Markets benefiting people

Walter Veltroni, National Secretary of the Italian Democrats of the Left, demands greater international cooperation in the face of the inequities of globalisation

Issue 4, Volume 1998

We are all aware of the threat of recession which looms over the world's economy. We are convinced that we should not be passive; that it is possible to react; that we can bring about a sea-change in the economic policies of our countries and also in world economic relations which would lead to an upturn in growth, employment and stability.

I believe that for all our countries, for all our peoples, globalisation has been the major phenomenon which has defined the last fifteen years of the world economy. A phenomenon which needs us to be open-minded because the consequences of globalisation are ambiguous, some positive, some negative. Globalisation in some countries has led to development and to higher standards of living. It has also meant that it has been possible to direct capital flows to support growth in new areas of the world. It has also brought greater parity not only between markets, but also between peoples and cultures.

However the process of globalisation has obvious limits and has generated both threats and challenges. Development has been quite intense in some countries, but not in others. New inequalities have emerged and old inequalities have appeared. In those countries which have seen their economic potential grow, this economic dynamic has not been accompanied by equivalent progress in political, social or institutional innovation, nor in the protection of workers' rights, nor in the transparency of the markets. The gap between technological achievements and access of all citizens in the world to the benefits of scientific development has not shrunk but rather the opposite. Also the threat to our environment has increased.

At the same time we are uncertain as to what the future holds - this is something which both individuals, communities and society as a whole feels today. We have job insecurity, we have problems in terms of welfare provision, it is hard to adapt to new ways of working and people fear the loss of linguistic and cultural identity.

What we have before us today is not a crisis of globalisation, it is the crisis of a certain model of globalisation, one which is not at all pragmatic, but which is strongly ideological, subordinate to the religion of unregulated markets. It is a model which has forgotten the lesson that the most developed countries learnt after the 1930s: that the market is the best instrument to regulate economic life but that it cannot replace social life and collective life; it cannot be elevated to judge and jury, ruling over the lives of individuals and nations. As Lionel Jospin has said very clearly: ``Yes' to the market economy , `No' to the market society'.

In this new scenario we see that the arguments of the left, the ideas of democrats, the inspiration of socialists are reaffirmed. We see an increasing call for management of globalisation, a demand which so far has benefited the left but it might not always be the case in the future, unless we can carry out swift reform of national and international policies.

Our task therefore is to work towards new transnational regulation of the global economy. Thus we see a movement towards regionalisation, the resolutions of the last G7 summit and the prospect of reform of the International Monetary Fund.

But this is still not enough. Never has it been more pressing than today to confirm and develop the agenda set at the Socialist International XX Congress in 1996, that is: consolidation of democracy, creation of employment and of higher welfare standards, coordination of national policies, promotion of free trade and fair trade, strengthening of financial aid for developing countries, reform of the international financial system, increased cooperation at global and regional levels, protection and increasing of social rights, equality of opportunity, sustainable development and protection of our environment.

I believe that to advance these objectives the role of the European Union and Europe is very important. The European Union is really making history. We have a Union where we have socialist and democratic left parties in government, either alone or within centre-left coalitions, in thirteen out of fifteen countries. The EU, on the basis of results obtained from integration, must now shelve any remaining idea of being a Fortress Europe, rather it must turn outwards, take up its responsibilities within the global economic system. Europe can today return to a path towards growth, innovation and social cohesion. European growth may well be a factor of stabilisation for the world economy.

The commitment of socialist parties and the democratic left in Europe in this direction is about to be fully shown in the coming period. Chancellor Schröder has advanced a proposition of a new system for regulating exchange rates amongst the main international currencies, so as to limit excessive fluctuations. This proposition is supported by the Italian government which has been a driving force behind an initiative which aims at reducing restrictions on European fiscal policy in terms of public investment. The British New Labour government, not initially bound by the rigid undertakings of the single currency, is already taking this path. Romano Prodi, former president of the Italian Council, has advanced the proposal of using the remaining reserves in central banks for European infrastructures once we have the euro. And the French government also has some very innovative proposals for dealing with speculative capital flows. All the left and centre-left governments of the Union are working to bring about conditions which would allow a further drop in interest rates.

In conclusion, Europe is on the move thanks to the role of the new left and socialist parties. The movements and parties of the SI throughout the world face common challenges, because the crisis of these recent years is not only a financial one, it is not only an economic crisis. It has a long history and is linked to the change from a bipolar world, it is linked to the speed of technological change, to the revolution of information, to the rapid population flows and imbalances, to increasing imbalances between North and South.

It is important therefore to recognise that socialists are not alone when we face these political challenges, but rather around the world we see increasing possibilities to work together, to join the old traditions of socialist movements with other political and philosophical, traditions which are tied to the values of democracy, of care for the environment, dignity for the individual - values which have a religious inspiration. We can come together for tactics, but also for perspectives and values.

New horizons are opening up. The basic values of the democratic left's commitment, values of freedom, democracy, equality now intermesh with new values and come together with new awarenesses, with new objectives in this world. Geographical boundaries are superseded to find solutions to the problems of economic growth, security, justice, accessibility and equality of opportunity. We see a mix of races and cultures, greater social inclusion, an independent civil society and individuals being more responsible, as are local communities.

So globalisation has given birth to a new alphabet for the left on the eve of the next century, an alphabet which is not just made of good technical solutions to world financial problems, but rather is a political one. The regulation of economic globalisation is first and foremost a political choice, a new political approach which we are discovering is an essential instrument to answer the concerns of the citizens of our countries and of our peoples around the world.