The bill has finally come due for decades of reckless economic policies and utter disregard for the planet. We are now confronted with two intertwined crises of historic proportions—one economic and one environmental.
The economic crisis, which has been smoldering for more than a year, caught fire when the US housing bubble burst nearly taking the entire global financial system down with it. The financial crisis quickly morphed into a general global economic meltdown. The OECD reports that taken as a whole, its 30 country membership—representing the leading economies in the world—is in recession. China’s growth rate is at a 7 year low. Middle income and developing countries are being swept up in the chaos as commodity prices fall and capital flees to safer havens.
Efforts to avert a climate catastrophe—already fraught with difficulty-- have been made even more difficult by the economic crisis. The immediate steps to achieve the needed reductions in greenhouse gasses will likely cause economic disruptions in parts of the economy, precisely at a time when political will may be flagging. Public money is scarce, private funding is drying up. The only silver lining: as the crisis worsens and unemployment rises, refitting the built environment and shifting to low carbon energy could be a source of employment and an engine of economic growth for decades.
A central problem in dealing with the crises is that markets are global while regulatory regimes and the politics that shape them are national. But no nation—not even the US which remains the richest and most powerful in the world—can address either the economic or the climate change crises on its own.
Averting disaster will require an unprecedented degree of international cooperation to deal with the tangle of vested national economic and political interests. That is why this week’s pledge of coordinated global action by the G-20, which we will analyze in a later post, is short on substance and long on rhetoric.
Traditional national Keynesian stimulus programs, currently proposed by many politicians across the political spectrum, can provide much needed employment for those out of work, but will not work as planned to revive economic growth. These policies were devised during a period of national capitalism very different from today’s global economy. Keynesian job creation projects are intended to provide the jobs and spending power to increase the consumption of what are assumed to be nationally produced goods and services thus priming the economic pump. But in globalized economy consumers are just as likely to purchase goods produced abroad, reducing the impact of any stimulus package on national employment.
There is an additional problem with traditional Keynesian programs. Historically, these programs were indifferent to the types of jobs created as long as they created spending power. But today, strict attention must be paid by any job creation programs to the kinds of jobs created to insure that they do not contribute to global warming or they risk dealing with one crisis by intensifying another. What is needed is global stimulus program that focuses on sustainable economic growth if we are to mitigate the effects of the current crises.
New administration, new opportunities
We don’t know what the Obama Administration will bring in the way of new economic and climate change policies. It is too early to tell. After we pause for a moment to savor the passing of Bush & Co and Obama’s remarkable election, we should return to a healthy skepticism. But let us not forget: people across the US voted for Obama as an agent of change and expectations are high that he will deliver.
Labor and social movements need to harness the energy and expectations of the Obama campaign, not by falling in line with the new administration, but by creating a global discourse and a global movement for people centered change. Ironically, it is President-elect Obama’s new Chief of Staff, Rahm Emanuel who said it best, “You don't ever want a crisis to go to waste; it's an opportunity to do important things that you would otherwise avoid."
The abject failure of policy makers and mainstream experts to predict the current collapse or control the fallout has opened a huge credibility gap that offers an historic opportunity for alternative views and alternative movements to move front and center. Many of these same failed policy makers and experts will claim they have the formula’s to turn the economy around—to “save the system”. The truth is that no one has the formula to prevent recessions or depressions. The current economic collapse rudely reminds us that recession and depression are capitalism’s age old built in regulatory regime. But in the era of globalization those recessions and depressions have become global.
It is not the job of labor or social movements to bailout the banks or “save the system”, but to protect and promote the economic and environmental well being of ordinary people. Every program to address the crises should be measured against these standards: Does it provide jobs or income to those affected by the economic crisis? Does it keep people in danger of foreclosure in their homes? Does it maintain public services? Does it promote environmental sustainability? Does it promote the global solidarity needed to confront global crises?
The world’s other super power
The New York Times dubbed the massive global anti-war demonstrations of March 2003, which emerged from the World Social Forum and other global justice networks, “the world’s other super power.” It is time to wake that super power in defense of economic and environmental justice. There are grounds for optimism . The global justice movement is alive and well.
- Trade unions and worker activists, despite losing strength nationally, have continued to build new official and unofficial global networks. The global nature of current economic crisis makes these networks important venues for cross border cooperation.
- Environmental groups have forged closer ties to fight climate change. The run-up to the Copenhagen climate change conference in 2009 provides a focus for building a stronger global network. People everywhere are alert to the dangers posed by inaction.
- Cross movement contacts have also increased as labor and climate change activists have begun a serious dialog in many countries and in global forums. Unless these two movements link in a common effort each will be undermined.
- The World Social Forum remains a space where movements of all kinds can meet to discuss matters of common concern. The upcoming WSF in Belem, Brazil could serve as a launching pad for new global initiatives much as the 2003 WSF launched the massive anti-war demonstrations of that year. But a word of caution: the economic crisis will mean that many will not be able to attend the WSF this year. It is therefore imperative that those that do see the meeting merely as a moment in a broader WSF process. The planning leading up the gathering and the follow-up actions should be open to a broad range of groups regardless of whether they attend or not.
The convergence of the climate change and economic crises will forever alter the way people live and work and raises critical questions. In the coming months GLS will play our small part analyzing and reporting on how the crises interact with each other and with other issues of pressing concern and how labor and global justice movements are adapting to the changing terrain.
We will explore fundamental questions like:
- How do we promote global solidarity in times of environmental and economic crisis? Movements and politicians are under intense pressure to respond to the immediate economic crisis faced by their constituents. There will be a tendency to play constituencies, countries, and regions against each other.
- How can we maintain public support for climate change initiatives amidst economic collapse? Political support for climate change and green jobs programs is already being scaled back. Private money has dried up and public funding will be limited—and the fear of raising energy costs could stifle alternatives.
GLS will also increase our posts on background and topical themes related to the unfolding crises.
- How does this economic crisis compare with past crises and what can we learn from the comparison? How are global institutions like the G-20, national governments, and labor and social movements responding to the crises? How can bodies like the WSF contribute to movement building and the search for solutions?
We will begin our series later this week with a look at how the current economic crises compares with others since the Great Depression.