Change How the World Works? Yes, We Can

In The Timeslast week Hugo Rifkind threw down the gauntlet to
demonstrators protesting at the G20 summit to "formulate a coherent
argument" and "propose some sort of feasible alternative to the world
economy instead of just bitching about it and blowing your bloody whistles".

Humorous disciples of neo-liberalism too often delight in ridiculing critics
through caricature. So I welcome this opportunity to point out that we not
only offered cogent reasons why capital and trade liberalisation aggravate
global inequality, but predicted that they would prove destabilising as
well. We not only argued that stock market and property bubbles were no
substitutes for productive investment, but predicted that these bubbles
would pop, leaving wreckage in their wake. And we predicted that, whatever
one might say about markets in general, free-market finance and free-market
environmentalism were accidents waiting to happen.

I sympathise with Rifkind's lament that, because we could not predict the date
when a crisis would occur, it was impossible for him to be certain about our
warnings - but I have the same regrets for myself as well.

Yet Rifkind and others are right to ask what we want instead. Our answer is
simple: we want to empower people to protect themselves and the natural
environment from the damage caused by neo-liberal capitalism. But we also
want to replace the economics of competition and greed with the economics of
equitable co-operation so we are not forever fighting defensive battles to
mitigate environmental destruction and economic injustice, and so we need
not fear that a crisis such as this will happen again.

Moreover, we have "coherent arguments" and "feasible alternatives" about how
to do both.

Of course, if Rifkind asks a demonstrator clad in "hemp clothes and nasty
piercings" to articulate proposals, he is likely to be disappointed. What he
will hear is a primal scream of righteous outrage at a catastrophe that need
never have occurred. But visit the websites of any number of reputable,
progressive economic institutes, or read the publications of any number of
distinguished economists who dare to break from neo-liberal strictures -
including three recent Nobel prizewinners - and you will find many concrete
alternatives.

Step 1: Until capitalism is replaced, we want the tail to stop wagging
the dog. Finance should serve the real economy instead of the other way
around. If the financial sector improves the efficiency of the real economy,
it is helpful. But if it misdirects investment resources to where they are
less productive, it reduces production in the real economy by obstructing
the flow of credit altogether. Then it is failing to accomplish its only
social purpose. Jobs producing useful goods and services, and investments
which help us to produce what we need with less human toil and less strain
on the environment, are what count. Increases in the profit rates and stock
prices of financial corporations count for nothing when they fail to
correspond to real increases in productivity, as has too often been the case.

We have offered several positive alternatives to capital liberalisation and to
the governing structures and policies of the International Monetary Fund
(IMF) and the World Bank, such as capital controls and a Tobin tax to
protect smaller economies from volatile speculative flows. We have made
suggestions on how national governments can restore competent regulation of
their traditional financial sectors, and stressed the urgency of extending
regulation to cover new financial institutions which were allowed to grow
outside existing regulatory structures.

Unlike neo-liberals, who inexplicably are still in charge of managing the
response to the financial crisis that their policies created, we do not
persist in the Utopian illusion that toxic assets are really not toxic after
all. The problem is that the industry was permitted to dig itself into a
hole so deep that many financial institutions are now dead on arrival (DOA)
- and nobody knows how many enormous transfers of wealth from taxpayers to
their balance sheets would be required to make them solvent again.

The neo-liberal answer is for taxpayers to pay much more than the going market
price for as many toxic assets as the banks say they need to sell before
they feel that they can begin lending again. Whether the subsidy takes the
form of US Treasury purchases of toxic assets, as Secretary Paulson, the
former Treasury Secretary, proposed, or "private public partnerships" in
which the Federal Deposit Insurance Corporation and the Federal Reserve
provide free insurance against downside risk to induce private
participation, as Secretary Geithner, the current Treasury Secretary, has
proposed, the neo-liberal solution is the same: keep applying ever larger
doses of electric shock treatment to DOA patients even though there is no
sign that they will revive, and even though the generator has a limited
capacity and is needed for the rest of the hospital.

