It is now almost three years since the economic crash, and the global economy, led by China, is growing again. But the political disturbances provoked by that crisis are still rippling around the globe, and no-one believes that this unrest will soon subside. Why so?
Economics is easy, politics is hard. In its broadest sense, every living species practises economics, by adopting a strategy for sustaining itself over generations from a given set of resources. That doesn't need an MBA from Harvard Business School, or even a brain.
These strategies are immensely varied, but only a few of them involve co-operation with a group of others to provide sustenance and resist predation. Ants and bees achieve this by a complex mixture of biology and communication. Chimpanzees, with whom we share 99 per cent of our DNA, use gestures, cries and facial expressions to build social organisation, including patrolling the boundaries of territory and punishing deviants. They live quite well, but they are limited to a jungle habitat, now under threat from human expansion.
Being physically puny, but requiring large quantities of protein to feed our heavy brains, human beings needed to co-operate in sophisticated ways. It seems that size of brain and communication skills evolved together; as populations grew, more social organisation was required, and more brainpower demanded more nutrition. Larger groups relied on a shared understanding of their worlds, a way of agreeing who owned what, and a system for dividing up their spoils, to sustain co-operation and defence.
Archeological and anthropological evidence suggests that most hunter-gatherer bands were loose-knit and egalitarian; they rejected attempts to impose leadership, and preferred informal methods - ridicule, shaming, shunning - to achieve work effort. But gradually larger groups gained competitive advantage, by seizing key assets such as water holes. Eventually rulers, using new technologies and forms of military discipline, took charge, and finally writing, bureaucracy and organised religion made them stronger.
In human ecology, the struggle between tribes as much as the struggle with natural adversities shaped this development, and the sheer size of societies was often a key advantage. Ancient empires were the most advanced civilisations as well as the most prosperous economies of their day. But alternative political structures sometimes proved more resilient and adaptable. Tiny Greek city states defeated the mighty Persian Empire in the fifth century BC, before war with each other led to their decline.
The Roman Empire was a clear example of how an efficient political system could facilitate a flourishing economy, but it too perished when its military organisation could no longer withstand attacks from Germanic and Central Asian tribes.
Europe's prosperity lagged well behind that of China and the new Muslim empire from this political breakdown until the late middle ages. Then banking and trade, followed by science and technology, allowed Europe to forge ahead in the relative secuity of cities and newly-consolidated nation states, despite continual conflicts. Finally, by 1913 Europe ruled the world, its empires trading with eachother and absorbing colonies into an integrated global economy.
What followed was 40 years of war and political instability, slaughter and economic ruin. Globalisation in the late nineteenth and early twentieth centuries had not been matched by political evolution; rivalry between classes and nations over resources and power destroyed Europe's golden age, and allowed the USA to emerge as the world superpower.
Now once again we seem to be entering a period when the global economy has outgrown political institutions, after a long period of rapid growth. During that expansion it was assumed that transnational governance of various kinds would evolve to solve the problems thrown up by the new prosperity. After an unpromising start in the 1950s, the European Community seemed to be achieving this. When the poor and backward dictatorships of Greece, Portugal and Spain achieved democracy, the first thing they did was to apply for membership of the EEC; the same happened when the Central and Eastern European countries escaped Soviet domination ten years later.
Now the streets of Greece and Spain are full of people protesting against euro-austerity. In the UK we face a decision whether to remain a single country after the Scottish election, and the coalition government is committed to a revival of small-scale administration in the Localism Bill.
Politics is difficult because we do not even know the best kind of social unit in which to try to do it. For the past 30 years we have suffered from the delusion that the economy could regulate itself, and politics was dispensible. Historically, the price of that fantasy has always been conflict. If human ecology is not governed by orderly political processes, it will be brutally controlled by war between tribes of one kind or another.
Tuesday 31 May 2011
Tuesday 24 May 2011
Sex, Money and Power
What's the link between current celebrity sex scandals - should they be able to protect their privacy with super-injunctions? - and the threatened financial crisis in Europe? Obviously it is the arrest of the managing director of the International Monetary Fund (IMF), Dominique Strauss-Kahn, on charges of attempted rape of a chambermaid, as he was about to take off from New York to attend a meeting about the euro-crisis in Brussels. If you were trying to write a blockbuster with all the ingredients of sex, money and power, you couldn't make it up.
