Sunday, May 30, 2010

The asymmetrical revolution - part II

Just suck it up

David Seaton's News Links
There is an idea prevalent among many commentators that the "markets" are something immutable, some God-given law of nature, like the law of gravity. This is part of the "end of history", pensée unique, business. In fact the markets are just human social constructions like any other... that is to say they are political. What human beings have arranged, human beings can rearrange.

Admittedly the human animal can continue to flourish in conditions where any other self-respecting mammal would stop breeding and go extinct, but even so, if you oppress them enough, they turn and bite. That is what is about to happen shortly, certainly in countries with long traditions of taking things to the streets.

The welfare state is not socialism, but rather something created to stem the rise of socialism. The whole skimmed milk, social democracy business was concocted in the first place by the middle class (Bismark created the pension system, Roosevelt created Social Security, remember) to protect itself from violent revolutionary movements.

The reason we even had the recent subprime mortgage crisis in the first place was because a political decision had been made to make home owning possible for the savings-less working poor through easy credit -- by giving away money -- because the real incomes of everyone but the rich had either stagnated or had been in decline for decades.

Home ownership is considered socially stabilizing, the entry point to the prudent middle class. Politically it was thought positive to get  poor people (NINJAs) into houses they thought they owned, even if they really didn't and could never have afforded, if the lenders had been using traditional credit evaluation procedures.

Thus a fiction of prosperity was created through politics. The increasing inequality and impoverishment of the lower middle class and working class, brought on by decades of Friedman-Reagan-Thatcher-ism was papered over by easy credit and now the money is being shut off. Changing metaphors, root canal work begins after the anesthetic wears off.

So making endless cash available was a political decision to defuse social tension, but now it has been decided that politics must bow to the markets... we are expected to believe that the markets will decide the fate of nations, will decimate health care, education, pensions... and everybody is just going to resign themselves to that and say "Amen". People who believe this should take their eyes off the Bloomberg screen for a moment and read some history.

We have finally come to a major debt crisis because it has never been politically possible in democracy to ask people to resign themselves to poverty. It still isn't. They tend to rebel, especially when they see that those who are telling them to "live within their means" are drawing huge salaries and bonuses. Any ruler should know that if there is nothing left in the larder to throw to the "wolves", they will break inside and feed at will.

What is being cooked now is a huge social conflict... like 1968, but this time without the background of full employment; less festive, more "bread and butter", more widespread and more violent.

Hopefully democracy itself will survive this. DS

1 comment:

Allen said...

"Hopefully, democracy itself will survive this." Ah, yes, we may wish on the one hand, s__t on the other, and see which fills up first.