23 January 2010

The Tripartite Hegemony

It is clear that the problems facing the world economy have their origin in the financial system and that the curbs on bank powers proposed by Obama, significant as they are in a country where financial interests are so powerful, are insufficient and misdirected. What we need is not a behaviour management programme but a democratised system that serves the interests of all the world's people. Since the problems of the post-war period have resulted from too much US power - especially in global finance - it is unlikely that a solution is going to emerge from the President of the United States.

This is made heart-warmingly clear in a lucid and congent book that I have been enjoying recently: Unholy Trinity: The IMF, World Bank and WTO by Richard Peet. Like others I have been waffling on about the need for a new Bretton Woods without feeling entirely confident about the workings of the system that has proved itself to be so wrong. Professor Peet has been spending his time cutting through the verbiage and obfuscation of the financiers and has now presented his understanding in this excellent book.

From the travails of the 1930s that led to the conviction that politicians must take control of finance, through the weary Bretton Woods negotiations and the even wearier surrender by the war-ravaged European to US domination, Peet maps out the path we trod to arrive at a system where capital is supreme as never before - in spite of its clearly demonstrated incompetence and destructiveness. For those with a taste for abstract concepts like securitization and who thirst to fully understand the workings of a special drawing right, I can promise that you too will be satisfied by the thorough research and clarity of writing. Peet has no interest in demonstrating how smart he has been to work all of this out: his intention is to help us all to follow his lead so that our proposals for change will be better informed and more powerful as a result.

As with many books that arise from the left, this one is weak on prescriptions. But perhaps that itself is appropriate. We are clear about the need for the reclaiming of power over capital for the world's citizens, and the need for a new international negotiation to establish a world economic framework based on the twin principles of sustainability and equity. Beyond this we surely need the humility to listen to those of the world's people who are not responsible for the spectacular mess the smart guys in the west have gotten us into.

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