But this is no random connection. There is a crucial thread joining the revelation that Strauss-Kahn had a history of sexual harrassment with the feared collapse of the European currency. It is the new form of unaccountable power that is built into the global economy, and amazingly it all started with science fiction.
The BBC2 tv documentary 'Watched Over by Machines of Loving Grace' on Monday evening revealed what I had always suspected - that the fantasy of radical individual freedom through new technology created the posssibility of such power. The novels of the Russian-born American author Ayn Rand anticipated the invention of computer networks and the internet, claiming that they could free people from the need for government control, regulation and authority. She and a devoted group of followers spread the dream of personal liberation in a global society, mechanically co-ordinated through feedback from electronic systems. Set free to follow their sexual desires, individuals could create their own paradises of prosperity and self-fulfilment - a project which she and her acolytes lived out with disastrous consequences for their relationships and emotional well-being.
One of the leading members of the Rand clique was Alan Greenspan, who went on to chair the US Federal Reserve (their central bank) in the 1990s and early 2000s. But before this, the young entrepreneurs who launched Silicon Valley were fervent adherents to Rand's message, called their children after her, and their companies after characters in her novels. One of them even conducted a social experiment to show that people's actions could be rationally co-ordinated without any external direction or direct communication between them in a computer game.
So a fantasy, dreamed up by a creative genius with no economic education, became the guiding gospel for the most influential players in the game of globalisation. Drawing on the work of two elderly Austrian advocates of free markets, Hayek and Von Mises, they elevated these ideas into an orthodoxy for how the whole world should be re-organised, first through the US financial community, and then through the IMF. When the Soviet Bloc collapsed, the scope for global economic integration seemed infinite; the economic world could become a single, self-regulating unit, running on electronic adjustments in entirely automated processes, making governments redundant and liberating individuals for self-realisation.
Ever since the early 1990s this has been the ruling global ideology. Different variants have been the basis for the Washington Consensus and the Third Way; financial markets have been deregulated and governments have retreated almost everywhere (China has been an important exception). As gullible customers of the banks, people have enjoyed the opportunity to borrow far more than they could afford. Power has not disappeared - it has become concentrated in the hands of an unaccountable plutocratic elite, running the global economy in its own interests.
Through the Federal Reserve and the IMF, with US interest rates held low for many years, a series of bubbles hve inflated and exploded all over the world, but the outcome has always been the same. First the financial crashes in Asia, Russia and South America, then the dotcom bubble, and finally in the subprime crisis and the global credit crunch, bailouts have been followed by a downward plunge in the living standards of ordinary people, as they have been forced to pay for the mistakes made by the financial masters of the universe.
The cause of these bubbles has always been the same delusion - that the new information technology, high-speed global communications and complex new products could eliminate risk and human self-deception. Each time a new foolproof system is developed, its failure has to be paid for by the public, not the speculators.
What started as the power of a few individuals is now built into the system of global capitalism; even if we want our governments to hold their financial overlords to account, they cannot. Until this situation is challenged, we are waiting for the next crash.
So what started as science fiction and wishful fantasy is now hard reality. And the remedy is still the same, whether it is the power of the rich to flout the laws of sexual conduct or their power over our economic prospects. First we must abandon our dreams of perfect freedom and unrestrained prosperity. Then we must recognise that democracy and its rules are not artificial ways of limiting our chances to discover our personal potentials. They are essential ways to limit power, by holding the powerful to account.
But this is no random connection. There is a crucial thread joining the revelation that Strauss-Kahn had a history of sexual harrassment with the feared collapse of the European currency. It is the new form of unaccountable power that is built into the global economy, and amazingly it all started with science fiction.
The BBC2 tv documentary 'Watched Over by Machines of Loving Grace' on Monday evening revealed what I had always suspected - that the fantasy of radical individual freedom through new technology created the posssibility of such power. The novels of the Russian-born American author Ayn Rand anticipated the invention of computer networks and the internet, claiming that they could free people from the need for government control, regulation and authority. She and a devoted group of followers spread the dream of personal liberation in a global society, mechanically co-ordinated through feedback from electronic systems. Set free to follow their sexual desires, individuals could create their own paradises of prosperity and self-fulfilment - a project which she and her acolytes lived out with disastrous consequences for their relationships and emotional well-being.
