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	Economics does violence when it forgets that social science must also be moral science by Dr Nitasha Kaul Open Democracy   April 2009   The G-8 has gone double-digit in recent times. After decades of high powered global conclaves where the few took decisions on policies that would affect the many, leaders of the most industrialised countries have reckoned that their utterances will carry more weight if they had a bigger chorus. The new members such as China, India, and Brazil are welcomed into the fold at a critical time. Their co-operation is needed on issues of climate change, resource exploitation, and currency stability.   In the West, there has been a wave of crises - food price crisis, fuel crisis, sub-prime lending crisis, and the big bad one: the financial crisis. These crises have exposed the foolhardiness of blind faith in the efficient functioning of unregulated markets, and the powerlessness of governments to effect a widely acceptable solution when the interests of capital and labour forcefully collide.   What is at stake is the very conceptualisation of the economic and the political realm. William Grampp, an economist, puzzled in 1951, ‘political anarchy has rarely suggested itself as the complement of a free market’. Indeed, if people are demonstrably fallible when unregulated in the political sphere, how is it that their mistakes, power asymmetries, and lack of restraint vanishes when their behaviour is considered in the marketplace?   The ‘free markets’ are free in a very specific way: trading in certain sectors of the economy may be unregulated and unsupervised, which means that individuals who operate within those markets can make short term decisions that benefit them while imposing long term costs on others. Thus, whenever the market is free from government regulation, it is actually individuals in it that are free to be irresponsible (due to naivete or malice) if it is in their interests.   The financial crisis shows just how interconnected the network of interests is, across national boundaries, like the wind and the birds. And rather like dealing with acid rain and bird flu, financial stability is a global public good that requires co-ordination. As the rift over fiscal stimulus between Franco-Germans and the Anglo-Americans at the G-20 solutions table warned, co-ordination is not the same as consensus.   It is important to get the balance right for each individual country if we are to avoid an escalation of economic violence. In general, economic violence has been conceived as a security threat. By economic violence, commentators have meant that people (may) turn violent when there is a scarcity of resources. For example, if prices of basic commodities shoot up, or if banks fail, people can riot. This will lead to political instability and from there it can spread as a security threat . This would also appear to be the reason why -- at the request of President Obama’s administration -- the CIA, from February 26th 2009, has produced a daily analysis of economic intelligence briefing reports related to the international economic crisis. Along these lines, economic violence is important to monitor and contain so that it does not turn into political crises and cause security threats.   What I mean by economic violence is different. Economic violence is not only the violence caused for economic reasons, but also the violence caused by spurious economics. It is the violence caused to people when they lose their jobs and livelihoods, when they witness massively divergent rewards for work, when they see an endless perpetuation of inequality around them. Such involuntary unemployment in the long run leads to social breakdown and community fragmentation. This is already ongoing, but it must not be exacerbated.   Under conditions of economic uncertainty and social instability, a predictable pecking order gains credence - and those most vulnerable (low skilled, manual or factory labour, women and children, new immigrants) suffer disproportionately greatest through a circumscribing of the opportunities available to them..   * Dr Nitasha Kaul, is Visiting Fellow at the Center for the Study of Democracy at the University of Westminster. Visit the related web page
	G20 agrees to $US1 trillion global rescue package by AP / AFP and news agencies   April 2009 (UN News)   UN Secretary-General Ban Ki-moon has welcomed the $1.1 trillion package committed by leaders of the Group of 20 (G-20) nations in London, stressing that developing nations must receive the funds needed to stem the onset of a human development crisis.   The G-20 nations today also “reaffirmed previous commitments to increase aid and help countries achieve the Millennium Development Goals,” Mr. Ban said in a statement, referring to the ambitious anti-poverty targets with a 2015 deadline. This means that these nations are promising at least $300 billion in aid over the next two years, he said. “For the poorest countries this will be crucial. The world will be watching.”   According to new World Bank data, developing countries’ economic growth will slow sharply to 2.1 per cent this year, marking a 3 per cent drop from 2008. As a result, over 50 million more people would fall into poverty this year, living on less than $1.25 a day, due to the crisis.   Additionally, the world economy will contract by 1.7 per cent compared to last year’s 1.9 per cent growth, making the first global decline since the Second World War.   