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LISBON, Feb 12 2009 (IPS) - The economic crisis engulfing the world is getting worse day by day and has spread to every continent. It is a truly global crisis the solution to which is clear to no one. During the years of hope in the “glorious decades” following World War II, the communists never tired of proclaiming the impending general crisis of capitalism, which would be fatal for the system, according to Marxist analysts. Although there were small crises, none was comparable to the depression of 1929, which seems the ultimate measure of failure.

Then capitalism reformed itself. Welfare states emerged with universal social security, the New Deal of Franklin Delano Roosevelt, British Labour and postwar nationalisation, the democratic socialism of the Nordic countries, and bit by bit, in various shades, social assistance and harmony spread to the rest of Western Europe, with the dark exceptions of the Iberian peninsula and Greece.

Then Soviet communism spread to and was established in Eastern Europe, China -which would shortly adopt a communism that rivalled the Soviet form- North Korea, Vietnam, and Cuba. But western capitalism not only persisted but thrived, weathering the “oil shock” of the 1970s, and having the unexpected satisfaction of seeing the peaceful implosion of the communist bloc with the fall of the Berlin Wall in 1989 and the Soviet Union, while since 1978 China, with Deng Xiao Ping, has sought to reconcile single-party communism with the most savage form of capitalism.

The so-called West and the US in particular, exultant at the fall of communism, committed the fatal error of believing they were then the rulers of the world. Washington, during the presidency of George W. Bush, did everything possible to marginalise the United Nations and spread liberal democracy, a globalisation stripped of ethical rules, and “casino capitalism”. The arrogance of the victor lead it into the quagmires of Afghanistan and Iraq and the unpardonable errors of giving Israel the green light to attack Lebanon and the Gaza strip.

Finally came the global economic crisis. The financial system created by neoliberalism collapsed as fast as the communist universe twenty years before. And the question all ask themselves anxiously is, What now?

President Obama says that a change in economic model is necessary. This is clear. However, the mentality of the politicians, economists, entrepreneurs, and speculators has for the most part not changed. This makes me wonder whether for real change to take place, young people must be found, new politicians, economists, and entrepreneurs with ethical, social, and environmental values and strict public morality.

Some have called for a shift from capitalism to communism. Is it possible today at the turbulent dawn of the 21st century to revive the old 20th century utopias that so many outstanding figures still believe in? One would have to exclude authoritarian socialism of the Soviet, Maoist, and Cuban variety, which all failed. Without a market there are no free citizens, only servants and functionaries.

Where does this leave us? A market economy with ethical rules and strict policies. Rule of law that can control the markets and guarantee societies of free citizens, pluralist and participatory, democracies that are not oligarchic like those we know so well but oriented toward the well-being of all citizens, with independent media and rigorous environmental safeguards.

Broadly speaking, it consists of what for decades Europe has called democratic socialism or socialdemocracy. It might also be referred to as advanced or progressive capitalism in which people are valued above financial speculation. I don’t think that at this juncture anything better can be devised to lift us out of this crisis and provide humanity with a few years of peace and well-being.

This alternative demands that we subject globalisation to regulation. Otherwise it will be impossible to exit the crisis. Just as economic globalisation is a universal and irreversible fact, so the establishment of global political regulation by reforming the international financial institutions (starting with the International Monetary Fund and the World Bank) and integrating them into a UN reformulated in keeping with the Millennium Development Goals is indispensable. This would involve nothing less than a New World Order based on an inclusive system of international governance; in other words, not dominated by a handful of rich countries but responsive to the multilateral and democratic reality of today’s world and therefore representative of regional blocs and emerging countries from every continent. It won’t be easy, but I see no other way to build a better and more human world. (END/COPYRIGHT IPS)

(*) Mario Soares is ex-President and ex-Prime Minister of Portugal.

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