Taking a page from Keynes

In the news today we saw China flexing its military arm showing off its fighter aircraft while Obama is on a visit there. CNN carried the story to allege that the Chinese manufacturers had copied US design. Then the reporter tangentially ventured into talk about cyber warfare and how the Chinese had hacked into US weather systems recently. China is now gaining on the US to establish its supremacy globally.

Given how we are all so interdependent, such news is troubling. The end result is millions spent on an arms race and on cyber security. Tax dollars which should be educating our youth, feeding our poor, heck, stimulating our economy and providing jobs with infra structure spending are being poured into endeavours that assuage our fears. Is this the world we want. Why have we visioned our world based on these power structures and hierarchies? Could there not be a rethink? After all, we need each other. I sound like a naive bleeding heart oversimplifying our complex world but I think not. We need a groundswell of opinion for a world of open exchange. What would this look like?

I can illustrate with a small example, taking a page from Keynes whose economic theories are all the vogue right now because of his prescience. In 1944 close to his death, at age 62, Keynes proposed an International Clearing Union that would keep trade and investment in rough balance. Debtor countries would have to repay loans of course but creditor countries would have a role to play in that they would give their debtors breathing space by buying more of their products and services. So if this were to exist today, the Germans would be holidaying in Greece and Portugal and buying their wine from them. The Germans need wine and holidays so does it not make sense for them to help their debtor nation than to get it elsewhere? Sadly Keynes' idea lost out and instead we got the IMF providing aid to nations to meet balance payments and the World Bank to provide aid for development. We do not have the financial infrastructure to restore balance to global trade and investment, one that is based on sound international cooperation which identifies our obligations to each other for our collective good.

Keynes could have been talking about everything in our present world when he wrote in the 1930s "we have involved ourselves in a colossal muddle, having blundered in the control of a delicate machine, the working of which we do not understand. The result is that our possibilities of wealth may run to waste for a time- perhaps a long time."