The G7 passes the
buck to the G20
• Impossible to certify the
end of capitalism’s global crisis
Joaquín Rivery Tur
THEY may be the 20 countries with the most
economic weight in the world, but they are not
wizards, nor are their computers fortune-tellers.
Nobody on the planet can sign the death certificate
of capitalism’s global crisis. What just took place
in Pittsburgh, in the United States, is best
described as buck passing.
The Group of Eight (G8: United States, Canada,
Japan, Germany, Britain, France and Italy plus
Russia) was unable to deal with the global crisis,
much less with controlling the tangled neoliberal
financial web of the capitalist system, and had no
choice but to pass it on to the Group of 20,
possibly to dilute the responsibility of the world’s
most developed countries for the economic turmoil
into which the planet has sunk, and to look to
another 12 nations to share the blame.
In reality, the Pittsburgh Summit represents the
total failure of the richest nations in their desire
to rule and exploit a world that is totally
ungovernable for two reasons; one, the social
movements are increasingly up in arms over the
generalized injustice and, two; the large financial
corporations have rooted their power within the
highest layers of officials, so as to have free
reign for their profit ambitions and, therefore,
they cannot be controlled. Governments have always
been accomplices.
According to the news agencies, the leaders of
the G20 — within which the seven richest nations
have greater ability to exert pressure, more
influence and the power to coerce — agreed that the
new group is to be transformed into "a principal
forum for international economic cooperation."
That is an ambiguous sentence. It assumes that
the fundamental purpose of the meeting was to
collectively attain greater control over financial
corporations in order to avert – as far as possible
– the risks of a crisis as profound as the one
humanity is currently experiencing. In fact, in
order to do so, the seven richest countries
demonstrated their will to increase by at least 5%
the voting power of emerging countries — such as
China, India, Brazil and others — within the
International Monetary Fund (IMF), as if that could
actually change the relationship of forces, and
above all, as if the move signifies a major change
in the international financial architecture, which
the underdeveloped countries have been demanding.
The summit called for stricter regulations on
banking activities and limiting bonuses paid to
banking/financing executives, who had the power to
raise their own bonuses by millions, even in cases
where their companies were showing losses that
resulted in bankruptcy.
The problem is that a 5% increase in voting power
for emerging countries does not mean, for example,
that the United States will lose its veto power in
the IMF or the World Bank. Instead, it retains a
strong lever of pressure, mostly on the Third World,
which desperately needs help and investments to pull
it out of underdevelopment, but without those
nations becoming part of the crazy model of U.S.
consumption, which is leading the world to
environmental destruction due to climate change and
the depredation of nature.
The measures approved in Pittsburgh are an
attempt to avoid the phenomena that led to the
formation of financial bubbles with a tremendous
capacity for explosion and the creation of new
crises, but the most serious problem will be how to
really control the financial giants, and how to
dictate mandatory regulations to govern their
fraudulent operations. Is that possible in unbridled
capitalism?
It is very difficult not to hold the IMF
responsible in good part for what is happening
internationally, because its experts should have
realized that the financial bubble was about to
burst.
On top of the repeated affirmations about how
everybody is supposedly emerging from the crisis, in
a contradictory fashion, the G20 agreed not to
withdraw government aid packages to the major
corporations because of a risk of another downturn.
Even Chinese President Hu Jintao stated that the
alleged recovery "is not as yet solid," and he wasn’t
exactly referring to his own country, where not even
the crisis has been able to deter its booming
economic growth.
Apparently, nobody has learned anything. The G8 (which
still exists) has incorporated another group of
countries into its vicissitudes, but even that is
not a solution, because it is a question of
agreements within capitalist globalization, whose
neoliberal character is incompatible with government
controls. Nevertheless, protectionism is still
growing.
The big banks want deregulation, absolute freedom
to cheat and take risks in order to satisfy the
adrenaline needs produced by financial speculators’
ambition for profits.
With respect to the famous bail-out, in early
September, the Federal Deposit Insurance Corporation
in Washington revealed that in the second quarter,
banks with capitalization and bad loan problems (impossible
to collect) totaled 416; in other words, 111 more
than in the previous period. A very befogged
atmosphere.
The IMF put the frosting on the cake of the
crisis a few days ago, when it announced that the
planet-wide financial hurricane will affect economic
growth for at least seven years, and suggested — now!
— the implementation of structural reforms. The
result of the crisis forecast by everybody is less
employment, less growth, less investment and less
productivity. The problem is not one of phenomenon,
but of essence. It is called capitalism, no matter
how many times you spin the wheel.