Yanis Varoufakis's Blog, page 95
October 1, 2018
Discussing the Labour Party’s fitness for government, Brexit et al – on BBC 2’s Politics Live
Yanis Varoufakis and Conservative MP Ken Clarke join Andrew Neil, along with Camilla Tominey from the Telegraph and Labour’s Rupa Huq. They discuss whether Labour is ready to govern, Jeremy Corbyn’s Brexit meeting with the EU’s Michel Barnier and the Salisbury poisoning suspect reported to be a Russian military officer.
Χώρα Χαμηλών Προσδοκιών – EφΣυν 29 ΣΕΠ 2018
Ο ελληνικός παρασιτικός καπιταλισμός ηττήθηκε κατά κράτος μετά το 2008 χωρίς ποτέ η κατάρρευσή του να δημιουργήσει κάτι το νέο, το ελπιδοφόρο – έστω μια νέα δυναμική καπιταλιστικής συσσώρευσης για κάποια νέα τζάκια. Η πολιτική τάξη που εξέφραζε την ολιγαρχία της προσοδοφορίας στα χρόνια των παχιών (με δανεικά) αγελάδων, κυρίως η Ν.Δ. και το ΠΑΣΟΚ, διαχειρίστηκε όπως όπως την κατάρρευση, υπό τις υποδείξεις και εντολές της τρόικας. Το 2014 η απέλπιδα προσπάθειά της να δημιουργήσει νέα ερείσματα και ατμόσφαιρα ανάκαμψης (ποιος δεν θυμάται το Greekcovery των κ. Σαμαρά-Βενιζέλου;) δεν απέδωσε.
Καθ’ όλη εκείνη τη ζοφερή περίοδο, 2010-2014, όταν η Ελλάδα καταβαραθρωνόταν, είχε σημασία η ύπαρξη μιας οργανωμένης Αριστεράς που επέμενε ότι, ναι, υπάρχει ορθολογική εναλλακτική στη συνθηκολόγηση με τη μνημονιακή διαδικασία. Ακόμα και συντηρητικοί πολίτες, που το χέρι τους «δεν πήγαινε» να ψηφίσουν αριστερό κόμμα, υποσυνείδητα ανακουφίζονταν με τη σκέψη ότι υπάρχει μια οπισθοφυλακή, όσο και να τη φοβούνταν ή την αντιπαθούσαν.
Ηταν «κάτι» εκείνη η ιδέα ότι, αν το Μνημονιακό Τόξο καταρρεύσει, υπάρχει μια κυβέρνηση εν αναμονή που θα δοκιμάσει κάτι διαφορετικό. Εκείνη η προοπτική στο πίσω μέρος του μυαλού κεντρώων, απολιτίκ, ακόμα και συντηρητικών πολιτών ότι τελικά ίσως να υπάρχει εναλλακτική, βοήθησε την κοινωνία να διατηρήσει την αισιοδοξία της στα δύσκολα χρόνια.
Το 2014, το Μνημονιακό Τόξο έμεινε από εφεδρείες στο εσωτερικό την ώρα που έχανε την εμπιστοσύνη του Βερολίνου. Αποτέλεσμα ήταν η δική μας εκλογή τον Γενάρη του 2015. Καθ’ όλο το πρώτο εξάμηνο της χρονιάς εκείνης μας πλησίαζαν στον δρόμο άνθρωποι από όλες τις κοινωνικές τάξεις να μας πουν: «Δεν σας ψήφισα, είμαι δεξιός, αλλά μας επιστρέψατε την ελπίδα, την αξιοπρέπεια. Ευχαριστούμε». Η αντίδρασή τους δεν γεννήθηκε από το πουθενά. Απλά, η αντίσταση στην τρόικα έφερε στην επιφάνεια την προϋπάρχουσα υποψία στο μυαλό πολιτών που, ώς τότε, τα είχαν βρει με το καθεστώς, πως η αντικαθεστωτική Αριστερά μπορεί τελικά να ήταν η απαραίτητη οπισθοφυλακή.
Μια κοινωνία που την καταρρακώνει και πάνω της ασχημονεί ένα ολιγαρχικό καθεστώς έχει απόλυτη ανάγκη από μια αντικαθεστωτική Αριστερά που κρατά ένα μικρό κεράκι ελπίδας αναμμένο στην ψυχή ακόμα και των συμβιβασμένων με το καθεστώς.
Οταν, λοιπόν, το καλοκαίρι του 2015 η κυβερνώσα Αριστερά εντάχθηκε, και μάλιστα τόσο εντυπωσιακά γρήγορα, στη λογική της ρευστοποίησης της περιουσίας του κράτους και των φτωχότερων που απαιτούσε η ένταξη στο Μνημονιακό Τόξο –στον κύκλο δηλαδή των «σοβαρών» και «υπεύθυνων» πολιτικών– η Ελλάδα έχασε κάτι ακόμα πιο πολύτιμο από μια εξαιρετική ευκαιρία απόδρασης από τη Χρεοδουλοπαροικία: τη δυνατότητα να γεννά μεγάλες, ακόμα και μεσαίες, προσδοκίες.
Σήμερα, τρία χρόνια μετά, η παγιοποίηση της τετραπλής πτώχευσης (κράτους-τραπεζών-οικογενειών-επιχειρήσεων) οδήγησε στη μονιμοποίηση μιας μίζερης πάλης δύο τάξεων.
Από τη μία μεριά έχουμε ό,τι έμεινε από την παρασιτική, παρεοκρατική άρχουσα τάξη. Χτυπημένη κι αυτή από την κρίση και με προσόδους πολύ κατώτερες της προ του 2010 εποχής, η τάξη αυτή αποτελείται από κηφήνες που εξορύσσουν προσόδους από τις διαδικασίες ρευστοποίησης της κοινωνίας (π.χ. συμμετέχοντας σε εταιρείες που αγοράζουν κοψοτιμής «κόκκινα» δάνεια για να βγάλουν κατόπιν σπίτια και καταστήματα στο σφυρί, που συνεταιρίζονται με κερδοσκόπους οι οποίοι «χτυπούν» τα περιουσιακά μας στοιχεία που εκποιεί το ΤΑΙΠΕΔ) και, βέβαια, τις παραδοσιακές (αλλά πλέον λιγότερο επικερδείς, λόγω συρρικνωμένου προϋπολογισμού) σχέσεις με το Δημόσιο.
Απέναντι στους κηφήνες βρίσκεται ολόκληρη η υπόλοιπη κοινωνία η οποία διαιρείται σε τρεις κατηγορίες: Στους ακόμα κάπως βολεμένους (ΑΚΒ). Στους εγκλωβισμένους στον φόβο ότι θα χάσουν τα ελάχιστα που τους απομένουν. Και στους εξαγριωμένους.
