THE WORLD ECONOMIC SUMMIT: WHAT DID IT MEAN AND WHY?

"Nothing is harder than to determine the historic significance of events when they are happening. Yet the meeting of the heads of governments of the Group of 20 in Washington at the weekend looks as historic as the crisis it responds to. It might even prove the one bright light in the gathering darkness.

While the G20 contains countries of small significance, it does include all important advanced and emerging countries. The fact that this group could meet and commit itself to a substantial agenda and another meeting in April 2009 shows belated recognition of the shift in the balance of economic power".

"G20 Marks shift in economic power," Financial Times, in www.ft.com

"The G-20 met last Saturday. Afterward, the group issued a meaningless statement and decided to meet again in March 2009, or perhaps later. Clearly, the urgency of October is gone. First, the perception of imminent collapse is past. Politicians are superb seismographs for detecting impending disaster, and these politicians did not act as if they were running out of time. Second, the United States will have a new president in March, and nothing can be done until he defines his policy.

Given the sense in Europe that this financial crisis marked the end of U.S. economic supremacy, it is ironic that the Europeans are waiting on the Americans. One would think they would be using their newfound ascendancy to define the new international system. But the fact is that for all the shouting, little has changed in the international order. The crisis has receded sufficiently that nothing more needs to be done immediately beyond “cooperation,” and nothing can be done until the United States defines what will be done. We feel that our view that the international system received fatal blows Aug. 8, when Russia and Georgia went to war, and Oct. 11 when the G-7 meeting ended without a single integrated solution, remains unchallenged. Now, it is every country for itself".

G20 and GM: Economics, Politics and Social Stability," by George Friedman, 17 November in www.stratfor.com

After all of the talk of a 'Second Bretton Woods,' by people who should know better like Nicolas Sarkozy and Gordon Brown, it is not surprising that post-facto the entire G20 meeting has aspects of an exploded bicycle pump: something which generates a great deal of noise, but, with almost nothing to show for it. In retrospect it is quite obvious, that the entire 'event', was more of a media circus rather than a productive exercise in crisis management. The real parallel to the meeting, as the prolific if sometimes facile, British expatriate historian, Niall Ferguson reminded us over the week-end, was that pre-eminent exercise in failed economic, crisis-management: the London Economic Conference of 1933 (see his article in the week-end edition of the Washington Post, in www.washingtonpost.com). Like the G20 meeting it was an effort to resolve on a co-operative basis, the major economic problems of the day. And, like G20 meeting, it turned out to be merely a damp squib. With little to remember it by except for the fact that it provided future historians wonderful vignettes such as the silver devotee, and Chairman of the American Senate Foreign Relations Committee, Key Pittman, bowie knife in hand, racing down the halls of the Conference in search of an adherent of the Gold Standard. The reasons for this, as George Friedman of Stratfor makes quite clear is simply that the USA, the still unchallenged economic hegemon, had no real interest either the conference, much less endeavoring to come to any agreements with the other powers assembled therein. The fact that the other powers were quite desperate to obtain (to use the vernacular expression), 'face time,' with the incoming American President, merely proves Friedman's point. Those like the bien-pensant editorial board of the Financial Times, who think that the world has been 're-made,' by what took place in Washington, DC., over the week-end, have unfortunately merely took leave of their senses. Pur et simple.