Mayan calendar picks a pivotal year

Some restraints on financialisation are likely. National governments, either individually or in collaboration through entities like the G20, may begin to limit risk-taking. In addition a Tobin tax or something like it is now under discussion to reign in speculative finance operations.

It looks as though, just as they eventually did in the last great socio-economic crisis, the Great Depression, governments must step in to clean up the mess made by rampant markets. The underlying reality is that governments are still the final authority. The irony of the US losing its triple AAA ratings because the ratings agency Standard and Poor’s argued that Congress could not get it together to bolster the national economic condition is exquisite.

But in both the US and Europe governments have been slow to take up a more interventionist role. In part this is down to the spread of neo-liberal ideas which pushed governments into the background, but is also due to more specific reasons. In the US it is the corruption of Congress and the electoral process generally by vested interests, mixed with the toxic politics as the ideological split between left and (increasingly religious) right. In Europe it is the long standing differences between different cultures shoehorned into the unwieldy EU structure.

Underlying all this is the problem that all democratic governments now face: to take serious measures to clean up the economic mess means almost certain electoral defeat. Most fundamentally, it is the electorates that fail to accept responsibility to direct governments to act through their vote. This is really no wonder given that the developed world has become dominated by a materialistic individualism that recognises only rights, not responsibilities.

In fact, the only governments that look good are the more authoritarian ones, like China, Russia and the east Asian pseudo-democracies. But such systems are inherently unstable, as shown by the lengths China goes to in order to stifle dissent.

Governments collectively have also been badly hurt by their incapacity to deal with global warming. This is indeed a diabolical problem, but it must be faced, and sooner rather than later. 2011 ended with a series of warnings about global warming from various authorities. The US Department of Energy reported that greenhouse gases grew a greater rate than predicted, up 6% in 2010 over 2009. After another year of record extreme weather around the world, the IPCC released a report on the role of global warming in generating such weather. The International Energy Agency warned that we have five years before we lose the ability to control global warming.

The transnational Occupy movement is essentially a reaction to this impasse. This development highlights a number of issues, from foreign wars to inaction on global warming, but is focused squarely on the shift of power from people to business and markets. There are parallels with other movements for change – the earlier Iranian revolt, the Arab spring, riots in Greece, Spain and even the UK – which suggest a new sentiment is growing around the world, still inchoate but potentially powerful.

Again technology has been critical, this time the use of so-called social media to organise resistance. Social media is effective for  aggregating otherwise dispersed people into massed formations, but we have yet to see whether it can play a role in organising that sentiment into coherent programs of reform.

If things go bad 2012 will be dominated by a growing global crisis of many dimensions. It will include: increasing tensions between the US and China; growing tension and perhaps military action involving the US, Israel and Iran; European and then global economic meltdown; and a growing food crisis. All as global warming gets worse and peak oil approaches.

If things go well we will see a new era of collaboration between governments to manage the raft of challenges facing our now global civilisation. Their actions might include: cooperation to generate a global New Deal to stabilise the global economy; new agreements to ensure nuclear disarmament; agreements to manage resource depletion; agreements to integrate disease control and other emergency measures; and agreements to manage food shortages.

In the later scenario, once we get the hang of cooperating to solve problems, we can then continue to make things generally better for people everywhere by further cooperation.

So we have a really important year coming up. A year when we start to behave like adults, as one species with appropriate global institutional arrangements, or we begin to really pay the high cost of not doing so.