60-Second Expert: Fighting Finance

Many economic justice activists felt intimidated by the complexity of the Third World debt crisis in the 1980s and overwhelmed by the intricacies of the World Trade Organization in the 1990s. Now people are facing a confounding global financial catastrophe, and though we certainly need more activist education on the workings of financial markets, it’s remarkable to see how much progress civil society has made since the 2008 crash.

In the United States, labor unions and consumer groups have made positive steps toward reining in Wall Street excesses. Though their work was watered down by intense industry opposition, it represented a crucial first step. One of the next challenges will be to build international links to secure similar regulation in other countries.

Before the International Peoples Conference in Seoul, global civil society groups representing 182 organizations from 42 countries issued a statement in support of financial speculation taxes to generate revenue for jobs, and discourage high-risk short-term speculation. Public rallies during the G-20 summit displayed banners calling for financial transaction taxes, demonstrating the extent to which the issue has become popularized and internationalized. Their work may be paying off; French President Nicolas Sarkozy has vowed to make the tax a top issue at the next G20 summit in November 2011.

Global activists are also organizing to curb excessive speculation in commodities indexes, which have dramatically exacerbated the volatility of world food prices. A coalition of activist groups and business associations have initiated a campaign to persuade investors to pull out of commodity index funds, convincing the California teachers’ retirement system to reduce its investment from $2.5 billion to $150 million.

Beyond the immediate successes of these efforts, campaigns like those outlined above have proven useful tools for basic financial education, allowing the public to delve into dense subjects and produce positive results. Though the sheer complexity of these systems can be intimidating, the mistakes made by the IMF, world bank, and economists around the world have proven that the so-called “experts” clearly don’t understand it very well either.

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FPIF guest columnist Sarah Anderson directs the Global Economy Project of the Institute for Policy Studies and is the author of a new report on Civil Society Responses to the Global Financial and Economic Crisis.