Thursday 25 / April / 2024
Following the Great Depression in the United States in 1929, President Franklin Roosevelt adopted a number of programmes to restructure the economy and change financial policies - widely known as the New Deal.
His goal was to bring the nation back to the pre-crisis period - an idea not very well received by the players dominating the economy at the time. This, despite the fact that the successful implementation of the New Deal would give them back the benefits they once enjoyed. Large corporations were not in favour of the state organising and restructuring the economy and undermining the private sector’s powers. Such practices had once monopolized the American market and eventually led to the crisis.
This historical era in the West serves as a useful case study to highlight the conflict between power and politics in the US scenario that led to the public’s loss of faith in the political system and ended economic transparency. Over the years, this conflict has fueled the US economy’s dominance over the state, policies, and even laws, legislations and regulations.
President Dwight Eisenhower’s powerful words from his iconic Change for Peace speech in 1953 serves as a critique of this dominion that is still very much prevalent today. He said: “Every gun that is made, every warship launched, every rocket fired signifies, in the final sense, a theft from those who hunger and are not fed, those who are cold and are not clothed. This world in arms is not spending money alone. It is spending the sweat of its labourers, the genius of its scientists, the hopes of its children... this is not a way of life at all, in any true sense.”
Which brings us to the question - if the US President himself is criticizing warfare, then what are the forces creating war? The President’s words lead us to believe that economic monopolies do truly exercise a more than casual control over the United States.
This trend is seen across most global markets that emulate the US model of governance - dividing the world between a rich North and poor South, between a dominating center and subordinate followers. What these forces essentially achieve is creating a minority that controls the world’s wealth and a majority that lives in dire circumstances.
In this context, it is worth reflecting on the findings of the recently published Oxfam report, An Economy for the 1%. The report states alarmingly that 62 individuals own half of the world’s wealth. It also notes that the assets of 100 wealthy individuals is enough to eliminate world poverty four times over. What this means is that with just a quarter of their net worth we can completely eradicate poverty.
We are heading towards even more challenging times if larger economic monopolies remain independent. People have long since lost their power and voice. The predominant minority is moving forward with its own agenda, overlooking the needs of the people. After the latest global financial crisis, large American corporations have refused to pay their share of taxes and fled with their capital to global tax havens.
The distinct quality of the Arab region is that our practices have still not shifted to this Western model of absolute corporate power. Here the state continues to play a pivotal role in setting economic direction, and civil organisations retain their standing in society. Arab values have a dominant influence on the political and economic climate - collectivism is encouraged and an individualistic approach is looked down upon.
Our goal is for the economy to serve the collective interests of the state, society and corporations based on shared rather than divided interests.
Wisdom is something achieved from a careful reading of history. As Arabs, we have to wisely read modern history and ask ourselves several questions. What if we had dealt with the oil boom differently from the very beginning? What if we had expanded our productive base by utilizing the cash flows emerging from oil? What if we had rationalized our consumption? What if we had invested in our human resources and our productive social powers 10 years ago? What if we had established a common Arab market? What if we had produced more than we consumed? What if we had attracted more wealth than we lost?
Unlike Eisenhower’s speech, these questions do not express regret. Rather, their answers can open the gates to comprehensive development in the Arab region. We must reflect on the past in order to successfully shape a better future. Today we are witnessing a drastic economic, cultural and social rebirth. I am confident that if we carefully ponder on past experiences they will give us the much-needed knowledge to establish strong foundations for our glorious future. - The author is the Chairman of National Bank of Oman, Executive Chairman of Investcorp and an International Advisor to the Brookings Instituition. All the views and opinions expressed in the article are solely those of the author and do not reflect those of Times of Oman.