Οι ΑΚΒ (οι «ακόμα κάπως βολεμένοι», συνήθως σαραντάρηδες και άνω) καταφέρνουν να αναπαράγουν μια επίφαση μεσοαστισμού μέσα από διαδικασίες προσοδοφορίας μικρού βεληνεκούς: ενοικίαση διαμερισμάτων μέσω Airbnb, έσοδα από τουριστικές επιχειρήσεις (σε μια περίοδο εκρηκτικής ανόδου των αφίξεων αλλά μείωσης της κατά κεφαλή δαπάνης), κάποιο μικρό μισθό από κάποιο πρόγραμμα χρηματοδοτούμενο μέσω ΕΣΠΑ κ.λπ.
Τα εισοδήματα αυτά έχουν αυξηθεί κάπως την τελευταία τριετία αλλά όχι αρκετά για να καλύπτονται νόμιμα οι αυξημένες φορο-εισφορές και να δημιουργούν την προοπτική που απαιτείται για την ελάχιστη αισιοδοξία για το μέλλον, ιδίως των παιδιών τους. Είναι όμως αρκετά για να αναπαράγονται, ταυτόχρονα, οι χαμηλές προσδοκίες και η μίζερη πραγματικότητα αυτής της κατηγορίας πολιτών.
Η δεύτερη κατηγορία αποτελείται από τη γενιά των 384 ευρώ (μισθός ακαθάριστος που εισπράττει το ένα τρίτο εργαζομένων) καθώς και οικογένειες που φυτοζωούν με βάναυσα κουτσουρεμένες συντάξεις και επιδόματα. Βομβαρδισμένοι με το αφήγημα του Μνημονιακού Τόξου (ιδίως τα τελευταία τρία χρόνια κατά τη διάρκεια των οποίων ενώθηκαν μαζί του οι φωνές του επίσημου ΣΥΡΙΖΑ), ότι ακόμα και αυτά τα ξεροκόμματα κινδυνεύουν αν υπάρξει νέα ανυπακοή προς τους δανειστές, παγώνουν, εγκλωβίζονται στις Συμπληγάδες της εξαθλίωσης και του φόβου, τον οποίο σιγοντάρει η θλιβερή προσδοκία ενός φιλοδωρήματος τον Δεκέμβρη από τα ματωμένα πλεονάσματα του υπουργείου Οικονομικών.
Οι εξαγριωμένοι αποτελούν την τρίτη κατηγορία. Ο θυμός τους διοχετεύεται διαφορετικά στον καθένα: αποτροπιασμός στον κοινοβουλευτισμό, ροπή προς τον ξενοφοβικό εθνικισμό, συνειδητά επιλεγμένη μοναξιά, ιδιώτευση κ.ο.κ. Πάνω απ’ όλα, ο θυμός τους, ό,τι μορφή και να παίρνει, συνεργεί αρμονικά με την έλλειψη προοπτικής, την απαισιοδοξία, την κατήφεια.
Κάπως έτσι καταλήξαμε με την Ελλάδα διαιρεμένη σε κοινωνικές τάξεις που τις ενώνουν οι χαμηλές προσδοκίες οι οποίες, με τη σειρά τους, αναπαράγουν τη διαδικασία ερημοποίησης – με τους νέους και τους δημιουργικούς, απλά, να μεταναστεύουν.
Οποιος έχει διαβάσει το «1984» του Τζορτζ Οργουελ θα θυμάται το θλιβερό τέλος εκείνης της ιστορίας αντίστασης στον Μεγάλο Αδελφό – θα θυμάται πως η ελπίδα πέθανε στην τελευταία σελίδα του βιβλίου όταν ο αντιστασιακός πρωταγωνιστής ανακάλυψε ότι, τελικά, αγαπούσε τον Μεγάλο Αδελφό. Επειδή όμως στην πραγματική ζωή, ευτυχώς, δεν υπάρχει τελευταία σελίδα, κάποιοι εξ ημών ιδρύσαμε το ΜέΡΑ25 για να εμφυσήσουμε στους πολίτες ξανά Μεγάλες Προσδοκίες και για να τους πούμε ότι η αντίσταση στον Μεγάλο Αδελφό είναι εδώ, είναι ανένδοτη κι είναι πανευρωπαϊκή.
*γραμματέας του ΜέΡΑ25
Is Neoliberalism destroying the world? A. Admati, S. Gindin, P. Mirowski & Y. Varoufakis interviewed by CBC Radio
The Trump administration is largely populated by people from the neoliberal thought collective and they are busily carrying out things that they wanted to do for years.– Philip Mirowski
The term “neoliberalism” is likely more used than understood. But if at its heart it’s the ideology that markets know better than humans, then its ascension into virtually every sector of society is nearly complete. At least that’s the view of economic historian, Philip Mirowski at the University of Notre Dame. For him, the presidency of Donald Trump represents textbook neoliberalism: privatizing education and health care, gutting the Environmental Protection Agency (EPA) as well as health and safety, and food safety laws.
“People don’t pay any attention to this because they’re so fascinated by the buffoonery of Trump himself,” Mirowsky says. “The Trump administration is largely populated by people from the neoliberal thought collective and they are busily carrying out things that they wanted to do for years.”
Trump’s government is simply the visible part of the ideological iceberg that is neoliberalism. Brexit, the rise of extreme right-wing nationalism and anti-globalization, the Euro crisis, austerity, consumer debt and economic anxiety — these are all arguably byproducts of neoliberalism’s ideology.
TO LISTEN TO THE HOUR LONG PROGRAM, CLICK HERE
Roots of Neoliberalism
British Prime Minister Margaret Thatcher and U.S. President Ronald Reagan share a laugh during a break from a session at the Ottawa Summit on July 21, 1981, at Government House in Ottawa. (AP)
Some believe neoliberalism was ushered in with the rise of Margaret Thatcher and Ronald Reagan in the 1980s when they promised to roll back the so-called “welfare state” and clip the wings of organized labour. Thatcher and Reagan said government had to get out of the way of business, claiming that regulations, taxes and tariffs were preventing corporations from meeting their potential. Yet the ideology’s roots go much further back than the Reagan-Thatcher moment.
According to Mirowski, one of the world’s leading scholars on the topic, it’s not rooted in the traditional conservatism of Edmund Burke, the 18th-century Anglo-Irish statesman and intellectual, who felt governments must be neutral in guiding the economy. “(Neoliberals) don’t believe in laissez-faire,” explains Mirowski, “and this is the other big mistake that people make. They don’t believe in libertarianism. They don’t believe that markets will just operate wonderfully on their own. That’s why they have to engage in various kinds of political intervention to make the world more like a market society.”
