Thomas Paine

Thomas Paine
"These are the times that try men's souls. The summer soldier and the sunshine patriot will, in this crisis, shrink from the service of their country; but he that stands by it now, deserves the love and thanks of man and woman."

Sunday, 26 June 2011

Small IS beautiful

Perhaps, at this time, the global financiers who have lent their cleints money to the Greek, Irish, Portuguese and Spanish governments are reflecting on these words of Fritz Schumacher, taken from the title of his 1970's book. Although, there is little likelihood that it will be their own personal wealth that will be lost - if things go wrong.

Schumacher did not have global finance in mind when he wrote his book, his concern was that the creations of mankind were with the view of ever increasing growth, unlike nature, that keeps the size of its creations in proportion to their environment. The Greek crisis has underlined the extent to which the lives of so many of the world's citizens could be adversely affected by the Greek's failure to manage their debt. Although it is generally accepted that their economy was not strong enough to enter the eurozone at the time - and this current crisis was 'an accident waiting to happen'.

After the Lehman Brothers, then the fourth largest investment bank in the US, bankruptcy in 2008, caused by their large holdings of 'sub-prime' mortgages - it was accepted that severe restrictions should be placed on the banks with regard to how they invested their customers savings. If the extremely rich wanted to risk their money on chancy loans then this was their prerogative, but to risk the savings of millions of small savers and pension funds on such ventures should be prevented by new regulations. However such regulations have not been put in place - only some that were thought would help to prevent a similar event.

We are currently witnessing, in the UK, the immense impact that the Lehman Brothers bankruptcy has had on our economy - making the nation, itself, close to bankrupt. The austerity measures being put in place by the Coalition may be needed, but they are causing great stresses and insecurity for a large section of the people. This is not to just the poorest, but to many who would normally be considered 'comfortable'. And to what end were these mammoth deals originally aimed - to make some already incredibly rich individuals - even richer.

Having taken some interest in the Greek debt crisis, I have come to the conclusion that no one really knows what the true ramifications of either the Greeks being bailed out by the, hard up, eurozone nations or of the Greeks dumping the euro in favour of a new drachma - this would provide them with a currency that could be valued in accordance with the country's economic strength.

Respected experts have claimed that we are facing a new Lehman Brothers moment and others that we are heading for another 1930's style depression. It is the sheer complexity of the global financial markets that makes the outcomes so difficult to predict - a domino effect can be produced in a series of markets which, because of the number of variables, might lead to any number of economic disasters.

What must be abundantly clear to anyone who can observe these matters dispassionately is that the development of the much vaunted free global market, by each of the three main parties, must be halted and reigned back. The example of huge ocean going vessels has to be applied, if these ships hit rocks, the part of the hull damaged does not allow water to pour into the whole vessel and sink the ship, air tight cabins are built into the design so that any leaks in the hull can be contained to a few sections.

A similar design is required so that one large bank becoming bankrupt or one nation failing to repay its debts cannot be allowed to bring down the economies of many nations. In most cases the requirement for huge sums is to finance some grand development and although these may be essential in a few instances, these are cases of 'giantism' warned against by Schumacher.

It seems certain that if we are to have any kind of secure future, nations need to be allowed to manage their own economies through the use of import and export controls. They cannot be subjugated to the rules of multinational organisations such as the EU or global corporations which create unmanageable circumstances for national governments. This is also the case for international law, which also restrict governments from acting in the best interests of their people - these need to be reduced to an essential few.

What I think we can also conclude is that the biggest enemy to solving the many dire threats currently facing mankind - whether it be global warming, peak oil, mass migration, mass unemployment or national economic meltdown - is globalization. If mankind and the other species that share this planet are to have a hopeful future, the process of globalization has to be reversed.

Whether this will be achieved as an orchestrated plan or be the result of a global catastrophe from which 'small is beautiful' will arise like an, appropriately sized, Pheonix from the ashes - only time will tell.

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