One of the leading members of the Rand clique was Alan Greenspan, who went on to chair the US Federal Reserve (their central bank) in the 1990s and early 2000s. But before this, the young entrepreneurs who launched Silicon Valley were fervent adherents to Rand's message, called their children after her, and their companies after characters in her novels. One of them even conducted a social experiment to show that people's actions could be rationally co-ordinated without any external direction or direct communication between them in a computer game.
So a fantasy, dreamed up by a creative genius with no economic education, became the guiding gospel for the most influential players in the game of globalisation. Drawing on the work of two elderly Austrian advocates of free markets, Hayek and Von Mises, they elevated these ideas into an orthodoxy for how the whole world should be re-organised, first through the US financial community, and then through the IMF. When the Soviet Bloc collapsed, the scope for global economic integration seemed infinite; the economic world could become a single, self-regulating unit, running on electronic adjustments in entirely automated processes, making governments redundant and liberating individuals for self-realisation.
Ever since the early 1990s this has been the ruling global ideology. Different variants have been the basis for the Washington Consensus and the Third Way; financial markets have been deregulated and governments have retreated almost everywhere (China has been an important exception). As gullible customers of the banks, people have enjoyed the opportunity to borrow far more than they could afford. Power has not disappeared - it has become concentrated in the hands of an unaccountable plutocratic elite, running the global economy in its own interests.
Through the Federal Reserve and the IMF, with US interest rates held low for many years, a series of bubbles hve inflated and exploded all over the world, but the outcome has always been the same. First the financial crashes in Asia, Russia and South America, then the dotcom bubble, and finally in the subprime crisis and the global credit crunch, bailouts have been followed by a downward plunge in the living standards of ordinary people, as they have been forced to pay for the mistakes made by the financial masters of the universe.
The cause of these bubbles has always been the same delusion - that the new information technology, high-speed global communications and complex new products could eliminate risk and human self-deception. Each time a new foolproof system is developed, its failure has to be paid for by the public, not the speculators.
What started as the power of a few individuals is now built into the system of global capitalism; even if we want our governments to hold their financial overlords to account, they cannot. Until this situation is challenged, we are waiting for the next crash.
So what started as science fiction and wishful fantasy is now hard reality. And the remedy is still the same, whether it is the power of the rich to flout the laws of sexual conduct or their power over our economic prospects. First we must abandon our dreams of perfect freedom and unrestrained prosperity. Then we must recognise that democracy and its rules are not artificial ways of limiting our chances to discover our personal potentials. They are essential ways to limit power, by holding the powerful to account.
Sunday 22 May 2011
In Search of a New Politics
The enormous crowd of young people which has been assembling in the Puerta del Sol, Madrid, all last week is a protest against Spain's political elite and its failed economic policies. The rate of unemployment among people aged 16-24 is around 42 per cent; this is a well-educated cohort, in danger of becoming a 'lost generation'.
There are obvious echoes here of Tahrir Square in Cairo and earlier demonstrations in Tunis, both of which toppled corrupt, self-perpetuating regimes. But it was only a little over 30 years ago that Spain, like Greece and Portugal, overthrew a military dictatorship and became a modern democracy. Given access to the European Community in the 1980s, they ceased to be authoritarian, backward societies of emigration, and their economies grew faster than those to their north and west, where young people had traditionally travelled to work.
What went wrong? It is far too facile to see the present problems of southern Europe as symptoms of incompetent government, lax public finanacial management and reliance on Euro-handouts. The emergence of a 'Precariat', to use the term coined by Guy Standing in his book of that title published this month, is a global phenomenon. As many as half of South Korea's workforce are temporary workers and a third of Japan's. The process of making labour markets more 'flexible', which has been a defining feature of globalisation, has transformed employment everywhere, and created a new class of mainly younger people who lack the traditional links to job and income security, benefits eligibility, occupational identity, career prospects and pension rights of their parents' generation.
