DETHRONE THE DOLLAR

In the crisis, politics demands its priority. But the G8 has long been in competition – with much better ideas

By Elmar Altvater

[This article published in: Freitag, 7/11/2009 is translated from the German on the World Wide Web, www.freitag.de/positionen/0928-altvater-stosst-den-dollar-vom-thron.]

The group pictures were clearly arranged when eight men and sometimes a woman like Margaret Thatcher and later Angela Merkel were seen on photos from the G8 summit meeting. Now 20 heads of state are shown in Italian L’Aquila. On the first day the “Big Eight” met exclusively; then the expanded group of 20 came together. President Obama invited the heads of 16 states to the Major Economic Forum in April for climate negotiations. All the G20 states were there except for Argentina, Saudi Arabia and Turkey.

Is it a symbol that the leading state rulers of the world look to the future from the mountains of debris left behind by the grave earthquake of April in the Abruzzen? For a long time they were driven by the wind of the free market. However this wind has become a storm that drives the world into the disaster of the most serious crisis of capitalist history. The destruction of the earthquake can be repaired despite the proverbial Berlusconi incompetence. But can a billion people overcome financial- and economic crises, climate collapse and hunger? A UN commission under the chairmanship of Nobel Prize winner in economics Joseph Stiglitz answered this question. The commission published a “Compass for Resetting the World Financial Order.” Firstly, the neoliberal interpretation of economic events must be forgotten. They are history, a dishonorable history. When the true causes are first recognized, rebuilding from the ruins of the crisis can begin. Secondly, we need new institutions, a democratization of the UN, the IMF and other authorities to give more joint-determination to poor countries without political influence. Thirdly, new rules are necessary since the market is not a reliable problem-solver – regardless of what neoliberals preach untiringly. In the economic crisis, politics demands back its priority.

This is particularly true for global finances. Free enterprise speculation built structures of financial claims to the sky. These claims or demands could not be fulfilled by the real economy. The demands must now be written off; the real economy was regularly plundered. Both led to the collapse of the unstable structures of capitalism. Mountains of ruins tower everywhere on the globe, not only in Abruzzen. In biblical times, demands that could not be satisfied were canceled in the “jubilee year.” Today we need a global “bankruptcy order” as the former vice-chairperson of the IMF Anne Krueger proposed years ago to avoid the 2001 Argentinean crisis and as the Stiglitz commission proposes today.

The G8 and G20 luminaries in L’Aquila will not remove the “structural imbalances” of the world economy. That was the G8’s trivializing description in Heiligendamm. Without Bush and his “poodle” Blair, this is easier today than in 2007 and is only possible with the new superpowers from Asia and Latin America. The huge currency resources on one hand and the tremendous foreign debt of the US on the other amounting to thousands of billions of dollars must be reduced in an orderly way. To that end, a new world monetary order is needed that dethrones the dollar. What roles will the Euro, the Chinese Renminbi and perhaps “special drawing rights,” an artificial international currency, play?

The G8 has no future, unlike the G20. This is not only because the G8 only represents 13 percent of the world population while China and India constitute 37 percent, nearly three times as many. Economic power has shifted (if one disregards Japan) from the “Atlantic” G8 world to Asia. The future belongs to the G20 – the G8 is a discontinued model!

Others who were not in L’Aquila want to join in the conversation. Take the G-mills, the group of millions from civil society. They will have to leave the streets in L’Aquila to the police and state coaches. Berlusconi has rearmed. Still the assembled upper class of the world invited by the party lion Berlusconi is naked like the emperor from Anderson’s fairy tale. They have no trailblazing or future-oriented ideas for solving the crisis. However political countervailing power of the millions can only be formed with a long breath. This need not happen in the mountains of Apennin but in the metropolises or with the help of the increasingly necessary worldwide grassroots peasants’ movement Via Campesina. Solutions must be found in the villages. The grass grows from below; words fall empty from the top.