Neoliberalism’s origins begin with Frederick Hayek, an Austrian-born British economist (1899-1992), known most for his 1944 book The Road to Serfdom. Hayek was famous for his opposition to the Keynesian school of economics, which called for massive government intervention during the Great Depression to alleviate the cataclysmic poverty and unemployment that defined the era. Keynesian economics, named after the British economist John Maynard Keynes, held that governments should introduce social programs like unemployment insurance and labour reforms that benefit average workers, and that they should place controls on banks and stock markets.
But Hayek felt that any such efforts to control market forces were pure folly.
Birth of Neoliberalism
Neoliberals believe they have to build a certain kind of government and economy. Their key doctrine is that the market is an information processor more powerful than any human being.– Philip Mirowski
In 1947, Hayek organized a meeting that would change the course of economic history. He invited thirty-nine scholars from ten countries to meet at Mont Pèlerin, on Lake Geneva in the Swiss Alps. This was the beginning of the Mont Pèlerin Society, a group of economists who conceived of the ideological tenets of neoliberalism and whose influence would come to dominate in the coming decades. Many of the attendees later found positions at think tanks in the U.S. and Europe, and especially at the University of Chicago, earning themselves the label the “Chicago Boys”.
Whatever disagreements they may have had, they were united in one central belief, according to Mirowski: “Neoliberals believe they have to build a certain kind of government and economy. Their key doctrine is that the market is an information processor more powerful than any human being.”
Neoliberals believe government must be involved in the economy, but solely on the side of business and the wealthy. A recent example is Prime Minister Trudeau’s decision to purchase the Trans Mountain pipeline in 2018 on behalf of the oil industry — a move traditional conservatives would never have countenanced.
Steel pipe to be used in the oil pipeline construction of Kinder Morgan Canada’s Trans Mountain Expansion Project sit on rail cars at a stockpile site in Kamloops, British Columbia. The plan to twin the existing 1,150 kilometre-long pipeline has been indefinitely suspended. (Dennis Owen/Reuters)
More general examples are bilateral investment treaties, contained in free trade agreements like NAFTA, which allow corporations to sue governments if local communities impose policies that interfere with their right to make profits. Canada has paid out $160 million to U.S. corporations which challenged public decisions, including ones made on environmental policy.
So is neoliberalism ultimately anti-democratic?
Mirowski thinks so. “They are very suspicious of democracy but that doesn’t mean that they’ll never participate in a democracy,” he remarks. “What they’ll try to do is they’ll try to bend some democratic procedures.” Neoliberals are comfortable “making it way harder to vote,” says Mirowski, “and that’s why you get so much voter suppression in the United States. They want to make it so it’s very hard to pass legislation. And that’s why for them when the Congress doesn’t do very much, that’s a win. They love that.”
In the 1970s, neoliberal economists from University of Chicago school, particularly Milton Friedman, began advising the Chilean dictator Augusto Pinochet on how to “liberalize” the Chilean economy. Pinochet’s reforms, including opening the economy to foreign competition, led to widespread poverty and protests, and they in turn helped destabilize his regime.
Rise of Neoliberalism
[It’s] capitalism working without a working class opposition. I think that’s a fairly accurate description of what it is. – Sam Gindin
Another major target of neoliberals are unions, which emerged in the post-war era as powerful counter-balances to the power of corporations.
Sam Gindin, former research director of the Canadian Auto Workers Union (now called Unifor), and adjunct professor of political science at York University, explains the dynamics of neoliberalism: “[It’s] capitalism working without a working class opposition. I think that’s a fairly accurate description of what it is.”
Gindin says neoliberalism destroyed class opposition by “changing labor laws, making it harder to organize. But it especially meant letting unemployment rise.” Gindin had a front row seat to the assault on organized labour, joining the staff of the auto workers’ union in the early 1970s, just as the post-war boom was running out of steam and neoliberalism began replacing Keynesianism.
But the first real shot in this ideological war was the 1981 firing of striking air traffic controllers. Soon corporations were demanding wage concessions and other rollbacks that unions had won. In the UK, there was a bitter strike that went on for more than a year between the Thatcher government and militant mine workers union — which the union lost.
Gindin says labour’s defeat has meant workers have in effect internalized neoliberal values, as they’ve been compelled to compete as individuals in the marketplace. “They change the overtime laws so that you can work more overtime,” he says. “They increase the availability of debt so you can go into debt to solve your problem. These were all problems that you could solve individually. That’s why that kind of individualistic ideology could work, because it was materially the only thing a lot of people saw they could do.”
Fallout of Neoliberalism
But what happens when the neoliberalism recipe is applied to entire countries — do you end up with a debilitated country like Greece?
The neoliberal mantra was utilized in order to [create a] tsunami of capital that came to Greece in the form of loans that created bubbles.– Yanis Varoufakis
Prior to the 2008-2009 credit crisis, Greece had borrowed heavily from bankers and the European Union, despite having a weak economy and very little prospect of paying off its debts.So when their recession struck, the EU and banks wanted their money back, pressuring Greece to sell off state assets like airports, land, and even the national broadcaster, all in return for more loans. The civil service was gutted and government spending chopped. Unemployment rose to a staggering 25 per cent.
“Consider the fact that between 2010 and 2015 we lost more than one fifth of our national income,” Yanis Varoufakis, a former finance minister of Greece, told Ideas. “It was the worst episode in history at least since the Great Depression of the 1930s. You only have to take into consideration the fact that one in two families had no one working. Three and a half million Greeks out of a population of something like six and a half million adults were either unemployed or bankrupt.”
Pensioners waiting outside a closed National Bank branch and hoping to get their pensions, argue with a bank employee (L) in Iraklio on the island of Crete, Greece June 29, 2015. Greeks struggled to adjust to shuttered banks, closed cash machines and a climate of rumours and conspiracy theories on Monday as a breakdown in talks between Athens and its creditors plunged the country deep into crisis. (Stefanos Rapanis/Reuters)
In 2015, the left-wing Syriza party swept to power on an anti-austerity, anti-EU platform. Varoufakis, a charismatic Marxist economist, was appointed finance minister. He immediately challenged the EU and its bankers, demanding debt relief and better terms for loans. The EU and the bankers refused.
In a referendum that year, Greeks voted against further austerity measures. But the prime minister, Alex Tspiras, folded to pressure from the EU, fired Varoufakis and embraced a new package of austerity and privatization. The country has been mired in crisis ever since.
Varoufakis — who has since formed a new political party — argues that “neoliberalism is not an economic model. Neoliberalism is an ideology. Imagine we were in the 1970s in the Soviet Union and we’re talking about the Soviet economy in terms of Marxist ideology. There was no relationship between the policies implemented in the Soviet Union with Marx or Marxism.”
