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How Not to Waste the Crisis
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Ghost Dog  (1000+ posts)      | Fri Feb-27-09 08:50 AM Original message |
| How Not to Waste the Crisis |
 | Edited on Fri Feb-27-09 08:55 AM by Ghost Dog Jumping to the conclusions of the recent article by Prof. Leo Panitch and Prof. Sam Gindin: From Global Finance to the Nationalization of the Banks: Eight Theses on the Economic Crisis, I find this succinct call to "take the financial system into public control" deserving of note (my emphasis added). The scale of the crisis today is such that nationalization of the financial system cannot be kept off the political agenda. It is increasingly apparent, that monetary and fiscal stimulation alone are unlikely to succeed in ending the crisis since the banking system's dysfunctionality today undermines the multiplier effect, just as new regulations are supposed to make finance more cautious and prudent in their lending. Indeed, there has been an increasing realization that it may not be possible to keep off the political agenda much longer the issue of bringing large portions of the financial system into public ownership. This is advanced today along the lines of the temporary nationalizations that took place in Sweden and Japan during their financial crises in the 1990s whereby the state took on the banks' bad debts and then passed the banks back to the private sector. It is a measure of the severity of the crisis that nationalization is now being quite generally proposed even within the US although it poses a host of problems as a way of saving global capitalism. It is highly significant that the last time the nationalization of the banks was seriously raised, at least in the advanced capitalist countries, was in response to the 1970s crisis by those elements on the left who recognized that the only way to overcome the contradictions of the Keynesian welfare state in a positive manner was to take the financial system into public control. Now that bank nationalization is back on the political agenda (albeit now coming from very different sources), it is very important to contrast the type of band-aid nationalization now being canvassed with the demand for turning the whole banking system into a public utility, which would allow for the distribution of credit and capital to be undertaken in conformity with democratically established criteria. And it is necessary to point out that this would have to involve not only capital controls in relation to international finance but also controls over domestic investment, since the point of making finance into a public utility is to transform the uses to which it is now put. The call for nationalization of the banks provides an opening for advancing broader strategies that begin to take up the need for systemic alternatives to capitalism. The severity of today's economic crisis once again exposes the old irrationality of the basic logic of capitalist markets. As each firm (and indeed state agency) lays off workers and tries to pay less to those kept on, this has the effect of further undercutting overall demand in the economy. At the same time, the financial crisis exposes new irrationalities, not least those contained in the widespread proposals for trading in carbon credits as a solution to the climate crisis, which involve depending on volatile derivatives markets that are inherently open to the manipulation of accounts and to credit crashes. In the context of such readily visible irrationalities, a strong case can be made that -- to save jobs and the communities that depend on them in a way that converts production to ecologically-sustainable priorities during the course of this crisis -- we need to break with the logics of capitalist markets rather than use state institutions to reinforce them. We need to put on the public agenda the need to change our economic and political institutions so as to allow for democratic planning to collectively decide how and where we produce what we need to sustain our lives and our relationship to our environment. However deep the crisis, however confused and demoralized are capitalist elites both inside and outside the state, and however widespread the popular outrage against them, making this case will certainly require hard and committed work by a great many activists, many of whom will see the need for building new movements and parties to this end. This is what is really needed if this crisis is not to go to waste. Leo Panitch is Canada Research Chair in Comparative Political Economy at York University. His most recent books are American Empire and the Political Economy of International Finance and Renewing Socialism: Transforming Democracy, Strategy and Imagination. Sam Gindin, formerly Chief Economist and Assistant to the President of the Canadian Autoworkers Union, holds the Packer Professorship in Social Justice at York University. He is the author of The Canadian Auto Workers: The Birth and Transformation of a Union and (with Panitch) Global Capitalism and American Empire. ____ ... And the same, it might be said, can be said of Europe and all other countries as well as America, with the proviso that Europe may be a little more experienced, less so to the East and South, more so to the North and East, at running democratically-planned economies which take into account, albeit imperfectly, social ends and environmental necessities. This at least provides a degree of basic social security others lack. Nevertheless History, all seem to agree, is about to change forever accustomed lifestyles and ways of doing things, one way or the other, by means of systemic economic crisis and its aftermath. It is an opportunity that surely should not go to waste.  |
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  Whatever we do to the financial system has to be done with ... | ColbertWatcher | Feb-27-09 09:02 AM | #1 |
| Oh hell yes. Its all about this line: | napoleon_in_rags | Feb-27-09 09:11 AM | #2 |
  That's it! Out with the Old, In with the New. | Ghost Dog | Feb-27-09 12:41 PM | #5 |
| What crisis? | ConcernedCanuk | Feb-27-09 09:46 AM | #3 |
| Controlling it's own currency is one of the prime requisites of any nation. | Greyhound | Feb-27-09 09:57 AM | #4 |
| The American state is absolutely central. | Ghost Dog | Feb-27-09 02:44 PM | #6 |
| ColbertWatcher (1000+ posts) | Fri Feb-27-09 09:02 AM Response to Original message |
| 1. Whatever we do to the financial system has to be done with ... |  |
 | ... the idea that one day the GOP (or whatever right-wing party takes their place) may be in power again. There has to be strict regulation, diligent oversight and severe penalties for crimes. I'd hate to think that we fixed the problem, only to have a GOP leftover sneak in and exploit a loophole. |
