Maurice considers the crash of a decade ago, and introduces our new series of short films on the theme of sustainable economic democracy.
Forty years ago a number of political actors on both sides of the Atlantic took political power, then immediately started using it to take economic power away from the workers at the base of the economic pyramid and cranking it to the already wealthy and powerful, the big corporations and those who ran them. They did it by suppressing unions, deregulating corporations, privatising public assets and offshoring both jobs and potential tax revenues. It was known as the Washington Consensus, or ‘trickle-down’ economics. I call it the crank economy, because much more is cranked up than ever ‘trickles down’.
While the crank is certainly capable of driving up profits and GDP growth, it also drives up inequality – both in terms of wealth and in terms of power. Because those who accumulate sufficient wealth, relative to the bulk of the population, can start to fund political campaigns to ensure those who will look after the interests of the wealthy are elected, and can afford to purchase the media outlets to spread the idea that this is best for the ‘country as a whole’. Indeed, that ‘there is no alternative’.
The Washington Consensus, then, helped drive up inequality, from the 1970s onward, cranking wealth and power to a relatively small number at the top (say, the wealthiest 1 per cent), while putting pressure down on the rest of the population (perhaps around ‘the 99 per cent’).
Then, on 16 September 2008, the day after Lehman Brothers collapsed, the Washington Consensus died. Or it should have.
The entire globally interconnected financial system, it became clear, was close to collapse. Any thought of relying on ‘market forces’ to save the world economy, as the orthodoxy since the 1970s had it, was patently absurd.
It should have been obvious, from that moment on, that the economic orthodoxy which had governed the global political economy since the 1980s had been shattered.
Yet miraculously, the champions of the crank economy managed to breath a last spurt of life into the corpse of the Washington Consensus, which seems to stagger on, like the Zombies that suddenly seem to have become widespread in popular culture at about the same time.
Conservatives regained power on both sides of the Atlantic by persuading just enough voters that the best cure for the crash was to get the crank turning again as fast as possible – and by persuading them that any problems emerging could safely be blamed not on truly brutal austerity policies but on government overspending, and on foreigners (migrants, Brussels).
So is there any hope we can finally lay the Zombie to rest? Well, there are signs of life in various global political movements – a whole new raft of progressive democrats have sprung up in the wake of the election and Presidency of Donald Trump, for instance. And it has suddenly become possible to discuss, for example, the nationalisation of the railways in the UK in a way that would have been unthinkable a few years ago.
Moreover, there are also signs of life in alternative economic models, both theoretical and practical. Which brings me to our new series of short videos…
For the first of these, The Zirimiri, I travelled to Rochdale in northern England, and to Mondragon in the Basque Country to learn more about the co-operative pioneers of both regions. You can watch it here.
In future episodes we will look at the co-operative movement closer to home, here in Northern Ireland, and then at some other interesting and potentially powerful politico-economic experiments going on at the moment.
‘Powerful’ being the key word. Wealth is power – this is not a metaphor. So if we can find ways for people to take economic power back into their own hands, without waiting for some heroic leader to sweep into Westminster or the White House and do it for us, then we will have begun to shift the gears, turning the crank on its side, so that more and more of the forces are directed horizontally, and wealth and power begin to flow and cycle through our own local communities.
22 September 2018