Instead, Varoufakis argues, European bankers embrace neoliberalism only when it suits them. “The neoliberal mantra was utilized in order to [create a] tsunami of capital that came to Greece in the form of loans that created bubbles. They gave most Greeks a false sense of prosperity and, of course, when the bubbles burst, being a deficit country, the burden of adjustment in the form of austerity fell upon the Greeks.”
The loans to Greece were so large, he says, that there is no chance of ever paying them off, leaving Varoufakis with a bleak view of Greece’s future: “Very soon, we’re going to witness the building of splendid facilities for pensioners from all over northern Europe by the sea in the warm climate, while Greek pensioners, and whomever is left of the Greek population, will be eating out of garbage bins.”
Guests in this episode:
Philip Mirowski is a historian and philosopher of economic thought at the University of Notre Dame.
Sam Gindin is the former research director for the Canadian Auto Workers union (now called Unifor) and an adjunct professor of political science at York University, and co-author of “The Making of Global Capitalism: The Political Economy of American Empire, (2012).
Yanis Varoufakis is a Greek politician, economist and author, and former finance minister of Greece
Anat R. Admati is a professor of finance and economics at Stanford University and author of “The Bankers New Clothes: What’s Wrong with Banking and What to do About It, (2013).
ATHENS – As deadlines approach and red lines are redrawn...
ATHENS – As deadlines approach and red lines are redrawn in the United Kingdom’s impending withdrawal from the European Union, it is imperative for the people of Britain to regain democratic control over a process that is opaque and ludicrously irrational. The question is: How?
Democracy can never aspire to being more than a work in progress. Decisions made collectively must constantly be reappraised collectively in the light of new evidence. Yet, in the UK’s current circumstances, nothing would be more poisonous to democracy than revisiting Brexit by means of a second referendum.
Both sides, Leavers and Remainers, feel betrayed. Even though Brexit was meant to restore its sovereignty, Parliament has no real say in a process that will mark Britain for decades to come. The Scots and the people of Northern Ireland are hostages to a distinctly English feud that could do them serious damage. The young feel the old have hijacked their future, while the old feel that their accumulated wisdom and legitimate concerns are being ignored by insiders striking bad deals behind closed doors on behalf of vested interests. In short, British democracy is failing its latest and most stringent test.
September 24, 2018
Η απαραίτητη ρήξη με το 4ο Μνημόνιο και η εκλογική πρόταση του ΜέΡΑ25: Συνέντευξη του Γ. Βαρουφάκη, ΤΑ ΝΕΑ, 22/9/2018
Πώς περιγράφετε τη ρήξη με τους δανειστές που προτείνατε στη συνέντευξή σας στη ΔΕΘ;
Το ΜέΡΑ25 καταθέτει τα βασικά νομοθετήματα που απαιτούνται για να ανακάμψει η χώρα (π.χ. μείωση του ΦΠΑ και του συντελεστή μικρομεσαίων επιχειρήσεων στο 18%). Σημειώνουμε ότι οι δανειστές θα πουν «όχι» εφόσον ερωτηθούν. Θα τα νομοθετήσουμε χωρίς πρότερη συζήτηση στο Eurogroup. Δεν θα προτείνουμε, ούτε θα απειλήσουμε με Grexit. Ομως φοβόμαστε τη σημερινή ερημοποίηση της Ελλάδας πιο πολύ από το Grexit. Αν το Βερολίνο αποφασίσει να προχωρήσει στην αποπομπή μας από το ευρώ, ας το τολμήσει.
Αλήθεια, αν η ρήξη απέτυχε όταν υποτίθεται είχατε και μεγάλο μέρος του κόσμου μαζί σας επί πρώτου κυβερνητικού πενταμήνου ΣΥΡΙΖΑ, πώς θα την επιτύχετε σήμερα;
Κάτι που δεν έγινε ποτέ δεν μπορεί να απέτυχε. Το 2015 ζητήσαμε από τον ελληνικό λαό εντολή: (α) να καταθέσουμε μετριοπαθή πρόταση προς τους δανειστές (τις προτάσεις μου για αναδιάρθρωση χρέους, δραστική μείωση στους φορολογικούς συντελεστές με παράλληλο αλγοριθμικό κυνήγι των φοροφυγάδων, δημόσια εταιρεία διαχείρισης κόκκινων δανείων κλπ.), και (β) να μην υπογράψουμε καμία συμφωνία στο Eurogroup αν δεν εξασφαλιζόταν άμεσα η βιωσιμότητα του χρέους και ο τερματισμός της λιτότητας (δηλαδή πρωτογενή πλεονάσματα κάτω του 1,5% του ΑΕΠ). Ο ελληνικός λαός μάς έδωσε αυτή την εντολή δις: την 25η Ιανουαρίου και την 5η Ιουλίου του 2015. Δυστυχώς, ο κ. Τσίπρας από τα τέλη Απριλίου ενέδωσε ως προς τη λιτότητα και, λίγο μετά, συνθηκολόγησε για το χρέος. Η ρήξη, λοιπόν, δεν έγινε ποτέ και, φυσικά, ακολούθησαν τα «ναι σε όλα». Ρωτάτε πώς θα επιτύχει η ρήξη σήμερα. Απαντώ: Τολμώντας την!
Βιώνουμε ήδη τη μεταμνημονιακή εποχή ή βλέπετε κάτι πιο ζοφερό για την ελληνική οικονομία;
Βιώνουμε το 4ο Μνημόνιο της περιόδου 2018-2032, ενόψει ενός 5ου (2032-2060). Τι σημαίνει Μνημόνιο; Δεν σημαίνει επιτήρηση από τις Βρυξέλλες – όλες οι χώρες της ΕΕ τελούν υπό επιτήρηση. Σημαίνει κάτι άλλο, πολύ συγκεκριμένο. Σημαίνει συνδυασμό: (α) ευκολιών αποπληρωμών του χρέους μας στην τρόικα, οι οποίες όμως επιβαρύνουν το συνολικό χρέος μακροπρόθεσμα, με (β) σκληρή λιτότητα στο διηνεκές (πρωτογενή πλεονάσματα 3,5% μέχρι το 2021 και 2,2% μέχρι το… 2060).
Δηλαδή;
Μια ματιά στη συμφωνία κυβέρνησης Τσίπρα με τους δανειστές επιβεβαιώνει ότι εισήλθαμε στο 4ο Μνημόνιο, το οποίο βέβαια, για προπαγανδιστικούς λόγους, αποφάσισαν – σε μια οργεουλιανή έκρηξη – να ονομάσουν «ενισχυμένη επιτήρηση». Η μόνη διαφορά του 4ου από τα προηγούμενα Μνημόνια είναι ότι οι ευκολίες αποπληρωμών πλέον βασίζονται λιγότερο σε νέα δανεικά και περισσότερο σε αναβολές αποπληρωμών (που όμως τοκίζονται και μεταφέρονται στο μέλλον).
