebels and radicals have rallied for years may now actually become a reality – not through revolution but rather as necessities needed to address global warming. Two super-stars on the social justice stage – Walden Bello from the Thai-based NGO Focus on the Global South and Susan George from the Transnational Institute – lay the foundations for a new economic order that will effectively respond to climate change: an economy of the people, by the people, for the people.  

To listen to this episode of Cool Change, simply click on the play button in the audio player just above.

The full transcript with Susan George and Walden Bellow follows:

Cool Change — an audio adventure to discover how combating climate change can create a fairer world. Progressive people from Europe, Asia, Latin America, North America and Australia offer us successful strategies to confront climate change as well as some radical changes that are already taking place around the world.

Chris Richards: Hello and welcome to Cool Change, progressive prospectus about climate change. I’m Chris Richards and today I’m delighted to be talking to be talking to two superstars on the social justice stage whose many books and articles continue to enrich international thought and debate: Walden Bello, who’s a Senior Analyst with a Thai-based NGO Focus on the Global South and Susan George, Chair of the Transnational Institute.

Adjusting to climate change means many changes – cutting back on oil and unsustainable consumption; adopting a creed other than greed; and getting the globe to agree on a direction that will benefit everyone. Suddenly changes for which rebels and radicals have rallied for years may now actually become a reality – not through revolution but rather as necessities needed to address global warming. So combating climate change may actually offer us opportunities to build a fairer world. Susan George, you’ve just given a prestigious Schumacher Lecture. In your lecture you refer to the growing income gap between the rich and the poor that’s plagued almost every country in the world. You say that bridging that gap will actually help address climate change. How so?

Susan George: Well actually, what I tried to do was to show that we were in the midst of simultaneous crisis. So you have the social crisis. It’s a poor-rich crisis of increasing poverty and inequalities. You have the financial crisis which needs no introduction; everybody can see that. It’s the only thing in the news at the moment. And we have of course the ecological crisis which in my view is the most serious of all. And I think that these different crises interact and they reinforce each other because if you have a billion poor people, they are going to begin to destroy their environment, not through their own fault but because they have no other choice than to overuse the environment. But the rich are even worse on the environment because they have much larger ecological footprints. And the financial crisis is aggravating also the social crisis, etc., etc. So I think if we look at these three major crises which include of course energy and food, we can see that they are all structurally linked and that their solution can also be structurally linked. And that’s the important point which I’m sure we shall get too.

Chris Richards: Walden Bello, what do you see as the common causes driving, on the one hand, climate change and the other hand, the financial meltdown we’re presently experiencing?

Walden Bello: I basically see the same connections that Susan has seen here. Let me just say that I think we do have to confront the fact that this goes to the heart of the system that is dominant globally which is capitalism – global capitalism. The dynamics of climate change and the dynamics of the financial crisis really stems to the tremendous drive of the system to create tremendous wealth as well as tremendous inequality, especially over the last 25 years in the form of neoliberalism that has spurned regulation that would have pushed more equality among countries and within countries as well a greater and a more sane equilibrium between the environment and society. And what we’ve seen is this unregulated mode of production and consumption that has basically led to the dead end that we’re in now.

Chris Richards: You’ve been writing that the driver of the financial meltdown is overconsumption and the motivation is profit and capital accumulation – capitalism in essence. Many progressive people would say that that’s what drives global warming. Must capitalism be killed to effectively combat climate change do you think?

Walden Bello: Well I think that this is a time that we have to combine principle with pragmatism and go beyond the old “isms” over here. You know the system that should come out of this should be various from government regulation backed up by electoral coalitions that are pro-environment and pro-equity coalitions in power that in fact impose the regulations that would ensure that a market is constrained, is disciplined and is forced the channels that work for the common good and for the good of the environment so that the market does not go wild as it has both ecologically as well as financially. So that’s really what we’re talking about.

Chris Richards: Yes, indeed. Susan George, as a result of the current collapse of global financial systems, the public is more demanding of government regulation of the market and wants the greed of the very rich reigned in. Could the financial crisis as well as climate change help bridge the gap between the rich and the poor?

Susan George: That is what I am trying to push because I think that we have to look at the financial crisis as an opportunity. It was very hard to get the ear of the powerful. So long as the prices were all going up, everybody was happy. The bankers were making billions. The profit rate in the UK for the banks was 20% a year, etc., etc. You couldn’t tell people: ‘This is going to collapse – the world’s biggest casino – and you’re going come to grief” because they simply wouldn’t listen even though we’ve been saying this, people like Walden and me, for years. But now, they’ve got to listen. And what I am proposing is that we use this crisis to get the banks under control. That is the first step obviously. But then, that we get something in return for the trillions of dollars that they are in process of receiving. And what we can get are 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. You know, taxation redistribution, and use the banks: making them conform to a certain number of rules so that we can invest in research and development in clean energy; in construction which is energy neutral; in retrofitting homes that people can get loans at below market interest rates or no interest rate at all in order to refit their houses, put in solar panels, etc., etc. A whole range of ecological activities that we could force the banks to help finance. And then also, I believe it’s the moment to talk about international taxation of currency transactions of any purchase of shares. And also of corporate profits and of closing down tax havens, of getting 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 and Europe I’m honorary President of, which is called ATTAC. And I think that it’s time to push it home and to try to unite people around such a solution because we could really get rid of both the poverty and equality crisis, the social crisis, and the ecological crisis by using the financial crisis.

