Wednesday,Jun 30,2010
Jonathan, Babangida and the Sword of Damocles
In the Sword of Damocles, the Roman politician and philosopher Cicero tells the story of Dionysius II, a king who r.... By Jideofor Adibe
Wednesday,Jun 23,2010
Attahiru Jega and the Search for a Nigerian Hero
Nigerians seem to be in constant search for public heroes - competent little messiahs who will not hesitate to put .... By Jideofor Adibe
Thursday,Jun 17,2010
The Return of Mallam Ribadu
Mallam Nuhu Ribadu, the one time strongman of the financial crime buster EFCC, who sneaked out of Nigeria into self.... By Jideofor Adibe
Thursday,Jun 17,2010
Too Many Captains…
Two major attributes that have been quite easy to discern about President Goodluck Jonathan are: one, he seems to l.... By Ijeoma Nwogwugwu
Thursday,Jun 10,2010
Should Suspects Be Paraded?
The above question is generating increasing furore among our intellectuals, and ‘beer parlour’ politica.... By Jideofor Adibe
Thursday,Jun 10,2010
Nigeria: A Two Party System By Legislation?
Perhaps enamoured by the seeming ease with which two dominant political parties trod the political landscape of, at.... By Joel Nwokeoma
Professor Patrick Bond is Director, Centre for Civil Society and Research Professor, School of Development Studies,University of KwaZulu-Natal, Durban, South Africa
Roots of the economic crisis in overaccumulation,
financialisation and ‘global apartheid’
Introduction
The crash of a variety of US financial institutions – at this writing on 3 October, 2008 the five main investments banks, the two main home mortgage guarantors, the largest insurance company, the largest-ever bank to collapse and the Dow Jones itself (which on 29 September had the biggest-ever fall in share prices) – is being superficially explained by mainstream commentators. Many mention deregulation, corruption, greed, feckless borrowing by debt-addicted consumers, or a combination. Joseph Stiglitz adds ‘ideology, special-interest pressure, populist politics, and sheer incompetence’. Here is US political commentator Thomas Edsall describing the banal mainstream discourse:
The Huffington Post, October 2, 2008
Conservatives Seek To Shift Blame For Crisis Onto Minority Housing Law
by Thomas B. Edsall
Blame for the current economic crisis has been laid on many doorsteps, including the Gramm-Leach-Bliley Financial Services Modernization Act of 1999; credit default swaps; hedge funds; the Commodity Futures Modernization Act of 2000; Alan Greenspan; and Phil and Wendy Gramm. But it has fallen to right-wing pundit Ann Coulter to blaze a truly simple path through the maze of credit derivatives, collateralized loan obligations, tranches, securitization transactions, and Thomson Financial League Tables. This gentle lady spells out the source and origin of the current economic crisis: “THEY GAVE YOUR MORTGAGE TO A LESS QUALIFIED MINORITY!”
Amidst the cacophony, we really need to consider structural roots and shoots
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of this crisis now – especially in a South African economy that suffers many of the same features of US financial capitalism (the subject of the next paper in this series). After all, there is no doubt that financial volatility remains central to the way global markets are developing, and that such volatility constrains economic, social, political and environmental progress in the Third World. The grounding of volatility as a symptom of deeper economic tensions also requires setting the stage politically. These are the main objectives of the second section.
Having done so, the third section allows us to consider two half-hearted and one visionary approach to global financial reform, from above. Time constraints do not permit me to dissect the various reform proposals for the immediate symptoms of the crisis, in the US financial institution collapses. Instead, let us retrace several global financial reform proposals to give global context. First, the status quo processes of the Monterrey Financing for Development agenda in 2002 led in 2005 to G7 finance ministers offering sufficient debt relief as to keep borrowers – especially in Africa - paying both large downpayments and high rates of export earnings. However, the experience of such extreme Northern domination through the International Monetary Fund was the main reason for Latin American countries (and a few others) repaying the IMF early, threatening its own revenue streams. With these divergent forces at work, there was very little on offer in multilateral reform. Second, at least one country, Norway, made some tentative steps forward (e.g. to defunding the World Bank due to its water privatization fetish, and to canceling earlier corrupt shipping loans), but these were half-hearted and contradictory. Third, we can turn to a much clearer agenda for reform, by post-Keynesian financial economist Jane D’Arista in 1999. But no constituency for this project was built during the crucial early 2000s, as the Jubilee movement’s weak Northern base and militant but strong Southern group found themselves marginalized, and as the rest of the global justice movement addressed issues not immediately concerned with finance – the topic of the third paper in this series.
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