Κατά τη γνώμη σας πού οδεύει ο σημερινός ΣΥΡΙΖΑ; Διεξάγεται μια συζήτηση αν θα αποτελέσει πόλο ενός προοδευτικού μετώπου, ενώ υπάρχει και κουβέντα αν θα είναι μέρος ηγεμονικό μιας νέας Κεντροαριστεράς…
Η πασοκοποίηση του ΣΥΡΙΖΑ έχει ολοκληρωθεί. Το ίδιο και η επί της ουσίας προσχώρησή του στο τέως σοσιαλδημοκρατικό μπλοκ, το οποίο όμως έχει απονομιμοποιηθεί στα μάτια των ψηφοφόρων πανευρωπαϊκά.
Εχετε πολλές επαφές έξω, μιλάτε συχνά και συναντάτε κόσμο σε πολλές χώρες. Το επίδικο σήμερα είναι η μάχη κατά της Ακροδεξιάς; Θα μπαίνατε σε ένα κοινό μέτωπο ως MέΡΑ25 και ως Diem25 με άλλες δυνάμεις;
Δεν έχουμε απλά «επαφές». Εχουμε ήδη συμπράξει σε κοινό, διεθνικό, πανευρωπαϊκό και παγκόσμιο μέτωπο εναντίον της ξενοφοβικής Δεξιάς αλλά και, παράλληλα, εναντίον του αυταρχικού βαθέος κατεστημένου. Για τις ευρωεκλογές το κοινό μέτωπο με έντεκα κόμματα και κινήματα ανά την Ευρώπη είναι γεγονός, και ονομάζεται Ευρωπαϊκή Ανοιξη. Πρόσφατα, σε δημόσια εκδήλωση με τον Τζέρεμι Κόρμπιν, τον αρχηγό του Εργατικού Κόμματος, ανακοινώσαμε την κοινή μας βούληση να πάμε πέραν των ευρωπαϊκών συνόρων δημιουργώντας Προοδευτική Διεθνή. Την περασμένη εβδομάδα, μέσα από τις σελίδες της βρετανικής «Guardian», ανακοινώσαμε με τον Μπέρνι Σάντερς ότι προχωράμε μαζί προς την ίδρυση της Προοδευτικής Διεθνούς, με επόμενο σταθμό κοινή μας εκδήλωση στο Βερμόντ στα τέλη Νοεμβρίου. Οπως βλέπετε, το ΜέΡΑ25 και η πανευρωπαϊκή του ομπρέλα, το DiEM25, συνδημιουργεί το κοινό μέτωπο στο οποίο αναφέρεστε.
Μήπως πριν από τη νέα σας εκλογική κάθοδο, πρέπει να σταθείτε αυτοκριτικά στον ελληνικό λαό για το επτάμηνο της διακυβέρνησης του 2015 και το όλο κόστος των διαπραγματεύσεων;
Οποιος αρνείται την αυτοκριτική είναι επικίνδυνα φανατικός. Ομως, το ερώτημά σας πρέπει να απευθυνθεί κατ” αρχάς σε εκείνους που κατέστρεψαν τη χώρα, δηλαδή στην ολιγαρχία και την τρόικα – όχι στον μόνο υπουργό Οικονομικών που δεν δανείστηκε ούτε ευρώ (ενώ αποπλήρωνε το χρέος), που δεν έκοψε ούτε ένα ευρώ συντάξεων (ενώ βελτίωσε, έστω και λίγο, τα ταμειακά του κράτους), και που τίμησε τη λαϊκή εντολή πλήρως. Κόντρα στις μανιώδεις προσπάθειες του μνημονιακού τόξου, να μεταθέσουν το δικό τους κόστος σε εκείνους που τους είπαν «όχι», η αυτοκριτική μου είναι σαφής: Δεν έπρεπε να εμπιστευτώ τον Αλέξη Τσίπρα. Και δεν έπρεπε να δείξω καλή πίστη συμφωνώντας με τους δανειστές την επέκταση της δανειακής συμφωνίας.
Θα κατέβετε στις εθνικές εκλογές ή μόνο στις ευρωεκλογές και με ποιο σύνθημα;
Θα κατέβουμε στις εθνικές και στις ευρωεκλογές. Τα συνθήματα είναι ξεπερασμένα. Εμείς θα βασιστούμε στο ολοκληρωμένο μας πρόγραμμα, τόσο για την Ελλάδα όσο και για την Ευρώπη, που αποτελεί προαπαιτούμενο ώστε να πάψει η Ελλάδα να ασφυκτιά σε μια Ευρώπη που αποδομείται.
http://www.tanea.gr/print/2018/09/22/...
September 18, 2018
Συνέντευξη Τύπου για το Εκλογικό Πρόγραμμα του ΜέΡΑ25 – video
Το Εκλογικό Πρόγραμμα του ΜέΡΑ25 όπως παρουσιάστηκε στην ΔΕΘ την 14η Σεπτεμβρίου 2018. Δείτε ακόμα το σχετικό άρθρο “Για μια άλλη ΔΕΘ” στην Εφημερίδα των Συντακτών.
2008 and the International New Deal we need for the post-2018 world – OECD Keynote, 14 SEP 2018
2008 marked globalised capitalism’s near death experience. A decade later we have no right to be looking at those events as part of our economic history. The reason? We are still entangled in the crisis that the events of 2008 sparked off. They remain very much at the centre of our present. The same crisis is taking different shapes in different places, migrating from continent to continent, from country to country. It morphs from an unemployment-generator to a deflation-machine, to another banking crisis, to a maximiser of trade and capital global imbalances. It depletes middle class savings in Germany and Holland, suppresses wages across the West, causes credit bubbles in China, keeps Greece and Europe’s periphery in a permanent Great Depression, it fuels Brexit and discontent in middle America, in Europe. Last but not least, it jeopardises the life prospects of millions of people across the so-called Emerging Countries.
Moreover, I shall be arguing, 2008’s causes are intact, the imbalances that triggered it are getting worse and, tragically, democratic politics – the only antidote to this crisis and the next – are in a state of disrepair as a result of the never ending crisis that 2008 bestowed upon us. But, lest you fear a talk dripping with gloom and doom is in the offing, let me promise that I shall conclude – when turning from discussing 2008 to the lessons for beyond 2018 – with an upbeat message: Yes, we can! We can put 2008 behind us in a manner that strengthens democracy and brings shared green prosperity for a majority of people in a majority of countries.
