Although the World Social Forum’s meetings are always hopeful occasions, none of us will find much to celebrate as we look back on the year just past. It climaxed with the Copenhagen Catastrophe—exceptionally bad news for the human race– but it had also witnessed two appallingly conventional G-20 meetings whose clear objective was to return to Business as Usual in the shortest possible time. The G-20s remedy consisted in saving the IMF from extinction by handing it $750 billion worth of taxpayers’ money with absolutely no conditions. Thus the Fund is once more free to impose drastic structural adjustment policies on its victims. There was a brief flurry over tax-havens but the G-20 fixed things so that none of them needed to worry and made the ridiculous announcement that there were no longer any countries on the OECD black-list.
Meanwhile, the banks, resurrected from the dead by their respective governments have gone straight back to their old ways. The trillions worth of taxpayers’ money have been partially paid back but this does not mean that anything will change for the better. There will perhaps be a few marginal regulatory changes introduced but clearly no “Glass-Steagall” type restrictions will be placed on the major financial institutions which remain too big to fail but not to bail. The US banking system spent over five billion dollars lobbying to get rid of some dozen regulations; the financial crisis was the direct result of their efforts. At the beginning of 2009, the pundits who had almost universally failed to predict the financial meltdown offered the feeble and false excuse that “no one saw this coming”. At the end of the same year, they just as unanimously proclaimed that “the crisis is over”. Neither is true: plenty of people saw the crisis coming but were not listened to; the crisis is not over by any standards except by that of the half-hearted recovery of some stock markets. The banks, however, are doing very well thank you—by November 2009, Goldman Sachs was reportedly raking in $100 million a day.
With the G-20 officially replacing the G-7/8, one wondered beforehand if the presence of the BRICs would make any difference to the outcome . Now we know. Apparently the newcomers are so grateful to be sitting at the same table with the old-boy network that they have offered an implicit guarantee not to make waves. The 172 countries not present can expect little or nothing from this new configuration, and if they needed confirmation of their insignificance, Copenhagen supplied it in spades.
Never underestimate the powers of financial innovation: Now that they have been well and truly saved, the banks are selling a new product, structured just like the subprime loans-based “collateralised debt obligations” or CDOs. Instead of buying up thousands of subprime loans, packaging them and selling them on to clients worldwide, the banks are now buying up the insurance policies of old and chronically sick people at a deep discount and, being careful to include a mixture of diseases—AIDS, Alzheimers cancers, diabetes and so on—packaging and selling investors the statistical prospect of early death and major gains when the insurance company pays out the full amount due. Until now, death was not really a marketable commodity but this oversight has now been remedied.
By any standards other than those of the banks and the stock markets, however, the crisis is definitely not behind us. Unemployment has increased hugely as has precarious labour. Inequalities have never been so great either within or between countries. Banks are not lending to small and medium-sized businesses which are failing. The huge increase in food prices which in 2008 plunged another 100 million people into chronic hunger were caused largely by substitution of agri-fuel crops for food crops in the US and Europe and above all by speculation on commodities markets. These outrageous price increases subsided somewhat later that year but in 2009 began once more to increase and are continuing upwards. WSF participants know all these things very well and I won’t use my limited space to elaborate.
The conclusions one can draw from the sorry state of the economy seem to me to be the following. The triumph of neo-liberalism continues and it remains hugely profitable for a tiny minority; one which is largely served by the governments of the G-20. They show no signs of doing anything serious against the wishes of the banks. If we imagine the organisation of the world as a series of concentric circles or spheres, the first and most influential of all is certainly marked Finance, now largely divorced from the real economy. More than 80 percent of financial lending activity goes to the financial sector itself, not to actual production, distribution and consumption. The next circle is the Economy, free to go wherever labour costs and taxes are lowest. Together, Finance and the Economy regulate Society and dictate how it must be organised. It is clearly not organised to satisfy the needs of citizens. Finally, and least important of all in the current scheme of things is the Environment. Copenhagen has proved once more that smallest, least important of the circles remains the place we get our raw materials, including oil, gas and coal, and dump our wastes.
The challenge for the WSF and all those who are part of it in spirit, whether they know it or not, is to reverse the order of these circles or spheres so that the Environment is seen for what it is—the condition of the possibility of continued human existence and of civilisation. We must obey the constraints placed upon us by the planet because we cannot do otherwise and expect to survive. Next comes Society, democratically organised in such a way that everyone’s basic needs are recognised and satisfied; public services are supplied as a matter of course, employment opportunities increase and inequalities diminish. The Economy needs to be organised in order to satisfy the demands of society, with far more cooperative-type enterprises. The market remains an important feature and functions according to the traditional forces of supply and demand, because markets can be efficient and promote innovation so long as they are regulated. Ccentral planning à la Sovietique is not needed, but targeted government spending is used to promote development of particular industries and activities; particularly green ones. Finally, Finance is a tool at the service of the economy, not its master.
Such is the broad framework I believe the WSF should strive for. I have many concrete proposals on which I could elaborate:
–At least partial nationalisation and socialisation of any banks that receive public money, obliging them to lend at cost to small and medium social/green enterprises in order to hasten the conversion to a renewable energy economy and cooperative management.
–Job-creating Keynesian green infrastructure projects financed through special bond issues [in Europe this would mean changing the nature of the European Central Bank]
–Begin the debate on income limitations: if the lowest paid person gets 100, what should be the ceiling for the highest paid? 500? 1000? 10.000? We have endless studies about the poor but not about the rich.
–International campaigning on tax havens. Idem on international taxation, including taxes on financial transactions of all kinds, with the proceeds to be used at least partially for financing climate change mitigation measures in poor countries. Re-instate taxes on wealthy individuals which neo-liberalism has abolished and use to finance public services.
–An international accounting system that reveals and therefore excludes transfer pricing dodges and repatriation of capital by transnational corporations.
–Restoration [or, in Europe, introduction] of Glass-Steagall-type separation of banking functions, with credit consider a public good [while naturally subject to prudential rules]. Re-establishment of the various regulatory measures, particularly on commodities markets, that have been abolished in the last 10-15 years.
–Debt cancellation against reforestation and bio-conservation in the LDCs.
The only good thing that came out of Copenhagen is the cementing of social movement with environmental campaigners: they now seem, finally, to understand that they can’t win separately. The WSF must work to strengthen and deepen this alliance and try to discover and include peace and conflict organisations in the mix as well. Our governments are not going to do anything unless we force them to.
I still believe that the WSF should work for an annual day of protest and proposals en every country to equal the 15 February 2003 demonstrations against the invasion of Iraq. A common, broad theme with an easy and inclusive headline [like Jobs, Justice, Climate….] and a lot of ideas coming in from all over the world in preparation to stress original, TV-friendly actions anyone can do with minimum equipment. All the journalists I meet start by saying that the movement is dead. For sure it isn’t visible and we may have missed a tremendous chance in 2009. I would like to think that 2010 can be better, more focused, more energetic, more purposeful—and that we might start to win for a change.