November 10, 2008
This Open Letter appeared in AToL
on November 7, 2008
Open
Letter to World Leaders
attending the November 15 White
House Summit on Financial Markets and the World Economy
Dear World Leaders:
The Winter of 2008-2009 will prove to be the winter of global economic
discontent
that marks the rejection of the flawed ideology that unregulated global
financial markets promote financial innovation, market efficiency,
unhampered
growth and endless prosperity while mitigating risk by spreading it
system wide.
For more than three decades mainstream neoliberal economists have
preached, and
regulators have accepted, the myth of the efficiency of unregulated
markets,
ignoring the critical lesson provided by John Maynard Keynes’s analysis
of
interconnection of financial markets and the international payments
system.
Those who do not learn the lessons of history are bound to repeat its
tragedy. Neoliberal
economists in the last three decades have denied the possibility of a
replay of
the worldwide destructiveness of the Great Depression that followed the
collapse
of the speculative bubble created by unfettered US
financial markets of the “Roaring Twenties”. They fooled themselves
into
thinking that false prosperity built on debt could be sustainable with
monetary
indulgence. Now history is repeating itself, this time with a new, more
lethal
virus that has infested deregulated global financial markets with
“innovative”
debt securitization, structured finance and maverick banking operations
flooded
with excess liquidity released by accommodative central banks. A
massive
structure of phantom wealth was built on the quicksand of debt
manipulation. This
debt bubble finally imploded in July 2007 and is now threatening to
bring down
the entire global financial system to cause an economic meltdown unless
enlightened political leadership adopts coordinated corrective measures
on a
global scale.
The US
sub-prime
mortgage problem that started in 2007 has developed predictably to a
morass
that has caused the abrupt failure of interconnected financial markets
and
threatened the viability of financial institutions worldwide as
contagion
spread at electronic speed via an antiquated, dsyfunctional
international
payments system.
To arrest the global financial meltdown, much can be learned
from Keynes’s vision of how the international payments system should
work to
permit each country to promote a national full employment policy
without having
to fear balance of payments problems or to allow financial incidents in
other
countries to infect the domestic banking and non-bank financial systems.
Another Great Depression can be avoided if world leaders would
reconsider John
Maynard Keynes’s analytical system that contributed to the golden age
of the
first quarter century after World War II. The undersigned and others
have long
advocated a new international financial architecture based on an
updated 21st
century version of the Keynes Plan originally proposed at Bretton Woods
in 1944.
This new international financial architecture will aim to create (1) a
new
global monetary regime that operates without currency hegemony, (2)
global trade
relationships
that support rather than retard domestic development and (3) a global
economic
environment that promotes incentives for each nation to promote full
employment
and rising wages for its labor force.
Sincerely,
Paul Davidson
Editor, Journal of
Post Keynesian Economics
Visiting Scholar
Schwartz Center for Economic Policy Analysis,
The New School, New York
Henry C.K. Liu
Visiting Professor of Global Development,
Department of Economics,
University of Missouri-Kansas City
********************************************************************************
Partial
List of Supporters:
Irma Adelman
Professor in Graduate School
University of California at Berkeley
Olivier Allain
Associate Professor in Economics
Université Paris Descartes
France
Philip Arestis
Director of Research
University of Cambridge, UK
Dr. George Argitis
Senior Lecturer
Dept. of Economics
University of Athens
Angel Asensio
University Paris 13
Member of the ADEK and PKSG
H. Sonmez Atesoglu
Professor of Economics
School of Business, Clarkson University
Potsdam, NY
Rainer Bartel
Associate Professor of Economics
Johannes Kepler University
Linz, Austria
Renaud Bellais, Ph.D.
Associate Professor in
Economics
French Army Academy (Saint Cyr)
Manager for European Defence
and Security Affairs
Institutional Relations, EADS
ASTRIUM
Paris
Janine Berg
Senior Labour Economist
International Labour Office
Brasilia, Brazil
Dr Dirk Bezemer
University of Groningen
The Netherlands
Dr. Wolfgang Blaas
Associate
Professor
Department of Spatial
Development, Infrastructure and Environmental Planning
Centre of Public Finance and Infrastructure Policy
Vienna University of Technology
W. Robert Brazelton.
Professor-Emeritus/Economics
University of Missouri-Kansas
City
Luiz Carlos Bresser-Pereira
Professor Emérito da Fundação Getúlio
Vargas
Christopher Brown
Professor of Economics
Arkansas State University
Antonella Bucci
Terre des Hommes International
Federation
Paul D. Bush
Professor Emeritus of Economics
California State University, Fresno
Fernando J. Cardim de Carvalho
Professor of Economics
Institute of Economics,
Federal University of Rio de
Janeiro, Brazil
Àngels
Martínez i Castells
Economist.
