Sharan Burrow: High rollers can't shake addiction to casino capitalism

The eyes of the world will be on London over the over the next few days. The G20 Leaders’ Summit taking place here shapes as one of the most important international gatherings since World War II.

It is being held in the shadow of an all-encompassing economic catastrophe, which began in the US housing market, spread to credit markets and is now causing mass unemployment across the globe.

Predictions that 50 million people worldwide may lose their jobs this year could turn out to be optimistic.
More than 200 million more workers could be pushed into extreme poverty, mostly in developing and emerging countries where there are no social safety nets. The huge scale of the crisis means the number of working poor – those who earn below $US2 a day – may soon rise to 1.4 billion.

Workers around the world, those who are losing their jobs and their homes in the rich countries and those who are facing poverty in the developing nations, are the innocent victims of this crisis and their anger is growing.

This is understandable as more and more discover that their jobs, their houses, and their income security in retirement have been stripped away by a crisis precipitated by greed, incompetence and a blind faith in the market.

The governments of the world must take a more honest look at the impact of the policies of privatisation, liberalisation, and labor market deregulation of recent decades.

On Saturday tens of thousands of ordinary citizens took to the streets to loudly send a message to the leaders of the G20 that there can be no return to business as usual.

There must be an end to the ideology of unrestrained financial markets, the fraud of self-regulation and the destructive path of leveraging profit from unconstrained debt.

The rampant free market paradigm must be replaced with a more sustainable model for growth.

We need constraints on excessive risk-taking by businesses, a stronger role for government and a more equitable sharing of the benefits of growth through greater respect for workers’ rights.

As the President of France has put it, we will require a new ‘moral foundation’ for the world’s economies.

A foundation which puts people first and recognises that economies must serve communities and not the reverse.

It is tempting for the union movement to cry ‘I told you so’.

We have been warning for many years about the casino capitalism of a financial sector increasingly divorced from the real economy.

At the same time there has been an explosion in inequality through a growing gap between wages and profits, a dangerous rise in precarious employment and ballooning debt levels for working families.

The shameful reality is that not only have there been no apologies and no jail sentences but outrageous multi-million bonuses are still being pocketed by financial engineers who created an artifice now shackling the banking system with toxic debt.

CEOs are still taking home salaries many times the average wage, while at the same time closing factories and sacking workers or sending their jobs to even lower-paying countries.

Indeed, some of the corporate cowboys who created this crisis are saying the solution is to free markets up even further. They are shamelessly still acting as if they run the show.

Here’s a news flash from working people around the world: the party is over.

If the global financial crisis has taught us anything, it’s that unfettered markets don’t work. They imperil the economy, and they hurt workers.

Meanwhile, economic development has also rushed headlong down a path of environmental catastrophe, with climate change threatening the livelihoods of hundreds of millions of working families and vulnerable continents like our own.

There are positive signs that the need for fundamental change is sinking in.

Kevin Rudd, Barack Obama, Gordon Brown, Angela Merkel, Lula De Silva are among other G20 leaders who understand the challenges.

It is essential however that the views and interests of workers and the whole of civil society are respected and fully taken into account.

We can no longer leave it up to the business community to drive a self-interested agenda of deregulation.

Working people will of course play a constructive role in rebuilding the global economy.

But we are determined to see a just and equitable outcome.

We demand urgent and far reaching action from the G20 leaders that includes:

  • A co-ordinated stimulus and development plan that maximises job retention and protects the incomes of the most vulnerable.
  • Stiffer regulation and stronger intervention by governments to restore confidence and lending in the financial system, including mechanisms for managing toxic debt and the establishment of new rules to control global finance.
  • Laying the groundwork for a sustainable recovery that sees respect for workers’ rights, an end to global poverty, fairer international trade, and action on climate change. 

  • By working together on these goals we can get through this crisis and build a better foundation for a more just and equitable future for all.

    Sharan Burrow, President of the International Trade Union Confederation is in London representing the global union movement. She addressed the Put People First rally in London’s Hyde Park on Saturday (March 28) and is meeting with G20 leaders this week.

    An edited version of this article was published in the Canberra Times on 1 April.