Bring the economy back to human scale

5 December 2009

Bring the economy back to human scale

"In the last few years, in relation to the economy, what we've heard is 'big is beautiful'. The bigger a bank, the bigger the profit. That was the idea, and this idea has landed us with big problems. That is why the SP wants to see a fundamentally different economy, one in which it is not the size of the bonus paid to the manager which is seen as the gauge of a firm's success." This is the message which Dennis de Jong, leader of the SP's European Parliamentary group, brought to the world's major financial and economic institutions during a working visit to Geneva and Basel.

Dennis de Jong During the visit De Jong spoke with the head of the World Trade Organisation (WTO) Pascal Lamy, the Secretary-General of the Basel Committee responsible for supervising the activities of banks, Stefan Walter, and Philippe Egger, head of the International Labour Organisation (ILO). The trip came about as a result of De Jong's participation in the European Parliament's temporary committee of investigation into the economic crisis.

The agenda included proposals for strengthening supervision of banks, but in De Jong's view this is insufficient. "This crisis is the result of structural faults in the economy; there has been too much of a belief in the free market. Of course we need more and better surveillance of banks, but that's only a first step. Banks should also be reduced in size. This goes incidentally not only for banks but also for the corporate sector in general: nobody wants to see endless waves of takeovers, by which for example more and more Dutch firms find their way into the hands of foreign investment groups. That's bad for workers and also for consumers; it means that the distance between ordinary people and management is growing ever greater. We want to restore the economy to human scale instead of ever more managers who work according to 'marketing models'. It's time for social initiatives in which workers, consumers and small businesses take centre stage."

Free trade policy will also form a topic for discussion during the visit. The role as a promoter of free trade which the WTO has played during the last few years has proved catastrophic. In particular, for developing countries the undermining of protection for the local economy has turned out to be a disaster. The SP has therefore a number of bones to pick with the WTO, which has demonstrated precious little inclination during the crisis to examine its own role in helping to bring it about, or, most importantly, in exacerbating its consequences for the world's poorest people. De Jong's message was clear: "The WTO must drop the free market dogma. A global economic crisis must be resolved on a global level in a manner which rests on solidarity. We should not be imposing neoliberal policies on developing countries, now that the crisis has made it apparent that this is an approach which, from most people's point of view, is bad. It is madness that we are at such a time urging developing countries to liberalise their financial services, while it was this very liberalisation which led to the crisis of which we are now all harvesting the bitter fruits."

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