G20 Seeks the Capitalist Order Sustenance

Fiscal reforms don’t mean that European countries are questioning the validity of capitalism. Interview with Mohammad Kohandel, international economy analyst.

G20 summit in London was the culmination of efforts carried out by governments and major fiscal institutions of the world to rescue market economy. Iranian Diplomacy has interview Mohammad Kohandel, global economy analyst.

Can we consider the G20 summit a step towards restructuring the capitalistic system and saving it from the current crisis?

The summit is the first in its kind. One of the factors that triggered the global economic crisis was the policies defined for the global fiscal system and the way this system was directed. The policies had remained untouched since the early days of capitalism. But now we are witnessing reforms in fiscal structures of countries such as Germany. Nationalization of banks on the table means they’ve distanced from the capitalistic order in fiscal issues. However, none of the amendments mean they’re casting doubts over the validity capitalism

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Holding the G20 summit for finding a solution to the crisis doesn’t mean these countries are going to distance from capitalism, but demonstrates that they seek a way to fulfill their economic and political interests through a collective decision. Nevertheless, capitalism is doomed to fail if doesn’t rethink its goals, plans and principles.

For long the capitalistic system has survived parasitically by consuming the resources of weaker countries. This can not continue anymore. United States’ economic hegemony and its leadership in the capitalistic system have waned and U.S. dollar is not the strongest currency of the global fiscal system anymore. United States’ supremacy in other areas is also declining.

The course of events proves that capitalism can no longer rest its life on weaker countries, and U.S. economy can not pay the price for its survival since it has the heaviest economic debt.

Capitalism is facing a decline and despite periods of flourishing, its fall has begun since two decades ago. To hold up the capitalistic system, America turned towards real state market. But efforts fell short of success and became the starting point of global economic crisis.

How do you see the one thousand billion dollar agreement to aid the global economy?

That is not a significant number if it’s going to save the capitalistic system. According to economic experts global economy had injected 12 thousand billion dollars to the American economy prior to the crisis to uphold its capitalistic economy. When the flow of these investments slowed down, United States turned towards real estate market and the problems snowballed. That’s why I think one thousand billion dollars is not considerable. It wouldn’t be effective in a normal situation, let alone in crises. Of course it is not totally futile. The decision mitigates the severity of the crises, but if we know the real budget required to save the economy of America and other industrial countries’ economy, it is insignificant.

It is said that China had a leading role in the summit’s final decision. Is this the forerunner to China’s greater presence in global economy?

China is America’s largest creditor. And it is not unlikely that the country is providing conditions to receive its credit. Plus, since late 1980s China has embraced capitalism and its ties to the global capitalism requires it to seek circumstances which fulfill its interests.