Global economics

Thinking aloud: we need all good ideas to combat our double economic crisis: the increasing misery crisis at the bottom, now also in rich countries in the West, and the increasing system crisis, also striking those countries; but both are all over. So the following are notes for an epilogue to a forthcoming book, Peace Economics, about how to overcome the flagrant structural violence in the misery crisis, and the threat of direct violence, not only terrorism and state terrorism, but a major world war to get the West out of the system – like the Second World War lifted them out of the Great Depression.

We are facing six conflicts, four current, one past and one future are shaping our present reality. Conflict is a relation of incompatibility between parties; not an attribute of one party. It spells danger of violence and opportunity to create new realities. Thus, to understand the shoa the narratives of unspeakable German atrocity and infinite Jewish suffering are indispensable. But so are the narratives of German-Jewish relations, Germans to others, Jews to others. Failure to do so blocks rationality: if conflict is in the relation, then the solution is in a new relation. This is not blaming the victim. What matters most is changing the relation. Are we able?

/10/jonathanpower2.jpg”> We all know the clichés: Is the glass half full or half empty? Is the light in the tunnel the train coming towards you? But this time the new World Bank figures for the decrease in Third World poverty are absolutely clear. The glass is filling up. The train is not going to crash into us. The doomsayers from Malthus in 1798 to Ehrlich’s “The Population Bomb” to the Club of Rome to some of the activists at World Trade meetings and to the UN’s Food and Agriculture Organisation which in a quite recent mistake it now admits to, reported that the number of hungry people soared from 875 million in 2005 to one billion in 2009, have been proved to be wrong.

US politics has for a long time, since the 1970s, been the politics of inequality. Not only have the indicators of inequality, like the ratio in average income between the top and the bottom 20%, or the salary ratio between a CEO and the average employee in a corporation, increased (from 50 to 1100). But the top 10 or 1 or 0.1 percent, has acquired wealth so far unheard of. And the bottom 90, or 99 or 99.1 percent see the average family income in real terms decreasing; for the lowest down below the poverty line, way down into misery like worrying about where the next meal comes from (from the soup kitchen for very many).

This post is a revised version of a text that appeared a few days ago in Al Jazeera English, and seeks to use the selection of an American as the new President of the World Bank both to expose the fraudulent claim of a merit-based selection process and to insist indirectly that the future peace and justice of the world requires a more democratic and legitimate structure of global governance that reflects the post-colonial rise of the non-West, a rise that is not reflected in antiquated structures that persist despite changed conditions. ****************************************** The unsurprising announcement that the Board of the World Bank had voted in favor of the American candidate, Jim Yong Kim, presents an opportune moment to reflect upon the soft power structures that shape global public policy in the early 21st Century inside the UN system and beyond. It is necessary to draw a distinction between Mr....

/10/jonathanpower2.jpg”> What have these eleven countries in common – Finland, Norway, Canada, Japan, Poland, Turkey, Australia and, to a lesser extent, the US, Russia, Sweden and Denmark? They have not put themselves through the economic purge and their economies are growing at a reasonable rate. Not for them savage cuts in social services and public investment combined with lower wages. They have kept their economies purring. They are pro-Keynesian – a policy attributed to John Maynard Keynes, the most brilliant economist of the last century, in an age when there were many brilliant economists, both of the left, the middle and the right.

From Madrid, Universidad Nacional de Educación a Distancia-UNED, Foro Los Nuevos Problemas Sociales Here is one of the hidden faces of the economic crisis: (¶C/¶t) + (¶C/¶S)rS + (1/2)(¶2C/¶S2)q2S2 = rC The famous Black-Scholes equation to find the “correct price” for financial derivatives. Based on partial derivatives over time, this is classical calculus for continuous change; useful within a zone of stability, but not at the edge of that zone, the tipping points explored in René Thom’s catastrophe theory years earlier. Black-Scholes is intellectually like calculating increasing speed of an accelerating car heading for a wall or an abyss. But, with warnings, no 1997 “Nobel Prize in Economics” (actually a Swedish State Bank’s prize honoring Alfred Nobel)? And one year later their company “Long Term Capital Management” had lost $100 billion and collapsed. The trade in derivatives is now at $1 quadrillion a year (15 zeros), ten times the industrial...

