The Financial Crisis Is Too Dire to Be Left to Politicians
Editor's Note: As tens of thousands of activists from around the world gather in Belem, Brazil, for the World Social Forum, social movements everywhere are debating how to respond to the ever-deepening economic crisis. This article is excerpted from the longer discussion paper "Globalization From Below" Tackles the "Great Recession" prepared by Global Labor Strategies.
At the pit of the Great Depression in 1930, an American country music group named the Carter Family recorded a song called "The Worried Man Blues." It began:
"I went down to the river and I lay down to sleep,
When I woke up there were shackles on my feet."
Though many subsequent verses describe the horrific outcome, there is no explanation of what had happened or why -- just an awakening to a seemingly endless catastrophe. The song immediately became an unprecedented national hit. It's hard to imagine that its success didn't have something to do with capturing the sense of being the helpless victim of incomprehensible disaster that so many felt in the face of the Great Depression.
The seemingly sudden collapse of the global economy in 2008 has similarly left millions, indeed billions, of people all over the world victims of a catastrophe that appears both inexplicable and unending.
But what's now being dubbed the "Great Recession" is neither incomprehensible nor irremediable. On the contrary, it can be understood as an expectable result of a capitalism that has been globalized and at the same time "freed" by neoliberalism of control in the public interest.
The economic globalization that transformed the world at the turn of the 21st century promised, according to its advocates, a glorious vista of prosperity that would provide unprecedented economic growth and raise billions of people out of poverty. In practice it generated personal and national insecurity, growing inequality and a race to the bottom in which every community, nation and work group had to reduce its social, environmental and labor conditions to that of its most-impoverished competitor.
But economic globalization also gave birth to a new convergence of global social forces that opposed this kind of globalization. People all over the world fought back against this "globalization from above" with their own "globalization from below." They used asymmetrical strategies of linking across the borders of nations and constituencies to become a counterpower to the advocates of globalization. They created a movement -- variously known as the global justice movement, the anti-globalization movement, global civil society, or as we call it, globalization from below -- that some in the media even characterized as "the world's other superpower."
The anti-globalization/global justice/globalization-from-below movement developed in response to the expansive phase of globalization and neoliberalism. Now the global economy has entered the most severe financial crisis since the Great Depression.
The financial crisis has turned out to be the start of a cascade of other economic crises that are reshaping the global economy as definitively as an earthquake reshapes a city. Current leaders of the world's nations have utterly failed to develop a solution. The likely impact of their failure on ordinary people around the world is incalculable.
The advocates of globalization from above propounded as an article of faith that markets are self-regulating and that all would be for the best in the best of all possible worlds if only governments, labor unions, citizens organizations and the unruly mob let them alone to do their thing.
The times, they are a-changing. U.S. government officials long known as market fundamentalists seize banks, buy mortgage and insurance companies and commit $7.7 trillion -- half of the U.S. annual product -- to government intervention in financial markets.
The Clintonite "moderates" who once gutted the social safety net and sacrificed commitments to jobs programs in order to build up budget surpluses now propose vast public works programs financed by budget deficits.
The International Monetary Fund, scourge of "irresponsible" countries that didn't balance their budgets, advocates a trillion-plus dollars in global government deficits and claims to have replaced "structural adjustment conditionalities" with condition-free loans.
These programs may well fail in halting the downward spiral of the global economy. But they open the door to new forms of more social and public economy. That's one reason conservatives normally oppose them -- and one indicator of how serious the present crisis really is. The economic crisis makes it possible to put proposals on the table that have long been ruled inadmissible.
While economists have asserted with great confidence that one after another trillion-dollar "solution" would save the global economy, one after another has failed, raising the specter that it cannot be saved in its present form. Peter Boon and Simon Johnson of the Web site baselinescenario.com recently raised that possibility in the Wall Street Journal.
