Only a New Internationalism Could Tackle the Aftermath of the Foreclosure-Triggered Crisis

Economist Samir Amin, speaking two days after the much-publicized meeting of Group of 20 said that only a new internationalism could tackle the aftermath of the foreclosure-triggered crisis. He feels a diametrical change of direction is needed.

The foreclosure storm has not died or even slowed down. It continues to rage and spread its tentacles across the world in a chain of reactions is crippling banks, mauling stock markets, harming manufacture and leaving millions homeless and jobless.

The dominating view of the media and thinkers is that the foreclosure related crisis is the product of random de-regulation and the greed of Wall Street giants. These are but superficial causes and one needs to make an in-depth study as to its roots. The collapse seen today is the mere tip of the iceberg. Below it is a huge store of accumulated capital and deeper down are cracks in the capitalistic system. The irresponsible behaviour of the banks is not the sole cause. Apparently it seems that if regulation were once more enforced things would become hunky dory again. It is flawed reasoning. It is exactly the kind of thinking the G-20 could not go beyond. It is not surprising since the G-20 had already been rehearsed by G-8 in tandem with the IMF.

In trying to find another version of this foreclosure crisis it is necessary to forget the notion of thinking this to be fallout of neo-liberal globalization. It describes but does not analyze. At the crux of the problem is that the current system has caused intense centralization of capital. The latter is in the hands of jumbo oligopolies, about 5,000 sprawled across the world, that hold the controlling reins at regional, national and global levels. It is they who are deciding policies of the world. The level of centralization today is far stronger that what it was half a century ago.

This concentration of capital has led to a basic shift in the management system. Hitherto there was investment in productive economy to create surplus value (with labour exploitation as usual) but the target today is the competitive effort to re-distribute the profits of that surplus value among the powerful oligopolies. This is done through monetary investments. Each tries to increase its area of monetary investment so as to take the lion’s share of the profits. These profits are by nature different and may be termed as monopoly rents or ‘financialisation’. For this to happen deregulation is a must. Deregulation therefore has not being fundamentally questioned by the G20.