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epilogue: the econoMic crisis
and the like). as has been well-documented, this ideological
philosophy dominated the decision-making of governments and key
agencies such as the WTo, imf and World Bank. further,
desperation to save the unfettered market system still marks these
agencies’ interventions. indeed, the authority of the imf was
bolstered by a quadrupling of its funding at the april 2009 G-20
meeting. in supporting fiscal stimulus and government bailout for
both financial and industrial capital (disproportionately favouring the
former), the imf has indicated that countries will need to restructure
their long-term expenditures in order to meet this burden. Thus, the
imf has indicated that countries like australia will need to examine
the generosity of their welfare regimes while, for poor debtor
countries, imf loans will entail planned shrinkages in government
expenditure and wage cuts (hudson, 2009). in essence, interventions
are not addressing income and wealth inequalities and ordinary
working people and taxpayers are being asked to pay the price for
decades of corporate excess and unfettered markets.
a point lost in the current debate around the economic crisis is
that Keynesianism did not simply entail fiscal management
(something that has now been re-embraced) but also critical
redistributive mechanisms such as full employment, government
services aimed at protecting the poor, progressive tax regimes and
the like. in sum, however imperfectly, Keynesianism sought to
manipulate social inequality to some degree in order to address the
profound economic instabilities that arose from an unregulated
market system and from capitalism in general. The newer regime,
on the other hand, concentrated wealth in the hands of a few, while
income levels for workers often stagnated and, in wealthy countries
at least, high levels of personal debt were increasingly used to
sustain consumption (something markedly different than the
situation during the Great Depression and which is likely to
exacerbate the effects of the present crisis). furthermore, current
efforts at fiscal stimulus largely ignore the need for redistributive
mechanisms. pumping money into banks that still refuse to lend,
since they cannot trust other financial institutions (why would they,
as more evidence of ever-greater debt burdens unfolds), or into the
automobile and other industries in order to save jobs (which it won’t,
since burgeoning wealth inequality and income and job insecurity
imply that consumption will continue to contract) are responses that
will not resolve the problem. indeed, the latter was tried and failed
during the Great Depression. more recently, the same strategy has
been tried in Japan and failed. as was already noted, thus far the
vast majority of interventions assist capital and ask the poor to pay
official opening of the new financial
center. warshaw (poland).
source: © ilo/MFa (no date)
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