21st cen­tury needs new eco­nomic sys­tem

Lesotho Times - - Leader - LCJ Poly­chro­niou is a po­lit­i­cal econ­o­mist/po­lit­i­cal sci­en­tist who has taught and worked for many years in uni­ver­si­ties and re­search cen­tres in Europe and the United States. C J Poly­chro­niou

IN his Prison Note­books, the Ital­ian rev­o­lu­tion­ary An­to­nio Gram­sci wrote: “The cri­sis con­sists pre­cisely in the fact that the old is dy­ing and the new can­not be born; in this in­ter­reg­num a great va­ri­ety of mor­bid symp­toms ap­pear.”

To­day, it is the world econ­omy, to be pre­cise, that finds it­self once again in the midst of an in­ter­reg­num. The post-war model of eco­nomic growth that pro­duced the golden age of cap­i­tal­ism is long gone, but a new eco­nomic sys­tem has yet to be born.

The mor­bid symp­toms around abound: In­tense and grow­ing in­equal­ity, mas­sive un­em­ploy­ment and ex­treme youth idle­ness in many parts of the world, rapidly de­clin­ing stan­dards of liv­ing, dan­ger­ously high lev­els of both pub­lic and cor­po­rate debt, a fi­nan­cial sys­tem that re­mains out of whack, and eco­log­i­cal col­lapse.

More­over, the world econ­omy not only con­tin­ues to rely on fos­sil fu­els to power growth, but is ac­tu­ally in­creas­ing the con­sump­tion of pri­mary en­ergy sources - such as coal, oil and nat­u­ral gas — in spite of the phe­nom­e­non of global warm­ing which threat­ens to de­stroy hu­man civil­i­sa­tion as we know it.

In­deed, the ex­ist­ing eco­nomic model is de­funct: con­sider also the fact that pro­duc­tiv­ity growth in the ad­vanced economies of the world since the erup­tion of the fi­nan­cial cri­sis of 2008 has been ex­tremely slow in both ab­so­lute terms and rel­a­tive to pre­vi­ous decades. But the model re­mains deadly dan­ger­ous.

Why a new deal is not enough In light of the afore­men­tioned rea­sons, many econ­o­mists around the world, in­clud­ing Thomas Piketty, have been propos­ing the im­ple­men­ta­tion of a new global deal on growth in the mould of Franklin D Roo­sevelt’s “New Deal” pro­grammes dur­ing the 1930s.

The call for a New Deal has also been adopted by sev­eral po­lit­i­cal move­ments in Europe, and the United States in­clud­ing Bernie San­ders and many of his sup­port­ers.

The prob­lem with this ap­proach is that a new global deal is in­evitably struc­tured to­wards the goal of sav­ing the ex­ist­ing eco­nomic sys­tem, not over­com­ing its ul­ti­mate con­tra­dic­tions and re­plac­ing it with a new so­cioe­co­nomic or­der, which is what to­day’s world re­ally needs.

Roo­sevelt’s New Deal, prob­a­bly the great­est ex­per­i­ment of ac­tive state in­ter­ven­tion un­der cap­i­tal­ism, saved many peo­ple’s lives, but did not even end the Great De­pres­sion. What re­ally ended the Great De­pres­sion in the US was the mo­bil­i­sa­tion of all eco­nomic re­sources to sup­port the war ef­fort.

Roo­sevelt’s New Deal did not ad­vo­cate or pro­mote eco­nomic democ­racy, nor did it seek to lay the ba­sis for the emer­gence of a more ra­tio­nal so­cioe­co­nomic or­der.

In­deed, when con­cerns about in­fla­tion and the fed­eral deficit be­came wide­spread only a few years af­ter the ini­ti­a­tion of the New Deal pro­grammes, the Roo­sevelt ad­min­is­tra­tion de­cided in 1937 to cut back on its eco­nomic stim­u­lus, which caused the US econ­omy to fall back into re­ces­sion.

We need a new eco­nomic sys­tem Un­less we are will­ing to ac­cept so­cial dis­in­te­gra­tion, in­creased con­flict and even wars as ir­re­versible pro­cesses, and stand idly by while global warm­ing caused by the logic of a fos­sil fuel-based econ­omy de­stroys the planet, the ex­ist­ing sys­tem of ne­olib­eral transna­tional cor­po­rate cap­i­tal­ism needs to be re­placed by an eco­nomic or­der that is aligned with hu­man in­ter­ests and sus­tain­able and bal­anced growth.

In ac­tual prac­ti­cal terms, this means mak­ing a great shift away from the pro­cesses of con­stant cap­i­tal ac­cu­mu­la­tion, pos­ses­sive in­di­vid­u­al­ism and eco­nomic glo- bal­i­sa­tion.

It also means putting an end to the de­struc­tive prac­tices of Western in­dus­trial ex­trac­tive tech­nolo­gies and be re­spect­ful of the nat­u­ral re­sources that sus­tain life.

Eco­nomic glob­al­i­sa­tion, which lies at the heart of the cur­rent eco­nomic sys­tem, is pro­mot­ing a mono­cul­ture econ­omy, and has dev­as­tat­ing ef­fects for the well­be­ing of most com­mu­ni­ties in the global South and the en­vi­ron­ment alike.

Putting a halt to the cur­rent dy­nam­ics and con­tra­dic­tion of eco­nomic glob­al­i­sa­tion does not mean elim­i­nat­ing in­ter­na­tional trade. But what it does re­quire is do­ing away with the ne­olib­eral trade treaties, which have given global cor­po­ra­tions and banks such im­mense wealth and power that they can pro­mote their own in­ter­ests with­out con­cern for democ­racy, work­ers’ rights and sus­tain­abil­ity.

As such, we need to re­think terms such as de­vel­op­ment, growth and progress.

In this case, a rev­o­lu­tion in con­scious­ness is manda­tory in or­der for a great shift to oc­cur in the way the global econ­omy works and the fu­ture we want.

Cap­i­tal­ism is a rather new, his­tor­i­cal eco­nomic sys­tem that be­longs to a cer­tain era of hu­man­ity, which means that there is noth­ing to sug­gest that it will be around for ever.

The new eco­nomic sys­tem should be based on lo­calised forms of in­dus­try, fi­nance, par­tic­i­pa­tory democ­racy, and the use of tech­nolo­gies which are con­gru­ent with com­mu­nity needs for the pro­duc­tion and dis­tri­bu­tion of food in or­der to erad­i­cate poverty and hunger and pro­vide sus­tain­able liveli­hoods.

This rev­o­lu­tion in con­scious­ness is al­ready un­der way and it has been em­braced by mil­lions of peo­ple through­out the de­vel­oped and de­vel­op­ing world, par­tic­u­larly among ur­ban youth, and could soon be­come the new­est po­lit­i­cal and so­cial move­ment to emerge as the old sys­tem is dy­ing and a new one is strug­gling to be born.

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