Emmaus International

Susan George, alter-globalist activist and co-founder of ATTAC shared her expertise on the workings of the global economy in a talk to grassroots activists who took part in Emmaus’ World Forum of Alternatives led with the most excluded on September in Geneva.  

économie susan george Flickr cc-by-nc

Economics are within everyone’s grasp

“I am going to try to take you through 85 years’ of economic history. Sometimes we are a little afraid of the words economy and economists but it isn’t complicated. Economists often try to complicate things but, I promise you, truly everyone can understand it. 

It does require a bit of effort at the start, though!  When I first became politically active, our slogan was “USA out of Vietnam”, with which people either agreed or disagreed, but at least everyone understood. Now, if I were to talk to you about certain aspects of the economy, you might not immediately understand everything. It requires a bit of concentration, but it is easy to pick up. You should not be afraid of it because knowing what your enemy is up to (that is to say finance, which has turned today’s economy against the public interest) is important in order to be able to fight it. You may be aware of inequalities around the world, but it is very hard to overcome your enemy if you do not know what your enemy is.”

The lobbyists’ catastrophic victory

Franklin Roosevelt, who was president of the USA after the worst economic crash in history in 1929, decided to split the banks.

On the one hand, you would have commercial banks, into which you or I pay our salaries or deposit savings as individuals or small or medium-sized businesses. On the other hand you would have investment banks that accept funds from extremely rich people and try to make those funds grow so that these people can become even richer!

Banks did not like this so-called “Glass-Steagall Act” at all, even though it protected the US and European economies for 65 years.

Financial lobbyists, of which there are at least 2 000 in Brussels today, campaigned tirelessly and finally had the law repealed in the USA in 1999, a decision made by Bill Clinton, a democrat!  

It took less than 10 years for this to lead to the massive crisis of 2008. The 2008 crisis, the 10-year anniversary of which will be celebrated – if I dare say such a thing – this year started with the collapse of the Lehman Brothers bank. Banks’ finances had become so complicated that nobody knew who owed what to whom and why!

The attempt to shed light on this has taken years. In fact, after the repeal of this law protecting the economy, banks did just as they pleased, playing with our money! Commercial banks were able to take as much money as they wanted, borrowing and investing wherever they liked.”  

The disastrous move from a real economy to a financial economy

“The biggest change was that we moved away form an economy based on our need to feed, house and clothe ourselves, a real economy where people exchanged real things and invested in the production of real goods. We moved to a financial economy, with very little investment in the real economy.  

A purely financial economy is one where money is not made through selling products, but where money makes money. What, then, was the 2008 crisis? Highly ‘creative’ bankers decided they would attempt to flog mortgages to people who did not have the means to pay them off.

Borrowing to buy a house is all well and good if you can afford it, but there were hundreds of thousands of people who did not have the means to pay back their mortgages. Bankers packaged up these mortgages by the hundred and by the thousand, and sold these packages as a financial product saying – ‘just you wait and see – this will be a good earner’.

Ratings agencies responsible for assessing the quality of this type of investment said that they were all fine. They gave them a ‘AAA rating’ and so nobody was in the least wary.

This is a very brief summary, but the banks had become too big to fail and they knew it. So when the crash of 2008 hit, was it an option just to let the global economy crumble? This did not only affect Europe and the USA, but countries of the global south as well.

14 trillion invested in saving the banks!

The Bank of England calculated that different governments spent a total of 14 trillion dollars buying back the banks and bailing them out.

As nobody can truly grasp a figure as large as a trillion, I’d like you to look at your watch. If you imagine that each second being marked by the second hand represents a dollar, to get to 14 trillion dollars you would have to be looking at your watch for 450 000 years! It is a colossal figure.

When I talk about the real economy as opposed to the financial economy it is to explain that no economy can function unless each citizen can contribute to it.

No billionaire is going to buy 200 pairs of trousers at once, or 150 000 euros worth of jewellery each day. However, it is buying things like food that keeps an economy running. And, better still, being able to make purchases without worrying about getting through to the end of the month.

But this is the situation we currently find ourselves in! For many people, and not only in southern countries, but also the USA and Europe, this is a very real concern."

An economy that is harmful to humans and the environment

Currently, finance mainly exploits labour and the environment.

We are in the process of eating up our capital, that is to say, our planet. We are wrecking biodiversity. This summer was extremely hot throughout Europe. The global south is suffering hurricanes and tropical storms.

The earth has been given to us, placed under our protection, and we are not protecting it. We are involved in a criminal economy that thinks that we can continue to produce greenhouse gases as long as profits continue to flow into the coffers of big companies like those producing oil.

An organisation like Emmaus International must, of course, support the poorest, but most importantly it must denounce the context that some people force them to live in.

There is enough money for everyone. The earth is groaning under the weight of all of the money on it. That is not the issue – the issue is generating more equality, the issue is ensuring our politicians stop playing the game of refusing to do anything during their term of office that might make them unpopular.

They must act, and it is the role of social movements to force them to act. Groups like Emmaus International should not stop the work they do on a daily basis with the most excluded, but I think that there are times, there are important moments, where great coalitions should be forged that force our leaders to react.  If not, it will not be just our economy that collapses – it will be our planet.”

An essential convergence of struggles

I would not dream of telling solidarity activists what to do, but I believe that it is my responsibility to encourage any initiatives aiming to recruit as many people as possible, regardless of the field of action, whether it be access to housing, health, or fighting exclusion. We need an occasion, once a year, where everyone comes together. That is why this first edition of the Global Forum of Alternatives is so exciting! It is moving to see people who have come from all over the world to debate and think about collective action. I hope that shared strategies will be born out of this forum.

I am a founding member of ATTAC, which started out in 1998, 20 years ago this year. We have organised various activities to mark this anniversary. 15 partner movements joined with us at our annual university, where 300 organisations were represented. We all learnt from each other, which is how we develop. I firmly believe in training of all sorts because this is how we learn and draw lessons from our respective struggles. And when we know that a bill is being considered that might harm those in the most precarious situations or create further exclusion, we must all mobilise.

If we come together, we can make our governments change course. Power is not mobile – it always prefers to maintain the status quo. The only way to achieve victory is to act together. The battles we win this way will be what give us the strength to keep pushing forward and not give up the struggle.  Whatever our battleground, whatever our position, those of us on the stage (Jean Ziegler, Richard Mokolo, Roberto Savio) and you in the room, we are all equally important. We are all equal citizens and we are all equal in our struggles.”

Geneva, 19 September 2018