[OPE] Dr Susan George and the new "Greeny & Corporatist Taxation Keynesianism"

From: Jurriaan Bendien (adsl675281@telfort.nl)
Date: Mon May 05 2008 - 05:19:39 EDT

(Since Hillel Ticktin raise the spectre of Keynesian revival, here is a clip from Susan George, who actually argues for it)


"The US economy seems to be heading for a genuine recession triggered by the subprime affair, but which goes deeper than that, and the fallout for ordinary people in terms of jobs, housing, consumption and future welfare is going to be serious. If I am right, if the economic problems in this country and therefore in the world are going to fester and get worse, if the United States is sliding into recession, then some new economic tools will have to be used to combat it, simply because the old ones have already been pushed to their limits and have little or nothing left to give. 

For example, the dollar is extremely weak-this has made US exports cheaper but it can be devalued further only at great risk. Deficit spending is already beyond belief and the country is hugely indebted, as are households. The housing bubble is collapsing if not already burst. The Federal Reserve says it will reduce interest rates if the economy gets worse, but there too there are limits. 

If these traditional tools won't work, then the only new tool I can think of to pull the United States out of the economic doldrums is a new Keynesianism, not military this time, but environmental; a push for massive investment in conversion and eco-friendly industry, in alternative energies, in the manufacture of lightweight materials for use in new vehicles and airplaines; in clean, efficient public transport; in the green construction industry and retrofitting and so on. 

How could one finance such an effort which would involve targeted government spending in the traditional Keynesian sense? By levying carbon taxes, plus taxes on movements of finance capital and purchases of shares; taxes on the profits of transnational corporations and-in order to encourage more local consumption-taxes on the miles travelled by the food that we eat and the clothes we wear. In the South, the best measure would be total debt cancellation so long as it was accompanied by the condition that a given portion of the savings would be spent on environmental transformation. We also need safeguards to prevent delocalising all the ecological activity once more to China and other low-wage countries. In other words, we need some form of protectionism--but let the Indians invest in Indiana and the Chinese in Chicago if they want to pay American level wages and respect American laws and standards. They too should be allowed to "site here to sell here". 

All these new, eco-friendly industries and products would have huge export value and could quickly become the world standard. I am trying to describe a scenario that can be sold to the elites because I don't think they will embrace genuine environmental values and conversion if there's nothing in it for them. But this approach is not merely a cynical attempt to get the elites to move in their own interests. There are also plenty of advantages in such an economy for working people. A huge ecological conversion is a job for a high-tech, high-skills, high-productivity, high-employment society. It would be supported, I believe, by the entire population because it would mean not just a better, cleaner, more climate-friendly environment, but also full employment, better wages, and new skills, as well as a humanitarian purpose and an ethical justification-just like World War II. 

In other words, it's a Public Relations dream. Whichever political party understands this can win on such a programme. We ought to initiate such a new ecological economy in Europe but I'm afraid we won't, so I'm giving you the idea for what it's worth because in the US you contribute even more than we do in Europe to the current crisis and because you also just might be able to do something about it, without having to bring down the entire capitalist system as a prior condition for saving the world. 

Before you tell me that none of this will work, that my solution is worse than a pipe-dream, that you don't want to save capitalism anyway and I've been wasting your time, please let me make one more point. The economic solution can come from a massive Keynesian-type commitment bringing together government, corporations and citizens but such an effort would also have vital role in creating renewed social cohesion. By this I mean it would bring many constituencies together in a common cause. Politically speaking, today no single interest group can solve the problem that concerns it most; that is, alone, ecologists can't save the environment; farmers alone can't save family farms; trade unions alone can't save good jobs in industry, and so on. Broad alliances are the only way to go, the only strategy that pays. 


Total text: http://www.tni.org/detail_page.phtml?&act_id=17306

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