Dear capitalists, admit you got it wrong

Buoyed up by a crisis and with five presidents in attendance, the international left has ideas for fixing the world that a neoliberal might recognise

OFTEN mocked for an endless ability to disagree with itself, the World Social Forum—an annual jamboree for NGOs, anti-capitalists, leftish intellectuals, bohemians and bishops—was unusually united this year. More united, in some ways, than the recent World Economic Forum in the Swiss resort of Davos, a gathering of political and corporate bigwigs to which the social forum supposedly responds.

While Davos Man was busy looking for someone to blame for his predicament, no such doubts troubled his opposite number in Belém, a city on the edge of the Brazilian rainforest where mango trees grow so tall that their fruits can shatter car windscreens when they fall. The culprit was the whole current design of the world economy, promoting competition. Free trade and free movement of capital needed to be re-thought, participants insisted. Some even had ideas on what should replace it.

The forum’s main purpose is to bring together social movements (which generally dislike being called NGOs) from around the world to network. In that respect, it is rather like any other business conference, though some participants carry spears and wear the feathers of various unfortunate parrots on their heads. The forum is skewed towards Latin America, especially Brazil. One of the founders of the forum is a Brazilian businessman called Oded Grajew, and its first meeting was held in Porto Alegre, in southern Brazil.

Of more than 5,000 accredited organisations, 4,193 were from South America, roughly ten times the number of African outfits present. This partly reflects the number and prominence of NGOs in South America and the semi-official role which some governments give them. This year Brazil’s left-leaning government gave the forum a subsidy of R$120m ($52m)—a piece of generosity that was not universally popular at a time when economic growth may be on the verge of halting.

As a result, many causes dear to the Brazilian left were well represented. T-shirts demanded asylum for Cesare Battisti, a left-wing Italian émigré convicted of murder in Rome, who is currently in Brazil. Banners called for Brazilian troops to be withdrawn from Haiti, where they are doing a good job of containing violence.

A proposed hydroelectric dam on the Madeira river (a tributary of the Amazon) was denounced, and the country’s new oil find claimed for its people. Plenty of people came from further afield, like the Catholic Bishops’ Conference of India, with a Delphic slogan: “We would rather sweat in peace than bleed in war.” And there were swarms of young, largely white folk who treated the forum like a music festival.

This cacophony sometimes sat awkwardly with the presence of five leftish presidents—Fernando Lugo of Paraguay, Rafael Correa of Ecuador, Evo Morales of Bolivia, Hugo Chávez of Venezuela and Luiz Inácio Lula da Silva of Brazil—who dropped in to be fêted. The flurry of helicopters and security men seemed out of place. Four leaders (President Lula was elsewhere) appeared together at a meeting that was billed as a dialogue with the social movements. But the talking was mostly one way. Mr Chávez gave a long, rambling speech in which he struggled to animate the crowd. “Another world is possible! No! Another world is necessary,” was as inspiring as it got.

Since its inception, the forum has struggled to get the right balance between a range of attractions: intellectual stars such as Noam Chomsky and Joseph Stiglitz, both of whom have addressed previous meetings; sympathetic politicians; large NGOs and the smaller single-issue organisations which often feel squeezed out.

This tension produced the best exchange in the presidential meeting. “You all talk about doing these things,” said João Pedro Stedile, a founder of the Landless Movement in Brazil, “but when you met in Bahia [in December] you just went to the beach.” “I didn’t go to the beach,” muttered the Venezuelan leader. “Well, perhaps those of you who are a bit overweight didn’t go,” Mr Stedile fired back.

Away from this set-piece spat, people were sitting in meeting rooms and coming up with proposals. The ones that dealt with reforming finance read a bit like a co-production between militant anti-capitalists and more cautious types, which was no accident. At the far edge was the idea that money and finance are public goods and should be shared out accordingly, through democracy. The familiar call for a special tax on international transactions was repeated. But there was plenty of talk that was more moderate and rather more interesting.

The forum suggested that the United Nations should be charged with preventing large trade surpluses and deficits from building up. Controls on exchange rates and the international movement of capital should be re-established. Credit-rating agencies should be reformed, incentives for excessive risk-taking reduced and bankers’ bonuses paid on the basis of long-term performance. Hedge funds, private-equity firms and other parts of the shadow banking system should go, along with over-the-counter derivatives (OTCs), collateralised-debt obligations (CDOs) and other nefarious structured products.

In general, a “speculator pays” principle should be introduced and applied when things go wrong. Finally, the world’s economy should get a stimulus in the form of a green New Deal.

Bits of this belong to the realm of reality; indeed, they might have come from America’s Democratic Party, or even from the op-ed pages of a respectable business daily. Interestingly, the forum proposed an outright ban on subprime mortgages, even though it might have been expected to look favourably on lending to people who would otherwise struggle to get credit.

If some delegates seemed to have thought hard about the economic crisis, the same could not be said of the visiting presidents. After leading the crowd in a chant of “Fidel, Fidel, Fidel!” Mr Chávez joined Messrs Lugo, Morales and Correa in a karaoke rendition of “Hasta siempre commandante”—a dirge about the exploits of Che Guevara—before disappearing. That was far too cruel a fate for the assembled company of Asian bishops, indigenous types in all their finery, would-be financial reformers and anti-capitalist warriors.

http://www.economist.com/world/international/displaystory.cfm?story_id=13061828