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International labor markets and financial system reform should be part of the agenda. Modified versions of the social-democratic labor and financial market regulations that have been put in place at the national level could be extended to the global economy.

Labor rights should be established as a fundamental human right. These rights should include, at least, a internationally recognized right to organize so that workers can set their own labor standards. Other reforms to consider: curbs on exploitation of child, female, and immigrant labor; or maybe some sort of a global "minimum wage," although these will be more problematic to implement as they would have to be adjusted to a country's level of development.

And the labor movement itself will have to become more internationalized as well.

Perhaps even more important are steps to reform the international financial system. Our current system permits excessive trade and capital-market imbalances, generates instability, and is biased against growth:

Th[e post-Bretton Woods] . . . dollar-centric international monetary system has been a powerful force in shaping the global economy and is, to a great extent, responsible for the current pattern of globalization.

. . . Th[is] system has pushed more and more economies toward export-led growth, which tends to suppress domestic wages and regulatory standards.

Countries that cannot pay for imports and attract foreign investment in their own currencies must "earn" these external currencies, mainly dollars, by exporting more than they import to one or a few countries that issue the global means of payment.

To remain competitive with other nations and insure continued access to these markets, they have adopted policies that maintain downward pressure on wages and exchange rates and have shunned those that stimulate the demand necessary for sustained development.

One potential answer to these problems might be, as Keynes first proposed during WWII, to establish an international central bank that could stabilize exchange rates and international financial markets, and also provide more space for countries to pursue demand-led domestic full employment and growth policies. Proposals along these lines can be found here, and here.

by TGeraghty on Wed Jun 13th, 2007 at 06:50:43 PM EST
 One potential answer to these problems might be, as Keynes first proposed during WWII, to establish an international central bank that could stabilize exchange rates and international financial markets,

Yes and No.

An International Clearing Union: Yes.

A global "Value Unit": Yes.

But a Central Bank? Resoundingly: NO.

Hong Kong demonstrates emprically that Central Banks are not actually required.

But leaving that to one side, Central Banks, like all credit intermediaries such as Banks, Building Societies and even Credit Unions are actually rendered obsolete by the disintermediation made possible by the Internet.

As John Gilmour almost said:

"The Internet interprets Banks as damage and routes around them".

www.zopa.com and www.prosper.com render Credit Unions obsolete, but then they do not cretae credit in excess of their Capital base.

The only value a credit intermediary actually provides in our "Fractional Reserve Banking" monetary system is that of a Guarantee of the Borrower's credit.

A "Guarantee Society" - whereby bilateral (interest-free) trade credit is backed by a mutual guarantee and supported by provisions paid into a default fund,  rather than "Interest" - gives rise to a mutualised banking model where banks are service providers MANAGING the creation of credit.

In this way the credit necessary for global trade is straightforwardly created AT COST.

The financing of the productive assets - such as property - which actually gave rise to most of the credit = money in existence - well, that's another story.

"The future is already here -- it's just not very evenly distributed" William Gibson

by ChrisCook (cojockathotmaildotcom) on Thu Jun 14th, 2007 at 03:32:28 PM EST
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