Wednesday, October 15, 2008

Gordon Brown and Alistair Darling have tried to present the picture that the buyout of the banks using public money is an investment by the taxpayer, and, when the banks are making a profit again, these investments will be sold, the taxpayer thereby receiving a benefit. In return, governments want to impose conditions on the way banks perform.

Whatever you want to call it, this is a form of nationalisation and the fact that even the United States has followed suit demonstrates that it can be implemented independent of any ideology. In fact, it could be argued that the government is operating like a capitalist corporation itself.

Given this precedent, then, what is to stop governments investing taxpayers' money in other industries which they believe could in the future generate a profit and be sold off to the benefit of the public purse?

Industries such as the marine renewables sector, which is poised for exponential growth with British companies at the forefront?

The Carbon Trust's investment in innovative low carbon technology companies is indicative of what can be done, only with this model the taxpayer does not stand directly to make a profit at the end of the day.

Why not? Because that will be seen as government interference in the market. Well, surprise surprise, this is no longer off limits.

Boris Johnson has called for continued investment in Crossrail. This right-winger is arguing for public spending on massive infrastructure to help us through the recession.

This is exactly the type of imaginative response which others are now arguing the government and the world needs to take to see us through the double crunch.

One of those calling for such responses is Yvo de Boer, Chief of the Bonn-based U.N. Climate Change Secretariat. He said in October that the global credit crisis could hasten countries' efforts to create "green growth" industries by revamping the financial system behind them.

This however would depend on governments helping poor countries tackle their problems, instead of spending most available money on rescuing the financial world.

“Our actions, largely driven by the capitalist market, are depleting Earth’s resource bank at an unprecedented rate, causing a shrinking supply of Earth’s resource capital. We are in a global environmental credit crunch. The very worst that can happen from the financial crisis is recession but a climate catastrophe could wipe out humankind,” Nick Reeves, Executive Director of CIWEM said in a statement in October.

The two crises, the nature crunch and the credit crunch, have the same cause. as writer George Monbiot has pointed out, "in both cases those who exploit the resources have demanded impossible rates of return and invoked debts that can never be repaid".

This is a massive wake-up call. We have to respond with courage and imagination.

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