New Internationalist

Meltdown - and out

The people who brought you the financial meltdown have been pouring the molten remains into the same broken mould.

The latest G8 finished with a promise of $20 billion over three years for agriculture in the ‘developing’ world. That’s less than $7 a year for each of the estimated billion people (and counting) who are now malnourished - even supposing that the cash materializes, and that G8 promises don’t come as cheap as they are.

No G8 leaders - even ministers - bothered to turn up at a UN conference on the financial crisis in June. Rather, they went out of their way to rubbish it. That was partly because a UN Commission, chaired by the Nobel Laureate economist Joseph Stiglitz, dared to propose modest reforms, including some sort of UN Economic Council to oversee the IMF, World Bank and WTO – and a new international currency to replace the US dollar.

Despite talk of ‘recovery’, so far it relates to little more than the continuing flow of public funds into private banks (now via ‘quantitative easing’ - or printing money). They’re still not lending, least of all to each other. An unknown quantity of toxic debt remains. General Motors is bankrupt - floating, with the banks, on public funds. The Millennium Development Goals disappear over a distant horizon. Beyond even there the ‘targets’ for reduced carbon emissions are invisible to our current political system and therefore useless.

All that’s on offer now, in rich and poor worlds alike, are tax hikes, public-service cuts and rising unemployment – a recipe for depression on top of recession. And for what? So the banks can consolidate the totally unprincipled coup they’ve got away with so far – nothing more elevated than that?

This much we know. But where’s the alternative? Even if Obama’s electoral victory in the US broke some other moulds, on financial matters his chief advisers made their names by fashioning the old one. In Britain, at precisely the moment when democratic control over the use of public funds was most urgently required, elected representatives were busy devising their own version of the bankers’ bonus culture. In recent elections to the European Parliament the usual political suspects, plus assorted neofascists, emerged almost triumphant.

It’s not as if there’s any shortage of new ideas, from the UN Commission to the Green New Deal. New Internationalist has just published an anthology, People First Economics(which I helped to edit), that mines a rich vein of fresh thinking. Apparently disparate ideas are on the verge of forming a coherent whole. What’s lacking is the political will to get cracking.

Why? That’s the conundrum – and where the real political debate begins. In Britain, Put People First came close to forging a new alliance around the London G20 meeting. Greater impact, however, was made by the ‘Financial Fools’ Day’ mobilization in the City of London, which was less conventional, more direct. Distinct political constituencies still focus separately on the upcoming Copenhagen climate conference and future meetings of the G20, though the issues are inextricably linked. In any event, the credibility of the established international ‘machinery’ is now too thin to carry much weight at all. The global justice movement will have to look elsewhere. Fresh political - as well as financial – thinking is urgently required.

Easier said than done. But the time for modest reform, in this fleeting age of possibility, is being squandered – and rapidly running out.

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About the author

David Ransom a New Internationalist contributor

David Ransom joined New Internationalist in 1989 and wrote on a range of issues, from green justice to the current financial crisis, before retiring in 2009. He was a close friend of Blair Peach, once worked as a banker in Uruguay and continued to contribute to New Internationalist as a freelancer until shortly before his death in February 2016. He lived on a barge on the waterways of England’s West Country.

His publications include License to Kill on the death of Blair Peach in 1979 and The No Nonsense Guide to Fair Trade. He also co-edited, with Vanessa Baird, People First Economics.

Read more by David Ransom

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