On sitting down to write these lines, I feel myself to be thirty percent sad and seventy percent happy. The percentage of sadness is due to the fact that Gordon Brown, the prime minister of the United Kingdom, has anticipated “my idea” (or at least its verbalization, as many people here in Brazil and in the rest of the world have already intuitively deduced this) that global solutions are necessary for global ills. From this starting point, world government is just another step forward. At least, initially, as a topic of conversation.
My percentage of happiness comes from knowing that the prime minister of an important country was fully aware that the response to the current crisis must be global. His article ends stating that (...) “as America stands at its own dawn of hope, so let that hope be fulfilled through a pact with the wider world to lead and shape the 21st century as the century of a truly global society”.
This statement fits like a glove for those who believe that it is necessary to start, right now, and in an amicable manner, to talk about how to set up a democratic world government. Pardon me for saying so, but no society exists, irrespective of whether or not it is global, that does not have an equivalent government.
In an item published in O Estado de S. Paulo newspaper (B4, Economia) this morning (03-03-09), when I was preparing to write my article, I read that Gordon Brown stated that, in order to resolve the current global economic crisis, there is a need for a global “new deal”. It was precisely about this topic that I was going to write. Everyone, including me, likes to imagine “discovering the wheel” and, in the case in question, Gordon Brown first externalized that verbal synthesis which summarizes an idea that is not yet usually “made concrete” in a phrase. Whether we like it or not, peoples “think” using ready-made clichés and phrases. If the phrase were non-existent, perhaps the thing that it represents would not exist. Man thinks much more with words than ideas. If such terms as “infinite”, “subconscious”, “incongruence” did not exist, how many hundreds of words would we have to use in order to express something close to these nouns? In the language used by deaf people, hand movements certainly exist with such meanings; however, it is my belief that these gestures can only be perfectly understood by those with impaired hearing who are already familiar with these concepts.
Returning to the global “new deal”, what I was going to say, prior to glancing at the newspaper, is that with irreversible globalization (fruit of the internet and the intense exchange of information, goods and services between all countries) a “new deal number two”, if only North American, would not even resolve American difficulties, to the contrary of that which occurred in the case of the policy of Franklin D. Roosevelt. At the time of his government (he was elected four times) in the 1930s, the USA was politically isolated, this being something that no longer occurs. The Americans became exaggerated consumers and the whole world needs these rich buyers. When they show signs of a shrinking economy, everyone suffers, including those who live in the USA.
I think that, as far as economics is concerned, the majority of historians agree that Franklin Roosevelt was a pragmatist. Taking over responsibility for government at one of the worst moments in the history of his country, he was in urgent need of solutions, not theories. After hearing proposals put forward by the best minds that surrounded him, he decided whether to take this or that way forward. A “solutionatic” instead of a “problematic” approach. If it was unsuccessful (the outcome of certain issues is dependent upon the passage of time), he took a change in direction, without any kind of ideological trauma. Economics is a science (humm...) highly impregnated with philosophy and psychology. Whoever reads books and articles on economics, even if only in part, is astounded by the high degree of subjectivism that impregnates a branch of knowledge that could only be called “science” with a good stretch of the imagination. Unless one excludes predictability, one of the essential attributes of all sciences. If economics is a science, it is so to a lesser extent, although useful as some of its few truths have withstood the passage of time. What demoralizes the science is its object of study, its greedy guinea pig: the laboratory rat, or rather, man.
