United Nations Conference on the Financial Crisis and its Impact on Development – New York, June 24-26 2009
Much has been said of the impact of the crisis on the foundations of the economy and of its social consequences, arising from the artificial and unequal character of its growth and its demonstrated vulnerability, affecting both developed and developing countries. However, the present situation, compared with other financial crises, in particular that of the 1930s, involves a convergence of various crises of food, energy and climate with combined social consequences for employment, poverty and immigration.
This coincidence is not accidental. There is a basic historical logic linking all of these crises. The financial crisis, cyclically recurrent in the prevailing economic system as a rectifying mechanism, has been aggravated by the uncontrolled global expression of financial capital, enabling quick profits at a high rate. The food crisis has been accentuated conjuncturally by speculative investments and structurally by the fact that agriculture has become a new frontier for capital accumulation, with the development of monoculture. The energy crisis has been linked to the increase of petroleum prices, partly for speculative reasons, while the necessary investment in structural solutions for a change in the energy cycle (from fossil to other sources) has been seriously hindered by the huge injection of money to save the financial system. Climatic changes have been accelerated by an irrational use of natural resources, in particular fossil energy, due to the post-war growth model. This has also been at the origin of increasing inequalities, combining spectacular growth for about 20% of the world population and inhuman poverty for more that one billion people on the planet.
In the face of such effects, which are related to a common logic of increasing rates of profit and the ignoring of ecological and social externalities, two main questions can be raised: for how long can the financial and monetary systems be repaired, and for what purpose?
The first question should be seen in light of the great crisis at the end of the 1920s. Then, also, the solution was to draw up a new set of rules to regulate the market, with the recognition that the market’s self-regulation was an illusion. This was the New Deal and its various applications. But when the economic system began to recover (thanks also to reconstruction after a world war), pressure to deregulate culminated in the establishment of what has been called “the Washington Consensus”, i.e. the neoliberal era of capitalism. Will the same logic prevail, as seems evident from many declarations? If so, in a few years we shall be faced with the same consequences again. The most logical answer for the short and middle term is thus to propose permanent regulations and not just temporary cures.
The second question is much more serious. Efficient measures have been proposed to allow the financial and monetary system to function again on a sound basis, in order to restore growth, development and prosperity. But what does this mean? To begin again with the same logic that brought about the present situation?
Shall humanity continue to exploit natural resources that destroy the ecological system? Will the financial institutions promoting the automobile industry (even if made a little greener) continue to extend monocultures, destroying biodiversity, soil and water, especially for agrofuel? If the Copenhagen Climate Conference – an initiative of the United Nations – is to be effective, it will have to propose very strong measures to save the planet – in direct contradiction to some powerful economic interests that are already lobbying to mitigate the resolutions.
Will the restoration of the financial system be based once again on a logic of unequal growth, perhaps with large aid programmes for poor sections of the world population, but without challenging the main philosophy of the world’s economic organisation? Will it serve to finance wars for the control of scarce natural resources and energy supplies? In other words will it mean “business as usual”?
It has been repeatedly affirmed that the Millennium Development Goals will be affected by the crisis, but such goals are already in themselves an admission of failure. If they were to be achieved, in spite of the world’s unprecedented wealth some half billion people would still suffer from hunger and poverty in 2015. A telling illustration of this is that Africa is supposed to be receiving international aid at a level lower than that of the US government’s intervention to save General Motors.
Hence the necessity of raising the question of paradigms. We need not only regulations, but alternatives. We need another definition of growth, of development, of prosperity, of civilisation. This involves the fundamental aspects of human life on the planet: relationships with nature, the production of goods and services for life, socio-political organisation and the meaning of life and ethics.
It is around these four basic aspects of human life that new paradigms could be developed for the common good of humanity. First, a renewable and responsible way of using natural resources, respecting nature, not exploiting it as a commodity, because it is the source of life. Second, priority given to use-value over exchange-value, the economy being the human activity to produce the basis of the physical, cultural and spiritual life of all human beings in the world. Third, generalised democracy in all institutions and human relations, including gender, and, finally, multiculturalism, to ensure the participation of all cultures, knowledge, philosophies and religions in defining the meaning and ethics of human life on the planet.
It may appear utopian, but all these principles have direct and concrete applications, which already exist in many parts of the world. They have been tried locally by social movements, translated into political forms by governments, theoretically systematised by intellectuals. One day the United Nations could proclaim a Universal Declaration of Humankind’s Common Good, similar to the one on Human Rights.
Such a perspective is the kind of utopia the world now needs to motivate collective action, to encourage social commitments, to realise political projects. There are many signs in the world of a new collective vitality, such as the appeal of the social movements to the African heads of state, the proposed charter of peasants’ rights and other such initiatives, often the issue of very tough social-justice struggles. They are the sources of hope for the future of humanity.