Chris Richards: Do you have any figures for us, Susan, about how much that financial tax is likely net and how it could be applied?

Susan George: If you’re speaking about the currency transaction tax, it’s fairly easy to work out. At least until a couple of months ago, about $3.2 trillion was being traded everyday. So if you could tax all of the different currencies being traded but you wouldn’t even have to start by using all of them. You could tax just transactions involving the Euro for instance. But if you tax them at one-tenth of 1% right… nobody is asking for the moon here… you would have hundreds of billions. When I worked it out once I came to about $700 billion a year. You could even do it at a smaller rate than that.

Now we’re not, in this case, trying to use a tax that would discourage financial transactions. People sometimes say: ‘Well you have to charge a higher tax.’ I think that it’s better to charge a lower one, not interfere with the flows because the problem we have at the moment is one of flows and that hurts ordinary people as well as the larger companies. So, I would say one-tenth of 1%, one basis point in other words, and this would produce hundreds of billions.

Taxation now stops at national borders and so much finance is international that we’re missing the biggest field of all. Also, tax havens protect about 250 billion per annum from governments who otherwise would receive it in tax revenues.

Chris Richards: And is the idea then to apply those funds to acclimatizing countries – to protect them from the climate change catastrophes that they’re likely to face in the future?

Susan George: Yes, exactly. Not only that but also large Keynesian redistribution programs, exactly what was done in the Second World War, in the New Deal, which pulled the United States out of the depression.

Chris Richards: Yes, absolutely. I’d like to speak quite a bit about that just a little bit later down the track. But before we get on to that, Susan…Walden Bello, what new models of economic production and consumption would you like to see that can be cultivated at the present time because of the backdrop that we’ve just been describing?

Walden Bello: A private sector that’s decorporatized and relies on small and medium industries instead of these big gigantic transnational corporations – both financial and industrial corporations – that I think need to be dismantled. And then you really need, both at the national and the global level, a very active civil society that monitors and impacts on both government and the private sector. And I think the third actor, you know civil society, is really in my view the key actor because civil society is the force for democratization, both for politics and for the economy.

Now, what do we call this? Do we call this ‘economic democracy’? Basically, I don’t think the title or the name is what is important. It is the essence of it which is that production is made for the public good. Production and consumption basically are regulated so as to serve both the public good and the good of the environment. And basically, we bring citizens in to very active day-to-day decision making over not only politics but over key decisions affecting the economy. And we’re now entering unchartered territory with all the negative consequences that could stem from this coincidence of crisis.

But I agree with Susan that it is also an opportunity. And I think what we’re going to need – both in the advanced industrial world as well as in the south – electoral coalitions that in fact bring into power people supported groups and coalitions that would undertake this new agenda. So this is the task to build up the coalitions that would bring together this agenda for the transformation of both social and political relations.

Chris Richards: What you’ve just described sounds really exciting. Susan George, I know that you’ve been talking and thinking about equitable economic models that we can start introducing to combat climate change. What are some of those models in your view?

Susan George: Well I’m sorry to disappoint you. I don’t really have models because I think that those emerge from democratic practice. You mentioned the word ‘revolution’ a moment ago and I think that that has too many connotations.

Chris Richards: Indeed.

Susan George: It’s sort of… everyone immediately thinks 1919. My take on that is please tell me who the Tzar is that we’d have to overthrow and please tell me where the Winter Palace is (Footnote: Saint Petersburg home to Russian Tzars, which was a pivotal front during the 1917 Russian Revolutions) and I’ll go with you. But I really don’t see where that is and I certainly don’t want some command economy. Life is much too complex for that. So I think that’s a word that we can get rid off. What we are going to do is a progressive revolution. But let me introduce here a word of caution because let’s not forget that the last financial crisis in 1929, eventually led to fascism and to war. And 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. This really is unchartered territory which is why I think that we’ve got to provide win-win scenarios. So that’s what I’m trying to do with this idea of green Keynesianism. Now purists who have “isms” on their agenda will not like this because they will say this is giving capitalism a new lease on life. And I plead guilty because that’s what it would do. But it would be regulated capitalism and it would be a model of taxation of redistribution. It would be a universal welfare state. 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.

