subscribeDavos at a dangerous crossroads
Post By gaia1 in Transformation versus reform
For forty years professor Klaus Schwab has corralled business leaders, politicians and NGO leaders to come to Davos and to work together. In preparation for these annual meetings many other meetings are held and there are many ongoing initiatives that promote trans-institutional collaboration.
This week some 2500 participants, half of whom are corporate business leaders, will congregate under the ambitious theme “Rethink, redesign and rebuild.” As a matter of fact, the World Economic Forum (WEF) has a special initiative dedicated to redesign. “The Global Redesign process is integrating the Forum’s diverse communities through a series of meetings and activities structured to promote integrated thinking and develop concrete proposals to update and upgrade structures of international cooperation in a wide range of areas.”
Both the WEF and the world are at a dangerous crossroads, both are at an inflection point where hard choices are to be made, that bring either death or life to people, species and planetary systems. Though redesigning, particularly the redesign of global financial structures, receives top attention, the WEF rethinking focus is weak. It stops at some reformist proposals while the international monetary, financial, economic and commercial systems continue to their work, i.e. enriching the few, impoverishing the many and imperiling species and planet.
At this dangerous crossroads of an aggravating climate crisis, an economic crisis that continues to keep millions of individuals out of work, and a financial system that is still out of control transformational rethinking would include at least three major components. They are integrated in a transformational system, called the Tierra Fee & Dividend (TFD) system.
The TFD first of all addresses itself to the climate crisis and proposes a Fee & Dividend system rather than the going cap-and-trade system. The latter is a second rate carbon reduction methodology, because it is not fast, formidable and fair enough.
While this fee and dividend system or similar tax systems will soon regain the upper hand among the half dozen carbon reduction methodologies, the Tierra Fee & Dividend system’s second component of adding a carbon-based monetary dimension to this Fee & Dividend system is at the bottom rung of acceptance, because it has only recently been proposed and it demands an integration of three distinct disciplines. The International Institute of Monetary Transformation is working on a re-carbonization monetary standard with its carbon-based international reserve currency of the Tierra that would be part of an updated International Clearing Union, proposed by John Maynard Keynes during the Bretton Woods UN Monetary and Financial Conference of 1944. This carbon based monetary system’s international reserve currency and its Tierra International Clearing Union also derive some its rationale from the recommendations of the UN Stiglitz Commission of June 2009.
In order for this TFD system to work the public sector has to reclaim the money creation function from privately-owned banking systems and engage in efficient regulation of financial flows via the Tierra International Clearing Union which, in Soros’ words, is to be the “global sheriff”. This governmental role is to be fully coordinated across the G192, because otherwise “financial arbitrage” is going to take place, particularly by the TBTF financial corporations.
At this crossroads that is full of peril, but also full of promise, the choice becomes choosing between a route of muddling with some minor reforms here and there, and a route of transformational rethinking and redesign that addresses the economic and climate crises systemically and builds towards an equitable, sustainable, and, therefore, stable international monetary system that, as Barry Eichengreen has it, is the glue that binds monetary, financial, economic and commercial systems together.