Green shoots in Finaghy

Governments and central banks throughout the world have been struggling with a myriad of unco-ordinated measures to deal with the global financial crisis that has triggered a precipitate fall in output and rising unemployment.

They are trying to lubricate seized-up markets while pouring trillions of their various currencies into the banks to prevent a systemic collapse.

New bursts of credit have been issued to stimulate demand for consumer goods which has all but collapsed. Every announcement of a new rescue package places the price to be paid by future generations further beyond calculation.

The spin is that this is beginning to work and that if you examine the economy for signs of life, you will see “green shoots of recovery”.

But reality has a disturbing habit of disappointing the hopeful. Yesterday, on the same day as Barack Obama’s headlining claim that US government action on the economy was starting to bear fruit, figures were released on consumer spending for March.

Retail sales in the US were much weaker than forecast, falling 1.1%per cent, rather than rising the predicted 0.3 per cent. This takes the decline to 9.4 per cent in a year. Not much sign of an improvement there.

Obama understands, or at least acts as though he understands, that without continuous increases in the volume of credit relative to the value of production, the social system built to service the inbuilt self-expansion of capital would have seized up decades ago.

With a pattern of thought informed by pragmatism, the American version of English empiricism, the argument goes: it - new and expanded forms of credit - worked before to dig us out of the, albeit accelerating reoccurrence of crises towards and after the end of the 20th century, and it’ll work again.

It has to, they say. It always has, always will.

Anticipating the self-created dream of capital’s recovery to profitability, and in the wake of the empty rhetoric from the G20, Willem Buiter, one of the Financial Times’ more forthright, upfront writers had already put it like this a week ago: “The green shoots are weeds growing through the rubble in the ruins of the global economy.”

But even this is hope built upon hope. The potential is for greater damage than the state bankruptcy in the US and the UK that Buiter considers possible. It happened for both countries during the Great Depression of the 1930s, he says, and it could happen again.

Buiter’s analysis too is based on historical precedent, but the last 30 years of credit-led capitalist exploitation of people and the planet have created a deeper and more profoundly damaging, global impasse.

There are a set of inter-related, self-feeding and mutually conditioning crises that are eating away at the ecological, social, political, economic and financial systems and processes of the world.

For example, at the same time as the world’s major banks have actually become insolvent, without the assets to meet their obligations, climate change has already reached a tipping point.

The scale of the current planetary emergency is beyond the capacity of existing measures. Totting up the total overhang of accumulated credit, or even the geometrically accelerating causes and effects of climate change get nowhere near it.

So are there grounds for optimism? Yes there are, but not for Obama or Brown, nor for any of the political or executive representatives of unsustainable capital.

The green shoots can be seen in the wave of occupations that will no doubt follow the example set by Visteon car part workers in the former Ford plants in Enfield, Basildon and on the Finaghy Road, in Belfast.

One Belfast trade unionist, commenting on the ordinariness of where things begin, is reported to have said, “Who’d have thought the revolution would begin in Finaghy… !?”

Gerry Gold
Economics editor