Calls for debt cancellation for Pakistan.

Calls for reparations and debt cancellation not just for Pakistan but for the Global South in light of the floods are being met with a sceptical view that these proposals are impractical. For scholars, activists and policymakers, this scepticism is - or should be - almost irrelevant. The goals are worth pursuing and we must allow ourselves to pursue ambitions which may never be fully realized. That is how science and politics are done. Nevertheless, the case for reparations and debt cancellation is not just a moral case. It is a practical economic case.

As a Keynesian, the present conundrum reminds me of Keynes's frustrations about the events of the Paris Peace Conference at the end of World War I and the Treaty of Versaille. His frustrations were both moral and economic, and both were related. The moral frustration was that the treaty was crushing an already beaten enemy. The economic frustration was that in doing so it didn't sufficiently address the massive, convoluted net of debt in which the Allied powers had become entangled. Consider the present problem through this lens: on the moral side, recall that the Global South has been crushed twice over. First, crushed directly by the imperial and colonial powers (See Utsa Patnaik's work). The second time around, the Global South is getting crushed by the industrialized countries' disproportionate impact on the global natural environment. So the reparations are in fact, debts owed to the global south.

On the practical economic side of things, there is a real question whether a debt-ridden Global South can transition to a greener economy while also preparing for further climate change related disasters which it is too late to prevent, but whose impact could still be mitigated. In Pakistan's case especially, this debt - 'paper shackles', as Keynes might call it - will keep us stuck. Keynes' argument was that the debts of the Allied powers to each other would keep them tied up and prevent them from doing the work that needed to be done to rebuild after the war. The same applies now. There is pressing work to be done. This work will not be done until countries like Pakistan struggling to stay afloat can get far more than just some breathing room. They need a tank full of oxygen and dry ground to stand on.

A degree of economic stability might be achieved through a transformation of capitalism which sets it on a path where it doesn't keep on pummeling the natural environment. Will the...