As the global economy hurtles toward Great Recession II, the earth hurtles toward climate catastrophe. Both represent the results of a neoliberal deregulation that has left humanity no means to shape our economies to serve human needs — not even the need for economic and environmental survival.
How global movements respond to these intertwined environmental and economic crises will be key to our common survival. The politics will surely be complicated. A case in point is an article in today’s New York Times about the United Steelworkers union’s WTO complaint against China for providing “illegal clean energy subsidies” to domestic solar, wind and other green industries.
To promote international dialogue on these questions, we thought it might be useful to post a recent paper, entitled “Globalization, Neoliberalism and Climate Change”, which was prepared by GLS at the invitation of Professor Liu Cheng of Shanghai Normal University for an international conference this April on “Global Economic Recession vs. Deregulation” jointly organized by the Peking University Law School and the Shanghai Normal University Faculty of Law and Politics and supported by the ILO Beijing Office. The paper stresses the interest of workers around the world in cooperating to create an alternative to neoliberalism based on making the transition to a green economy.
Globalization, Neoliberalism, and Climate Change: Toward a New Regulatory Regime
For thirty years, global and national economies have been guided by policies of neoliberal deregulation, often known as the “Washington Consensus.” Neoliberalism has been disastrous for workers in most countries, pitting workers against each other in a race to the bottom and making it all but impossible to protect working class interests. There is now a growing consensus that the Washington Consensus has been a failure.
There is also a growing global recognition that we are in the midst of an unprecedented climate crisis. Ready or not, that crisis is affecting every nation, every locality, and every worker. Its effects are already serious, and unless decisive global action is taken to counter it, they will soon be catastrophic. Neoliberal deregulation, by dismantling the means for public steering of society to meet social needs, has also made it nearly impossible to correct global climate crisis. Read the rest of this entry »
The G-20 summit convening in London on April 2 is preparing to
create a quarter trillion dollars of brand new stimulus money to help
poor countries battle the global recession.
World leaders plan to
use a little-known form of global currency to pay the freight, a
currency known technically as "Special Drawing Rights" (SDRs) but often
referred to as "paper gold." It’s a currency that can be issued by the
International Monetary Fund (IMF), and the Telegraph has reported that the U.S. government is keen on the idea.
figures in the U.S. Treasury have been encouraging the Fund to issue
hundreds of billions of dollars worth [of SDRs] to prevent the
recession from turning into a global depression.
leaders at the G-20 summit can create "paper gold" to jump-start the
global economy, they can also turn it in a green direction to
jump-start protection of the global climate.
They should put much
of paper gold stimulus under discussion into an international fund, to
help developing countries pay for climate protection. Such an action
would remove the greatest stumbling block in the way of international
climate action — the lack of financing to pay for energy conservation,
technology transfer, adaptation, forest conservation, clean energy, and
research and development. It would allow negotiators to arrive in
Copenhagen for climate talks at the end of the year with the finances
in place to negotiate and sign a global deal.
financing, the chances of success in Copenhagen are slim. Yves De Boer,
the UN's climate chief, left no doubt about that in comments he made this week
criticizing EU finance ministers for putting conditions on financial
help for developing countries, contrary to promises made in Bali in
I think without clarity on finance from industrialized countries there will be no commitment from developing countries.
gold" offers a way out of this stalemate — a way to mobilize resources
without either taxing or borrowing. That’s why G-20 leaders are
proposing to issue a quarter trillion dollars worth of new SDRs – and
why paper gold can play a crucial role in protecting the climate, too.
that would fight both global warming and global economic meltdown
simultaneously are being called a "Green New Deal." At the climate
talks in Poznan last December, UN Secretary-General Ban Ki-moon called
a "Global Green New Deal" the best chance for securing a climate
agreement in Copenhagen in late 2009. And in a February op-ed in the Financial Times, Ban together with Al Gore wrote,
we need is both stimulus and long-term investments that accomplish two
objectives simultaneously with one global economic policy response — a
policy that addresses our urgent and immediate economic and social
needs and that launches a new green global economy.
World leaders convening at the G-20 have the opportunity to do just that.
The SDR Backstory
normally set aside reserves, most often in gold and U.S. Treasury
bills, as insurance to protect their currencies against speculation,
runs, and other forms of economic adversity. If a country’s currency
starts to plummet in value, the government can use the reserves to buy
back its own currency and stabilize it.
In the early 1930s, as global unemployment tripled in two years and the world plunged into the Great Depression, the world’s labor movements developed a program for fighting the global crisis through international public works. It’s a little-known historical might-have-been that could have helped halt the Great Depression, the rise of Adolph Hitler, and the Second World War. And, as the efforts of world leaders to address today’s “Great Recession” threaten to break down in nationalist rivalry and petty political bickering, it bears lessons – and perhaps an alternative vision – for today.
Workers and organized labor have historically advocated government public works as a solution to unemployment. Not only would they provide jobs and income for those directly employed, but they would raise overall purchasing power, thereby creating demand for the products of other workers and creating a virtuous circle of economic growth. In the context of swelling unemployment in the early Depression, discussion of national public works programs developed in many countries.
The proposal for international public works originated with General German Trade Union Alliance (ADGB), which included most of Germany’s trade unions and represented the great majority of its workers. The plan won the support first of the German union alliance, then of unions around the world, and finally of the League of Nations’ International Labor Organization.
The plan was worked out by the head of the Alliance’s statistical department, W.S. Woytinsky. Woytinsky was a Russian émigré who had been president of the St. Petersburg Council of the Unemployed during the 1905 revolution and had organized mass action to force the city to provide public works employment. Observing Germany’s combination of spiraling deflation and spiraling unemployment in the early 1930s, he came up with the idea of using credit expansion to finance massive public works.
Taking a cue from recent League of Nations policy proposals, Woytinsky proposed an international agreement that would allow the lowering the gold reserve requirements for national currencies. That would let central banks create new money that could finance international public works and thereby create the purchasing power needed to reflate the economy.
In a June, 1931, article, Woytinsky proposed an “Action Program for Reviving the Economy.” It called for the labor movement to “assume the role of conveyor of the idea of an activist world economic policy.” It was up to the labor movement to “force the state and all public institutions to implement measures to revive the economy.”
Labor’s policy “must be a global economic policy. All nations are suffering because the world economy is sick, and therefore they must all concentrate their forces upon joint action to overcome the worldwide crisis.” The international agreement would provide an alternative to the rise of economic nationalism, supporting “tariff reductions and European economic unification” as well as “internationalization of wage policy and social policy.” The program would also support workers’ fight for higher wages, shorter hours, social rights, and regulation of business.