Opinion Sur
It is not about reactivating the pre-crisis concentration dynamic, but instead about transforming it. Keynesian policies can help only if they are part of a strategy that aims to exiting the crisis into a fair and sustainable development. ‘While the richest 10% of the World gets 40% of global income and the poorest 10% barely 1%, the 1210 multimillionaires of the planet hold an accumulated wealth of 4.5 trillion dollars (equivalent to the entire Latin American annual GDP). At the same time, and according to a recent report by the Swiss Federal Institute of Technology, 147 entities (from amongst 43.000 global companies) control, through a complex entanglements’ network, 40% of all transnational corporations.’
Juan Gabriel Tokatlian, Professor, Di Tella University
If it was in fact about exiting the crisis and returning to the pre-crisis financial schemes with their devastating effects, then only adopting measures inspired by Keynesian policies might suffice. They would succeed in strengthening the battered aggregate demand generating the conditions for reinvigorating production and therefore, a spiral which some (not this author) denominate virtuous for inducing growth would be reestablished. By expanding the economy fiscal income increases while the relative weight of the sovereign debt is reduced. The economic system regains its vigor, expectations shift to positive and, if some sanity is to prevail, even new regulations to prevent more ‘excesses’ in financial management from happening might be adopted.
If instead of Keynesian measures a wild adjustment were to be implemented such as it is happening in European countries, it is also true that one day the crisis will be beaten, only that leaving behind a bundle of victims. The adjustment would put an end to over indebtedness and the public deficit, at the expense of harshly sacrificing the level of income and consumption. As in almost every crisis, the highest price would be paid by the most vulnerable and those sectors with the lowest capacity to respond when facing recession. By putting accounts in order, macroeconomic functioning is recomposed, economic engines are reactivated due to a higher productivity based on wage relapse and, what a shock, step by step that growth spiral, which some stubborn still insist on calling virtuous, is reestablished.
In both cases, the goal is to recuperate what has been lost and restoring, as much as possible, the pre-crisis’ order. They differ in something far from insignificant and that is that the social cost of a wild adjustment is infinitely greater than exiting the crisis by resorting to economic reactivation policies. That in which they do coincide is that, in principle, neither of them point to transforming the economic dynamic that prevailed before the crisis although, as evidence shows, it was this kind of concentration dynamic which led us to the crisis in the first place. We say in principle because in both strategies concentration dynamic’s transformational measures could be included; something quite unlikely bearing in mind that financial interests are precisely those who carry the most weight when determining the specific measures that are to be implemented in both strategies.
If the grounds of the concentration dynamics could not be transformed, the outlook would again become complicated. Perhaps while the crisis experience is still fresh, a higher dose of prudence might prevail, exerting certain control over ‘excesses’ and ‘unwanted externalities’. However, if the mechanisms that lead towards the unbridled contemporary concentration, environmental destruction, increasing inequality, poverty and destitution’s reproduction, irresponsible consumerism, organized crime’s growth, weakening of social cohesion, leaderships that do not represent the will of the people, limitations to democratic governance, were not to be transformed, then there will be no way of avoiding that, sooner or later, one way or another, those enormous forces resume a trajectory of overwhelming economic alienation. They define the systemic course and our way of functioning, they impose values and opinions, they decide where, how and when to invest the planet’s utterly concentrated income.
Whoever finds these expressions to constitute an unfounded exaggeration would better revisit the quote with which this article commences. 40% of world wealth is in the hands of 10% of the population. Of all 7 billion people (people, not numbers) that inhabit this planet, 0.000017% (1.210 multimillionaires) hold a wealth equivalent to what an entire continent (Latin America) generates annually. It is no coincidence that such a dramatic situation has its parallel in the impressive concentration of decisions regarding the investment of the world’s savings, what to produce, where to do so, when to fold back, whether we support real economy or go for speculation, whether we play by the book or we challenge institutional regulations, whether we respect democratic will or we alienate and manipulate it: 147 entities (from amongst 43.000 global companies) have control over 40% of all transnational corporations.
Facing forces of such caliber, the possibility of transforming the systemic course and giving way to a fair and sustainable development is closely associated to assembling wide political fronts in renewed democracies, a renovation sustained by the awareness and mobilization of immense population majorities. It is about a laborious, constant, permanent effort, far from magical solutions and even farther from authoritarian ones. There lies what may be the main challenge of our societies in this XXI century.