ON THE NATURE AND CAUSES OF 2008
2008 was our generation’s 1929. The globalised financial system collapsed and was only propped up by two massive interventions: First, the institutions of the American state backstopped the world’s banks and their offshore dollarised business centred in London, Frankfurt and here in Paris – the Fed with its gigantic swap lines primarily but also the US Treasury. One European central banker, accurately, referred to Europe’s central banks in 2008 (the ECB, the Central Bank of Switzerland and the Bank of England in particular) as having become the 13th branch of the US Federal Reserve system. Secondly, China – whose authorities pumped up credit and investment magnificently in a judicious attempt on the one hand to replace domestic aggregate demand (lost to the free falling Chine exports) and, on the other, to buy time for Europe and the US to get their act together.
While the world of finance was saved from itself by the American and Chinese states, financialisation’s near death experience had repercussions that were felt everywhere. The aggregate effect on output and trade was greater, in the first couple of years, than that of the Crash of 1929. The certainties created by decades of establishment thinking – for instance that markets are self-regulating and politics largely irrelevant – were gone, along with around $40 trillion of equity globally, $14 trillion of household wealth in the US alone, 700,000 US jobs every month, countless repossessed homes everywhere. Even McDonald’s, for goodness’ sake, could not secure an overdraft from Bank of America!
Meanwhile the response of governments that had hitherto clinged tenaciously onto fiscal conservatism, as perhaps the 20th century’s last surviving ideology, caused many eyebrows to lift in puzzlement. Once they realised it was not enough to pour of trillions of dollars, euros, yen etc. into a financial system which had been, until a few months before swimming in profits and liquidity, our Presidents and Prime Ministers, men and women with impeccable anti-statist free-market credentials, embarked upon a spree of nationalising banks, insurance companies and automakers that put even Lenin’s exploits to shame.
Here, in continental Europe, where we had created an odd monetary union featuring a central bank without a state to have its back, and 19 governments responsible for bailing out national banks but without a central bank to have their back, the result was a remarkably self-defeating policy of contractionary contraction, that lasted from 2008 to 2015, which caused a historic defeat for European capitalism – one that, despite the various proclamations that the crisis has ended, is still with us, depressing real investment as well as productivity and poisoning our democracies by making them vulnerable to orchestrated xenophobia and a moral panic around the issue of migration.
So, what caused the events of 2008? After 2008, even those who had argued that 2008 was impossible are now experts in what caused it. Such is life. But let’s look at the various explanations:
Growing trade imbalances
Financialisation creating a toxic dynamic: the narrative of riskless risk producing massive systemic risk that fed on itself
Toxic economic theory aiding and abetting toxic finance; e.g. the Efficient Market Hypothesis, Rational Expectations Hypothesis, the so-called Real Business Cycle Model – Regulatory capture
The entry of 2 billion workers (from the former communist states, China and India) into the global proletariat
The global savings glut that these developments engendered
Central Banks fighting the wrong war against price, not asset, inflation).
All these explanations are true and apt. But, I want to argue that all of these explanations are themselves symptoms of a deeper cause: an underlying global macro dynamic that has been unfolding since the 1940s. In short, my argument is that these developments, that precipitated 2008, were caused by the nature of the transformation of the US from an hegemonic economy whose surplus was used, by political means, to stabilise Europe and Japan to a deficit economy whose hegemony grew as a result of stabilising global aggregate demand via its growing twin deficits.
To see this, we need to begin at the beginning – in 1944 and the Bretton Woods Conference. As the war was drawing to a close, the New Dealers’ administration in Washington understood that the only way of avoiding the Great Depression’s return, once the guns had been silenced, was to recycle America’s surpluses to Europe and to Japan, and thus generate abroad the demand that would keep American factories producing all the gleaming new consumer products that American industry would switch to at war’s end.
The result was the project of dollarising Europe, of founding the European Union as a cartel of heavy industry, and of building up Japan – all within the context of a global currency union that was the Bretton Woods system and its underlying new philosophy according to which money was co-owned by those who had it and the global community that backed it. A system featuring fixed exchange rates regime anchored on the US dollar, almost constant interest rates, boring banks (operating under severe capital controls) and American-led management of aggregate demand for global capitalism’s goods and services.
This dazzling design brought us a Golden Age of low unemployment, low inflation, high growth and massively diminished inequality. Alas, by the late 1960s the foundations of Bretton Woods were disintegrating. The US surplus, which was the bedrock of the global monetary system, disappeared. This, combined with the bankers’ perennial attempt to unschackle themselves from the constraints placed upon them, created the offshore Eurodollar market that was to become, later, after Bretton Woods was jettisoned in 1971, the basis for financialisation. Indeed, by 1968, America had lost its surpluses, slipped into a burgeoning twin deficit and could, therefore, no longer stabilise the global system it had created by recycling surpluses it no longer had. Never too slow to accept reality, Washington killed off its finest creation: On August 15th, 1971 President Nixon announced the ejection of Europe and Japan from the dollar zone.
President Nixon’s decision was founded on the Americans’ refreshing lack of deficit-phobia. Unwilling to rein in the deficits by imposing austerity (that would shrink the United States’ capacity to project hegemonic power around the world), Washington stepped on the accelerator boosting its deficits. Thus American markets worked like a giant vacuum cleaner absorbing massive net exports from Germany, Japan and, later China – ushering in the second phase of post-war growth (1980-2008). And how were the expanding American deficits paid? By a tsunami of other people’s money (around 70% of the profits of European, Japanese and Chinese net exporters) enthusiastically rushing into Wall seeking refuge and higher returns, a sea change that was aided by three developments: (i) US wage growth that was lower than that in Europe and Japan (thus, boosting returns to foreign capital flooding into the US); (ii) Paul Volcker’s 20%+ interest rates; and (iii) the Wall Street-City of London dollarised financialisation that occasioned self-reinforcing financial paper gains.
By the mid-1980s, the United States were absorbing a large portion of the Rest of the World’s surplus industrial products while Wall Street would administer the foreign capital flooding into the US in three ways. First, it provided credit to American consumers (whose wages stagnated). Secondly, it channelled direct investment into US corporations and, of course, thirdly, it financed the purchase of US Treasury Bills (i.e. funded the American government deficits).
But for Wall Street to act as this ‘magnet’ of other people’s capital, and perform the role of recycling other people’s surpluses so as to pay for America’s deficits, it had to be unshackled from the New Deal and Bretton Woods era stringent regulations. Put differently, the eurodollar, unregulated financial market that had grown up in the City of London had to take over the rest of the world, becoming the dominant financial model in NYC, here in Paris, in Frankfurt and in the Far East. Institutionalised greed, wholesale de-regulation, the infamous ‘revolving doors’, the exotic derivatives etc. were mere symptoms of this brave new global recycling mechanism. And, after 1991, an additional two billion workers entered the global workforce producing new output that boosted the already imbalanced trade flows, capitalism had entered a new phase. It is what became known as Globalisation.
