Can the G-20 Summit Solve the Problems of
the Capitalist Crisis?
The leaders of the G-20 countries – the
main industrialized and developing economies – met in Washington two weeks ago
in an attempt to regain control of international financial markets and to
establish new rules for international trade and finance. Following the meetings
it was announced that the leaders had reached a consensus on lessening the
impact of the crisis by running deficits, as well as on the necessity to take
measures to prevent such a thing from ever happening again. Since many of the
G-20 countries, most notably the U.S., were already running deficits and
preventative measures are always vowed after serious financial declines, it is
unclear how the summit is going to have any affect on the severity or duration
of this crisis.
Some have referred to the meeting as the
beginning of a new BrettonWoods arrangement which
stabilized the international capitalist world in the post-Second World War
period. However, the circumstances then and now could not possibly be more
different, as will the outcome.
The Bretton
Woods meetings took place in the middle of 1944 as the Second World War was
drawing to a close. The main capitalist economies, with the notable exception
of the U.S., were in shambles and were facing a serious threat of revolution
and socialism. The United States had emerged as the sole capitalist superpower
and every capitalist government in the world was eager to come under its
protection and hegemony. Furthermore, the period of capitalist crisis which
began in 1929 had come to an end, largely due to the enormous destruction of
capital during the war, and a period of unprecedented capitalist expansion was
beginning. The productive and consumptive power of the U.S. economy and the
resulting strength of the U.S. dollar were the key ingredients in that
expansion. Even so, it took almost two years of negotiations for the big powers
to reach an agreement.
The G-20 summit, on the other hand,
comes at the beginning of an economic crisis of unprecedented proportions. It
comes at a time when the U.S. economy is in severe decline and the U.S. dollar
is also expected to drop in the coming months. There is no immediate threat of
revolution and socialism and the major capitalist economies are no longer
looking to the U.S. for protection. They are also challenging U.S. hegemony in
international financial affairs. The European Union, led by France and Germany,
is making a bid for the Euro to replace the U.S. dollar as the main instrument
of international commerce. China, India and Brazil are demanding a greater say
in regulating international finance, while Saudi Arabia, by dint of providing
most of the capital for the bailout of the Western financial institutions, has
also emerged as a major player. Furthermore, many of the G-20 leaders have
already blamed the U.S. for creating the current crisis and have indicated that
they will not accept a U.S. dictated “solution”.
Talk about “solving” the current crisis
and adopting rules to ensure that such a crisis does not occur again is window
dressing to fool the people. That is not what the G-20 summit is really about.
None of the G-20 leaders seriously believes that capitalist crises can be
prevented or that capitalist greed can be “regulated”. Rather, the talks are
about how to cope with the current crisis in such a way as to block the working
people and the oppressed from seeking solutions outside of the capitalist
system. Yet another aspect to these talks is to work out which capitalists will
benefit the most from the current crisis and which will lose.
The Americans and Europeans are both
talking about tighter controls over the smaller and weaker economies by the
main capitalist countries, In other words, they are talking about further
strengthening the neo-liberal policies which have bled those economies during
the past 25 years and which have resulted in the transfer of enormous
quantities of wealth into the hands of the biggest monopoly capitalist groups
in North America, Europe and Japan. Those who created the current crisis are
demanding that the world’s people pay for it. However, they have sharp
differences over which monopoly capitalists will benefit the most from this
increased exploitation of the world’s poor. The U.S. does not want to see any
substantial changes to the current arrangement which allows it to dictate to
everyone else. On the other hand, the Europeans want to replace the U.S. at the
centre of the capitalist world. Whoever has the main say in these matters and
whichever currency becomes the currency of international trade translates into
huge extra profits for those monopoly capitalists. Some experts have estimated
that the U.S. has enjoyed a 10 percent advantage due to its currency being the
medium of international trade. U.S. corporations have also enjoyed an advantage
over their competitors as a result of American control over the International
Monetary Fund (IMF) and the World Bank.
It is, therefore, inconceivable that any
agreement can possibly come out of the G-20 summit. The U.S. is determined to
preserve its position of hegemony and has the military power to threaten any
country which represents a serious challenge to its economic dominance.
However, it is essentially bankrupt and incapable of defeating the people of
Iraq and Afghanistan. It has also lost control of international natural gas
supplies to Russia and is being challenged by Russia for military domination of
Europe and Central Asia. Therefore, it is not in any position to dictate a
“solution” to the Europeans, as it was in 1944. For their part, the Europeans
are not strong enough economically or militarily to push their agenda through
and the Chinese and Indians have their own problems to deal with as their
export markets dry up. This has created a situation in which no bloc of capital
can dictate to the others and no bloc is willing to submit to the others. This
is not a situation which lends itself to agreement, but rather one which lends
itself to conflict and war.