Instead of bailouts without limits which may fail to revive patients in any
case, we propose public takeovers of failed financial institutions. This can
be done through government purchases of a majority of shares at current
market prices, then appointing new managers to carry out new lending
policies. Or it can be done, as it has been countless times before, by
bankruptcy followed by sales of assets to healthy institutions. In either
case, the cost to the taxpayer would be far less than endless bailouts.In
either case, we know that credit would begin to flow again.

And if we could rid ourselves of the myth that the "wizards of finance" who
brought on this crisis are the only ones smart enough to decide on the
disposition of society's investment resources, and that they can choose
wisely only when working for private financial institutions that pay them
gargantuan bonuses, we might find ourselves with a financial sector that
begins to serve the social interest.

Instead of a financial sector intent on funnelling society's investment
resources into stock market and property bubbles, we might find ourselves
with a new financial system that channels savings where they are most needed
- into investments in renewable energy sources and energy conservation which
are needed to transform our fossil fuel-guzzling economy into a
carbon-neutral economy before we broil ourselves to death.

Step 2: We want a fiscal stimulus of sufficient size to stem the
recessionary slide into an even worse depression. Monetary policy in the
United States is already exhausted and German resistance needs to be broken
to finish driving interest rates down in Europe. But academic debates
between Keynesians and anti-Keynesians over whether fine tuning can be
accomplished through monetary policy alone are now moot. A broken financial
system means that monetary policy is no longer in play. With no new bubbles
on the horizon, only a massive global fiscal stimulus can stem the
recessionary slide that continues to accelerate. Obama did not get us a
stimulus nearly big enough, although the US is doing better than others on
this front than others. Republicans who now preach fiscal responsibility,
and those in Europe who foolishly echo their mindless braying, are worse
than Nero, whose legendary fiddling at least did not pour more paraffin on
Rome's fires.

Step 3: We want trickle-up economics, not trickle-down economics. We
want a dramatic redistribution of income and wealth that reverses the trend
of the past 30 years because it is fair, and also because it makes
capitalism less prone to crisis by providing a reliable source of demand for
businesses satisfying the needs of ordinary people.

We want a welfare system that is adequately funded and treats clients with
dignity and respect. We want highquality education and healthcare for all,
independent of one's financial means. And we want all this paid for by
progressive taxes on income and wealth. We know that this is perfectly
possible and can be achieved through well-tried policies. Only poor priorities
that stem from the power of wealthy elites to impose their will stand in the
way of achieving it.

But Rifkind wants to know if we have an alternative to capitalism, not just an
alternative to neo-liberal capitalism. Yes, we do.

Our slogan "a better world is possible" means that we reject the economics of
competition and greed as a human necessity and embrace the possibility of an
economics of equitable co-operation. These approaches to solving our
economic problems are fundamentally different. One way motivates people
through fear and greed and pretends that market competition can be relied on
to bend egotistical behaviour to serve the social interest, when too often
it does not. The other way organises people to arrange their own division of
labour and negotiate how to share the efficiency gains from having done so
equitably. This way motivates people to work at tasks that are not always
pleasant, and to consume less than they sometimes wish, because they agreed
to do so, secure in the knowledge that others are doing likewise. The
driving force behind our economic world is participation and fairness, no
longer fear and greed.

There is agreement among us that economic decisions should be made
democratically, not by an elite or left to market forces. We would also give
workers, consumers and localities more decision-making autonomy than
traditional approaches to economic planning have allowed.

But, not surprisingly, there are different ideas on how best to do this. Given
that before the demise of the communist economies most anti-capitalists
simply looked to those economies for answers, and that after the fall of the
Berlin wall many people stopped thinking about alternatives to capitalism
altogether, it is surprising how much progress has been made. Much work in
fleshing out visions into rigorous models, comparing similarities and
differences, and evaluating strengths and weaknesses of different procedures
to guide equitable co-operation has occurred already, and the pace of this
work will surely increase in light of renewed interest.

