It's been 13 long months since the leaders of the G8 gathered for their annual talkfest. I'm sure the details of last year's communique are etched into your brain but just in case you've forgotten what was agreed in Heiligendamm, here's a reminder. "We noted," the G8 said, "that the world economy is in good condition and growth is more evenly distributed across regions." This was June 8 2007, two months to the day before the entire global financial system came to a shuddering halt. If you like your humour black, it's rather funny isn't it?
But wait, because it gets better. The communique expressed confidence that there would be "a smooth adjustment of global imbalances which should take place in the context of sustained and robust economic growth". Glad to see, then, that there was no risk that the US sub-prime mortgage crisis would prompt what the International Monetary Fund has called the biggest shock to the global financial system since the Great Depression.
In fact, the G8 had nothing to say about housing bubbles at all, though it did find time to discuss the need for a settlement between Armenia and Azerbaijan over Nagorno-Karabakh. And so it goes on. The G8 managed a cursory glance at what hedge funds were up to and decided that - on balance - there was nothing really to worry about. "While noting the positive contribution [sic] of hedge funds to financial-market stability, we also want to minimise systemic risks by increasing transparency and market discipline on the part of all parties involved."
These are the same cuddly hedge funds, presumably, that have been in large part responsible for driving up the price of oil and food on commodity markets, to the point where the "good condition" of the global economy is threatened by stagflation and hunger?
As one hedge fund manager, Michael Masters, told a Congressional hearing in May, speculation in commodity futures has increased 20 times in the past five years - from $13bn (£6.5bn) to $260bn - and during that time the price of a basket of commodities has risen by 183%. The increase in demand from speculators, Masters said, had been almost equal to the increase in demand from China.
There are extremely eminent economists, such as Paul Krugman, who say that speculation is not the reason the cost of crude has doubled in the past year even though physical demand has barely increased. There is, of course, one way to find out. The G8 could agree this week to release crude from their strategic reserves for the hedge funds to buy. My bet is that if they did so, the price of oil would fall like a stone.
Will the G8 do so? It would be foolish to bank on it, and indeed far safer to expect a repeat of last year's hotch-potch of complacent inanity. To be sure, there will be reference to the headwinds facing the global economy because the challenges facing the summit are as great as they have been since French president ValÃƒ©ry Giscard D'Estaing called for the first cosy chat at the chateau of Rambouillet outside Paris in 1975. Indeed, the threat is now even greater, since at least in the mid-1970s the problems facing the summiteers were primarily economic - the collapse of the post-war golden age of growth in the face of rising inflation. This time, the G8 has more on its plate than simply a bog-standard cyclical economic downturn at the end of a prolonged period of low inflation and strong growth. In addition there are three other meaty issues to consider: the threat of climate change; the threat that the global economy may soon be facing shortages of two vital resources (oil and water), and the parlous position of many of the world's poorest countries as they grapple with the effects of global warming and rising food prices. As a paper released by the Cabinet Office today shows, it is the poor who suffer most when the cost of food rises: in Britain food accounts for 15% of the household budgets of the poorest 10% of the population compared with 7% for the richest 10%. In the developing world, food can take 50-80% of a family's income.
In the build-up to the summit, it has been clear that the individual members of the G8 have been tempted to concentrate solely on the problems facing their own economies and to defer action on the issues that have dominated these events over the past five years - Africa and climate change. Gordon Brown was right to say at the weekend that it would be a profound mistake for the G8 to adopt that approach. For one thing, it is impossible for any country, no matter how big and powerful, to insulate itself from developments in the global economy. And even if they could, it would still be stupid since in the long-term the stability of every country in the world will require energy security, action on climate change and the spread of economic prosperity to the billions living on or below the breadline. This is certainly not the time to renege on the Gleneagles aid pledges made three years ago or to decide that the threat of unemployment makes tackling climate change something that can be put off for another day.
The prime minister is also correct when he argues that the big issues on the agenda this week have to be dealt with together rather than individually, since it is quite clear that there is no lasting solution to the world's macro economic problems that does not include a solution to where we are going to get our energy from, and how we marry strategies for growth with strategies for environmental sustainability.
Brown has ideas for what should be done - investment in agriculture, a stronger commitment to renewable energy, the conclusion of a global free trade deal and progress on a new climate change deal in Copenhagen next year. The difficulty with this blueprint is it fails to get to grips with the magnitude of the problem and so does not go nearly far enough.
If the G8 was doing its job properly, this week's communique would be rather shorter than usual. It would say the world is about to be battered by a triple crunch of a credit-fuelled financial crisis, galloping climate change and - even in the absence of speculation - a long-term increase in energy prices caused by the imminence of peak oil.
All this requires more than just the tired old business as usual nostrums. On the last two occasions the global economy reached crisis point - in the 1930s and 1970s - there was radical change. It is worrying and depressing that there is an intellectual vacuum when there ought to be a plethora of ideas about how to dig ourselves out of this hole.
A pamphlet to be released later this month suggests the answer is a Green New Deal, which would involve far tougher regulation of capital, changes to tax systems and a sustained programme of investment in energy conservation and renewable energy. It certainly has a more coherent answer to the problems we face in 2008 than the G8, though as one of the authors I probably would say that, wouldn't I?
Larry Elliott has been at the Guardian for 17 and a bit years, and the newspaper's economics editor for the past 11. He coauthored the Age of Insecurity with Dan Atkinson in 1998.
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