Our economy is plummeting into the unknown. We go about our daily business as yet untouched by the disasters on the economic front. This is the phoney crash. We don’t know how far we are going to fall nor what kind of pain we’ll feel when we hit the bottom. Doubt and uncertainty grip us. So who now owns the progressive future?
Both the New Labour Government and the New Conservatives are products of the neo-liberal era which is disintegrating around us. Its rule book has been torn up. The status quo has vanished.
The New Labour project is exhausted and across Europe third way style social democracy is in crisis. In response, the government resurrects Peter Mandelson the memory of its halcyon days. The old glory of New Labour will bring life to a zombie government. In Birmingham, the Conservatives struggled to gain a foothold on solid ground. They found it in the memory of Margaret Thatcher. They too cannot escape the discredited orthodoxies of the past. In Birmingham Cameron sounded like he’d given up trying. ‘I’m a man with a plan’, he asserted. In truth he has no plan. Until the New Conservatives give up their dogmatic belief in liberal market capitalism they’re irrelevant to the crisis at hand.
Alistair Darling has been resolutely irresolute. His tantalising promise of action which specified nothing sent a paranoid market into flight. Now at last the government has been forced to ditch its blind faith in markets. Its massive and unprecedented intervention will attempt to prop up the banks and stop the collapse of the wholesale money markets.
Will it work? The banks must put up their hands – ‘please sir I need some money’ – so confirming their weakness to the market. Will it react like a herd of frightened wildebeest and stampede?
Suddenly the truth of markets dawns. Like water capital is almost impossible to stem when in flood. This is a liquid economy. As one government attempts to shore up its collapsing banks, capital pours out across its national boundaries. The markets are amoral, and they are mindless. They need regulating otherwise they pursue successful profit seeking to destruction. They have no place in the governance and civic and social affairs of society.
And yet markets have come to rule our lives and now threaten to destroy us. The so called invisible hand is a charade which allows those who have to gain more. A tiny unaccountable elite has manipulated economic activity in order to enrich itself. The profound absence in this crisis is our collective sense of democratic agency. Today’s unprecedented measures have been forced upon a reluctant, timid government. And yet they have to be the first step in the fundamental structural reform of liberal market capitalism. Democracy must assert itself over capitalism. Where is the politics capable of seizing this moment?
The markets cannot be allowed to manage people’s long term social security or pension schemes. The principle of social insurance has to be be reasserted. Markets cannot be allowed to deliver welfare reform, nor are they suitable for allocating the resources of care and health provision. The market has created a crisis in housing provision. Privatisation and proxy markets have undermined the ethos of public service and led to dysfunctional, demoralised organisations. The culture of capitalism has invaded every aspect of British society. Its logic of profit seeking, its nihilism and instrumental drive toward efficiency and cost reduction destroys creativity and is profoundly at odds with the promotion of human wellbeing.
The credit culture that has driven our consumer society and turned our homes into commodities has been a modern form of exploitation. Systemic irresponsible lending has expropriated people’s often meagre wages to create continuous revenues of debt repayments that have redistributed wealth to the rich via the financial markets. The credit culture has created an illusion of plenitude and affluence which disguises the millions who are paying back debt like a form of indentured labour.
There are more storms brewing on the horizon – global warming is rolling towards us. These are momentous, frightening times. The fundamentals of our economy, the sustainability of human life are under threat. This is no time for timid, piecemeal politics. A retreat into the past is only a reminder of the causes of this economic free fall. The future will demand a more active and democratic state engaging with economic development and regulation. The redistribution of wealth and resources will be essential in rebalancing a dysfunctional economy. We need to look forward and seize this opportunity to create a new political economy for these times.
This article appeared on Compass.
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This post was written by Jonathan Rutherford