Welcome to the worst of worlds
How could we not recall the British cult TV series from the ‘60s, The Prisoner, where a giant bubble frantically pursued the hero played by Patrick McGoohan? Our world now finds itself in a similar situation: we are all hostages to the now-plentiful bubbles, and not only the speculative bubbles that infect our markets. It’s actually very easy to identify bubbles that fence in and isolate our political leaders, wage bubbles, bubbles emanating from the board director bonuses of the largest companies in the financial world, youth employment bubbles, and finally inequality bubbles. Just like the bubble that relentlessly chased the prisoner in that TV show, it would seem that a similar curse is hampering our financial system, because when a bubble bursts the speculative fever automatically moves on to another instrument or to another market, which then swells to form another speculative bubble! In fact, it’s thanks to the unprecedented boom of finance that we have gradually lost control over our lives. It’s not for nothing that Joseph Stiglitz has pondered over whether an individual’s life now depends on their income or their upbringing from their parents ?
The diagnosis made on the current government deficits, accused of being responsible for all our woes, thus intentionally elides the existential questions to contemplate and rage over only the superficialities and the consequences of actions paid for with government debt. We forget, for example, to recall that Spain honoured the Maastricht criteria (fulfilling the supreme dictum of the financial orthodoxy) up until 2008 and that it was considered to be an exemplary student of the eurozone. We now, however, pretend to be oblivious to the fact that the Greek crisis was part of a series of events set off by the liberalisation of the global financial system, for which the eurozone acted as an extra stepping-stone.
Built on such 100% neoliberal foundations, the European Union also flagrantly intensified this process of stripping states of a major part of their duties and prerogatives so that it could weigh in on this global capitalist battle fought amongst China and the US. The remaining powers still in the hands of states were irretrievably lost due to the international crisis. The result is that politics now lay in ruins, effectively unable to do anything anymore, having been deprived of nearly all their tools.
When will markets realise that budget economies do not constitute a credible strategy for reducing government deficits? It’s actually the state’s role in the economy that’s at the heart of these diametrically opposed – even antagonistic – solutions between the partisans of budgetary rigour – meaning rolling back the state even more – and those who tolerate government deficits, considering them to be the price to pay for a state assuming its duty as an arbiter and regulator. Accepting budget economies not only succeeds in locking us into a financial and accounting orthodoxy that is as unjustifiable as it is counterproductive in times of crisis, it also resigns us to stripping back ever more prerogatives of the state, and therefore of our own.
Let’s recall the prophetic words of Aldous Huxley in Brave New World: “Sixty-two thousand four hundred repetitions make one truth.” The real aim is of course to achieve anorexia of the state, which will automatically turn into bulimia of the private sector, but firstly of finance. It is therefore now time to talk about Keynes again, who in 1936 concluded his General Theory with a call for the “socialisation” of investment, a matter too grave to be left to the sole discretion of financial markets.