6 Apr 2009
The G20 was not about bringing about the 'new world order' touted by Britain's Gordon Brown. It was an attempt to maintain the 'old world order', contends Leo Panitch, Professor of political science at York University and author of "The American Empire and the Political Economy of Global Finance."
In his view, the G20 countries have come together with an agreement around a bunch of rhetoric and some "not insignificant measures."
The rhetoric is that they are united in dealing with this crisis, which given what happened in the 1930's is not insignificant. During that time, capitalist governments all turned on each other. There was a massive trade war and break down of the the London conference in 1933 (the equivalent of the G20 meeting that just took place).
According to Panitch, what this G20 summit achieved in terms of measures is not enough, but not insignificant.
The G20 have put more money into the IMF than was predicted -- $500bn, which should help some developing economies, such as Latin America and Eastern Europe, where the banking systems are under threat because they are heavily invested in by Western banks that are now pulling their money out. These bailouts are an attempt to induce capitalists to keep their money in these countries.
The G20 have also put in a provision for a $250bn credit fund for trade. The current crisis is exacerbated by the fact that banking loans to companies that trade internationally have dried up. This money will help ease the problem.
But, says Panitch, these measures are not the kind of thing that are going to get us out of this crisis. The central problem is that banks are not lending. All that the G20 has done is to ensure that the bankers don't get more frightened -- they are being bribed to loan.
This is an attempt to keep the capitalist 'old world' system going and the way that the G20 has kept it going is to provide enough tax payers money and enough guarantees of confidence to the bankers.
Editors Note: You may also be interested in watching this post from Al Jazeera's Listening Post about New Media and the G20, where it is reported that there was definitely a divide between what was reported by the mainstream media and the alternative media, including the blogosphere, with respect to the recent G20 Summit.