Battles over the UN Summit on the Economic Crisis

On June 1-3, the UN will host a Summit conference on the world economic crisis at UN headquarters in New York. In the dire conditions of last December, the richest and most powerful countries actually agreed to the event. But now the big guys are having second thoughts and trying mightily to scuttle the process – either by preventing it from taking place at all, or by blocking any serious outcome. There is clearly a hope, strongest in Washington and London, that the pre-crisis economic order can be revived with minimal changes, so that everything can go on as before, with smiles again on Wall Street and in the City of London.

At the UN, the activist Nicaraguan president of the General Assembly, Miguel D’Escoto, has been pushing for a conference that would definitely not lead to business as usual. D’Escoto named a panel of economists from many lands, chaired by Nobel Laureate Joseph Stiglitz of Columbia University, and they have come up with game-changing proposals. Meanwhile, China is pressing for a new approach to world reserve currency that would reduce the role of the dollar. The great majority of countries feel that fundamental change is urgently needed. But the richest have another view. So, negotiators at the UN General Assembly have been waging mighty diplomatic battles.

In some quarters, opposition to the conference (and its many reform proposals) has been vivid and intense. Some, like UK Prime Minister Gordon Brown, present themselves to the public as reformers, but in practice seem keen to derail the UN process and stick close to the status quo. Brown and others have privately let it be known that they do not plan to attend – unless, of course, the gathering agrees to a watery agenda. Washington seems to be on the same course. These status quo powers are calling on the real reformers to stand down and let the IMF, the G-20 or the secretive Financial Stability Forum take the lead. In other words, minimize the danger of system change, even while the crisis continues to ravage the world economy, with no clear end in sight.

The question of system reform threatens some especially. The UK relies on the financial sector for a large share of its economy, since London is the world’s greatest financial center. Now that most goods-production has disappeared and North Sea oil production is in steep decline, what is left to fill the state’s coffers? Tourism will not do and the giant oil companies keep their monies resolutely offshore. The UK economy is consequently in terrible shape and the government has even had trouble selling its sovereign debt. So leaders in London will fiercely defend the Anglo-American system of deregulated finance. They will try to revive it, prolong it, and keep it alive, however shaky, crisis-prone and destructive it may be.

The throttle grip of these conservatives on the global political system must be ended before more damage is done. It is time to talk at long last about an economy that serves human needs, as some at the UN are saying. Let’s hope that the conference goes forward in spite of the conservatives' efforts and that it opens the door to a very different global economy..