A better world is possible - Global Commons Institute

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Copyright Bruce Nixon 2010. All rights reserved. This electronic copy is provided free for personal, non-commercial use only. www.brucenixon.com The chief features of the Bretton Woods system were an obligation for each country to adopt a monetary policy that maintained the exchange rate of its currency within a fixed value—plus or minus one percent—in terms of gold and the ability of the IMF to bridge temporary imbalances of payments. In the face of increasing financial strain, the system collapsed in 1971, after the United States unilaterally terminated convertibility of dollars to gold. This action caused considerable financial stress in the world economy and created the unique situation whereby the United States dollar became the "reserve currency" for the 44 states which had signed the agreement. Present global institutions such as the World Trade Organisation, World Bank and International Monetary Fund, are unrepresentative and dominated by the interests of big business and rich countries. Attempts to reform these institutions, make them properly representative of all nations, change their underlying rigid free market, free trade ideologies and make their policies fairer are strongly resisted. Similarly, five permanent members, US, UK, France, Russia, China, plus ten non-permanent members, constitute the UN Security Council. Also EU policies are unfair to poor countries. In The Age of Consent, George Monbiot put forward comprehensive proposals for the necessary reforms and how to bring them about. These include a World Parliament, a Fair Trade Organisation to replace the WTO to enable poor nations to catch up with rich ones, regulation of the largest corporations, a new international security system to replace the Security Council, an updated version of the proposed International Clearing Union to stabilise capital flight, currency fluctuations, indebtedness and trade balances. New Economics Foundation’s Centre for the Future Economy: - Proposals for a future global economy. Comprehensive proposals were put forward in From Old Economics to New Economics: Radical Reform for a Sustainable Future, November 2007 by Stephen Spratt and Stewart Wallis (NEF), also available on my website. The following is an edited version: We need an economy that serves people and planet. The need for a radical transformation of the global economy to tackle poverty has been recognised for over a decade. Now widespread awareness of climate change, peak oil, growing shortages and threats to the eco-system gives the need for radical action far greater urgency. We need a shift from an economy that consumes us to one that serves people and planet. It needs to be, as Adam Smith would have agreed, a “moral economy” based on moral principles. These principles would include social justice, social and economic rights for all, valuing the feminine and the “caring economy”, sustainable development for planetary systems and future generations and the fostering of diversity and systemic resilience at all levels. The goal would be to increase individual and collective wellbeing. The economic system has become the problem. It is not just that it is “not fit for purpose”; it causes serious and potentially fatal harm to all life on the planet. The assumptions underlying the current system are false: We can keep growing the global economy indefinitely More money or wealth equals more happiness Markets are equitable – clearly not the case when there are power differentials. As power differentials increase markets become even more inequitable. 126
Copyright Bruce Nixon 2010. All rights reserved. This electronic copy is provided free for personal, non-commercial use only. www.brucenixon.com A sustainable world needs to be based upon “development which meets the needs of the present without compromising the ability of future generations to meet their own needs” together with economic justice and non-violence. It also requires recognition of the informal economy and unpaid work to which women make the major contribution. A sustainable and just global economy Such an economy would be designed to achieve these ends: At a global level we halt and reverse our carbon emissions. We safeguard our eco-systems; give poor countries the room to develop in their own unique way, enable those in rich countries to scale back and live more sustainable and less materialistic lives. This is an opportunity. Despite the fact that our wealth has doubled since the 1970s, we are no happier. Trade reflects the environmental costs of production and transportation. Businesses bear the full environmental costs of their activities. Sustainable and progressive corporate behaviour is linked to the “bottom line” and becomes the mainstream idea driving innovation and progress. The financial system is re-designed to support sustainable and progressive business activity; it serves the real economy of the future with finance flowing into those activities society most needs and values. Institutions foster cooperation that would lead to the best outcomes. Space is opened up for people to participate to a much greater extent in local and national life. Decisions are taken at the most appropriate level; this is as locally as possible in most instances. Local communities gain democratic control over their public services and also the economic development of their areas. Institutional reform is essential to the creation of a sustainable, just and non-violent world economy in which people’s best instincts are fostered and allowed to blossom rather than being constrained and shaped by commercial imperatives. Greater personal, local and national autonomy and self-sufficiency are most likely to create the resilience needed in a world our economy. Similarly, by decentralising democracy, people need to be encouraged to take personal responsibility for their lives and engage in their local communities. Behaviour that increases well-being is encouraged; other behaviour discouraged. Institutions powerfully influence attitudes and behaviour. We need to create institutions that encourage people’s better instincts such as cooperation and mutual respect, rather than competition and “survival of the fittest” mentalities. International trade and finance At present, trade in goods and services and financial flows are tilted heavily in favour of rich countries’ interests as opposed to the developing world. Trade injustice is due to: Major barriers to developing country exports to developed countries Subsidisation of developed country agricultural products lowering world prices and damaging local country markets Developed countries forcing developing countries to open their markets, making them more open than their own. Imposing agreements on investment and services that favour rich corporations and countries. The dominance of major international companies in many markets and the lack of competition laws to constrain their behaviour. 127
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