The great economic crisis, or the great recession as it is now increasingly referred to, has led to changes in the way Westerners perceive their lives. The future is no longer as certain and stable as it once seemed. Dysphoria, fear, doubt and resignation have replaced the shallow triumphalism, which has dominated the international stage since the collapse of socialism in the 1990s.
For a brief moment it seemed that the crisis could open up a constructive debate on existential, system-wide issues concerning modern capitalism and the contemporary world. This hope, however, was short-lived, and in the visible part of the world stage (which is the only one that matters) the debate is superficial and disappointingly economistic.
The optimistic, joyous side of this debate is represented by those who believe that the economic crisis has been unjustifiably dramatized. In their opinion, it is a more or less “crisis as usual”, resembling the dozens that have preceded it. For them, it is a process of healing from which capitalism always emerges stronger than before. Nothing can shake their trust in the system. Such a position, although rare in the West, is very popular among Serbian proponents of neoliberalism.
Most participants in the global debate are somewhat more cautious and are looking at both the causes and consequences of the crisis. This crisis is obviously not a cyclical crisis like its predecessors have been. It is clearly a “non-creative destruction” accompanied by great economic and social risks. Nevertheless, those analysis also focus exclusively on the economic aspects of the problem and fail – intentionally or unintentionally – to grasp its broader social and political aspects.
Assuming the system foundations are sound, the solutions are always sought within the same framework. If the governments were to regulate their financial systems better, if the banks were less greedy, less speculative prone and better capitalised, all the problems would be solved. In order to end the crisis, all that is required is technical corrective measures and a better combination of monetary and fiscal policies.
While the uncontrolled craze of the deregulated financial sector, accompanied by the naive trust in the powers of the market was visible on the surface of the crises, its real causes, the heart of the financial darkness – the major deformation in the distribution of newly created value, stagnation of wages, and a huge increase of social inequalities – remained hidden in its depths.
For an economy to grow and become stronger, the businesses, the government and the citizens must spend to keep up the demand for goods and services. The “New Economy” requires and stimulates citizens to spend ever more, but (in relative terms) it pays them increasingly less and denies them what they have earned. Citizens compensate for their lower purchasing power by borrowing. As increased borrowing is not accompanied by increased earnings, the model inevitably heads towards the point at which the debtors’ balloon bursts. This fundamental cause of the crisis raises the question of political and economic doctrines on which the very system is founded, and thus becomes a dangerous and forbidden topic.
With the passage of time, as the impacts of the crisis gradually subsided due to enormous state interventions, the very causes of the crisis were disappearing into oblivion. The minimum earlier consensus regarding the crisis was melting away. As the financial sector has been partially healed (partly through the government spending and partly through an unprecedented printing of money), the memory of the banking crisis was slowly and patiently pushed away. The focus is now on the public debt crisis.
The masters of the universe and their intellectual conquistadors have managed the impossible – they have turned the perception of the crisis upside down. Although the facts are irrefutable, although it is absolutely clear that the crisis originated in the private sector and was caused by blind faith in the power of the market, the guilt is nevertheless attributed to the governments. The new interpretation shifts the key responsibility for the crisis to excessive governments’ spending.
Such an intellectual manipulation is very deftly designed and strongly supported by the media. The economic crisis that has persisted continually since 2007 is now being split – one crisis is artificially transformed into two, almost fully independent ones.
In a perverse twist, public debt crisis, which occurred as a result of financial crisis, is now declared as its cause. Allegedly, the current public debt crisis is not a direct consequence of the financial crisis, nor are the financial system enormous bailout costs. It is also not a consequence of huge expenditure resulting from the recession caused by the financial sector. In the prevailing interpretation, the public debt crisis is a consequence of the tendency of modern Western governments to spend excessively.
Since it is about excessive spending, the cure cannot be sought on the revenue side, through increased and more progressive tax rates, neither by closing numerous loopholes. No way. There is just one effective remedy and it boils down to the absolute and unconditional curbing of public spending.