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| napoleon_in_rags (983 posts) | Fri Feb-27-09 09:11 AM Response to Original message |
| 2. Oh hell yes. Its all about this line: |
 | Edited on Fri Feb-27-09 09:16 AM by napoleon_in_rags democratic planning to collectively decide how and where we produce what we need to sustain our lives and our relationship to our environment. Bank nationalization or not, this is one of the most important ideas of our time. The idealized free market functions on the principles of 1) accurate information on the part of participants 2) infinite information processing time on the part of the participants What happens in reality, why the free market fails, is that accurate information is obscured. Instead of an assessment based market where consumer needs are discovered through information systems and addressed through products and services, we have a marketing driven system where information is feed to the consumers to regardless of its truth value - all that matters is whether or not the consumer can be convinced of his or need of the product, not the betterment of society through assessing what the consumer really needs: Its about making the consumer need what they have rather than trying to have what the consumer needs. (The mainstream acceptance of protection racket mentalities, essentially. ) The surest, quickest way to address this problem is through democratic planning of products and services needed by consumers, with the realization that the information sources consumers use to make decisions can't be controlled by the same entities who profit from the consumers choices. Beyond that, you can let free market forces work. The second thing is to get rid of the illusion that people have infinite information processing time, which is to say that busy people can make informed decisions and sort through the crap thrown at them endlessly by ads and corporate controlled media. Eventually we will realize that we need people, be them public or private, whose interests are demonstrably separate from other commercial interests helping us make informed, safe and ethical purchasing decisions. Information systems may get there in the future of the Internet, but in the mean time that means government regulation. We can't wallow in the illusion that all consumers are able to test their food for pathogens, for instance. |
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| Ghost Dog (1000+ posts) | Fri Feb-27-09 12:41 PM Response to Reply #2 |
| 5. That's it! Out with the Old, In with the New. |
| It's time to provide a sense of direction (and a driver in the driving seat) to the economy. And that Driver needs to represent the true collective interests of the people through collective planning and decision-taking. |
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| ConcernedCanuk (1000+ posts) | Fri Feb-27-09 09:46 AM Response to Original message |
| 3. What crisis? |
 | . . .  |
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| Greyhound (1000+ posts) | Fri Feb-27-09 09:57 AM Response to Original message |
| 4. Controlling it's own currency is one of the prime requisites of any nation. |
 | Who or whatever controls a nation's currency rules the nation, regardless of title or law. Abrogating that responsibility was one of the Congress' greatest failures in our history. The People of the United States are the government and we must attend to this duty. Allowing control of our nation to be usurped by an infinitesimal class of oligarchs is the root of all of our problems, for they are not subject to our wishes, do not share our goals, and operate from a standpoint of pure self-interest. This is an excellent point, thanks for posting it. "Let me issue and control a nation’s money and I care not who writes the laws." - Mayer Amschel Bauer Rothschild  & R |
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| Ghost Dog (1000+ posts) | Fri Feb-27-09 02:44 PM Response to Original message |
| 6. The American state is absolutely central. |
| Edited on Fri Feb-27-09 02:45 PM by Ghost Dog Final paragraphs of this February 16, 2009 interview with Leo Panitch, though, show that Prof. Panitch dosn't feel very optimistic: The American state is absolutely central. It is no accident that the G20 meeting took place in Washington. Everyone sees that whatever resolution there is to this crisis will have to be undertaken under the aegis of the American state, and everyone is hoping that Obama will be able to provide the kind of leadership – for capitalists – that will accomplish that. So I think the American state is still very much at the centre of global capitalism. The material underpinnings of that hegemony have rested in part on New York as a financial centre. So it's a good question, what happens to that hegemony if New York seizes up as a financial centre? But I just don't see what could conceivably replace it. Certainly nothing in Asia could replace New York as a financial centre. People can start arguing that the Chinese state has financial clout, but we see how much the Chinese economy has been affected by this crisis originating in the U.S. economy. It will certainly be an enormous challenge for the Americans to hold it all together. But it is only the Americans that can hold it all together; and all the world's capital, more than ever, is looking to the Americans to hold it all together. But if the U.S. government does it very imperfectly... Yes, but I don't see any grounds for serious inter-imperial rivalry unless there are fundamental changes in the balance of class forces and state structures in other parts of the world, so that countries move in a national-socialist, fascist direction which would break down globalisation, or there is the kind of change in class relations that would put socialist options on the agenda, which would mean disarticulating from capitalist globalisation and attempting to re-articulate on the basis of new international socialist strategies. On the basis of the class configurations that exist in the regions outside North America, I don't see either of those things happening soon. The question remains of whether the Americans will pull it off. If they don't, will that produce social and political disruptions that would lead to something else? Maybe. But on the basis of the current configurations, with the types of capitalist classes and state bureaucracies that are oriented to maintaining the relationships that have developed over the last 30 years under global capitalism, I don't think we can speak seriously of inter-imperialist rivalry. (Socialist Project Bullet) |
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