More importantly, ideas on how to engage in equitable co-operation have been
tested in various real-world experiments over the past few decades. Worker
participation and partial ownership in capitalist firms, producer and
consumer co-operatives, community-supported agriculture, participatory
budgeting (pioneered in Kerala, India, and Porto, Alegre, Brazil),
egalitarian and sustainable "intentional" communities, solidarity economics,
alternative currency systems and other developments have been stimulated by
networking at world and regional social forums, by friendly governments in
several Latin American countries , and now by an economic crisis that has
abandoned billions to fend for themselves. Most of this has gone unreported
in the mainstream media, partly because it does not fit neatly into the
framework for economic debate defined by the Cold War so badly, for so long.

Demonstrators on the streets of London this week, and the millions of us who
support them, think that neither authoritarian communism nor neol-beral
capitalism is the answer to our economic problems. The fall of the Berlin
wall in 1989 signaled the end of political support for authoritarian
planning - except among ideological diehards.

It is to be hoped that this economic crisis will reduce support for
neo-liberal capitalism to a coterie who are no longer influential. We look
forward to the day when the power of social movements that we have helped to
build forces the political establishment to consign neo-liberal capitalism
to the dustbin of history along with authoritarian communism. Meanwhile, we
are also busy building a new economics of equitable co-operation. Some of us
build in the realm of ideas, so that when a majoritarian movement is ready
it will have a wealth of thoroughly vetted ideas on how to facilitate
equitable co-operation to choose from.

Many more of us are creating living experiments in equitable co-operation to
meet needs that increasingly are going unaddressed by a moribund economic
system. Ridicule us if you like. Or you can pitch in and lend a hand.
Suggestions are always welcome, and there's more than enough work for
everyone.

The protesters

Felix Haslam, 22, student at Bristol University

We are trying to put as much pressure as possible on world leaders to do
whatever they can to alleviate the hideous amount of suffering and injustice
in the world. We need to reform society so that it doesn't cause climate
change, so that it doesn't harm the environment, so that it doesn't exploit
the Third World.

It should be possible to change social structures in a way that enables it to
be everyone's absolute priority to do all they can to fight these problems
around them.

We hope to achieve this through peaceful protest. We need every kind of
peaceful action - from getting petitions signed on the street to direct
action and protest.

This cause should be all over the media 24/7 - everyone should be devoted to
it. But at the moment our whole culture diverts people from the suffering in
the world and their responsibility to do something about it.

Marina Pepper, 41, Liberal Democrat town councillor for Telscombe, East
Sussex

It's quite simple. The system is wrong. We fence off resources, push people
off their land, then use those resources to make stuff that people don't
really need. To make people buy what they don't need, we lend them money. We
underwrite it all with their mortgages, then we need more money so we lend
again - and then the whole debt thing collapses. Because it's built on
property, people's houses are going with it. The system is in crisis.

We're here to say that we can build the world anew, bottom up. I would put
myself on the line and say that we could be on the verge of a revolution -
we are getting to the point where people have nothing left to lose, and
that's when they rise up. Personally, I would like to see a "velvet
revolution" so we have a natural change - keep our police force, keep our
Armed Services. The police are not the enemy. The State isn't even the
enemy. The system is the enemy. Unfortunately we have people in power who
like being in power, and like the money and the privilege that comes with
it. They are not even making the right noises. They are not even clucking to
us, they are not even patronising us or saying that they will look after us.

You look at Gordon Brown and you think: "Who are you? Where have you come
from? I'm sure you were a decent bloke when you started out in power."

Quite frankly, at his age he is probably the wrong person to be giving us an
alternative. There's going to be a lot of merriment, mayhem and mirth. A lot
of people will get off their sofas and do something.

Charity Sweet, 42, mother of three from Essex

We have come to the Bank of England to exercise our rights to freedom of
expression and freedom of assembly. These protests are being hyped up as
something very violent but we're not violent. All we want is a little bit of
peace in this world.

I want to see everyone march into London and just sit - don't leave, don't go
home, just sit peacefully. Have a cup of tea, have a sing-song, have a
dance, whatever the case may be. But do it peacefully and don't leave.
That's why I'm here: peace, love and justice for all.

We need to demand that the Government starts telling the truth, stops the
porkie-pies and the b******s. These guys in the banks still get their
bonuses but we have no money for education. There is money for war but we
have no money for hospital care. We expect our children to tell the truth -
why not our Government?

