The leaders of the G-20 Group of countries who met in Washington DC for an emergency meeting to revamp the global financial landscape can be compared to a parable in the Hindu ‘Panchantra’. Like the six blind men who failed to see the elephant, they grappled in bright light for six hours and yet failed to frame an action plan that could truly stimulate the global economy.
The elephant in this case is the parasitical global financial system. It has thrived all these years on the hungry stomach of starving millions, extracting every last available ounce of blood. Untamed and unregulated, it demolished the borders of the nation-state to emerge unfettered and free — unrestrained by governments, and liberated from society’s control. In the process, speculative and mobile financial capital has played havoc with the global economy. The elephant has been on a rampage.
Instead of placing a wreath on the tottering financial system and acknowledging that the free market cannot survive without a massive life-saving blood transfusion from governments the world over, the blind leadership has worked out a 16-week roadmap to tackle the global crisis. What appears to be a concerted plan to pave the way “for reforms to help ensure a similar crisis does not happen again,” is in reality a recipe for yet another bubble ready to burst.
The economic policies that remain in vogue will continue to impoverish workers, promote jobless growth, push developing country farmers out of agriculture, mine natural resources (and render the commons barren in the process), and allow corporate control over farming while aggressively pushing for one-way trade — from the rich to the developing countries, adding to global warming and thereby driving the world towards an unforeseen ecological crisis. In providing enormous bail-outs to banks, the international leadership has not only acknowledged but applauded the role played by financial robbers and business pirates.
Isn’t this a sad travesty of the truth? If you rob a bank of a few thousand dollars, you are inevitably arrested and sent to prison. If you rob the entire international banking system, you not only receive a pat on the back but also a handsome retirement package. If you are personally unable to pay your debts to the banks, you are hauled before the courts and have both your movable and immovable property confiscated. But if the bank is unable to pay its debts, it is bailed out with catastrophic urgency. If you fail to pay your insurance premium, your policy is terminated. But if the insurance company falters, it is nationalised by the government while the CEO is relieved of his job with a multi-million dollar severance package.
The proposals of the G-20’s 16-week ‘action plan’ — boosting standards of credit rating agencies, addressing weaknesses in accounting and disclosure standards, and setting up a risk warning system for banks — are a whitewash. Yet we couldn’t have expected anything better from a blind leadership that has merrily facilitated the commodification of the Earth’s limited natural resources in the name of trade, and outsourced countless thousands of jobs in the name of competitiveness. Whether it is free trade or global warming, this entire stratagem is supposedly enacted for the benefit of developing countries — and all in the name of eradicating poverty and ending hunger. Such benevolence!
The memory of the world public is very short. We have forgotten that the last time Europe came to the ‘rescue’ of Africa, the whole continent was colonised. When the East India Company began to trade in India, the entire sub-continent was colonised for 200 years. When the British finally left, the fourth largest economy was left pauperised and hungry. In the last 30 years (including 13 years of the World Trade Organisation), 105 of the 149 developing have already become food importing economies. If the Doha Development Round is successfully completed, the likelihood is that these few remaining developing countries will be turned into food dumps for surplus produce from the West.
No wonder that the blind leadership is in a tearing hurry to push through further trade agreements. Here is an incident you probably missed; just prior to the Washington conclave, Brazil’s Finance Minister Guido Mantega hosted a meeting for central bank presidents and finance ministers from G-20 countries. “We have to change the tires of the car with the car moving,” he said. “This means that in 60 to 90 days we will need the solutions for new financial regulations.” Mantega and his colleagues need to be informed that changing tires with the car moving is a prerogative of James Bond, requiring either the aptitude of 007 or the imaginative skills of Ian Fleming.
Much has already been written, analysed and spoken about the present crisis. Although not an economist, I firmly believe that neo-economic thinking is the primary cause for all the misdemeanours currently being played out on the world stage and wreaking havoc throughout the globe — as witnessed in the financial crisis, food crisis, energy crisis, climate crisis, and the increasing crisis of international terrorism. If this is the garden path where modern economics has led us, isn’t it time to call out the elephant? It may well be politically incorrect to stand up against the might of the faulty economic system, but isn’t it time to call a spade a spade? Why wait for doomsday or Armageddon?
A retort I often receive is ‘where is the alternative?’ The question is asked because, in our myopic economic thinking, everything is measured in terms of ‘growth’ and ‘profit targets’, but we are never taught to calculate happiness and contentment or told that food, human genes and nature is not a commodity to be sold on the marketplace. We have never been taught, in other words, that it is sustainable ethics that leads to sustainable development. We have been too busy partying, and the hangover is too strong for us all to see the silver lining.
Before we discuss alternatives, allow me to draw your attention to another sinister design. The financial crisis is now leading us to a more terrible food crisis in the near future. The recent surge in food prices, accompanied by food riots in 37 countries in the beginning of this year, was a mere tip of the iceberg. After destabilising the global economic structure, the financial forces are moving into agricultural markets. Speculation in commodities trading is now widely acknowledged to be the major cause behind the food price crisis. But what happens when the hedge funds and the bailout packages are used by insurance companies, banks and investment firms to purchase farm lands across the globe?
Goldman Sachs and Deutsche Bank are eyeing a takeover of China’s livestock industry. Morgan Stanley has purchased 40,000 hectares in Ukraine. Landkom, the British investment group, has also bought 100,000 hectares of land in Ukraine. The two Swedish investing firms, Black Earth Farming and Alpcot-Agro, have purchased 331,000 hectares and 128,000 hectares of farm land in Russia, respectively. Along with these investment firms, the governments have joined in the mad race to purchase land in Asia and Africa to grow food to be exported back home (see my article: Land Grab for Food Security: Corporatising Agriculture).
What happens when the food bubble bursts? Who will bail out the hungry?
Returning back to the ‘TINA factor’ (the assumption that ‘There Is No Alternative’ to economic globalisation), there is in fact a very plausible alternative. The solution lies in the principle of self-reliance that Mahatma Gandhi advocated so many years ago. It is time to revisit Gandhi and dig out his vision for a sustainable world; where production by the masses is not replaced by production for the masses; where food security does not mean importing cheaper food; where every hand is provided a decent job; and where growth does not translate into profits, but happiness. A vision in which the earth has enough for everyone’s need, but not for everyone’s greed. Such a world is surely possible. All it requires is for us to stand up, throw away the blind covers, and be counted.