Subordinating finance to human and environmental rights.

1
Subordinating finance to human and environmental
rights.

• This presentation will probably involve audience
  discussion, which will create action items. Use
  PowerPoint to keep track of these action items
  during your presentation
• In Slide Show, click on the right mouse button
• Select Meeting Minder
• Select the Action Items tab
• Type in action items as they come up
• Click OK to dismiss this box
• This will automatically create an Action Item
  slide at the end of your presentation with your
  points entered.

• Ann Pettifor Jubilee Research at the New
  Economics Foundation www,neweconomics.org
  www.jubileeresearch.org

2
Post-war period

• From 1945 1970 the US and other western states
  were major exporters of capital

3
Globalisation the reality

• From 1970 2002 the US in particular but also
  the UK became major importers of capital

4

• US needed to finance growing deficit without
  structurally adjusting the economy.

5
After 1970s politicians decided

• To access finance from foreign capital markets to
  cover US deficit ..so the brakes on capital
  controls were lifted

6

• This required US and UK governmental decisions
  egged on in turn by City of London and Wall St.

7
Liberalisation led to dominance of finance
sector.

• In 1970, 90 of all international transactions
  were trade transactions
• only 10 were financial transactions

8
Despite massive increase in trade since 1970.

• 90 of all transactions by 2000 were financial
• Only 10 were trade transactions

9
Financial transactions involve

• Making money from money

10
Lending (sovereign, commercial, household)
11
Gambling
12
Speculating
13
Betting (derivatives trading)
14
So globalisation largely finance-led

• .dont blame Enron, WorldCom, Disney or Nike
• .often victims of the demands of the dominant
  
• finance/creditor/shareholder sector

15
Dominance of Finance/Creditors ..

• in the global economy leads as in the 1930s
  to
• deflationary policies

16
Why? Deflationary policies

• ..transfer assets from debtors to creditors

17
Inflationary policies.

• achieve the reverse..transfer assets from
  creditors to debtors

18
Policies of the finance sector

• through de-regulation. Have inflated asset
  prices

19
Creating Bubbles

• stocks, technology, telecomms and property..

20

• While the IMF/World Bank/G7/EU deflated wages and
  commodity prices

21

• Central Bank/IMF/G7 obsession with
• .Consumer price/ wage deflation .While
  tolerant of asset price inflation
• wealth holders dream!

22
(No Transcript)
23
Wages as a share of GDP
24
Growth in real wages in major economies 1961-2003
25
Trends in prices of Commodities
26
Stocks of real wealth and financial assets
79-2000
27
(No Transcript)
28
Restoring human/environmental rights over money
rights
29
Human rights over money rights

• Taming financial markets thru
• Capital controls
• Restraints on the growth of credit
• Establishment of International Clearing Agency,
  allowing countries to repay debts in own
  currencies
• A Tobin Tax

30
The Way Forward?

• A transparent, fair, independent international
  insolvency framework for the resolution of debt
  crises the Jubilee Framework see
  www.jubileeresearch.org

31
The Way Forward?

• Upsizing the state, restoring policy autonomy
  to states, allowing governments to respond to
  democratic mandates
• Increasing public investment

32
The way forward? The example of Bretton Woods
1944

• Imposed Capital Controls
• Liberalised Trade
• Restored Policy Autonomy to States
• Result unprecedented economic stability and
  growth
• Keynes achievement