They note that economists generally believe even the Great Depression of the 1930s could have been stopped by proper monetary policy. But, Boon and Johnson argue, governments may simply not be able to prevent such huge deflationary spirals. "Perhaps the events of 1929 produced an unstoppable whirlwind of deleveraging which no set of policy measures would truly be able to prevent." Their implication seems evident: The same could be true today.
The multi-trillion-dollar rescues and bailouts so far just attempt -- possibly futilely -- to save the status quo. But what can we do if the status quo can't be saved? Can globalization from below really provide an alternative solution to the great recession?
It has already started to do so. A landmark was the meeting of a group of social movements and nongovernmental organizations in October 2008 at the Asia-Europe People's Forum in Beijing that developed a sketch for a "transitional program for radical economic transformation."
The "Beijing Declaration" laid out alternatives that are "practical and immediately feasible" that put the "well-being of people and the planet at their center." This requires "democratic control over financial and economic institutions." It includes proposals for finance, taxation, public spending and investment, international trade and finance, environment and agriculture and industry. It provides a brilliant first expression of a globalization-from-below alternative to the failures of globalization from above.
The basic vision of the declaration is summed up in its title: "The Global Economic Crisis: An Historic Opportunity for Transformation." Its goal, in other words, is not to shore up the status quo and return to the destructive form of globalization that preceded the crisis. Its objective is almost the opposite of the $8 trillion-and-counting bailouts, rescues and subsidies provided to business in recent months by the world's governments. It aims instead to provide "a transitional program for radical economic transformation" to a "different kind of political and economic order."
"Transitional program" may sound like antiquated socialist rhetoric -- a call to take state power and nationalize industry. But both the goals and the methods are very different. Indeed, the declaration points a path between merely re-establishing the status quo and assuming that actions must be "revolutionary or nothing."
No "maximalism" here. "To capture people's attention and support" the declaration argues, proposals must be practical and immediately feasible. That is possible because, even under the domination of globalization from above, people have been developing alternatives within the world's nooks and crannies.
The unfolding economic crisis provides the opportunity "to put into the public domain some of the inspiring and feasible alternatives many of us have been working on for decades."
The goal linking these alternatives is the "well-being of people and the planet." And that requires a focus not primarily on restoring the financial system, but first and foremost on the great human and environmental crisis the world is facing in relation to food, climate and energy.
Such common human interests are not the principal concerns of the people and institutions that now call the shots in national governments or the global economy. The "well-being of people and the planet" will not be achieved by economic jiggering. Instead, "democratic control over financial and economic institutions are required."
The vision of such democratic control, however, is not of either a centralized national or a centralized global economy. It is closer to what Walden Bello elsewhere described as the coexistence of a variety of "international organizations, agreements and regional groupings" that would allow "a more fluid, less structured, more pluralistic world with multiple checks and balances" in which nations and communities can "carve out the space to develop based on their values, their rhythms and the strategies of their choice."
The current economic crisis creates opportunity for transformation, the declaration argues, because it severely weakens the power of the United States, the European Union, and the IMF, World Bank and World Trade Organization. It undermines the legitimacy of the neoliberal paradigm. And, where global pseudo-consensus once asserted that "there is no alternative" to liberal capitalism, the future of capitalism is now becoming an open question.
Of course, this moment can also be seized by "fascist, right-wing populist, xenophobic groups" who will try to "take advantage of people's fear and anger for reactionary ends."
What is the agency for pursuing constructive alternatives and resisting destructive ones? It starts with the "powerful movements against neoliberalism" that have been built over past decades. These will grow along with public anger at the abuse of public funds for private subsidy, the crises of food, energy, and the environment and the deepening recession.
As social movements from around the world converge in Belem, Brazil, at the end of January for the World Social Forum, they will be in a position to take the next step toward realizing their potential as the world's "other superpower."
Indeed, it is the convergence of the already-existing networks and understandings of globalization from below with the new outrage at what neoliberalism has done to the world that provides the opportunity to show that another world is indeed possible.