We are faced by a major economic and financial crisis: what kind of crisis is it? What are the alternatives?

Memo presenting the problem

The scandals and crisis that are affecting major corporations and the world financial system are the signs of the intrinsic limits of the global economy, which has been built purely serve this same system.

Since the end of the seventies, strategies have been defined and policies have been implemented with the aim of restructuring the hegemony of capitalism. The foundations of a system have been laid that places the major private economic and financial corporations at its center, under the aegis of the free market, primarily aimed at seeking increased productivity and unrestricted competition by accumulating huge concentrations of wealth and power on a global scale. To do this, liberalization, privatization, deregulation and the reduction of the role of government in economic regulation have become the keywords of an all pervading neo-liberal dogma. This has resulted in the economic health of businesses, the economies of nations and their governments being assessed on stock markets according to the standards and rules of speculation, whose legitimacy relies purely on maximizing profits at the expense of any other criterion. The privatized world, considered as one huge market, has become a kind of global casino. As casinos usually go bust, so has this system. Fictional company accounts, spectacular bankruptcies, sudden slumps in company share values: the exuberance and fragility of this globalised capitalism appear to be its inherent characteristics. What kind of crisis is it and what are the underlying causes?

Crises are a fundamental component of the capitalist system. The novelty of this new crisis is that it affects the entire world at the same time. Still worse, apart from the fact that it is global, the central issue of the current crisis concerns the capacity to propose a project, and the power, policies, processes and structures imposed by force by neo-liberal globalization. There is no escape for anyone. Despite the enormous diversity of situations around the world, no people, nation, society or government can distance itself from this crisis. What can be done to withstand it? How can the major corporations be brought under control? How can economies be freed from the speculative and destructive logic of the world financial system?

A basic question, made even more poignant by the current crisis, is that of the precedence of the economy over society.

We live in a paradoxical world where society must serve the economy rather than the reverse. The divorce is so radical that never before in human history has productivity been as disassociated from human needs. The main characteristic of current capitalistic globalization is to accumulate without producing anything, by simply speculating on the economic health of whole sectors and entire populations. The height of absurdity is reached with the rise in value of a multinational corporation's shares after it make announces that it is going to restructure its business and massively downsize its workforce. We must not forget the many tax havens that surrounds the main international economic-financial centers, where the dirty money of this economy can be laundered, generated by an economy that obeys only one law, that of the owners of capital. From the social point of view, the crisis of labor relations caused by this economy, with massive exclusions on a global scale -unemployment, insecure jobs, migrations, etc.- is a sign of the intrinsic limits of capitalistic globalization.

We have now come to a dangerous crossroads of civilization, where the problem is not simply economic. For the first time humanity is no longer confronted with a problem of scarcity in satisfying people's needs and rights, but rather a method of producing and distributing abundance. This is to say that social inequality, in terms of inequality of access to the economy, the use of natural resources and the goods and services produced is in fact a problem of unequal economic power. There is no lack of resources; on the contrary, it is the method of managing them, resulting from unequally shared power, that has led to this shameful global concentration of economic wealth. Poverty is not the fruit of scarcity but that of the system's intrinsic economic unfairness. Our central economic problem is that of combating inequality, by revealing the dimension of power embedded in the relations that fuel this global economy. We are faced with myriad interlocking social inequalities – between classes, genders, ethnic-racial groups, and between countries. What kind of economy should be built to serve society?

The world economic system is neither socially nor ecologically sustainable

Confronted by the current crisis we can see to what extent societies have lost the power to formulate policies via democratically elected national governments to the profit of non-elected global economic institutions. This results in accelerating the concentration of wealth between fewer hands and widening the gulf of inequalities and exclusion on a global level, accompanied with the increasing destruction of our common heritage and natural resources. It is not only the sustainability of the system that is now at stake, but life itself.

What should be done to ensure that natural and social sustainability becomes the essential condition for organizing the economy? Are the alternatives proposed compatible with the dual goal of combating inequalities and recognizing rights for all and the preservation of natural resources? Can democracy, by giving precedence to all human rights for everyone, be an alternative? Is building global citizenship and democracy enough to create new foundations for an economy with sustainable social and environmental horizons? Can the major transnational firms and the current financial system withstand such a democratic change? And how?

The world is not a saleable item! What alternatives can be built?

The huge crisis we are now facing has revealed the limits of considering everything as saleable: in addition to goods and services sold and purchased on the market, all relations, processes structures, common property and even nature and life itself have been transformed into merchandise. However, the worst is that the very image of neo-liberal globalization and the power of its ideology are presented as unique and unavoidable. The domination of mercantile thinking specific to neo-liberal ideology and practices appears to dominate everything, from material life to heart and soul. This is what innumerable social actors are fighting against, in different and contradictory ways, in genuine coalitions of a new type. Old and new movements are uniting to say No! Enough is enough! Can these revitalized social movements contribute alternatives to the present crisis? Furthermore, how can these alternatives be implemented?