Chris Richards: Yes, indeed.

Susan George: But we can also decide democratically that some things simply aren’t in the market. And some of those I believe are health, education, water and probably pharmaceutical research and a certain number of things which now are considered to be sources of profit for very few individuals and a very few major corporations. And that’s got to be completely rethought because the market can do some things very well indeed. But there’s other things that it shouldn’t be asked to do because the market is unable to think about the future in any long term way. That’s one of our problems right now. Housing prices could only go up; stock market prices could only go up, etc. That’s classical bubble thinking and that’s what’s put us in the mess that we’re in now with bankers innovating and so on. So we have to get them under control. I think the banks should be considered as public servants and public services. And the stock of credit has got to be regulated so that ordinary people can get credit for homes and for home conversion as I mentioned earlier. I mean there’s dozens of things that could be done. But my main point is let’s not have preconceived models but let’s have a lot of economic democracy. So that out of our interactions and out of people’s interaction inside their own enterprises, in their towns, in their regions, etc., 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, to take our two countries. And so it takes a bit of time. Democracy is messy and it can be long. But for me, it’s the only way to go.

Chris Richards: In the Schumacher Lecture you just gave, you looked back and looked favourably at the Second World War economy. What were the features of that that attract you?

Susan George: Well you know I was born before the Second World War. I remember very well when I was with my father and we were going out to get an ice cream on Sunday. And he heard on the radio the bombing of Pearl Harbor and he went absolutely white. And this is really my first historical memory. And so after that, kids were very much engaged in what was happening. We could perfectly well see because everyone in the society was targeted. Kids were buying war stamps to finance the military effort. And the conversion took place in less than two years. It was absolutely astonishing.

Chris Richards: So everybody was part of the economy almost? Everybody was part of the economic…

Susan George: Well I lived in an industrial town which produced rubber goods and automobile tires. And within a year they had completely converted to producing for the military at Detroit; converted to producing vehicles. I mean the lipstick factory would become a cartridge factory, that sort of thing. It was amazing and it was done through a kind of social solidarity that the US hasn’t seen since and probably had never seen before. But it was also the New Deal that contributed to this solidarity between people.

Now, of course society wasn’t perfect. There were still worker-management conflicts. But on the whole, people got better jobs. The men were off to war. The women were working. Minorities got better jobs. The unions got stronger. And it was, on the whole, an experience which showed that rapid conversion is possible. And that’s why I wanted to speak about that conversion because I believe that to reign in climate change we need something on a similar scale. To me this is the big challenge.

The financial crisis is a huge challenge but that is something where you can go back and you can fix it you know. I mean you’re smart enough, you can start at point A and remodel the financial system but 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 do and that’s why I keep talking about using the financial crisis in order to get the ecological crisis under control and that we do have an opening there.

I don’t say it’s going to work. Very often things that are obvious and should be done don’t happen because certain interests get in the way. And of course, the banks are already saying: ‘But no, but no. Don’t regulate us. We can do it. The market will do it.’ You know, the same old mantras. But I still have hope and I think that through publications like yours and these sorts of opportunities, little by little we can make this the obvious solution.

Chris Richards: I’m going to bring Walden back into our conversation now.

Susan George: Please, yes.

Chris Richards: Walden, I’m just wondering, is this the type of economic democracy that you would like to see?

Walden Bello: Yes, yes, definitely. What we’re saying here is that not only the public goods that Susan talks about but also energy industries, aircraft industries, car industries – the kind of industries which are very central to the economy. The decisions on whether to have those industries as well, their systems of control, should really be democratically decided. As much as possible bring into the arena of popular decision-making more and more areas of economic activity, and do not just leave this to the market.

I agree with Susan that there are certain things that the market is very good at, and that there are certain areas as economic life in which market forces would continue to reign. But I think what we’re talking about is more and more popular control over many different aspects of the economy. And I would also agree that the kind of mix between government civil society and the private sector that you would have would probably be different in different countries.

So there will be, in this world that we’re moving in to, a great deal of diversity, and diversity is good. And it’s precisely the kind of ‘one shoe fits all’ mentality that brought us both the centralized socialism that collapsed in the late 1980’s and early 1990’s, and the free market model that has just collapsed after so many years of crisis.

Chris Richards: Walden, just going back to what you were saying about people around the world coming forward and saying, “Well this is the type of industry we would like to participate in.” You’re working from Thailand at the moment and in the Philippines. I know you’ve just been to China. Do you see that happening?

Walden Bello: Not in the scale that we would want at this point in time. You have embryonic coalitions for popular economic democracy. And I think that the formation of those coalitions does need to be really speeded up at this time. The thing is this, I think in addition to the crisis that had been mentioned by Susan, you have a tremendous crisis of legitimacy now among the elite in both the north and the south and especially here.

