A Human Rights Legacy to the Global Financial Crisis? (December 2009)

Rethinking Bretton Woods | Tue, Dec 8, 2009

By Aldo Caliari

 Although the legacy of the ongoing financial crisis will be gloomy, it may also have another legacy in that crucial ideas about human rights and decision-making in economic policy can no longer be dismissed.  

This is the message of a Thematic Article by RBW Director Aldo Caliari featured in the recently released Social Watch Report 2009: A Human Rights-Based Response to the Financial and Economic Crisis

While there have been many explanations about the sources of the crisis, there is broad agreement on the importance of a number of failures due to lax regulation and supervision of financial markets, the actors that operate in them and the instruments with which they operate.  It is not hard to find support for the notion that the enjoyment of human rights will be significantly affected by the crisis everywhere. For instance, the dramatic decline in aggregate demand globally has resulted in extensive unemployment and destruction of livelihoods. 

Looking at these impacts, and accepting the consensus about the sources of the crisis, one has to conclude that choices made on financial regulation have tangible consequences for the enjoyment of rights. The reverse is also true: an approach that seeks to uphold human rights standards independently of addressing the impacts of financial policy and regulatory choices will prove to be woefully insufficient and ineffective. 

A response to the financial and economic recession that places human rights norms at its centre is not only necessary as a matter of justice; it will also make reforms of the financial and economic system more sustainable and resilient to future crises. The article dwells on the human rights principles of a human rights response, the implications for reforms of processes for decision-making (at both national and global levels), implications for banking and financial sector regulation, human rights and the impacts of the crisis in the South as well as those of economic stimulus packages.