I changed my name by deed poll because I kept getting arrested. If they want
to arrest me now, they have to arrest Mrs Charity Sweet instead of Marianne
Spencer.

Interviews by Tom Whipple

The protest groups

climate camp

Who they are: The happier, clappier face of the G20 protests, Climate Camp
have a history of organising sustainable camps to discuss global warming.
The group is non-hierarchical and without formalised organisation. It is
here that you are likely to find members of Plane Stupid - who organised the
recent invasion of Stansted Airport - as well as supporters of more
established environmental charities.

What they want: To encourage debate about climate change and campaign against
carbon trading schemes "which have clear parallels with the derivatives
trading that got us in this mess," says Kevin Smith, their spokesperson.

How they plan to achieve it: With workshops, a ceilidh, a big party and
decorations - in a camp that will occupy parts of the City on Wednesday and
Thursday. Smith explains the philosophy: "Bunting is the order of the day.
I'm not sure why, but to fulfil our political objectives we really need
bunting."

people and planet

Who they are: People and Planet are a little like those music fans who claimed
to have followed the Beatles from before they were famous - they have been
hating the Royal Bank of Scotland since the days when everyone else thought
that it was a reasonable business concern. An alliance of students, they are
campaigning against the bank's investments in fossil fuels.

What they want: For RBS, particularly now that it is in public ownership, to
make a transition to investing in renewable energy.

How they plan to achieve it: Their main focus is on April 3, the date of RBS's
annual meeting, but protesters will be outside the bank's London offices
from April 1.

g20 meltdown

Who they are: A loose collection of groups brought together by the "Government
of the Dead", a theatre group formed after the collapse of Lehman Brothers.
It is here that the police will be looking for anarchist tendencies,
including "the Wombles" who have been prominent at previous anti-capitalist
protests.

What they want: To oust the bankers, abolish all borders, get rid of corrupt
politicians and overhaul democracy itself.

How they plan to achieve it: Four (gender-neutral) Horsefolk of the Apocalypse
will lead campaigners to converge on the Bank of England on April 1. Expect
ritual beheadings of effigies, nudity and impenetrable student theatre. They
hope there won't be violence, at least until the Thursday. "I like to think
that comrades are intelligent enough to think strategically," their
spokesman says. "But there is a lot of anger."

put people first

Who they are: Established charities, first-time protesters - the angry public
who are not yet angry enough to call themselves anarchists.

What they want: An overhaul of financial institutions, accountability for tax
havens, the development of a green economy "built on decent work and fair
play".

How they plan to achieve it: The coalition's main focus was a 35,000-strong
march across London last Saturday, followed by a rainy rally in Hyde Park.

Tom Whipple

Naomi Klein

If the last ten years has been one big extravagant capitalist party, then
Naomi Klein was the sober guest who sat glumly on the sofa - ruining
everyone's fun. The Canadian journalist has been warning of the boom's dark
side since 2000, when her book No Logo attacked brand culture and big
corporations' exploitation of the developing world. In 2005 Prospect
Magazine named her 11th in a list of the world's top intellectuals, one
below Salman Rushdie and the highest-ranked woman. Noam Chomsky, her
left-wing stablemate, topped the list.

Chris Knight

Every story needs its bogeyman. The capitalists have Fred Goodwin, and last
week the anti-capitalists gained Chris Knight - a professor of anthropology
whose extreme statements have led to a number of unflattering (and possibly
unfair) portraits in the press. He has been suspended from his post at the
University of East London for wearing a sign that said, "Eat the Bankers" -
but is still a reliable source of inflammatory quotes. At a rally last
Saturday, he marched wearing a balaclava in front of a banner that read: "We
can overthrow the government." Another protester held a simpler placard:
"Eat Chris Knight."

George Monbiot

Reliable workhorse of the comment pages, George Monbiot's treatises on climate
change may not always make entertaining reading but - if only through sheer
dogged persistence - he is Britain's most heavyweight commentator on global
warming. But his protest credentials are also impeccable. He is banned from
several authoritarian regimes, was sentenced to life in prison in absentia
in Indonesia, and dabbles in guerrilla gardening.