Global Meltdown is Just Tip of Iceberg: Economist ~ Our Correspondent 22 November 2008

MUMBAI - The global financial meltdown is just the tip of the iceberg and the coming months will see an escalation of the crisis especially in the developing world, warns Samir Amin, eminent Egyptian economist and neo-Marxian thinker.

Speaking to Khaleej Times here on Thursday, Amin blames the 5,000-odd ’oligopolistic capitalists’ who have triggered off the biggest global crisis since the Great Depression of the 1930s.

Amin, the author of over 30 books, is one of the founders of the ’world systems’ school of thought. His recent books include ’The Liberal Virus: Permanent War and the Americanisation of the World,’ (2004) and ’Beyond US Hegemony: Assessing the Prospects for a Multipolar World (2006).

"In my book in 2004, I can say without any arrogance, I had referred to the expected breakdown in the global financial system," says the Cairo-born thinker and Left activist. "The global collapse of the financial system should have been expected, but none of the leading economists predicted the breakdown of the system."

According to Amin, modern capitalism - which he describes as ’oligopolistic’ - is different from traditional capitalism in several ways. About 5,000 oligopolies control the global financial system today and there is a high degree of centralisation in the system. While traditional capitalism believed in exploiting labour and natural resources, modern capitalism is focussed on finance and the consequent profit bubbles.

"They look for super profits, while traditional capitalists were content with moderate profits," explains the left economist. "They indulge in speculation, which has led to the financial system emerging 40 times bigger than global GDP."

Amin believes that the desperate attempts of the American, European and Japanese governments - and other partners in the Group of 20 - to inject massive liquidity into the system will ultimately hurt the poor in the South. "There will be more unemployment, declining real wages and inflation," explains the author.

"Conditions will then be ripe for companies from the developed world to plunder natural resources and cheap labour."

The Egyptian economist accuses the US of attempting ’military control’ of natural resourßces - oil, water and wood - of the planet.

Only one country, China, has succeeded in staying out of the financial system, notes Amin. Even India has succumbed to the global financial system, though thankfully, the government has not agreed for full convertibility of the rupee on the capital account, says the writer.

So does he see better prospects for the global Left movement in view of the financial crisis in the West? "This is the strongest opportunity for the Left to reverse the trend of the past 20 years," says Amin. But he warns that if the Left parties do not take advantage, the Right would move in swiftly.

The rise of ’political Hinduism,’ ’political Islam’ and other such pseudo-religious movements - which are neo-fascist in nature - should alert the Left to the dangers of letting them capture power.

He refers to the rise of the Bharatiya Janata Party (BJP) in India as an example of how ’political Hinduism’ is trying to take control of the country.

"Such major global crises result in rapid polarisation, as we saw in the 1930s, when the Left came out with the New Deal and social democracy, but the Right responded with fascism," says Amin. "This crisis will also see in the emergence of a harder Right and a harder Left movement around the globe."