Being on average better educated than their parents were adds to the sense of anger, anomie, alienation and anxiety experienced by this new class. Above all, they feel no identification with the political programmes of the established parties. The gathering in Madrid, now being consolidated into a semi-permanent camp, is like a mass movement-in-waiting, a crowd in search of new ideas. Whereas their Egyptian and Tunisian counterparts had a clear goal, to overthrow discredited autocrats, their European equivalent seems to be looking for a common identity and purpose.
But perhaps the most important aspect of this moment is the collective experience - the coming together of hundreds of thousands of people whose lives and work situations constantly isolate them, fragment their consciousness and make them feel responsible for their failure to achieve security, careers, property-ownership and family formation. The whole thrust of globalisation has been towards breaking up the organisation of the social, political and economic collectives in which people can form solidarities and influence their destinies by acting together. Denied these ways to understand and give meaning to their experiences, they have also been excluded from the political processes of their societies.
If the mass collective action of the precariat can be recognised and can recognise itself as a truly global movement of this generation, then it can acquire a vocabulary for its demands, and can frame specific policy goals. Guy Standing has long campaigned for a universl basic income, a guaranteed, unconditional sum which would allow all the legal residents of any political community to have the means to resist exploitation, to allocate time between paid and unpaid work, study, leisure and political participation. I too have spent 40 years advocating this proposal.
Starting as a protest, these demonstrations may become a movement with a voice, in turn leading to a new politics. Already the Madrid crowds are finding slogans to express their disgust with their situation. One of their largest banners reads: 'Spain Is Not A Business: We Are Not Slaves'.
There are obvious echoes here of Tahrir Square in Cairo and earlier demonstrations in Tunis, both of which toppled corrupt, self-perpetuating regimes. But it was only a little over 30 years ago that Spain, like Greece and Portugal, overthrew a military dictatorship and became a modern democracy. Given access to the European Community in the 1980s, they ceased to be authoritarian, backward societies of emigration, and their economies grew faster than those to their north and west, where young people had traditionally travelled to work.
What went wrong? It is far too facile to see the present problems of southern Europe as symptoms of incompetent government, lax public finanacial management and reliance on Euro-handouts. The emergence of a 'Precariat', to use the term coined by Guy Standing in his book of that title published this month, is a global phenomenon. As many as half of South Korea's workforce are temporary workers and a third of Japan's. The process of making labour markets more 'flexible', which has been a defining feature of globalisation, has transformed employment everywhere, and created a new class of mainly younger people who lack the traditional links to job and income security, benefits eligibility, occupational identity, career prospects and pension rights of their parents' generation.
Being on average better educated than their parents were adds to the sense of anger, anomie, alienation and anxiety experienced by this new class. Above all, they feel no identification with the political programmes of the established parties. The gathering in Madrid, now being consolidated into a semi-permanent camp, is like a mass movement-in-waiting, a crowd in search of new ideas. Whereas their Egyptian and Tunisian counterparts had a clear goal, to overthrow discredited autocrats, their European equivalent seems to be looking for a common identity and purpose.
But perhaps the most important aspect of this moment is the collective experience - the coming together of hundreds of thousands of people whose lives and work situations constantly isolate them, fragment their consciousness and make them feel responsible for their failure to achieve security, careers, property-ownership and family formation. The whole thrust of globalisation has been towards breaking up the organisation of the social, political and economic collectives in which people can form solidarities and influence their destinies by acting together. Denied these ways to understand and give meaning to their experiences, they have also been excluded from the political processes of their societies.
If the mass collective action of the precariat can be recognised and can recognise itself as a truly global movement of this generation, then it can acquire a vocabulary for its demands, and can frame specific policy goals. Guy Standing has long campaigned for a universl basic income, a guaranteed, unconditional sum which would allow all the legal residents of any political community to have the means to resist exploitation, to allocate time between paid and unpaid work, study, leisure and political participation. I too have spent 40 years advocating this proposal.
Starting as a protest, these demonstrations may become a movement with a voice, in turn leading to a new politics. Already the Madrid crowds are finding slogans to express their disgust with their situation. One of their largest banners reads: 'Spain Is Not A Business: We Are Not Slaves'.
Subscribe to:
Posts (Atom)