What was the brilliant intuition behind the “new deal”? The idea that, in times of economic crisis, it is better to do something - construct something useful - than to just sit at home, depressed and inutile, ruminating on the unhappiness of being unemployed or the lack of outlook for your business. As a result, Roosevelt resolved to do something - to build, investing heavily in public works. In doing this, he provided millions with employment and developed an infrastructure that, once the difficulties had passed, made the country much richer and more powerful. I do not know whether this generated inflation; however, it is certainly true that if a government, any government, prints money but, at the same time, increases the gross domestic product, sooner or later, such an increase neutralizes the inflationary effect of the printed money. Inflation is caused by excessive money supply in relation to economic growth. If the economy grows in the same proportion as money supply, then the equilibrium continues. There is no inflation. It is this, for example, that Brazil promises to do: construct and repair highways, amplify ports and airports, build railroads, reservoirs, sewage networks, schools, etc. If Brazil had ports that functioned in an effective manner, would this detail not be of benefit to the country when the global crisis passes? In summary, it is better to use one’s hands for doing useful work, rather than biting one’s nails. Work, it should be emphasized, does not mean employment in government jobs in which there is no work in the strict sense of the term.
Even in dictatorial regimes, full or almost full employment works wonders in the economic area. Hitler, a dictator who was somewhat ignorant (his oratory style, shouting and yelling, excited and hypnotized rather than provoking rational thought) managed to pull Germany out of economic depression. Thanks to large-scale investment by the state. It is only necessary to mention that, in 1933, there were 6,000,000 unemployed. In 1939, this number had dropped to 300,000 - a considerable reduction.
Some scholars of the German “economic miracle”, unnecessarily concerned with possible praise of a morally abominable figure, attempt to invalidate this highly satisfactory economic result alleging that, from the year of 1933, women were no longer counted as unemployed. Besides this, after 1935, Jews lost the status of citizens and were not included as such in statistics. It is also mentioned that there was an increase in the number of individuals called up to join the armed forces - all this to explain that the so-called German “miracle” cannot be even partially be attributed to Hitler.
In fact, it seems obvious that Germany, starting off with hyperinflation, came to be a great power in 1939. Not due to any merit on the part of Hitler himself, but the basic idea that any country, in order to grow, needs to produce goods, either through private sector initiative or governmental resolve. Although they represent opposing political philosophies, the United States and Nazi Germany freed themselves from depression and unemployment by adhering to the same recipe: “building things”. Something like an unemployed bricklayer who, in order to occupy himself, resolves to build rooms in his back yard. With the passage of time, this “hobby” could come to be a source of income, through the renting of sleeping quarters.
The significant difference between Roosevelt and Hitler lay in the “kind of things” they did during the depression. Hitler’s Germany directed its productive energy into the arms industry, as its plans included pitiless and unscrupulous expansion of “vital space”. Once armed to the teeth, what was Germany to do with so much power? It could only be declaring wars, invading neighboring countries and making them slaves. Submarines, tanks, battleships and fighter planes do not serve for tourism purposes.
On the other hand, the United States devoted its energies to building other “things”, using its resources in infrastructure improvements. There was only heavy investment in the arms industry at a much later date, following the attack on Pearl Harbor. After the USA came into the war against the Axis powers, this well-founded and peaceful infrastructure, created as the “new deal”, made it possible to produce the bombers that filled the skies of Germany, for hours and hours, during a single mission. A devastating show of force. Would all this have been possible without the “new deal”?
Coming back to the article by Gordon Brown, the whole text focuses on recognizing that, without a global response (and not only on the part of the USA), the world will not be able to extricate itself very quickly from the mess that it has got into. His own words, taken at random, show reveal the main focus of his article: “... while we can do a great deal nationally, we can do even more working together internationally”; “A new set of challenges faces the whole world, which summons forth the need for a partnership of purpose that must involve the whole world. Rebuilding global financial stability is a global challenge that needs global solutions”; “That is why President Obama and I will discuss this week a global new deal”; “I see this global new deal as an agreement that every continent injects resources into its economy”. And so on. Even specifically mentioning the country of Obama, who will be making a brief visit to England, his opinion explicitly implies that all countries with some degree of wealth should continue to work and produce without only thinking of internal problems, most notably those concerning market reserves.
However, the current global crisis may yet help countries to understand something that is still seen as a utopia and, as such, highly debatable. Man is a paradox in the field of ideas: intelligent in examining details, but slow-witted in managing the whole. Only this, even more than malice, explains the existence of so much suffering throughout the world.
(03-03-09)
