A Call by The Schiller Institute:
An Ad-Hoc Committee for a New Bretton Woods System
7 September 2022
SI—The neoliberal system is hopelessly bankrupt. But Western governments, rather than drawing the consequences of this fact, and fundamentally reorganizing the system, have escalated the confrontation with their alleged systemic competitors, Russia and China. This has led, as a result of NATO’s fivefold expansion eastward, to a reverse Cuban Missile Crisis and to a war in the middle of Europe which could potentially escalate into a nuclear Third World War.
Many people are afraid of a new world war, and justifiably so. But it is the causes of the danger that we need to eliminate! Aren’t we witnessing how nothing is working anymore? Aren’t supply chains breaking down everywhere? Aren’t food and energy prices exploding? The German government now wants to ration gas, while in Poland and Lithuania, people are once again heating with wood.
No, this has next to nothing to do with China’s “Zero Covid” policy, and only indirectly with the war in Ukraine. But it has a lot to do with the neoliberal model, in all its aspects. The neoliberal idea of outsourcing a nation’s industrial production to low-wage countries, was wrong, as it destroys productive jobs in industrial nations and exploits labor in the developing countries. Equally wrong is the idea of a “shareholder-value society,” in which short-term stock market profiteering is the sole goal, and long-term rises in physical economic productivity are meaningless. And just as wrong is the idea that “money earns money,” as if money had an intrinsic value in itself, or the just-in-time idea, in which inventories are no longer needed, since trucks can deliver semi-finished parts at the last minute. But above all, what is totally wrong is the idea that money is synonymous with social wealth. This fairy tale has only led to an explosive increase in the number of billionaires and millionaires, while the ranks of the poor are also growing, and the middle class is disappearing.
The stunning collapse of infrastructure in the United States and Europe—be it unsafe bridges, freight trains waiting for days on rail sidings, the absurd amount of time required for repairs, the shortage of skilled labor, or the disappearance of products on store shelves—is proof positive of the failure of the neoliberal model. Galloping inflation, in particular, is not the result of the “war in Ukraine,” but of the excessive money-printing by central banks since 2008, in an attempt to paper over the systemic crisis.
With the trans-Atlantic financial system today, we are facing what we faced in Weimar Germany in 1923: hyperinflation, which threatens to devour the entire life savings of the population. Attempts by the central banks to fight that inflation with interest rate increases could unleash a chain-reaction collapse of indebted firms and developing countries. The aggressive decoupling from Russia and the attempt to move against China are ongoing, and will sink all nations.
The effect on the developing world is murderous. Already now, according to the UN, 1.7 billion people are threatened with a hunger catastrophe, which has been exacerbated by the self-destructive sanctions against Russia and other countries. The neoliberal model has done nothing to fight poverty in the Global South, where 2 billion people have no access to clean water and the majority of developing countries have no effective health system, leaving them defenseless when exposed to the Covid pandemic and other diseases. The social systems of many countries are already collapsing. If inflation gets out of control, or if there is a sudden collapse, large parts of the world could plunge into total social chaos. Moreover, it is unacceptable to use climate and environmentalist concerns to justify de-industrialization and radical depopulation, as Malthus did in his time.
Although the governments of the Western world will not admit it, the neoliberal system today is as bankrupt as were the communist countries in the 1989-1991 period. Rather than recognizing this fact, they continue making decisions whose consequences they have not thought through, threatening the collapse of societies. Instead of rationing gas and letting prices for basic necessities soar uncontrollably, they should lift the sanctions—a brutal form of warfare against the populations of the targeted countries—and rely on diplomacy to solve conflicts.
We the signers therefore call for the immediate convening of an emergency international conference which mandates:
We, the signers of this call, are of the conviction that the system of “globalization” with its brutal vulture capitalism, has failed—economically, financially, and morally. We must make people the priority of the economy, which is not a self-service shop for billionaires and millionaires, but must serve the Common Good. The new economic order must guarantee the inalienable rights of all people on Earth.
Helga Zepp-LaRouche, founder, Schiller Institute
PDF of the first 104 signatories