Other Articles Written by: ELMAR ALTVATER
Risk Development and Dollar Inflation
RISK DEVELOPMENT: MANY CRISES IN ONE [This article published in the Swiss WoZ-Die Wochenzeitung, November 27, 2008 is translated from the German on the World Wide Web, www.woz.ch/artikel/2008/nr48/risk%20development/17197.html] Managing the ...
From ELMAR ALTVATER, Portland Indymedia, 7 Jul 2009
Related Topics: International Monetary Fund, Karl Marx, World Economic Forum, Joseph Schumpeter, Milton Friedman
Post-neoliberalism or post-capitalism?
"Markets are dis-embedded from society and nature since the "great transformation" to a market economy in the 18th and 19th century. Financial markets are dis-embedded from markets for real goods, services and labor:
From ELMAR ALTVATER, Portland Indymedia, 9 Jun 2009
The Vacuum of World Trade Breaks Down
THE VACUUM CLEANER OF WORLD TRADE BREAKS DOWN The collapse of the export market takes its toll on German labor market in 2009 Interview with Elmar Altvater [This interview with Elmar Altvater published in: Freitag 3/26/2009 is translated from the ...
From ELMAR ALTVATER, Portland Indymedia, 30 Apr 2009
Calories on the Table, not in the Tank
CALORIES ON THE TABLE, NOT IN THE TANK While rich desert states rent arable acreage in Africa, millions of people there are threatened with death from starvation. Crops often serve gas production [This article published in: Freitag, 3/19/2009 is ...
From ELMAR ALTVATER, Portland Indymedia, 3 Apr 2009
Related Topics: World Bank, International Monetary Fund
The American Patient
THE AMERICAN PATIENT Geo-politics - Financial crisis. The US is much too indebted to save the markets. The prescription: globalize the losses [This article published in: Freitag 40, 10/3/2008 is translated from the German on the World Wide Web, http:/ ...
From ELMAR ALTVATER, Portland Indymedia, 21 Oct 2008
Related Topics: George W. Bush, Lehman Brothers, White House, International Monetary Fund, Margaret Thatcher
Energy and Climate - Hunger and Money
ENERGY AND CLIMATE - HUNGER AND MONEY The Financial Crisis Seizes the Real Economy [Emeritus professor of political science Elmar Altvater grapples with the "global risks" destabilizing the world economy and world civilization. This article published ...
From ELMAR ALTVATER, Portland Indymedia, 4 Sep 2008
Related Topics: World Economic Forum, European Union, NATO, George W. Bush, Bertolt Brecht
"The End Game" by Elmar Altvater
THE END GAME Energy versus climate. The price of oil wakens nuclear desires [This article published in: Freitag 24, 6/13/2008 is translated from the German on the World Wide Web, www.freitag.de/2008/24/08240101.php.]
From ELMAR ALTVATER, Portland Indymedia, 2 Jul 2008
Related Topics: European Union, Angela Merkel
The Eighth Plague
THE EIGHTH PLAGUE Poverty and Hunger: How the Financial Crisis Infects the Food Markets [This article published in: Freitag 17, 4/25/2008 is translated from the German on the World Wide Web, www.freitag.de/2008/17/08170101.php.]...
From ELMAR ALTVATER, Portland Indymedia, 13 Jun 2008
Related Topics: World Bank, International Monetary Fund, European Union
Stock Market Game of Bankocrats
STOCK MARKET GAME OF BANKOCRATS: NOT TO GET KILLED Karl Marx' analysis of "fictional capital" from the 19th century is confirmed by the financial crisis of the 21st century [This article published in: Freitag 12, 3/20/2008 is translated from the ...
From ELMAR ALTVATER, Portland Indymedia, 24 Apr 2008
Dollar-Oil-Euro: An Unholy Trinity
Are there ways out? Transition to renewable energies in order to become less dependent on fossil fuels. This presentation includes valuable charts on oil production and consumption, uses of petro-dollar reserves and causes and consequences of ...
From ELMAR ALTVATER, Portland Indymedia, 12 Feb 2008