Tuesday, 9 August 2011

A Double Crisis of Government

A global stock market crash and riots in our cities; business leaders and media commentators call for strong political leadership. The government should step in to stabilise the economy, restore order and protect property.

But many making such demands - such as Eamonn Butler, Director of the Adam Smith Institute, on BBC Radio 4's 'The World at One' yesterday - have been campaigning for years to reduce the power of the state and allow a self-regulating market order. And they have largely succeeded. The public sector is ruled by a business ethos, citizens are cast as consumers, and such authority as officials still have is directed towards making sure that poor people take any low-paid work available.

Yet every time there is a crisis, it is the government that is expected to sort it out, as in the bail-out of the banks in 2008-9. As soon as taxpayers' money had been poured into rescuing them from their gambling debts, all the same old arguments were used to resist radical restructuring and controls. And now it is states that are left in the red, and unable to repond to the latest catastrophe.

The truth is that capitalism has always needed a strong neutral referee to save it from itself, but capitalists have always tried to subvert that power in one way or another (bypasssing regulations, corrupting politicians and officials, ripping off the public purse) for the sake of short-term gains. Now we see global markets demanding austerity programmes so that government borrowing can be repaid, but panicking because these measures are causing a second recession. It is just such contradictions in the system that political authority is required to resolve.

During the Cold War, states were able to keep an independent role in economy and society because business feared communism more than it resented regulation and taxes. Since 1989 governments have gradually lost their ability to protect their citizens from market forces, so that the new generation faces far bleaker prospects, in relation to employment security, wages, career development, pensions, property ownership, etc., than the previous two have enjoyed.

Young people's resentment of their position, and the blame they attach to the ruling elites in their societies, finds different expression in each country. We applauded the courage of the protesters in the 'Arab Spring' and in the Syrian uprising, because it was easy to identify with their fury at corrupt dictators and their plutocratic cronies. We even sympathised with the mass gatherings in Athens and Madrid, even if we regarded their governments as wasteful and incompetent.

But it comes as a shock to find that so many of our own young people refuse to accept their position as the victims of a failed political economy, and demonstrate this by smashing and looting shops and burning cars. Indeed, our political leaders and our media quickly adopt the language used by the regimes in Tunisia, Egypt and Syria to describe them. But in the end we all get the riots, protests or revolutions we deserve.

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