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|  | | | Editorial | | | | 20 years on… The challenges of new capitalism
By Bastien Gibert,
Expert of momagri | |
20 years after the fall of the Berlin Wall and the triumph of liberal capitalism over its old enemy communism, this anniversary year has left a bitter aftertaste. Capitalism, the ideological, economic and political foundation for our societies, has failed for the first time. In doing so, it has brutally reminded us of two important facts. Firstly, the market is not an end in itself but simply a means for organizing trade. Secondly, far from perfect, this means is subject to failure and should therefore be regulated.
Also, at a time when policy makers are meeting to lick the wounds of the recent economic and financial crisis and because as soon as 2010, there will be two main questions at the heart of the debate for rebuilding the foundations of new international economic governance, we should already be asking: What new objectives do we give the market? On what basis do we rebuild the international capitalist system?
The recent economic crisis has clearly demonstrated that markets were not clearly and faithfully reflecting reality; even worse, they were suffering from congenital short-sightedness encouraging short-term excess to the expense of long-term strategic objectives. It is therefore essential to correct this intrinsic market failure by setting strategic objectives which, when not realized, allow for international regulation. One of the main objectives which needs to be put forward is that of price stability to protect against the dangers of hyper-volatility, without, however, falling into opposite extremes. The underlying logic to this would be similar to that of the European Stability and Growth Pact which provided a framework for coordination, convergence and control of national fiscal policies without restricting or hindering them. Of course, some markets would be more concerned than others such as agricultural markets, due to the extent of strategic, non-merchant factors which challenge agriculture (environment, safety, development, action against hunger, ...).
All the decision makers and international experts in finance have emphasized the need to rethink the foundations and architecture of international economic governance. Nevertheless, one of the most important questions is: Where to begin? Which sector should be used for testing this new international economic governance? For many reasons, I consider that agriculture would be the most relevant sector for testing. Economically, because agricultural markets are comparable to that of milk and are exposed to specific natural risks and market risks more than any other market and require regulatory measures. Strategically, because over 43% of the world's population works in agriculture and it is therefore an important catalyst for growth and development. Politically, because the world must regain confidence in international cooperation on a sustainable and real basis and historically, agriculture represents the economic sector on which such cooperation was gradually built. | |
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Advocating for
agricultural market
regulation and global
food governance | |
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