I’m in the United States right now. You can just see the way that both Wall Street and Washington had blundered. That is creating a great deal of distress among people of the traditional elites that have ruled in this country. So I think here is an opportunity at this time for more popular coalitions to emerge. But as Susan said, points of crisis like this can either lead to the left or they can lead to the right.

Susan George: Let me point to a very tiny point of disagreement with Walden. It’s really very minor and it’s a question of degree. I don’t know how far economic democracy can go and to what level of detail. Like having ordinary people decide do we need a car industry and what it should produce and that sort of thing. I don’t want to be facetious because we’re talking about very serious things. But remember Oscar Wilde who said: ‘Socialism is all very well but it takes too many evenings.’ And sometimes I wonder if people would really be prepared to go to all of the meetings that would be required for them to take a serious interest in everything that they ought normally under that system take a serious interest in. Or would this not become a sort of specialized ‘your organization does this and mine does that’? That’s fine. And maybe we could have that kind of participation but universal participation in everything; I don’t think so because it would simply take too many evenings.

Chris Richards: Walden, would you like to join in there?

Walden Bello: I think that we’ve just got to right the balance at this point in time. My point was that people have been excluded from the whole economic sphere. That has all been left to what they call the market.

Susan George: Exactly.

Walden Bello: What I’m basically trying to say here is that there are so many areas of economic life in which in fact people should be intervening democratically at this point in time. People in the area of the economy, they have been forced into the role of just consumers. Just like in the area of politics they’ve been forced right into the role of cast your votes and leave it to your elected representatives after that.

Chris Richards: Absolutely.

Walden Bello: But I think we’ve got to reverse that process at this point in time. That really was the point that I was making.

Susan George: I agree completely with that. And I would simply add that many of our basic necessities, we should be getting from much closer to home wherever we live. And there are movements that are going in that direction. Getting much more of our food and of our dwellings and probably of our energy. There’s no reason energy couldn’t be decentralized very much closer to home which would knit communities closer and allow that kind of participation because it wouldn’t involve such an enormous scale. But I think we are going to witness the revenge of Cain because governments are going to have to do more for social welfare. And the past 25 years have been the biggest period in history of the creation of inequalities. It’s absolutely staggering. I mean there are really now inexcusable disparities between huge wealth and grinding poverty. And we’ve got plenty of money to right those wrongs as well. We need the opportunity to change the world here.

Walden Bello: Let me just add to that because I think this is a very fruitful area of discussion. I think that I would agree with Susan that what we need would be a revival of Keynesianism, one of the things we will need. But it will be, unlike the Keynesianism of the past, a democratic Keynesianism, a participatory one in fact.

Susan George: OK, fine. A participatory Keynesianism it is.

Walden Bello: Yes.

Susan George: Participatory Keynesianism is new and fresh.

Walden Bello: Keynesianism is a focus on putting purchasing power in the hands of people and that’s really what’s been taken away in the last few years.

Susan George: Yes.

Chris Richards: That was Walden Bello, Senior Analyst with the Thai-based NGO Focus on the Global South and before him, Susan George, the Chair of the Board of the Transnational Institute. Excellent! Look, it was great talking with you both. Thank you so much for being with us.

Walden Bello: OK. Thanks there, Susan.

Susan George: Nice to talk to you, Walden. What are you doing in New York? Let’s use Chris’ nickel to find out what you’re doing in New York. 

Walden Bello: I’m teaching for six weeks at Binghamton University.

Susan George: Oh, lucky you!

Walden Bello: And then I’ll interview some people who have been crushed by the financial crisis in New York. This is like ground zero.

Susan George: Right, I’m sure. Well enjoy yourself and build from ground zero.

Walden Bello: You too, Susan.

Susan George: Bye-bye.

Chris Richards: Bye-bye.

You’ve been listening to Cool Change produced by me, Chris Richards for New Internationalist Publications. The music that’s just coming up now as I’m waving goodbye, comes from that wonderful CD Dig Dig performed by Bob Brozman and René Lacaille from the World of Music Network’s wonderful collection of music from around the world. Check it out at And check out the rest of this series on the New International site which you’re on at the moment. Bye for now. Speak to you soon.

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  1. #1 HarryH 24 Jun 09


    Work is often thought as the definition of what makes a person. Your work is thought to be what you ultimately are – but how silly is that? (What if you service septic tanks for a living?) The author, philosopher, historian, and mathematician Bertrand Russell once wrote an essay called In Praise of Idleness, and we often forget the simple pleasure of writing a poem or doing crosswords in the paper, or reading someone's memoirs, if it's interesting enough. (The recollections of a business software engineer wouldn't count – boring!) In modern life, we too often are caught up in work or whether or not to get an online payday loan, and forget to take time to do nothing.

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