The U.S. Still Decides the Future of Capitalism, Not the G20, and Not the BRICS Nations

Published on The Bullet, Socialist Project’s e-bulletin no. 1029, by Leo Panitch, Aug 31, 2014.

International attention has been diverted away from this year’s G20 meetings in Australia by the declaration from the leaders of Brazil, Russia, India, China and South Africa, at their meeting in Fortaleza Brazil this July, that they would launch a new “BRICS bank.”

Created by the U.S. Treasury in the wake of the Asian financial crisis at the end of the 1990s, the G20 was designed to get the major “emerging market” states to take responsibility alongside the G7 for the “new international financial architecture.” This was seen as providing legitimacy for the continuing central role of the U.S. in superintending a greatly expanded but increasingly volatile global capitalism … //

… Still in Control: … //

… Wall Street, City of London:

Yet, the main reason for the continuing central role of the dollar has very little to do with the institutional structure of the IMF, or the greater size of its capitalization relative to what the BRICS bank will muster. It primarily reflects the absence – even in Shanghai, where the new bank will be headquartered – of anything like the depth and range of the financial markets centred on Wall Street and its satellite in the City of London. And it is the ways in which these markets are, in turn, so deeply intertwined with the U.S. Treasury and Federal Reserve that explains the latter’s dominant role in global economic management.

What is more, the room for manoeuvre the BRICS bank would be allowed from the IMF is distinctly limited. Indeed, to obtain the full benefit of borrowing under the BRICS bank’s “contingent reserve arrangement” would still be contingent on a country having an “on-track arrangement” with the IMF. Indeed, this looks very much like the 2000 “Chiang Mai Initiative” arrangement for currency swaps among China, Japan, South Korea and ASEAN countries after the 1997-98 financial crisis, which was little used and proved largely symbolic.

The alacrity with which the World Bank has welcomed the BRICS bank also relates to the fact that its goals as a development bank look not very different from the resource-depleting, export-oriented economic strategies that have heretofore governed the emerging markets participation in capitalist globalization. Along the lines of Brazil’s BNDES development bank, it might promote the BRICS own multinational corporations, but this stands in sharp contrast with the cooperative socialist principles of the now defunct Latin American Bank of the South that revolutionary governments in Venezuela and Bolivia initially had in mind.

At Fortaleza, a “BRICS from below” meeting of civil society groups and independent unions stressed the extent to which the dominant classes and governments of each of the BRICS members were themselves committed to neoliberal policies, often brutally administered in their own countries.

They were in this respect at one with the recent L20 trade union statement for the Australian G20 meetings, which in criticising “austerity policies and structural ‘reforms’ that reduce wages and workers protection” saw the BRICS as no model for an alternative. Indeed, it noted that “if in emerging Asian economies income distribution had not worsened over the past 20 years, the region’s rapid growth would have lifted an extra 240 million people out of poverty.”

For all the fanfare that attended the announcement of the BRICS Bank at the Fortaleza summit, it will in fact do little to shift the balance and, even more important, the substance of global financial power. There is an old lesson here, which also certainly applies to what will be heard about the “Brisbane Action Plan” this Autumn: real change begins at home.

(full text with hyper-links).

some Related Links:

Other Links:

The West: The Preeminent Cause of War in Human History, Strips the West of all Legitimacy, on Dissident Voice, by Paul Craig Roberts, August 30th, 2014;

Common sense prevailed: Ukraine releases Russian paratroopers, on Russia Today RT, Aug 30, 2014;

THE SATURDAY ESSAY: Why Doctors Are Sick of Their Profession, on WSJ, by SANDEEP JAUHAR, Aug 29, 2014: Dr. Sandeep Jauhar discusses his book on Lunch Break with Tanya Rivero …;

2 sets of Videos, uploaded on YouTube by Left Streamed, March 2014:

… and this:

Videos mixed with sometimes a diashow: Trains of the Midwest (with music), uploaded by TrainmanKnight, May 2011:

  • Part 1, 74.11 min,
  • Part 2 (Jefferson City Sub), 39.09 min,
  • Part 3, 16.17 min,
  • Part 4, 53.51 min,
  • Part 4 EXTRA, 1.54 min … totally 122 train-videos in autoplay … if too tired for else, enough silent contemplation for a sleepless night.

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