In Globalisation’s wake, the EU created its common currency. The reason the EU needed a common currency was that, as all cartels, it had to keep the prices of its main oligopolistic industries stable across Europe’s single market. To do this, it was necessary to fix exchange rates within its jurisdiction, as they had been fixed during the Bretton Woods era. However, from 1972 to the early 1990s each EU attempt to fix European exchange rates had failed spectacularly. Eventually, the EU decided to go the whole hog: to establish a single currency. This it did within the supportive environment of (grossly imbalanced yet temporarily impressive) global stability that the US-anchored Global Surplus Recycling Mechanism maintained. To get around the political hurdles presented by the Bundesbank’s understandable reluctance to sacrifice the DM, we ended up with the paradox of the ECB supplying a single currency to the banks of nineteen countries, whose governments would have to salvage these banks, at a time of crisis, without a central bank that could support them!
Meanwhile, Wall Street, the City and the French and German banks were taking advantage of their central position in the US-anchored global recycling system to build colossal pyramids of private money on the back of the net profits flowing into the United States from the Rest of the World. This added much energy to the recycling scheme, as it fuelled an ever-accelerating level of demand within the United States, in Europe and Asia. It also brought about the astonishing de-coupling of financial capital flows from the underlying trade flows.
To explain what I mean by the ‘astonishing de-coupling of financial capital flows from the underlying trade flows’, recall the heady days of August 2007 when the rot set in. My German friends, to this date, tell me that they don’t get it: How is it that Deutsche Bank, and the rest of the German banks, went, effectively, bust? How can any economic sector go, within 24 hours, from making zillions to insolvency, demanding massive taxpayer bailouts. The answer is as simple as it is devastating.
Consider Germany’s banks and exporters back in the summer of 2007. Germany’s national accounts confirm Germany’s large trade surplus with the United States. In the month of August of 2007, to give an example, German net export income from the United States was a cool $5 billion. Germany’s national accounts registered this surplus as well as a counter-balancing outflow of capital from Germany to the US. However, Germany’s national accounts do not show was the real behind-the-scenes drama, the real action.
From the early 1990s and until 2007, Frankfurt’s bankers were dying to buy the lucrative dollar denominated derivatives Wall Street and the City manufactured and did so with dollars that they were borrowing from… Wall Street. In August 2007, the price of these derivatives began to fall, underlying debts were going back and, thus, Wall Street institutions faced large margin calls. German bankers became apoplectic when their panicking New York pals began to call in their dollar debts. They needed dollars in a hurry but no one would buy the mountain of US toxic derivatives they had purchased. This is how, from one moment to the next, German banks swimming in oceans of paper profit found themselves in desperate need of dollars they did not have. Could Germany’s bankers not borrow dollars from Germany’s exporters to meet their dollar obligations? They could, but how would the $5 billion the latter had earned during that August help when the German bankers’ outstanding debt to Wall Street, that the Americans were now calling in, exceeded $1000 billion? This is what I mean by the astonishing decoupling of economics from finance, of trade flows from capital flows.
THE AFTERMATH
In summary, what had happened, globally, was that imbalanced dollar-denominated financial flows, which had initially grown on the back of the US trade deficit, ‘succeeded’ in de-coupling themselves from the underlying economic values and trade volumes. It would not be far-fetched to say that they almost achieved escape velocity and nearly left Planet Earth behind – before crashing down violently in 2008.
From that moment onwards, politicians went into overdrive to shift the losses from those who created them (the bankers) onto the shoulders of middle class debtors, waged labourers, the unemployed, those on disability payments and the taxpayers who could not afford to set up off-shore accounting units. In Europe, in particular, our leadership not only failed to temper the eurozone crisis but, by implementing to this day fraudulent insolvency concealment, delivered a historic defeat for European capitalism.
The dominant narrative on what went wrong had no basis in macroeconomics and was, thus, allowed to obscure the reality that the eurosystem had been designed not to have any shock absorbers to absorb the shockwave from Wall Street. Consequently, one proud nation was turned against another by a ruling class determined to disguise: (A) a crisis caused by an alliance of Northern and Southern bankers and other rent-seeking oligarchs, into (B) a clash caused by the profligate Southerners and ant-like Northerners, or as as crisis of over-generous German, Greek, Italian etc. social welfare systems. The political repercussions of this inane handling of an inevitable crisis are evident to all – and so I shall desist from saying anything more about it – even though my life is, these days, devoted to fighting against the Nationalist International that has grown out of this mess.
But let’s set aside these by now well-known developments. The question is: Where are we now?
While America’s trade deficit returned to its pre-crisis levels within a couple of years, it was no longer enough to stabilise global demand. The pre-crisis mechanism by which Wall Street and the City converted – and supercharged – the US trade deficit into fixed capital investments around the world has broken down. Sure, the Fed and other Central Banks tried to make amends with tsunamis of QE-induced liquidity. But that only pushed up asset prices in the West; e.g. giving US corporations an opportunity to buy back their shares while saving their own profits in offshore accounts. Where monies did flow, in the Emerging Markets, investment grew but was vulnerable both to the deflationary forces Europe continually exports (courtesy of its domestic austerity drive) and to the expectation of tapering and higher long-term interest rates in the United States. Perhaps the only pillar of global demand was China, although its capacity to maintain that boost was circumscribed by the constant threat of its credit bubble bursting.
In short, Wall Street’s pre-2008 capacity to continue ‘closing’ the global recycling loop vanished – and has not been replaced yet. America’s banks can no longer harness the United States’ twin deficits for the purposes of financing enough demand within America to keep the net exports of the Rest of the World going. This is why the world today remains in the clasps of the same crisis that began in 2008.
HAVE ANY LESSONS BEEN LEARNT?
Not really. Global capitalism behaved like a reckless driver who, having been caught for speeding, sticks to the speed limit for a while but soon floors the accelerator as if nothing had happened.
DEBT: 40% up since 2007, to 217% of global GDP
BANK REGULATION: Tougher national rules set out to constrain the banks’ balance sheets, causing a shift of financial intermediation from banks to capital markets, mainly with fixed income dollar denominated instruments. But, by making banks safer, market-making has been impaired or shifted to the shadow banking system which has grown from $28 trillion in 2010 to $45 trillion in 2018. Risk has not been eliminated, just taken out of sight and dispersed geographically; e.g. American banks dominate more than ever (the five larger US banks that were considered Too Big To Fail are now even bigger – accounting for 47% of all US banking assets, up from 44% in 2007), Asia’s new banking giants have rapidly expanded and it is the British and European banks that contracted – as US authorities required European competitors such as Barclays and Deutsche Bank to provide more capital to their US operations or to leave.
