Wednesday, April 01, 2009
Today, as leaders of the G-20- met to discuss a coordinated response to the global financial crisis, protesters sacked a branch of the Royal Bank of Scotland, one of the most notorious recipients of bail out funds from the Exchequer, while another protester collapsed in a police cordon in central London, and subsequently died.
As with the World Trade Organization ministerial meeting in Seattle in 1999, protest from below is converging with opposition from within. In Seattle, lesser developed countries refused to accept a trade liberalization treaty that preserved protections in the US and Europe, particularly in regard to agriculture, while forcing the opening of markets in poorer countries around the world. Meanwhile, out on the streets, police struggled against protesters that had initially shocked them by shutting down the areas around the conference center where the ministerial conference was being held. Residential neighborhoods adjancent to the center of the city were put under curfew until the conference was concluded.
Similarly, in London, protesters pressured the police, successfully sacking the Royal Bank of Scotland. But, equally important, as the protests erupted, divisions among the G-20 participants emerged. President Sarkozy of France and Chancellor Merkel of Germany conducted a joint press conference in which they objected to the refusal of Obama and British Prime Minister Gordon Brown to adopt a more rigorous regulatory approach to the address the financial crisis:
Similarly, as reported in The Independent:
In a day of breathless diplomacy in London, ranging across arms control and financial capitalism, Brown and Barack Obama emphasised a developing convergence, only for Nicolas Sarkozy, the French president, and Angela Merkel, the German chancellor, to lay down non-negotiable red lines on issues such as hedge funds and tax havens which they insisted had to be met today and not deferred until future gatherings.
The belligerent tone jarred as it came hours after Brown, standing side by side with Obama in the gilded splendour of the Foreign Office, had declared that the leading countries were hours away from securing a deal to reform the global economy.
Far from rowing back from the aggressive posturing which Sarkozy had adopted before flying to London, the French leader resumed the theme, saying this was no time for making fancy speeches and dismissing the idea of a summit later in the year. Speaking at a Knightsbridge hotel, he said he trusted Obama, but he blamed America, saying: The crisis didn't actually spontaneously erupt in Europe, did it?
The German leader joined in. This is a historic opportunity afforded us to give capitalism a conscience, because capitalism has lost its conscience and we have to seize this opportunity, she said.
Over the next course of the next day or so, we will discover if this is really serious. In Seattle, the developed world was united in its in attempt to impose neoliberal trade and finance against lesser developed countries for their benefit. Now, in London, nine years later, France and Germany, with Russia and China in the background, have broken ranks. Do they have the resolve to persist in their opposition to a ruinous combination of stimulus and subsidy for financial speculators? Time will tell, but it is worth noting that the Sarkozy/Merkel press conference has been consistently described as a surprise.
Bernard Kouchner, the French foreign minister, said he expected a confrontation at the summit between two worlds: one that wants more regulation, and the other that wants less and which is closer to so-called 'liberal' positions.
Ms Merkel warned that today's summit would be a failure if it only produced a vague statement of intent. We want results that yield concrete results and change the world as we know it, she said. The day after tomorrow will be too late. The decisions need to be taken today and tomorrow.
President Obama, who praised Mr Brown's extraordinary energy and leadership at their joint press conference, endorsed his call for other countries to stimulate their economies further. Although he played down the transatlantic split, the President said other nations could not rely on America's voracious consumer market to drive the global recovery. It cannot just be the United States that's the engine room – everybody is going to have to pick up the pace," adding: "Don't short change the future because of fear in the present.
If the French and the Germans hold firm, the anti-neoliberal contagion that initially broke out on the periphery in 1999 will have entered the capitalist metropolis within the European Union nine years later. In Seattle, the neoliberal order was incapable of incorporating the mild reforms of inclusion and fairness demanded by developing nations, effectively terminating the process of trade liberalization on the terms of finance capital as manifested in the WTO and the IMF. Now, in London, it appears equally incapable of accepting the demands of other countries within the developed world itself. The consequences of such a refusal will be profound, with the probability that the decline of American and British dominance within the global economic system will be accelerated.
Three interrelated currents are at work here: (1) increasingly angry and confrontational protest from below, as already demonstrated in protests in Iceland, France and Greece before the ones in London today; (2) a divergence of self interest among countries near the top of the capitalist hierarchy, like France and Germany, as they follow the lead of other dominant countries like Russia and China; and (3) the inability of the United States and the United Kingdom, as the governmental representatives of the capital class of speculators that crashed the global economy, to accept even the mildest of reforms, because they require the leaders of these countries to acknowledge the unspeakable, the permanent diminishment of their power and influence.