We live in a changing time. A time that challenges social democracy and all political movements. A time that offers new possibilities for our movement.
The victory march of neoliberalism has ended. The era of Margaret Thatcher and Ronald Reagan is behind us. And it was just under thirty years ago when these stars of neoliberalism proclaimed: The state is not the solution but the problem. That was the reason to aim for less regulation.
The price for the ultimate liberation of the markets is high: tens of millions of people have become unemployed. Poverty is increasing again.
The world has seen the most severe economic crisis since the Second World War. It is a crisis that shifts political thinking. It changes our views on the possible and the impossible, the right and the wrong.
The so called free market took the entire world to the edge of a cliff. Last autumn the world’s entire finance system was on the brink of a meltdown. A short circuit, a complete blackout.
Now, even the right-wing politicians are forced to evaluate the role of the state again. They are forced to admit that we will not overcome the crisis through pure market self-correction. We need a strong state and better regulation in the market. We need to rescue the finance market operations. We need comprehensive stimulation to start the economic growth again.
One conclusion from all that has happened is especially important to us.
Politics must regain the role that belongs to it in steering the development. Democracy must point the changing world to the right direction. It is time we see that the market forces do not build equality or create a just society. That is our task. That is the task of social democracy for this millennium.
We are glad that the United States has changed its course. President Obama’s administration proves, with its own example, that change is possible – also globally.
The economic crisis strikes its blow on the people who are the least privileged. To those who have got the smallest piece of the fruits of the economic growth. The American, European and Chinese factory worker loses his or her job as a result of the mistakes made by the big bosses and bank managers who got millions in bonuses. The regular workers get to go as the banks are reorganised for a better result. In Africa a small farmer gets to notice, yet again, that the price of fertilisers has got out of reach.
We must get the economy rolling and growing again – in a sustainable way. This calls for strong stimulation policies. Policies that have been at the core of the social democratic economic thinking also earlier. Stimulation is under way. And it bears fruits.
The more demanding task still lies ahead. Changing the world economic system so that the currently seen financial crisis with all its consequences will never happen again. This is the task that calls for us, social democrats, today. This is the task that all of our voters in every single country expect us to do. This is the task that measures our leadership.
We need a New Economic Order. We can rejoice the fact that the G20 meeting hosted by Britain’s Prime Minister Gordon Brown gave the way for big changes in the world economic order.
International organisations must change and give room for the changing world and its ideas. The IMF and the World Bank must be reformed so that emerging and developing countries get the influence they deserve in the decision-making.
The UN system must be also reformed. The reform of the Security Council is a pressing one so that it can, in the future, better reflect the changing world and the emerging countries.
Finance monitoring must be enhanced. We need strengthened organisations with proper jurisdiction. The Financial Stability Board is one stage on this road. The status and functioning possibilities of the IMF must be improved.
Justice is not achieved without intervening in old privileges and structures that create injustice.
Bank secrecy cannot obstruct revealing tax evasion and corruption. Today we must say that the era of bank secrecy is over.
We must finally eradicate tax havens. The authorities’ right to get information must be strengthened so that tax havens and secrecy aren’t any more possible. This is important both to the welfare states and developing countries and their people.
Developed countries, emerging countries and developing countries alike need long-term investments – not short-term speculative money. Impatient speculative money does not create sustainable growth and wellbeing.
We must lead the way in finding new innovative solutions. The Tax on Foreign Exchange Transactions could be this kind of a new, stability-improving measure. Even a low tax rate could yield billions to be used, for example, in fulfilling our commitments in development cooperation.
We must hold on to the objective of sustainable development. Building a just market system is central in this. As social democrats, we must see that healthy free trade has its role in enabling wealth for all. The Doha trade negotiations must be completed while giving the economies of developing countries time to improve their competitive ability and their social safety networks. Fair trade includes respecting the rights of the workers, and here we must bear the flag of better rules bravely.
One of the paradoxes in the world is the continuing armament race. Billions and billions of dollars are spent on armament at the same time as the development problems of the world continue, there is a real food crisis going on and millions of people suffer hunger daily.
The financial crisis strikes hard on the public economies of both developed and developing countries. Thus, in the name of fairness, it is time to make a claim for the prioritisation of public expenses as well. We must take care of our brothers and sisters instead of putting more and more money on new weapons.
We will continue to pay the bill caused by the financial crisis for a long time. And at the same time we use our knowledge and resources to create new havoc. I mean armament and its financing.
There is a need for new thinking. The growth in armament expenses should now be suspended for, say, five years. This would not weaken the relative status of any country but money would be saved for taking care of our own citizens as well as fulfilling our commitments in development cooperation.
The armament expenses of the world are a massive 1,300 billion dollars per year. The growth rate of the expenses has in the past few years varied between three and six per cent. The five-year moratorium in the growth of armament expenses would yield – even by careful estimations – 250 billion dollars to be used in our wellbeing elsewhere.
For example two million children (under the age of five) die yearly from pneumonia in the developing countries. Providing antibiotics and treatment for these children would cost about 450 million dollars. This is one per cent of what we add yearly to the previous armament bill.
There is a need for rethinking.
The development cooperation investments of all developed countries are approximately 100 billion dollars per year. The OECD countries’ support on their own countries’ agriculture is two and a half times more – 250 billion dollars.
Politics is about choices. We have options.
As social democrats, we must now lead the way. We need new thinking and brave reforms. To create sustainable development and a fairer world. The change is possible.