Soaring capital flows, a debt-based consumer culture and unbalanced trade between countries all contributed to the worst financial crisis since the Great Depression. The question now is whether governments follow a 'business as usual' model based on self-interest and inequality, or one that promotes equitable development based on moral and social principles.
Given recent changes in the IMF, it is ironic to see European governments inflicting old-IMF-style programmes
on their own populations. The danger is that austerity measures will not only kill European economies, but also threaten the very legitimacy of European democracies, writes Ha-Joon Chang.
Financial experts, warning of future crises, call for re-affirming
finance as a global commons, first recognized at Bretton Woods in 1945. The
Transforming Finance group, as beneficiaries and active participants in
global capital markets, affirm their responsibility to reform
finance in a signed statement.
The Commission of Experts of the UN General Assembly President
in 2009, chaired by the Nobel Prize winning economist Joseph Stiglitz,
presented its report to the UN but little of its recommendations were
followed up. Below is an extract of a paper that summarises and comments
on the Commission’s report, by Yash Tandon.
The economic lessons of the 1930s need not be repeated. Two of the world's leading economists say the time is ripe for a Manifesto in
which mainstream economists offer the public a more evidence-based
analysis of our problems. By Richard Layard and Paul Krugman.
Austerity measures are bad economics, bad arithmetic, and ignore the
lessons of history. But there are alternatives – for Britain, Europe and all countries that
currently imagine that government cutbacks are the only way out of debt. A book by Oxfam.
Historically, austerity has always hit hardest on those who have
the most to lose: the rich and powerful. Today’s austerity has reversed
that historic pattern — and widened the gap between society’s most
financially fortunate and everyone else. By Salvatore Babone.
The financial crisis is likely to reinforce a shift in the prevailing model of capitalism in developing countries, away from orthodoxy or so-called market fundamentalism. But will the financial crisis be a trigger for a new
twenty-first-century approach to collective action on global problems? A report by Nancy Birdsall.