Former professor of Barcelona University
Massimo Cingolani
Directorate for Operations in
the European Union and Candidate Countries
European Investment Bank
Luxembourg
Laurent Cordonnier
Assistant Professor
Faculty of economics and social sciences
Lille 1 University
France
Eugenia Correa
Posgrado de Economía
Universidad Nacional Autónoma
de México
Dr. James M. Cypher
Researcher-Professor,
Economics
Doctorate in Development
Studies
Universidad Autonoma de
Zacatecas,
Zacatecas, Mexico
Georgios Daremas
Senior Lecturer
Dept of Communication and
Media,
University of Indianapolis, Athens-campus.
Sheila
C. Dow
Professor
Department
of Economics
University of Stirling
Scotland, UK
Miguel Angel Duran.
Lecturer in Economic Theory
University of Malaga, Spain
Amitava Krishna Dutt
Professor
Department of Economics and Policy Studies
University of Notre Dame
Luca Fantacci
Assistant Professor
Department of Institutional
Analysis and Public Management
Bocconi University
Milano, Italy
Carmem Feijo
Associated professor
Fluminense Federal University in Rio de Janeiro, and
Executive Secretary
National Association of
Postgraduates Programs in Economics.
Marica Frangakis
Member of the Board of the
Nicos Poulantzas Institute
Athens, Greece
Jorge GARCIA-ARIAS
Associate Professor of Economics
Department of Economics
University of Leon, Spain
Anna Mª Garriga
economist
Barcelona, Spain
Marilena Giannetti
Department of Public Economics
University of Rome
"La Sapienza"
Italy
Alicia Girón
Instituto de Investigaciones Económicas
Universidad Nacional Autonoma de México
Claude Gnos
Associate Professor
Université de
Bourgogne and Cemf
France
Ian Gough AcSS
Professor of Social Policy
University of Bath
UK
Eric R. Hake
Assistant Professor
Eastern Washington University
韩德强 (Han Deqiang)
副研究员 (Associate Research Fellow)
北京航空航天大学经济管理学院 (Beijing
University of Aeronautics)
Geoff Harcourt
Professor Emeritus
Reader in the history of Economic Theory
Cambridge University
Distinguished Fellow of the History of Economics Society
Visisting Professor Fellow, University of New South Wales.
John T. Harvey
Professor of Economics
Texas Christian University
Baban Hasnat
Professor
Dept. of Business Administration & Economics
The College at Brockport
State University of New York
Geoffrey M. Hodgson
Professor of Economics
University of Hertfordshire
Hatfield, UK
Jörg Huffschmid
Professor of economic policy and political economy
University of Bremen, Germany
Edwin le Heron
Sciences Po Bordeaux
France
Bo Jonsson
Retired economist from the
Swedish LO and the ITUC (formerly ICFTU)
Member of the administrative board of the European Institute for Asian
Studies
Brussels, Belgium
Tadeusz Kowalik
Professor of Economics and Humanities
Polish Academy of Sciences
Warsaw, Poland
Dany Lang
Maître de Conférences at the University of Paris
Lena Lavinas
Assistant Professor of Welfare
Economics
Institute of Economics at the Federal University of Rio de Janeiro
Brazil
Frederic S. Lee
Professor
Department of Economics
University of Missouri-Kansas
City
Hoesung Lee
Professor of Economics
College of Environment
Keimyung University
Daegu, Korea
Noemi Levy-Orlik
Professor
Economic Department
National Autonomous University of Mexico (UNAM)
李昌平 (Li, Chang-ping)
河北大学中国乡村建设研究中心主任 (Hebei University-China
Village Construction Reaserch Center Director)
Henry van Maasakker
Economist.
