Monday, 21 November 2011

I for one welcome our new alien overlords

So: Greece has a technocratic government. So does Italy ('technocratic' in both cases meaning 'entirely unelected'). I hate being on the same side of an argument as Silvio Berlusconi, but he's right to object to the imposition of political leaders without the consent of the people. Over in Spain, they've had an election: the rather good Socialist Party has lost in a landslide to the conservative People's Party. There wasn't any battle of ideas: the Socialists were forced to promise massive austerity and the PP promised even more.

Both parties are subject to the whims of the market:
From a market standpoint, an absolute majority for the PP is just what the doctor ordered," Nicholas Spiro, of Sovereign Strategy told Reuters in London. "The risk, however, is that more retrenchment pushes the economy back into recession."
Thanks to Nick, who's one of the few money men prepared to speak the truth: the markets reject democracy. They don't need it, and sometimes it gets in the way. He also exposes the hypocrisy of the financial world: they're bankrupting countries which don't impose massive public service cuts, but when the cuts actually destroy any chance of economic recovery (I'm looking at you, Osborne), the bond markets punish governments again. It's win-win - if you're a banker.

We're used to the constant droning of the Tory phrase 'free-market democracy', the Thatcherite dream. Hopefully recent events have persuaded you that the emphasis is - and always has been - on the 'free-market' element: ever since the Chicago Boys imposed monetarism on Chile, at the invitation of its bloody dictator Pinochet, the rights of high finance to do what it wants has been paramount: the aspirations and values of mere citizens have come a very poor second. What you and I want is now immaterial.

Not, of course, that 'free market' means what you think it means. No, the term refers to the demands of Western financial institutions to operate without regulations even after taxpayers have to bail them out at the price of national bankruptcy, and the rights of Western nations to dump goods in developing countries without worrying about what happens to nascent local producers.

What we're seeing in Europe is simply what we've done to African, Asian and South American countries for 50 years. It looks a bit more civilised because the New Technocratic Elites turn up in sleek Mercedes limousines rather than tanks, but the effect is the same. The new boss is the market, which has no conscience, so long-term view, and no sense of hubris. We settled their losses and didn't reform them: why wouldn't they then embark on an orgy of profitable destruction? It's like giving an axe-murderer and Arts Council grant and sharpening his axe for him.

The Spanish, Greek and Italian governments no longer have any public duty to perform: they operate the levers at the direction of the bond markets. No doubt they tell themselves that appeasing the markets will lead to stability and the public good, but it doesn't wash. A serious system of inter-governmental lending, a fiscal structure which allows European nations to vary their interest rates to suit local conditions, and a severe curbing of bond trading will bring stability and realism to national finances. As it is, we're at the mercy of greedy young men whose idea of the future stretches as far as the annual bonus and their next line of coke.

1 comment:

The Red Witch said...

Ever read Erich Fromm's Escape From Freedom? He asked those questions 80 years ago - why people who have achieved democracy would elect a dictatorship. And already then he expressed concern about monopolistic capitalism.