I don't know what the G20 world leaders expect to achieve in under five hours of talking. My only hope is that they do as little harm as possible. But I'm not optimistic that they will succeed.
The one good thing is that there's going to be no agreement on hare-brained Keynesian spending packages. Countries like Germany feel they're quite indebted enough, and have no wish to borrow more. And for all the G20 leaders, the needs of voters at home are more pressing than Gordon Brown's need to be seen producing some agreed wheeze to 'save the world'. So I'm glad, because government job-creation plans actually cost jobs. They take money from where the market says it should be and put it to where politicians think that, possibly, it might give the appearance of doing good. And a bit disappears into the pockets of the civil-servants along the way. The Keynesian multiplier is really a minus.
But you can't stage a big event like this, with 10,000 extra police shifts and vast other costs, without having something to show at the end of it. So there will be agreement to look at global regulation. With luck, it won't go much beyond looking, because the last big regulatory initiative, Basel II, was ten years in the making but proved worse than useless – adding to the banks' problems – on its first outing. If our regulators had actually enforced the existing rules, we'd have been better off than we will be with lots of new ones.
And they'll agree that tax havens have to go. Which is a pity, because it means the end of effective tax competition between governments. The fact that people can shift their capital somewhere else is a good discipline on governments to run a tight ship. If they're trapped, because every state is a high-tax state, then the politicians can all relax. And that's not healthy.
I suppose there is a twenty percent chance that our world leaders might do one thing that would help us out of this pit they've dug for us, and that is to re-commit to the Doha free trade round. Global export markets have plummeted in this recession – exports are risky and hard to finance, especially now – and protectionism is rising. Easier world trade won't solve our problems, but it will certainly help, and help the developing countries in particular. But I suppose there's only a one percent chance of that twenty percent chance actually happening.
Dr Eamonn Butler's new book The Rotten State of Britain is published this month. Click here to find out more.
