In her speech at the Guardian Conference on capitalism in crisis, Jayati Ghosh, professor of Economics at Jawaharlal Nehru University, New Delhi, states that the financial crisis is not all bad news but rather offers an opportunity for alternative change. In her explanation Ghosh traces the historical pervasiveness of the current crisis back to the emergence of three simultaneous imbalances. The first imbalance describes the high interlinkages between the financial and the real economy. In order to avoid uncontrollable side-effects of not taking the counterparty risks, states had to nationalize banking. Ghosh, however, points out that the socialization of losses can only be considered as a transitional solution since it is boosting the second, macroeconomic disequilibrium. As a matter of fact, there is no alternative to reduce current account deficits. In particular, the U.S. debt burden – serving as an engine of the unequal demand boom – has to decrease. Coordinated expansion provides not only the basis for fiscal, but also for the waste of natural resources. Though the Club of Rome declared the Limits to Growth more than 35 years ago, pollution, congestion and degradation remain unsolved.
From crisis to creativity. How to make a virtue out of necessity
European Union: No fronts, no tricks, no soap box politics?
The creation of the European Union refers back to the process of ensuring peace after centuries of turmoil and barbarous wars. Trade instead of war was the fundamental motivation of its founders. However, the establishment of institutions failed to transform the military fight adequately into political antagonism. According to Chantal Mouffe, every kind of fight needs fronts or contrary parties that put their opinion at stake in order to negotiate visions, and for absorbing people’s emotions politically. Democracy as the evolutionary winning model deals with the distinction of government and opposition. The difference guarantees that not voted parties can be elected in a forthcoming procedure – enabling that possibly disappointed decisions can be made in a different way; it is just a matter of time. And it is a modern tragedy that ideas being ahead of the times often have to wait until outworn opinions and habits die out before social progress unfolds.