The G-20 leaders committed new resources for the International Monetary Fund (IMF) and the World Bank, and asked the UN to monitor the impacts of the current and future crises on the world’s most vulnerable, the Secretary-General added.   Mr Ban was also encouraged by their recognition of the strong links between tackling the economic turmoil, food security and climate change.   “One trillion dollars over two years is not so large a sum, considering the consequences,” he said. “Some might call it a moral imperative. But if our goal is to reverse a global slump, it is also sound economics.”   The financial crisis has spiralled into an economic crisis, Mr Ban said. “I fear worse to come: a full-blown political crisis defined by growing social unrest, weakened governments and angry publics who have lost all faith in their leaders and their own future.”   Mr. Ban appealed to nations to recognize their global interdependence, with no single nation being able to safeguard its economic security without taking into account the well-being of other countries. “There is a thin line between failing banks and failing countries, and we cross it at our peril.”   April 3, 2009 (News agencies)   British Prime Minister Gordon Brown has declared the end of the "old Washington consensus" and unveiled a unified, $US1 trillion injection for global economies, as well as new "name and shame" rules for tax havens and caps on bankers pay packets.   The British Prime Minister announced a package of six key pledges designed to boost the world"s economies and hasten the end of the financial crisis. A second summit is now likely to be held at the UN in New York later in the year to assess the impact of the reforms.   US President Barack Obama says the agreements reached at the London summit are historic. He says the G20 will not repeat the mistakes made by leaders during previous recessions.   "Faced with similar challenges in the past, the world was slow to act and people paid an enormous price," he said. "Today we"ve learnt the lessons of history. We have agreed on a series of unprecedented steps to restore growth and prevent a crisis like this from happening again."   Mr Obama, like all leaders, was issuing a note of caution that it would not solve all the ills. "This alone is not enough," he said. "And obviously the actions that each of us take in our individual countries are still absolutely vital”.   Representatives from the developing world welcomed the outcome. Brazilian President Luiz Inacio Lula da Silva told the BBC"s Newsnight programme that rich countries had engaged with emerging nations on "equal terms" to achieve a good result.   Gordon Brown, said the G20 leaders had forged an unprecedented agreement in response to the "international hurricane" that had rocked the global economy. The rescue package was vital to restoring jobs, economic growth and rebuild trust in the financial system, he said.   "This is the day that the world came together to fight back against the global recession, not with words but with a plan for a global recovery and for reform and with a clear timetable for its delivery," Mr Brown told, reporters.   "Today we have reached a new consensus that we take global action together to deal with the problems we face, that we will do what is necessary to restore growth and jobs, that we will take essential action to rebuild confidence and trust in our financial system and to prevent a crisis such as this happening again.   Mr Brown said in agreeing to the six pledges, the G20 nations made their messages "clear and certain" to markets and communities world wide.   "Today"s decisions, of course, will not immediately solve the crisis. But we have begun the process by which it will be solved ... I think a new world order is emerging with the foundation of a new progressive era of international cooperation." he said.   "New reforms of the global banking system, including institutions such as hedge funds, and other parts of the so-called "shadow banking system" are to come under global regulatory control for the first time."   The key pledges are: Immediate publication of a list of tax havens that don"t comply with information requirements as well as unspecified sanctions. The injection of an additional $US1 trillion into the global economy through measures including a $US500 billion increase in the funding available to the IMF, an increase in the availability of money for developing countries through the IMF"s "special drawing rights" to $US250 billion and a total of $US250 billion being set aside for trade assistance.   The establishment of international colleges of supervisors for national financial regulation. Agreements to do whatever is necessary to promote growth, but with approaches individual to each country, ensuring the possibility of further fiscal injections if needed in future.   The revamp of the IMF and other institutions to ensure nations such as China and India are given greater influence. Senior positions on the World Bank and the IMF will open to candidates from the developing world.   * Below is a link to "The Crisis and How to Deal with It", offering excerpts from a symposium on the economic crisis presented by The New York Review of Books and PEN World Voices at the Metropolitan Museum of Art on April 30. The participants were former senator Bill Bradley, Niall Ferguson, Paul Krugman, Nouriel Roubini, George Soros, and Robin Wells, with Jeff Madrick as moderator. Visit the related web page
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