A UN Economic Security Council

EDITORIAL, 22 Dec 2008

#41 | Johan Galtung

The world needs a UN Economic Security Council to intervene against massive economic crimes against humanity. Why? How?

To produce, we are told, one needs nature (“land”), workers (“labor”) and capital (adding technology and management). Any healthy economic system based on these factors will see to it that quantity and quality of the stock of nature, workers and capital is not only preserved but also strengthened. Capitalism, the name informs us, seems to privilege capital. So, what happens?

How capitalism treats nature we know: torturing animals, wasting and depleting, polluting including thermically and toxically, preserving some nature for profitable tourism.

How capitalism treats workers we also know: as dispensable, hire and fire “flexibility”. Marx was wrong: he believed there was a floor, that the wages would slip downwards toward minimum reproduction costs for working class families. Today’s hyper-capitalists could not care less: automation takes care of that, and if they die off, being born troublemakers, probably also terrorists, so much the better. Marx was too merciful.

How capitalism usually treats capital we know, transporting wealth upwards. There are many methods. One is for those who provide capital to pocket the value added in the production process in the real economy, not sharing it with the workers, nor with nature. Another is to make those without capital, producers and/or consumers, dependent on “credit” (“”, the term connotes trust) with the interest accruing to those higher up who have that commodity. The credit is then invested in the real economy for production, or to buy goods or services for consumption. And a third is to buy and sell finance products based on the first two approaches, in the pure finance economy.

At the bottom of this increasing gap people die. At the top they speculate. The gap broadens. And it deepens.

Or so we thought. What the world now has learnt since the wake-up call–that Titanic, the Lehman Brothers going down and under 15 September 2008–is that hyper-capitalism is totally capable also of massive mistreatment of capital. “Products” glitter like super-novas and collapse, leaving behind dark holes in the economic universe. If this were only a financial economy game played by some addicts, maybe less problematic. But the real economy implications of a mistreated, dying finance economy in coma, artificially fed hotly printed $700 billion, with spin doctors issuing a stream of mainly misleading statements about “credit squeeze” (like a patient suffering a stroke or an infarct having “breathing problems”) are maximally serious.

Characteristically problems in the real economy, like the Big 3, are handled with much more scrutiny than the much bigger problems in the finance economy causing most of the real economy problems. There is one exception: Madoff. Will he be the fall guy for the others? Why is he selected, being responsible for only $50 billion? Because it was a more obvious fraud? How about sheer incompetence, not even being able to play the system so well as Madoff and his predecessors in several banks around the world for some time?  Are there others higher up who are well protected, and in that case by whom?

Using the term “hyper-capitalism” indicates that there may be a capitalism tamed, disciplined, working for the best of human beings and nature everywhere that is acceptable. Think of the damage a wild elephant can inflict on nature and humans. Think of the marvels of lifting and transporting and company that a trusted, nicely treated elephant can provide.

Clearly, the system is not capable of curing itself, and, hopefully some time will have to pass before we are once again told about the “discipline of the market”, the immune system of a healthy economic body. The immunity deficiency is only too obvious. The government enters, not to take from the rich to give to the poor, but US style “socialism”, to take from the poor (who sooner or later will have to suffer the consequences of all that printed money) to keep the rich alive. And in the meantime retirements funds are halved, or cut down to zero, with livelihood shrinking all over–and just wait, the old adage that bonds are more reliable than stocks may prove wrong.

Hyper-capitalism is self-eliminating. Warren Buffet talks about “weapons of massive financial destruction”. A-B-C for atomic-biological-chemical, E for environmental and F for financial? We are getting accustomed to strong global measures for A, B, C and E – time is coming to F. The fake UN institutions in Washington are not up to it, the statement about Iceland’s economic prospects being enviable by the IMF shortly before the collapse being a clear indication of the lack of intellectual capability of contemporary economism.

We need a true UN Economic Security Council to issue early warnings; not leaving that kind of task to the manipulators of a “free” market presumably steered only by its own laws, neither by conscious acts of omission, not by acts of commission.

We need an economic security council against massive economic crimes against humanity, not only like the Security Council against acts of direct violence, also called aggression, but against the structural, and direct, violence of the market.

We need an economic security council capable of intervening in the global financial market against unacceptable speculation.

This article originally appeared on Transcend Media Service (TMS) on 22 Dec 2008.

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