La messe est finie, tout va pour le mieux, la crise est terminée. Peu de voix discordantes à cette soupe que l’on nous sert depuis 2 jours.

Et pourtant.


Actually, those G20 protesters do have a point

Behind the anti-capitalist ranting lie genuine popular concerns about globalisation that world leaders are simply ignoring

In Seattle ten years ago a friend of mine was running the gauntlet of protesters outside the world trade talks when he was accosted by an overweight lady dressed as a giant turtle. She was ranting so loudly against capitalism and globalisation that at first she didn’t hear him say: “I’m representing you.”

Eventually extricating himself from her scaly clutches, he explained that he was a lawyer negotiating an international agreement to stop shrimp nets catching turtles. She gaped, unable to comprehend that a guy in a suit might be on her side.

The G20 protests this week have been similarly confused. Want to help the poor? Capitalism has lifted millions more out of poverty than any aid programme. Want to save the planet? Emissions trading solved the problem of acid rain in America and offers more hope for the climate than vague pleas to “keep fossil fuels in the ground”. My friend in Seattle was James Cameron, who later helped to invent the European carbon market. It is nonsense to bracket him with “evil” bankers, just as it was nonsense to picket the Climate Exchange in Bishopsgate.

Yet some of the debate inside the summit has been almost as shallow. In the jumble of rage outside there are valid concerns that need to be addressed. The anger is real, the fear is real, and felt by many who did not descend on the City. The politicians who brandished their trillion-dollar deal yesterday are too complacent about this anger. Some of their slogans can seem almost as simplistic as those of the protesters.

The first is that “globalisation is good”. This is understandable, after a decade in which China exported both deflation and cheap goods to Western economies. Globalisation has created opportunities for many, but it has also damaged others. For 30 years, the wages of American workers rose as they became more productive. That era is over. Blue collar wages have stagnated since 2001, partly because jobs have been moved offshore. The rich have got richer but the middle class is working harder to stand still: in Europe, average real disposable incomes hardly rose between 1997 and 2007. This was masked by housing booms that gave the illusion of wealth. Now the bubble has burst, politicians must acknowledge the immense social strains that globalisation brings.

A related slogan, and a big theme of the G20 communiqué, is “freer trade”. The recession has hit exporting countries even harder than banking countries: Japan’s trade has dropped by 40 per cent in the past year and Brazil’s by a quarter. I have often made the argument for free trade, but I’m starting to wonder if this is intellectually lazy.

The theory of comparative advantage, which has underpinned trade for 200 years, is fraying. The argument was that everyone would gain because emerging economies would take over low-wage jobs and rich countries would gain new markets for high-end services. But India is already better at high-end technology than the West, and is filing an increasing number of patent applications. Western politicians make glib statements about the need to improve education. But the globalisation of innovation should shake them to the core. That’s why many G20 countries talk up trade while implementing protectionism.

A third slogan is that “growth is good”, and that more growth will help nations to bear the costs of eliminating pollution. But many ordinary people who read about the mass extinction of species, the unprecedented loss of forests and climate change, are starting to ask whether GDP growth always equals improvement. They wonder whether there could come a time when the environmental costs of growth outweigh the social and economic benefits. This is a question that politicians can’t even afford to acknowledge, because they survive by selling growth to their electorates. The summit yesterday did nothing to move the world towards action on climate change.

To be fair, the main aim of the summit was to prevent global recession turning into depression. The trillion-dollar package seems to have boosted the confidence of world stock markets. New money for the IMF will help Eastern European countries whose woes were haunting Western Europe and threatening to become a calamity. The $250 billion of export credits may do a little to help to unfreeze trade finance.

There was no harm in repeating that countries are already implementing a substantial £5 trillion fiscal stimulus – the failure of Britain and the US to persuade other countries to implement further fiscal stimulus may improve sentiment in markets that have become concerned about deficits.

Yet the summit did not attempt to resolve the fundamental problem of trade imbalances that, arguably, did more than bankers to create the bubble. Since the 1990s China has run a huge trade surplus, allowing the US to spend way beyond its means and to live on cheap credit. America and China were in what alcoholics call a “co-dependent” relationship, with America importing more than it exports and China recycling some of the profits back to America as cheap credit, enabling consumers to keep on bingeing. The truth is that developing nations with surpluses need to spend more and save less, and Western nations with deficits need to spend less and save more. But this was apparently too complicated, too diplomatically tricky, to address round the table.

Those trade imbalances were one hidden issue at the summit. The others were the profound concerns about growth and globalisation increasingly on the minds of national electorates. These are long-term questions, that the G20 had neither time nor bandwidth to tackle. But they require attention, as the gulf between leaders and voters grows. The protesters’ main achievement this week is to have shifted loathing from bankers to themselves. It is a shame that they could not articulate their concerns with something more than senseless slogans.