The 2008 Global Financial Crisis can be viewed in many ways. From the comfort of New Zealand’s middle class it existed as a media story that was concerning to some, but in truth most of us were spared the harsh realities experienced by others in other parts of the world. Some considered it a minor crash. Some believed that, once markets and economies came out of recession, stability would resume. Some believed it was the end of capitalism and the dawn of a transition into a new, post-capitalist world. In terms of history it would appear the Crisis was not an isolated event, but connected to wider movements of trade and time and one of a series of global financial crises that have occurred since the onset of globalization. I am inclined to agree with those who felt this was much more than just a financial crisis; I believe it is a sign that the global financial system which affects all of us inhabiting this planet is inherently flawed.
The purpose of this essay is to constructively pose the question: is our current global economic system sustainable, and is it the best system for human society and culture? The main counter-ideology to capitalism is communism. The mass perception of communism is that, due to being on the losing side of the Cold War, it was a failed experiment. But the collapse of the Soviet Union did not prove that the philosophy and theory were wrong. While it did indeed prove that this particular communist / authoritarian system was not sustainable, the communist system remains today in countries such as China, Vietnam and Cuba. Modern communism is fused with elements of capitalism. As it is with everything, it’s all about the fusion. The recent political trend in most of Latin America is toward Socialist Democracy, and to me this is as much a sign of the times as the Financial Crisis of 2008. Socialist Democracy is a much more positive sign, and gives me hope for the future of this world.
It is becoming increasingly clear that capitalism does not function well. As a system it is not stable, it is extremely unsustainable. This means that if we continue to use capitalism as our dominant system we will see many more crises and catastrophes, both economic and environmentally. The time has come for an honest, open and rational questioning of our current global economic environment and its impact on us as people and our planet. Life within this system is distorted, both in developed and less-developed nations. The narrow philosophy and theory that form the foundation of our capitalist democracy is incorrect. The equations don’t balance and the assumptions are flawed. There is more to life and the systems that shape it than individuals seeking to accumulate and consume. We are not just labour and entrepreneurs and we are not doomed to live like this forever (even though this may be the wish of those who want to live forever). We will change, we must – the dominant force of history is change – but time is fragile and we live in fragile times.
What is wrong with the financial system we have?
It was stated in a recent study by the IMF that inequality is damaging to economic growth. The current system of wealth distribution is based on the historical flow of wealth, ownership rights and privileges that formed out of wars and the empires that conquered and took control of global resources. It is now widely accepted that Europeans, largely due to the spread of their diseases (which killed off large sections of indigenous populations) and the appropriation of technologies from Asia, were able to take vast amounts of wealth and to this day exploit the resources of their former colonies to accumulate even more wealth. Alongside Japan, Australasia and North America, Europe managed to spread the capitalist economic system that they designed to all corners of the globe, however it has brought us to a point in time where we are facing economic and environmental catastrophe on a global scale. Should either of these occur, as even NASA forecasts, then we will follow a path similar to that of the 20th Century, and potentially a path similar to that of failed civilizations of the past. The currently dominant economic and political system is not sustainable, and if we are to avoid mass suffering we ought to begin the process of being brave enough to change it at all costs for the sake of future generations.
Why is this system so hard to change?
The system can seem impossible to change, but – though change can be difficult – it is possible. Often the most rewarding challenges of life seem too big when initially contemplated. In order to see change occur, we need to first think it is necessary and then to believe it is possible. This current system has been perfected over thousands of years. It is not just financial or even economic, it is a political power game between kings and their subjects that has played out since the beginning of humankind. Our economic systems are political systems; money is as much a force of power as is the military. To change this system means to challenge the social and political order, and rupture the very fabric of our time. We would need to put ourselves into a frame of mind where we believed in a better system and felt that it was essential to achieve it. While we are distracted by comfortable living in the digital age, so long as crises do not directly devastate our lives, we are unlikely to seek to change our system. But it is likely more and more of us will be affected by the increased regularity of disaster events and their impacts.
When would be a good time to change?
As I see it, the financial crisis of 2008 was the first of many economic crises that will keep occurring – some bigger, some smaller – until our system is re-stabilised from its foundations up. Unfortunately, history shows that periods of economic instability often preempt a major war; in fact such instability can cultivate the ‘right’ conditions for war. With Western countries currently in economic shock and the failed invasions of Iraq and Afghanistan dragging on, former Cold War foes and sleeping dragons China and Russia are waking up. They have been humiliated by the West many times in the past and they see an opportunity to regain their former glory. China is claiming vast parts of the Ocean and neighbouring islands as its own territory and this has increased tension with all of its neighbours. Russia is currently seeking to annex part of Ukraine, reminding us of the territory it took from Georgia in 2008. On top of these worrying geo-political developments, the environment is showing us more and more evidence that climate change is more than just real, it’s out of control. We are now getting used to weather records being broken on a regular basis. I’m not sure how many scientists it would take to wake up the leaders necessary to tackle climate instability but by many accounts it’s important, if not essential, that we face this as a united world as soon as possible.
Where do we go from here?
Information technology is both a blessing and a burden. It can be the curse that distracts us from fulfilling our potential, and it can offer the very tools we need to do so. Either way it is timely that, just as the world is facing economic, political and environmental catastrophe, we are also engaging in the most internationally connected, communicative and collaborative phase humanity has ever seen. From here we need to share more information, ideas. We need to activate ideas as plans and then activate the plans into reality. More people need to be assisted in waking up from unmeaningful slumber into following their passion and thinking about the world they live in. We need inspiration and insight on a mass scale. Mass awareness and cooperation are crucial: now is the time of informing and joining. The biggest sleeping dragon is the common people of this world; this dragon has never raised its whole body, soul and mind into united action.
Who is affected?
All of us.