The Global Financial Crisis and Care: Context and Gender Aware Responses

1. The Global Financial Crisis and Care: Context and Gender Aware Responses Isabella Bakker, York University icbakker@yorku.ca WIDE Conference Care Economy and Care Crisis, June 20, 2009

2. Three perspectives on capitalist crises, accumulation & care Market fundamentalists and “pure” neo-liberals: capitalism is an economically efficient system & crises are short-term & self-correcting. Markets should be allowed to self-regulate. Most economists: capitalist accumulation is unstable & crises are endemic. They require macroeconomic planning & political intervention to allow for stabilization & the resumption of “balanced growth.” Both of these perspectives generally treat the Care Economy as an ‘externality’ and as the ‘safety net of last resort.’

3. Another View 3. The radical position: Capitalism is a system of power. It does not involve the accumulation of goods for livelihood and social well-being, but accumulation of monetary values which in turn allows for control over society & the labour of others. The goal of capitalist accumulation has nothing to do with livelihood, it has everything to do with increasing the social power, wealth & control of the few. Sees Care Economy as a producer of labour & of values, subsidizes capital; social reproduction is part of and constitutive of production (Power, Production and Social Reproduction: Human In/security in the Global Political Economy, Palgrave Macmillan 2003).

4. Context: seven features of capitalism 1989-2009 Turnover time of capital accelerates, profits boom & rates of exploitation of people & nature increase. Political power of free enterprise & the propertied fully restored, unprecedented growth of a global plutocracy. Subordination of state forms to capital (following some socialization and nationalization of the means of production 1917-1989). Governments promote market + privatization + workfare + cut provisions for families, education, health, leading to privatisation of risk for a majority; state guarantees (socializes) risks for big capital, e.g. huge bail-outs, subsidies. Acceleration of extreme inequality of income, wealth & life chances. Expropriation or dispossession of producers of their means to subsistence – parallels early capitalist dispossession, enclosure and colonization. Capitalist markets increasingly govern food supplies, water and other basic necessities: global hunger and starvation mediated by the capitalist market in ways that resemble 19th century capitalism.

5. Context: the Current Financial and Economic Crisis 2 aspects to consider: 1. deregulation of finance 2. growing inequality and declining wages 1. Origins of this crisis is in Global North - Deregulated financial markets & very bad supervision. Broader activities for banks (beyond earning interest to trading of stocks & asset securitization -pooling of loans e.g., mortgages/Lehman Brothers, into sellable assets which offloads risk to others and earns profits. Real vs. securitized mortgages. Wall Street self-regulates: faster and greater profits.

6. Current Crisis: Financial Deregulation & More Exploitation 2. Contradiction of neo-liberalism: Growing inequalities in US and declining wages since 1970s (growing exploitation) presents a barrier posed by the real economy: sub-prime loans and inability of households to pay (debt of US firms and households-savings well below consumption) --thus falling housing prices, less construction, ripple effects.

7. Shift from 3 Ds: dollars, deficits, debt to 3 Bs: bonuses, bailouts, banks- “it’s political.” Socialization of risk for wealthy and the privatization of risk for majority. Opportunity costs of bail outs: how better spent for instance for care economy?

8. Global priorities: capital comes first • EU + US + UK bailouts & fiscal stimulus = US$17 trillion. • This is over 22 times larger than the total planned funds for the UN’s Millennium Development Goals • MDGs seek to provide minimum & basic health & education for billions of the world’s very poorest people between now and 2020.

9. Previous Crises of Economic System and of Care • Crises of care and social reproduction are a long-term phenomenon in the Global South (“crisis on top of crisis”) and a product of neo-liberal doctrine (free markets & capital flows, privatize, limit gov’t, IFI institutions-IMF, WTO, WB). • Examples: debt crisis early 80s, Asian financial crisis 97, post-89 former East Bloc restructuring, Argentina 2001, SAPs in 80s and 90s, food and fuel crises (market prices).

10. Continuities and Differences Continuities: Crises are endemic to capitalism but heightened and depended under neo-liberal globalization 1940s Bretton Woods-”finance as the servant of production” Differences: This is the first truly global crisis: no existing alternative as there was in 1930s (USSR). Collective Keynesian response but one-sided: finance rather than real economy.

11. Discontinuities of Current Crisis Size of states in capitalist economies far bigger than in 30s & neo-liberalism doesn’t roll back fully yet privatizes most profitable segments. More countries abandoned (not necessarily voluntary - e.g., IMF) automatic stabilizers and re-distributional policies that acted as buffers. Once economies are stabilized, there will be pressure for fiscal austerity - cost cuts based on weakest constituencies and post-emergency calls for austerity (“balancing the books”).

12. Current Crisis and Care Pressures for fiscal austerity will decrease fiscal space and privatize existing social safety nets. Wealthy can pay for care vs. poor who require socialized system but have care informalized. Remittances are likely to fall as even wealthy or middle class cut back on transnational motherhood: impacts on sending communities infrastructure and care spending. Care crisis more visible in global north? In global south represents a continuum and depends on context: those places more fully integrated into global economy through export led development and global care chains may have more visible impacts.

13. Toward a Gender Aware Stimulus Package Reduce care burden: recognize, account for and redistribute unpaid work: decent work for women and men; infrastructure (state regulation & provisioning). Socialize risk: regulate finance; access to minimum social safety nets for everyone; broaden tax base through global response; popular and gender responsive budgeting; ODA/FfD; cost human rights commitments and align with budgets.