Written By: - Date published: 5:20 pm, January 7th, 2013 - 43 comments
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Like many, I’ve been somewhat bemused and not a little angered that austerity is touted as a pathway to economic recovery. Like many, I’ve come to view both austerity and bail outs simply as means to put public monies and the control of public institutions into private hands – all the while diminishing the power of citizens on both an individual and collective basis. And I’ve been particularly irked that the National led government has tried to hitch NZ to the austerity bandwagon.
But anyway, why consciously destroy or abandon real economic activity in a quest for power or/and wealth? Why not continue to build on whatever ‘real economy’ bases of power you posses? Idle speculation might suggest a lust for power, y’know… power for power’s sake. Or a reaction to, or recognition of impending peak resources in a world of growing population.
Following that reasoning, if the real economy was deliberately shrunk to postpone resource peak dates, and if that was done in conjunction with shifting the basis for the accumulation of money (and power) to more abstract realms, then current elites could do more than simply hold on to their power – they could augment it.
Shrinking the total size of the ‘real economy’ would obviously require excluding increasing numbers of people from access to resources and productive goods. But that wouldn’t be an issue. The goal would be the retention of power – of market share. And market share, rather than total market size, is what determines levels of influence and power.
And exploring this scenario further – where market participation recedes from people – social safety nets could be diminished and destroyed because such things are an unnecessary drain on the accumulation of power and wealth that corporations and financial institutions desire.
Too cruel? Too unimaginable?
Think of Africa then, and the recurring situations where people have died while the resources to save them (food, drugs) have sat all around yet out of reach due to a lack of purchasing power. And then cast an eye on Greece where people are increasingly unable to afford food (it’s being sold at prices determined by global market rates that put it increasingly out of reach); where 1/3rd of the population have no access to health care and where cancer sufferers are being given cortisone injections (if they can get anything at all) because hospitals have no drugs any more.
And look at the effects of austerity spreading across Spain or the UK and Italy, the US and elsewhere….increasing levels of homelessness, poverty, joblessness and suicide. And manufacturing continues to be closed down, unions attacked and social safety nets torn away. Meanwhile, financial and corporate entities are posting record profits on the back of speculative ‘investments’ and trading strange and wonderful financial abstractions amongst themselves. And when hic-ups and crashes occur, in rushes our increasingly ‘enabling’ governments…some, like Italy run by unelected technocrats… with injections of public monies to bouy them up. And then social welfare provisions and real economic activity are wound down further as a consequence in a self reinforcing downward spiral.
And in the interests of finding some reason behind all this lop sided pain and gain maybe a certain philanthropy shot through with a dash of pragmatism could be considered.
Classical economists are pretty insistent that it isn’t possible to reduce CO2 emissions at rates science demands to avoid “dangerous” or “extremely dangerous” levels of global warming. At least, not without crashing the market. So, in the interests of preserving power, saving the world and (of course) the economy, the idea might be to exclude ever growing numbers of people from market participation in the hope that the denuded real economy ( presided over by the lords of the new abstract economy) will then deliver big enough CO2 reductions.
And everyone gets to live.
Just some live a bit better than others. But that’s always been the way. However, just to make sure – maybe fall back on all those ‘war against terror’ inspired restrictions of political freedoms and the increased scope and power of repressive agencies to contain potential reactions. And maybe let all of this unfold at a fast-ish yet still ‘boiling frog’ pace, so that any realisation that might fuel a reaction arrives too late. Maybe pick off sections of the population one at a time – an incremental process of demonising and ostracising should do the trick.
Okay, I’ll confess to not believing what I’ve written…well, not with regards the volition. There is no cabal or committee of shadowy bankers or whatever thinking their way through all of this and working hand in hand with governments to enact policies to further some devious master plan for world domination.
The principle of Occams Razor demands we opt for the simple explanation. And that is simply that the institutions of the bankers and financiers and government encourage a certain degree of ineptitude, defensiveness and stupidity. It’s not that bankers, financiers and government personnel are necessarily cruel and stupid individuals – though I’ve no doubt that some are. But when you work or are involved with an institution, you become subject to ‘institutional capture’ – meaning that you put your personal sensibilities aside and behave and act on institutional sensibilities.
So for example, there can be no peak in resources from a market driven institutional standpoint – there are only resources and profits to be derived from them. And when there are no resources well, there will be no profits. And that’s the real loss from an institutional perspective. The same applies to global warming. Even when global warming is knocking us all for six, institutional foci will still be on profit and economic performance only. And this institutional blindness is something that any and all personnel must adopt as their own if they are to maintain their position.
Banking institutions and corporations accumulate and have no sentience; no moral compass. They are just market driven institutions. Meanwhile, governments are just further institutions that manage the market economy such that it enables banking institutions and corporations to accumulate. And that’s something that must be preserved. And to reiterate;- people within those institutions have to behave accordingly.
The effect is more or less the same as some cabal devising a grand conspiracy and acting out on it. But it’s not a conspiracy. That would be far too easy to counter and deal with.
So the banking bailouts and the austerity measures and the ‘national security’ measures alongside the denial of both peak resources and global warming : these things are going to continue. And they’ll continue, not because of bad or stupid people, but because that’s the inevitable trajectory of both market driven financial institutions and the government institutions whose task it is to manage and protect that same market economy.
And it seems we have few options should we wish to successfully challenge both detrimental institutional dynamics and detrimental institutional inertias. Keeping within the bounds of orthodoxy, our only option is to pile pressure on government. And historically that has meant bringing government to the realisation that it has more to lose by not acceding to social demands than it has by continuing to defend the socially unacceptable status quo.