To make the paradox even more striking, it is precisely the financial sector that is now the most efficient instrument of disciplining governments – in any manner possible, irrespective of social ramifications. The bare fact that financial sector has directly caused the crisis and forced states to deal with the consequences of the crisis, has by now been all but erased.
Unless government spending is reduced, the financial sector will punish states by imposing increasingly higher interest rates for money needed to finance the deficits. At the same time, the money used to extend expensive loans to states was given to the banks virtually free of charge through borrowing from central banks – effectively from the states. Thus, the states finance themselves by using a very costly intermediary, in order to maintain the mantra that central banks must not directly cover budget deficits.
Hence, the overall burden of the crisis has shifted to the citizens, to those 99 per cent of the population which is not among the privileged minority. Social and health protection is weakening, public services are impoverished, and the security of citizens and their assets is continually decreasing.
In a situation where jobs are easily lost, in which the ease of laying off workers is declared to be a virtue of the system, citizens are forced to accept that they must work more and/or be paid less. That is the new magic mantra – a flexible labour market – offering a universal solution for the problem of unemployment.
How is it possible that the truth and facts can be so terribly distorted? How is it possible to manipulate public opinion so shamelessly?
Such a triumph of untruth and domination by an unscrupulous minority is possible only in a situation of controlled and sponsored false-consensus, only in context of colossal intellectual treason. This current betrayal is much worse than the one described by Julien Benda in his well-known essay “The Treason of the Intellectuals” published in 1927. It is not founded on ethnic, racial or class misconceptions or prejudice. It is based on money, the coarse intellectual corruption that does not lend itself to being covered with any form of an ideological fig’s leaf. For the sake of “the crumbs which fall from their masters’ table”, the modern intellectuals are prepared to betray everything – ideas, the past, the present and the future, their fathers and children alike.
Media space is strictly controlled, and praetorian guards are placed at all major gates. Only the chosen ones can penetrate these gates, only those who promote the system, or whose criticism does not threaten any of the system’s dogmas.
Others, who are not able to accept reality as such, cannot pass through the gates and are therefore stuck on the media margins. Their voices can be heard only on the Internet, where they are also subdued by background digital cacophony so that their noise does not threaten the system and cannot force it to change.
A cynical analysis could perhaps identify this reality as the vitality and ability of capitalism to transform itself and survive. Even so, the price attached to such adaptation and survival is questionable – the incessant and numerous regional wars and the terrible human suffering accompanying them, the permanent deterioration of quality of life, the complete fragmentation of society, the degradation of the environment, and the threat to the very survival of the planet.
It is not only important to be a winner, but also what kind of world the winner leaves behind them. In this new world, all dangers (from global wars to fascism) emerge again, potentially, in an even worse form. And all fundamental issues and problems of capitalism remain open and waiting for another new, even more damaging crisis. Civilisation, which has been reduced to only two linked ideas – profit and consumerism, no longer has anything to offer or promise – not even greater consumption. Society can subsequently be ruled only through fear – fear of becoming redundant, of terrorism, of immigrants, of others.
A system in which everything is for sale, which persistently attempts to turn humans into commodities, in which the economy does not serve the people but the people serve the economy, sooner or later ends up in evil and blood-shed.
It seems that there has never in modern times been a period in which, like today, people live without ideology, without faith and without a competition or a clash of ideas. And how could there be a competition of ideas when the left side of the political spectrum has been virtually deserted?
The scene is dominated by complete social and political regression. All achievements of a social democracy that have been built laboriously over the past century are now slowly disintegrating. Such a journey into the future resembles a return to the nineteenth century. An unnatural turn of this kind cannot go without outcry, resistance and rebellion. As there is no one to articulate the protest and rebellion, it will express itself on the streets and against institutions. Articulation of that type is always chaotic, destructive and has a malign polarising effect on society.
It is dangerous to maintain the illusion that societies going against humanity can be controlled forever by the police, the military, secret services, or laws which treat every social protest as terrorism. The world has missed the opportunity to utilise the great economic crisis to look at itself in the mirror. The mirror has instead been covered up, but this fact will neither alter the reality, nor hide it from those living in it. In the intellectual terms, the economic crisis is nothing but yet another missed historical opportunity.