EMERGING MARKETS LOSE THEIR CAPACITY TO ADJUST VIA DEPRECIATION: It is well known that QE-monies flowed into Emerging Markets. Indeed, over the past decade, dollar-denominated loans to EM borrowers grew by 17% every year, flowing into China, Brazil, Chile, Turkey, Argentina, Indonesia etc. $3.7 trillion all up. This is now causing the troubles we all read about. Worse still, devaluation seems to make no difference (as Argentinians will not keep their money in pesos even if offered 100% interest rates). Even when the government has enough foreign currency reserves to cover its dollar liabilities, the appreciation of the dollar causes domestic corporates that labour under large dollar debts to retrench at home, thus blunting the capacity of depreciation to boost domestic economic activity.
A SENSE OF INJUSTICE: $321 billion fines were imposed on bankers. It was a tiny percent of the liquidity and public assets sunk into them by taxpayers. Remarkably, unlike the 1980s when a much smaller banking crisis erupted in the US (the Savings and Loans scandal), which saw more than one thousand bankers jailed, no arrests were made for financial crimes related directly with the toxic activities of financiers which led to 2008.
NO PLANS FOR THE NEXT EPISODE: No plan is in place for when the new tail risks hit; a domino effect that may begin in a variety of ways (e.g. Italian public debt scare, a Chinese credit bubble meltdown) and made more ominous by the Trump strategy of inciting a coordination failure at the global level, by Brexit in Europe, by the generalised poisoning of democratic processes.
WHAT NEXT? The need for a Progressive International and a sketch of the International New Deal it must campaign for
The 2008 crisis begat the Great Recession, which begat the Great Deflation, which gave rise to the Comprehensive Dissolution of any semblance of Global Governance. The European Union is, sadly, at an advanced stage of disintegration, with the migration debacle fronting for the underlying macroeconomic imbalances that are inconsistent with the euro’s institutional framework. The United States has adopted the strategy of shifting to bilateral negotiations; a framework within which neither the European Union nor the Chinese economy can continue as at present. The current trends will, almost certainly, lead to: (a) Europe exporting greater deflation and instability to the rest of the world; and (b) China reducing its unsustainable levels of investment by more than 10% of GDP, which in conjunction with a maximum growth rate of 6% and a savings ratio of 40%, leads to the safe prediction of a capital outflow from China that will exceed 10% of GDP. While particular economies will be able to do reasonably well in such an environment, the global economy will suffer and tensions will multiply. If to this picture we add the pressures from the next crisis (i.e. the deflationary effects of AI and automation), the future looks bleak.
Can the future be brighter? Yes, of course it can. Recently, together with Bernie Sanders, we issued a call for a Progressive International to campaign for an International New Deal, a brand new Bretton Woods. What would that mean in practice? Here are three examples of what that would mean:
A Large-scale Green Investment Program by which to put to useful purpose the global glut of savings
This would be equivalent to an International New Deal, borrowing from Franklin D. Roosevelt’s plan the basic idea of mobilising idle private money for public purpose. But rather than through tax-and-spend programs at the level of national economies, this should be administered by a multilateral partnership of central banks (like the Fed, the European Central Bank and others) and public investment banks (like the World Bank, Germany’s KfW Development Bank, the Asian Infrastructure Investment Bank and so on). Under the auspices and direction of, say, the IMF, the OECD even (!), the investment banks could issue bonds in a coordinated fashion, which these central banks would be ready to purchase, if necessary. By this means, the available pool of global savings would provide the funds for major investments in the jobs, the regions, the health and education projects and the green technologies that humanity needs.
Fair trade deals, based on minimum living wages for poor countries and a job guarantee scheme for the deprived regions of the richer countries
To illustrate that tariffs are not the best way of protecting our workers, since they mostly enrich local oligarchies, we should campaign for trade agreements that commit governments of poorer countries to legislating minimum living wages for their workers and governments of the richer countries to legislate a job guarantee scheme for deprived regions – so that communities can be revived in richer and poorer countries at once.
A New International Monetary System – a global trade & capital clearing union
The task here is to rebalance trade and create an International Wealth Fund to fund programs to alleviate poverty, develop human capital, support marginalized communities and invest in the Green Transition across the world, and not just in the developing world but also in the rustbelts of the United States and Europe.
While keeping their own currencies, and central banks, members of the New Bretton Woods would agree to denominate all payments in a common accounting unit, let’s call it the Kosmos (K) – a common digital currency to be issued and regulated by the IMF on the basis of a transparent digital distributed ledger and an algorithm that would adjust the Ks total supply in a pre-agreed manner to the volume of world trade, all of which will be denominated in K units. Foreign exchange markets would function as they do now and the exchange rate between K and various currencies would vary in the same way that the IMF’s Special Drawing Rights do viz. the dollar, the euro, the yen etc. The difference, of course, would be that, under this system, member-states would allow all payments to each other to pass through their central bank’s K-account. Further, to exploit the system’s full potential for keeping imbalances under check, two stabilising transfers would be introduced.
The supply of K will be run on the basis of simple, automated rules which boost global K supply at times of a global slowdown, minimise politicians’ and bureaucrats’ discretionary power, regulate heavily the financial sector’s dealing in Ks and keep global trade and capital imbalances in check using two instruments:
The Levy: A trade imbalance levy to be charged annually to each central bank’s K-account in proportion to its current account deficit or surplus and paid into a common Wealth Fund
The Charge: Private financial institutions to pay a ‘surge’ fee into the same Fund in proportion to any surge of capital flows out of a country, reminiscent of the congestion price-hike that companies like Uber charge their customers at times of peak traffic
The Levy’s rationale is to motivate governments of surplus countries to boost domestic spending and investment while systematically reducing the international spending power of deficit countries. Foreign exchange markets will factor this in, adjusting exchange rates faster in response to current account imbalances and cancelling out much of the capital flows which today support chronically unbalanced trade. As for the Charge, it will automatically penalise speculative herd-like capital inflows or outflows without, however, handing discretionary power to bureaucrats or introducing inflexible capital controls.
Suddenly, through the Common Fund, the world will have acquired, without the need for any subscribed capital, a Global Sovereign Wealth Fund by which to fund programs to alleviate poverty, develop human capital, support marginalised communities and invest in the Green Transition across the world, and not just in the developing world but also in the deprived areas of United States and Europe.
CONCLUSION
2008 was a wakeup call that fell on deaf ears. The world in 2018 is more precarious than it was in 2007. Finance continues to suck the oxygen out of the creative workers, corporations massively under-invest in the things humanity needs, the majority of people face diminishing life prospects in an uberising labour market, and democratic politics is being poisoned both by the inane establishment’s business-as-usual fixation and the increasingly triumphant xenophobic Nationalist International. Only a Progressive International campaigning for the International New Deal outlined here can inspire hope of the future.
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