Euromemorandumgroup
The Netherlands
Ricardo Paes Mamede
Professor of Economics at
ISCTE
Lisbon University Institute
Wesley Colin Marshall
Professor of Economics
Universidad Nacional Autonoma de Mexico
Brent McClintock
Associate Professor of
Economics
Department of Economics
Carthage College
Kenosha, Wisconsin
John McCombie
Director, Cambridge Centre for Economic and Public Policy
Department of Land Economy
University of Cambridge, UK
Sergio Cabrera Morales
Economics Faculty
Universidad Naciona Autónoma
de México
Tracy Mott
Associate Professor
Dept. of Economics
University of Denver
Antonio Carlos Macedo e Silva
Instituto de
Economia - UNICAMP
Campinas (SP)
Alcino Ferreira Camara Neto
Dean of Law and Economics
Federal University of Rio de
Janeiro
Brazil
Paulette Olson
Professor
Department of Economics
Wright State University
Dayton, Ohio
Ozlem Onaran
Associate Professor
Vienna University of Economics
Austria
Walter O. Ötsch
Head of the Centre for Social and Cross-cultural
Competency
Johannes Kepler Universität
Linz, Austria
Athanasios G. Papaioannou
Professor
University of Thessaly
Greece
Jørgen Lindgaard Pedersen
Associate Professor
Technical University of Denmark
Maria Cristina Penido de Freitas
Brazilian Economist,
Ph.
D. on Economics by University Paris
Wolfgang Polt
Head of Vienna Office of Joanneum Research
Institute for Technology and Regional Policy
Vienna
Daniela Magalhães Prates
Professor of the Economy
Institutr of University of Campinas
Alcino F. Camara Neto
Professor and Dean
Federal University of Rio de
Janeiro
Brazil
Clyde Prestowitz
President
The Economic Strategy
Institute
Washington D.C.
Dr. Werner Raza
Austrian Chamber of Labor and
Vienna University of Economics and Business Administration
Austria
Colin L. Richardson
Internet Economist
William Penney Laboratory
Imperial College, London
Louis-Philippe Rochon
Associate Professor
Laurentian University
Canada
Jacqueline Runje
PRESOM Coordination Assistant
University of Dortmund
Faculty of Spatial Planning
IRPUD Institute of Spatial Planning
Germany
Zdzislaw L. Sadowski
Professor of Development
Economics
University of Warsaw
Poland
Irma Erendira Sandoval
Social Science Research
Institute
Universidad Nacional Autónoma de
México
Prof. Dr. Thomas
Sauer
Professor für Volkswirtschaftslehre - of Economics
FB Betriebswirtschaft - Dep. of Business Administration
Fachhochschule Jena - University of Applied Sciences
Jena, Germany
Ingo Schmidt
Labour Studies
Athabasca University
Canada
Prof. Dr. herbert Schui
Former professor of economics
University for Economics and
Policy
Hamburg, Germany
M.P. at the Deutscher Bundestag
Parliamentary Group DIE LINKE Economic
Spokesman
Mario Seccareccia
Professor of Economics, University of Ottawa, Canada
Editor, International
Journal of Political Economy
Mark Setterfield
Professor of Economics
Trinity College, CT USA
Anwar Shaikh
Professor of Economics
Department of Economics, Graduate Faculty
New School for Social Research
Catherine SIFAKIS,
assistant professor of Economics
University P. Mendès France of Grenoble
France
Jeffrey Sommers
Visiting Professor
Stockholm School of Economics in Riga
Dr. Engelbert Stockhammer
Dept of Economics
Vienna University of Economics and Business
Vienna, Austria
Dr. Servaas Storm
Dept of Economics,
faculty TPM, Delft University
of Technology
The Netherlands
James I. Sturgeon
Professor of Economics &
Economics Department Chair
University of Missouri-Kansas
City
Senator Eduardo Matarazzo Suplicy (PT-SP)
Brazil
Prof. Dr. Claus Thomasberger
Faculty of Economics
University of Applied Sciences
Berlin, Germany
Éric Tymoigne
Assistant Professor
Department of Economics
California State University, Fresno
Cathleen Whiting
Associate Professor of
Economics
Willamette University
Gregorio Vidal
Department of Economics,
Posgraduate Programme
Universidad Autónoma Metropolitana
Mexico
Roderich Wahsner
Professor Emeritus of Labor Law
University of Bremen
Germany
L. Randall Wray
Research Director
Center for Full Employment and
Price Stability
Department of Economics
University of Missouri-Kansas
City
Senior Scholar
Levy Economics Institute
dr.Emiel F.M. Wubben
Wageningen University & Researchcenter
Business Administration/ Management Studies Group/ Bedrijfskunde
Social Sciences Group
Wageningen, The Netherlands
Haibo Yan
Associate professor
Postdoctoral Mobile
Research Station
Institute of Economics
Chinese Academy of Social Sciences
Bin Yang
Associate Research Fellow
Institute of Industrial Economy
Chinese Academy of Social Sciences
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