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17 March

World Public Finances for all and none

[World Social Forum] 

"World Public Finances" is an over-arching concept which needs to be elaborated together by the individuals and groups who act in the spirit of the social forum, in order to bring an end to the era of Neo-liberalism and the contemporary financial non-system. (1)

At the Nairobi WSF in January, a number of participants met two times to discuss and plan their further work and cooperation on "World Public finances". It was mentioned there, and it has been repeated since, that we shall arrange a WPF-seminar in Rostock or Berlin (or some nearby place) in connection with the next G8-summit at the beginning of June. The seminar should be a step towards publishing an international pamphlet on "World Public Finances" in the autumn.

Photo: Participants in the planning meeting on World Public Finances at the Kasarani stadium, Nairobi WSF, 22 January 2007.

In my opinion, "World Public Finances" should become the theme, or at least one of the main themes, of the Day of Action which will be the substitute for the World Social Forum event in 2008, and which will probably again be arranged in various parts at the time of the Davos World Economic Forum.

We are now all waiting for practical suggestions concerning the Rostock meeting, the book project (which was called the pamphlet above), and the preparations for the day of action in 2008.

In the meantime, let me present some reflections on two complicated questions,  which belong (but how?) to "World Public Finances":

1. Climate Change

 "Using the results from formal economic models, the Review estimates that if we don’t act, the overall costs and risks of climate change will be equivalent to losing at least 5% of global GDP each year, now and forever. If a wider range of risks and impacts is taken into account, the estimates of damage could rise to 20% of GDP or more. In contrast, the costs of action – reducing greenhouse gas emissions to avoid the worst impacts of climate change – can be limited to around 1% of global GDP each year."(2)
How does this relate to our concept of public finances? Or should we rather  ask: Does our concept of the world's public finances help "to avoid the worst impacts of climate change"?

Undoubtedly, climate change is a public issue which concerns the whole world. It is a public issue in sofar as it has become part of the public sphere, that is,  the sphere of the common evaluation and decision-making. In reality, we have three large and inter-related areas of the common public sphere: the sphere of the scientific communication, the cultural sphere where the authors, artists and critics are fighting their battles(3), and then, of course, the political sphere, which is for us the sphere of democratic communication and deliberation.

Now climate change has come up as a major reality in all three regions of our common public sphere.

The British economist Stern is said to have put a price-tag on climate change. We could add, perhaps, that in so doing Stern turned climate change into a global financial issue. For climate change to become that, its "price" had to be evaluated and estimated in terms of money.

What money is that?

According to Stern, this value, is measured in percentages of the global Gross Domestic Product.

So we may ask: are percentages of the global GDP what WPF is about? I am inclined to say yes, - and thereafter I would like to hear wise comments from Stern and other economists, about that strange measure, "the global GDP".  - I would like to know, for instance, how the pathological growth of the money trade -- its increase with two orders of magnitude during  the last 30 years --  is being reflected in the estimations of the global GDP? (4).

Is it not obvious that "World Public Finances" is also about the "financial system" (or, rather, considering the pathological features of the present "system", the  non-system)?

This last question is rhetorical. We are back to the inter-relatedness of the big issues and, by consequence, the need for cooperation and common action. The informed opinion of the economist and the financial expert is certainly needed, but that of the scientist, the politician and the philosopher is also much wanted. "World Public Finances" is für alle und keinen (for all and none). Should it not be recognised as a common goal of the World Social Forum, and the movement which sometimes sees itself as the global justice movement? That should be a burning political question.

2. Military Expenditure

The second issue I would ask you to tackle concerns the military expenditure, which is public because the military belongs to "the public sector" of the national economy.

There is, of course, also much public debate and deliberation about the military expenditure. It is definitively is an issue, which belongs in the public sphere.

Again, we have to ask: How does military expenditure relate to our concept of public finances?  Does our concept of the world's public finances help to avoid and get rid of the military expenditure?
"The greatest taboo in the development field is the silence regarding the costs of militarism. Global military spending levels - stimulated by the war on terrorism - are now climbing back to the heights they reached during the Cold War. After dropping substatioally during the 1990s, now, some 15 years after the fall of the Berlin Wall, the world's military bill comes to USD 1035 billion, and it is still rising"(5).
Is this not what the concept of the WPF is about?

To ask that question is, again, an exercise in self-evidences. However, there is a hard truth to be gained here, namely: "world public finances" cannot be only about the financial system or architecture. By necessity, we must also come to the question of the political constitution of a world with radically reduced military expenditure.

"World Public Finances" is an open conspiracy (6) to replace the empires with a  non-militaristic form of government. One of the building-blocks of that new form of government is already at hand. It is the internet, the world's new public library.

(1) About the "world Public Finances"-initiative, see http://www.cttcampaigns.info/otrosistema

(2) Quoted from the summary of the STERN REVIEW on The Economics of Climate Change ; see

(3) "...the art-work is the shining sword in the battle of the minds", according to one of the aphorisms of German art-critic Walter Benjamin (1892-1940), here quoted via http://burndenverdown.blogspot.com/

(4) "The most common approach to measuring and understanding GDP is the expenditure method: GDP = consumption + investment + (government spending) + (exports − imports)". See http://en.wikipedia.org/wiki/Gross_domestic_product.
- Consider also the following comment by the authors of the Stern Review:
"The analysis should not focus only on narrow measures of income like GDP. The consequences of climate change for health and for the environment are likely to be severe. Overall comparison of different strategies will include evaluation of these consequences too. Again, difficult conceptual, ethical and measurement issues are involved, and the results have to be treated with due circumspection." Executive Summary, p. 9. (http://www.hm-treasury.gov.uk/media/8AC/F7/Executive_Summary.pdf)

(5) Quoted from WARFARE OR WELFARE? Disarmament for Development in the 21st century. A Human Security Approach. The International Peace Bureau, Geneva, 2006., p. 31. The estimate is based on SIPRI Yearbook 2004.

(6) This is a reference to a pamphlet by H.G.Wells. See Wells, H.G. (2005) The open conspiracy. Revised and republished as ‘What Are We to Do with Our Lives?’ in 1931. (Web edition by Rae West, accessed in July 2005),
http://www.mega.nu:8080/ampp/hgwells/hg_cont.htm  - For some further comments on this book by H.G.Wells, see my article "2015: Political aspects of the public library", in "Information for Social Change" ISC 24 Special Issue: Libraries & Information in World Social Forum context. (http://www.libr.org/isc).

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