/10/jonathanpower2.jpg”> Approximately half the people of Africa own a mobile phone. In many African countries phone technology is ahead of Europe and North America. Money can be transferred from the city to an upcountry village. Bills can be paid. In Ghana farmers can receive text messages reporting the price of yams and corn two towns away and thus find the best market without a middleman. In Kenya residents of small villages can receive texts to say when the perambulating doctor will next be coming. In parts of West Africa nurses are storing patients’ data on phones. It may be more difficult to build up fast internet penetration on pcs but in some countries 40% of mobile owners are using phones for email and the internet. The IMF says that the telecommunication sector is adding 2% to Nigeria’s already handsome annual economic growth. Black Africa has come late to the party...

/10/jonathanpower2.jpg”> Did you know that Nigeria, the most populated country in black Africa, is now one of the top five fastest growing big economies in the world? (The others are China, India, Turkey and Argentina.) The image of Nigeria is of poverty, crime, corruption, election fiddling and maladministration. Africa, I find from my family and friends, is still a continent where death stalks – war, starving children and impoverished refugees. But the tale of progress is unsung. This wretchedness is the only news that penetrates. Only one western newspaper, the Financial Times, has a full time correspondent in Nigeria where one third of all the black people in the world live. The rest get their news from the fickle eye of television and the rest of the newspaper pack.

 From Kyoto, Japan: A grey, cold Sunday morning, fitting the sad theme. The Japan Times, an excellent middle wing newspaper, came in the middle of the night, with four typical stories, for a starter. We approach the 3/11 anniversary. The earthquake struck on 11 March 2011, followed by the tsunami and the near meltdown of Fukushima No. 1 nuke plant. On 11 March 2004, terrorism struck the Atocha train station in Madrid. A bad date; may inspire somebody. We read: “Worker at No. 1 nuke plant died from ‘overwork’. He was dispatched by a subcontractor, a construction firm based in Shizuoka, and started working at Fukushima No. 1 on May 13. On his first day he engaged in piping and other work in a waste disposal facility at the complex, but complained of not feeling well the following morning. He was immediately taken to a hospital and died shortly afterwards–radiation...

By David R. Loy Buddhist Reflections on Occupy Wall Street In a Buddhist blog about Occupy Wall Street, Michael Stone quotes the philosopher Slavoj Žižek, who spoke to the New York Occupiers at Zuccotti Park on October 9, 2011: “They tell you we are dreamers. The true dreamers are those who think things can go on indefinitely the way they are. We are not dreamers. We are awakening from a dream which is turning into a nightmare. We are not destroying anything. We are only witnessing how the system is destroying itself. We all know the classic scenes from cartoons. The cat reaches a precipice. But it goes on walking. Ignoring the fact that there is nothing beneath. Only when it looks down and notices it, it falls down. This is what we are doing here. We are telling the guys there on Wall Street – Hey, look down!” As...

What are the three credit rating agencies, Standard & Poor’s, Moody’s, and Fitch – 95 percent of the rating “industry” – about? Not very transparent, yet “Standard & Poor’s: silent but deadly” (El País, 16 Jan 2012), stimulates some reflections. The agencies are US, which goes well with the tendency of the USA to sit in judgment of other countries. It also goes well with something more dangerous: the tendency of other countries to take that judgment seriously. The new prime minister of Spain said he needed no lecturing (from the agencies) on the Spanish economy; but the downgrading shook Spain. Why does Europe not have its own agencies, rating all 50 US states, for instance, like US agencies rate EU members?