Volume 2, Number 3 (2009)

The Global Crisis and its Consequences

Sandro Sideri

Institute of Social Studies, The Hague

The first section of the paper identifies the immediate causes of a crisis that is both severe and global. The second section examines the unsustainable imbalance that feeds the current crisis: more than two billion people under-consume and save, while a few hundred million borrow and live beyond their means. This imbalance rests on, and at the same time strengthens, the huge and often widening income gaps between, and within, countries, including the redistribution in favor of capital and highly skilled labor caused by globalization and technological change. The third section explores the effects of the crisis and the problems that it is creating, including those generated by the way in which it is being handled and the “exit strategy” that will eventually be used. The crisis is accelerating the shift of power toward Asia, because the US is increasingly perceived as the destabilizer of the world economy, but until the imbalance is eliminated, the financialization of the global economy is brought under control and productive investment replaces the speculative activity of financial capitals, other crises are bound to follow. Which means that any future international order that emerges from the current mess must abandon the present economic growth model, while integrating globalization with regionalism. These two processes are already underway and may perhaps result in a more balanced and multipolar world system.

Keywords: crisis, bubble, globalization, growth model, financial system, dollar, China, reserves, reform, competition, income distribution, regional integration


La Crisis Global y sus Consecuencias

La primera parte de este artículo identifica las causas inmediatas de una crisis profunda y global. La segunda parte analiza los desbalances globales que constituyen el trasfondo de la crisis, los cuales deberían ser resueltos con el fin de reducir el riesgo de una nueva crisis. La tercera parte explora los efectos de la crisis y los problemas que está generando, incluyendo aquellos generados por la manera en que es manejada. Imaginar un futuro orden internacional que surja de del presente desorden implica abandonar el modelo de crecimiento económico actual, e integrar globalización y regionalismo. Ambos procesos han ya comenzado.

Palabras clave: crisis; burbuja; globalización; modelo de crecimiento; sistema financiero; Dólar; China; reservas; reforma; competición; distribución del ingreso.