Like the deputies to the Estates General crawling to Versailles in 1789, this hodgepodge of deputies to assemble represent an amalgamation of conflicting agendas and hidden desire given flight by a decade of American indifference to the conceptual rumblings that have become fashionable (even among those circles who profit most from the current system). See, e.g., Larry Catá Backer, Ideologies of Globalization and Sovereign Debt: Cuba and the IMF, Pennsylvania State International Law Review, Vol. 24:497-561, 2006; Larry Catá Backer, Economic Globalization Ascendant: Four Perspectives on the Emerging Ideology of the State in the New Global Order. University of California, Berkeley La Raza Law Journal, Vol. 17(1) , 2006. From the first estate (the IMF and World Bank), to the nobles (the old G-8), to the bourgeoisie (India, China, Brazil, etc.), everyone, it seems, from Castro to the Americans, have now joined in a chorus of some variant of "death to the current system." This from the Brookings Institute: "As early as April 2004, we argued in a Brookings policy brief (Policy Brief # 131), and then again in April 2006 (Policy Brief # 152), that the G8 had lost in effectiveness and legitimacy and that a G20 summit forum would represent a pragmatic approach to reflecting the dramatic changes in the economic structure of the world, where the emerging markets economy now plays a critical role in maintaining global economic stability and prosperity." Bradford & Linn, supra.
And why not? The Americans have appeared to make a hash of the current system. With full knowledge of the risks (forgot the post facto expressions of disbelief) and with the deification of short term maximization presumptions, the Americans have come close to losing their grip on global finance and its utility for keeping production moving globally. The solution is the calling together of the Estates General, long formant, with the idea that the deputies can be both controlled and used to subsidize the hemorrhaging of the current system. And like those who welcomed the Estates General as a means of pacifically reorganizing the French monarchy, this grand meeting to undo the settlement that reorganized global power on the end of the Second World War and European hegemony is meant to provide an orderly process for the passage of power without the consent of a resentful but still quite alive leadership set. But the presumption of docility among the newly rich, newly enfranchised and ambitious is hardly ever right. The likelihood that anyone will control the process or that the group will avoid chaos--or conflict--is small indeed. But all to the good of those who would profit either from a change in power relationships at the to or those who would profit from anarchy and the good old days of territorialism and inter-governmental political control as the privileged means of governance.
Yet, even as the political classes lumber towards the drama of institutional change, the global banking system has begun to realign in ways that are quite interesting. One worth noting is the incremental reaction of a global federal reserve system--not a classical central bank as such -but a consensus system of diffused banking power that works together to preserve systemic integrity. Thus, we have been told,
"Today, the Federal Reserve, the Banco Central do Brasil, the Banco de Mexico, the Bank of Korea, and the Monetary Authority of Singapore are announcing the establishment of temporary reciprocal currency arrangements (swap lines). These facilities, like those already established with other central banks, are designed to help improve liquidity conditions in global financial markets and to mitigate the spread of difficulties in obtaining U.S. dollar funding in fundamentally sound and well managed economies."Federal Reserve Bank, Press Release, Oct. 29, 2008 (For an easy introduction to the Federal Reserve System developed by the FED, see Federal Reserve System Resources, and Get the Most Out of the Federal Reserve's Site). These facilities, are are also informed, "will support the provision of U.S. dollar liquidity in amounts of up to $30 billion each by the Banco Central do Brasil, the Banco de Mexico, the Bank of Korea, and the Monetary Authority of Singapore." Id. And these are not the first, but merely add to a web of interbank relationships. "The FOMC previously authorized temporary reciprocal currency arrangements with ten other central banks: the Reserve Bank of Australia, the Bank of Canada, Danmarks Nationalbank, the Bank of England, the European Central Bank, the Bank of Japan, the Reserve Bank of New Zealand, the Norges Bank, the Sveriges Riksbank, and the Swiss National Bank." Id. And it parallels similar facilities development by the International Monetary Fund. Id.
