“The boss of one of the world’s most important economic organisations has said the lack of regulation in world markets was the root cause of the financial crisis which has hit world economic growth. (…)
Pascal Lamy, the director-general of the World Trade Organisation (WTO), told the BBC that “a little more prudential regulation” could have helped prevent the banking crisis that has engulfed the US and Europe.
Mr Lamy said that the fundamental problem was that here was no international consensus on how to regulate the rapidly changing world financial markets or who should be the regulator.
The WTO boss also said that workers hurt by globalisation should receive more help from their governments.
Mr Lamy’s remarks put him at odds with the so-called “Washington consensus” that liberalisation, privatisation, and open markets are the only way to bring about economic growth.”
Well that’s a bit rich considering how much the WTO has done to precisely create the conditions under which the system finds itself in crisis today. So, now, governments are supposed to pick up the tab for unscrupulous investors, but heaven forbid that they tax said investors for that purpose.
However, the shift away from the Washington Consensus (something already noted here) is actually interesting.
“The WTO chief said he well understood the concerns of those workers who feared that globalisation would cost them their jobs, but argued that the WTO was “not an advocate of unfettered globalisation.’
And he criticised governments – including the US – for not providing enough domestic support, including retraining and job programmes, to help workers displaced by changing global trading patterns.
Trade was often just “an excuse” for not making the necessary adjustments in domestic policy to support workers hit by globalisation, he said.
And he added that he was not surprised that protests were strongest in the US, because it has the weakest system of social protection.”
Yeah, no kidding. How about not creating conditions that leave people in such precarious situations? Because, at the end of the day, Mr Lamy does not question nor challenge the economic system that displaces workers. He has the same “evolutionary” view of economic globalization… workers displacement is just a necessary step towards a better world. So, first, let’s create conditions that displace workers, THEN, provide social services to help them. How about creating economic conditions where workers don’t get displaced in the first place? That never comes into the discussion (Well, Hillary Clinton talked about that in her campaign). And, of course, Mr Lamy rejects protectionism, especially in the US form of massive subsidies. Is that really new thinking in the Transnational Capitalist Class of which Mr Lamy is a member? Hardly. Case in point:
“Mr Lamy said there was no doubt that the effects of the global financial crisis were extremely serious, especially for the US and Europe.
World economic growth and world trade are both slowing sharply.
But Mr Lamy argued that the growing economic power of emerging market countries such as Brazil, China, and India was a crucial counter-weight to the slowdown in the rich countries, adding that this would not have been possible without the expansion of free trade.”