Go Global (And Beware Of War)

Money is an expression of power relations. The current financial crisis reflects a much deeper crisis, which has to do with the exhaustion of the late twentieth century model of development. By model of development I mean a combination of technology, patterns of production, consumption, communication, infrastructure, and a specific set of political institutions. The twentieth century model of development, often known as Fordism, was based on the intensive use of oil. It is characterised by mass production, high levels of consumption and military spending, the spread of the automobile and the aeroplane, as well as radio and television, the growth of suburbs and a consensus on state intervention. This period also crucially saw the emergence of American hegemony, which has underpinned the role of the dollar as the world’s reserve currency. Capitalism has evolved through several models of development; starting with the introduction of the factory system and the production of textiles led by Britain, then the increasing role of coal, iron and railways, followed by the introduction of steel, electricity, colonialism, and the rise of Germany and America.

At some point, the model of development is institutionalised and it becomes increasingly difficult to innovate and also to increase productivity and therefore profits. This began to happen with the Fordist model in the 1970s; productivity growth slowed down, oil became more expensive, the US started running trade deficits, and so on. At the time, neoliberalism was seen as the answer to sluggish economic growth. Liberalisation and deregulation did free up capital to invest in a future model of largely IT based development. The so-called new economy spawned huge new companies like Apple, Microsoft, Google and Facebook, but the full diffusion of the new technologies was blocked by the political institutions and patterns of consumption typical of Fordism. Because of the difficulty in continuing to make profits in the productive sector, finance switched to investment in assets and developed new speculative tools – hence the rise in private debt and asset inflation that was bound to collapse at some point. It is important to understand, therefore, that this is an economic, social, environmental and political crisis, not just a financial crisis.

In moments of transition from one model of development to another, the role of social movements is critical. The labour movement was crucial in creating the conditions for the Fordist model of development by pushing for a greater role for the state in welfare provision and pressing for higher wages, so that workers could then buy consumer goods. By the 1960s disaffection with the paternalistic male dominated ‘old left’ as well as the inflexibility of the state led to the rise of new movements both on the right (the neoliberals) and of a more emancipatory kind (peace, green, human rights, feminist). The 1980s and the 1990s were the highpoint of neoliberalism, but these were also decades associated with the spread of ideas about freedom, human rights, and greater tolerance towards minorities. A new set of movements began to develop in the late 1990s renewing ideas about social justice, the anti-globalisation movement, the movement for climate change action, and protests against the ‘War on Terror’. These were the precursors to the current wave of mobilisation, of which Occupy is such an important part.

So can the new social movements offer a way out of the crisis? What is needed is a shift away from finance and a move towards massive public investment in green technologies and in a range of public goods like education, health, or poverty reduction. Under Fordism productivity gains were labour-saving. The IT revolution offers the possibility for resource-saving innovations. In other words, we need a new green economic paradigm not only because of the risk of climate change and resource depletion, but also to solve current economic problems. To achieve this, I believe we will need a greater role for local (municipal or sub-regional), regional (European) and global governance because of the institutional blockage at national levels. We will need a shift away from American dominance to a more cooperative world system. Above all, we need to reinvent democracy on a multi-scalar basis.

The big concern is the risk of war. In previous transitions, war played a crucial role (for example, the Napoleonic wars, or the wars of the mid-nineteenth and mid-twentieth centuries). War was both a response to crisis situations and a way of crushing protest. This period is much like the period before World War I when syndicalists, suffragettes and others were campaigning for more democracy, more rights and more social justice. They were sidelined by the wars and their demands were only finally and partially fulfilled after the most terrible slaughter the world has ever witnessed. I worry about growing conflict in the Middle East and about the rise of populist and xenophobic movements. While increased awareness as a result of the new forms of communication may make us less vulnerable to violence on the scale of the twentieth century, everyone who is currently politically active both at the top and at the bottom has a big responsibility to find ways to steer a peaceful and democratic transition to a green, socially just global economy.

Mary Kaldor is a former peace activist and professor at LSE, where she directs the research group on global civil society and human security.