And this development has been noted in Cuba. Indeed, it appears that Fidel Castro reads the same Federal Reserve Board press releases well all do. But rather than react with enthusiasm, Castro had a different reaction. See Fidel Castro Ruz, La peor variente, Granma Internacional, Oct. 31, 2008. And that reaction is worth considering, if only because its echo will be heard quite loudly by certain attendees at the upcoming G-20 conference to overhaul global finance. Castro's reaciton was simple enough: "De ese modo se afianza el poder económico de su moneda, privilegio otorgado en Bretton Woods." Id. (In this way the economic power of its [the U.S.] currency is consolidated, a privilege granted in Bretton Woods"). The running dog of the United States, the International Monetary Fund, "que es el mismo perro con diferente collar," (id., ("which is the same dog with a different collar") has also been turned loose. It
anuncia la inyección de elevadas sumas a sus clientes de Europa Oriental. A Hungría le inyecta el equivalente a 20 mil millones de euros, gran parte de los cuales son dólares procedentes de Estados Unidos. No cesan las máquinas de imprimir billetes ni el FMI de otorgar sus leoninos préstamos."Id. ("announced the injection of large sums to its clients in Eastern Europe. To Hungary it will inject the equivalent of 20 billion euros, a large part of which are dollars provides by the United States. There is no halting the money printing machines nor the IMF's granting of one sided loans"). Castro, quite rightly, sees the danger of the Fed action--the possibility of building a monetarist global reality before the political actors can meet to remake that system formally in the course of the meetings of the G20. In that sense, the actions of the Fed and the construction of an informal global central bank through a network of institutionalized consensus governance mechanisms would be a threat to the construction of an alternative system. Worse, of course, form the Cuban perspective, is that the system would realign but preserve the privileged position of the Americans and Europeans (along with their global institutional mouthpieces). The effort to destabilize (or upend) that hegemony and replace it with another (or none) is thus in jeopardy. At the same time it suggests the potential of this approach. For those invested in a global system of private trade it might be hoped that an institutional framework of a more permanent character id established from out of the tentative sets toward networking global financial governance through these state controlled central banks.
Por su parte, ayer el Fondo Mundial para la Naturaleza (WWF) declaraba en Ginebra que al ritmo actual de gastos, la humanidad necesitaría los recursos de dos planetas en 2030 para mantener su estilo de vida.
El WWF es una institución seria. No hace falta ser graduado universitario en Matemáticas, Economía o Ciencias Políticas para comprender lo que eso significa. Es la peor variante. El capitalismo desarrollado aspira todavía a seguir saqueando al mundo como si el mundo pudiera soportarlo.
(Id. "For its part, yesterday World Wildlife Federation declared in Geneva that at the present rate of consumption, by 2030 humanity will need the resources of two planets to sustain its lifestyle. The WWF is a sober institution. One need not be a university graduate in mathematics, economics or political science to understand what this suggests. Fully developed Capitalism continues to aspire to the continued looting of the world as if the world could continue to support it").The global system, including the global financial system supporting a system of global markets uncontrolled by the notions of the greater good that is the province of states, is bound to fail because there are insufficient goods to support it. The vision is apocalyptic--in the absence of change--chaos. The cure is lowered expectations. The source of that cure is the state. The villain is both an economic system (capitalism) and its greatest beneficiary (the United States). The solution requires the elimination of both as threats.
Some might view this as warfare by other means (and why not the Cubans might retort--the Americans have been waging their own form of war against Cuba for quite some time). Bravo! But the Americans can also fight back, and their destruction, if not carefully arranged (and in the blood lust to rid the world of its former benefactor care would be the first thing to go) the Americans can (and perhaps in their own long tern interests ought to) take the rest of the world down with them. But war also tends to obscure objective. And that, of course, will be the first thing to go when the G-20 meet. We will begin by seeking a solution to the current global crisis. We will seek to restructure the current system to avoid similar calamities in the future. But that effort might well become so polluted with other agendas (the destruction of the privilege of the United States, the attempt to seek wealth or technology transfers, the attempt to move power form the private to the public, etc.), that the objective will become lost in the politics of power that we should expect when the deputies meet.
Now, who will seek to lock the G-20 third estate out of the meetings, and who will take the first set of oaths on the tennis courts (le serment du jeu de paume) of this Estates General. Castro expects that the G-8 will play the role of the noble class, seeking the cooperation but not the participation of the rest of the G-20, and that in the confrontations that follow, a new order will be crafted, sweeping the G-8 and their priestly class (the IMF/World Bank) off the governance stage. He may even work that make that happen. He ought to if he were smart and committed to his decades old purpose to undo the current system. And the Americans ought to use that knowledge to their advantage. Whether that happens or not will make for some interesting times ahead.