The last time there was a great economic collapse, some major political
and economic changes followed it. Now this was a combination of the legacy of
failure to deal with the political, economic, and social consequences of
the economic collapse, combined with a desire not to return to a grim pre war
world and the positive legacy of the combined effort to win the war and defeat
fascism. This 'economic revolution' was
established or perhaps enshrined at the Bretton Woods conference (in 1944) and
lasted until the late 1970's.
This time around following the greed and stupidity induced banking crisis which
triggered economic collapse there has been no 'economic revolution', there
appears to be no collective desire to make sure the same mistakes does not
happen again – at least amongst the political elite. We are collectively stuck
with the same old deeply flawed unregulated 'free market' theories that helped
to contributed to the banking crisis in the first place - there is apparently 'no
alternative' but simply to hope that the failures of the past don't come back
to haunt us in future years.
Yet, the version of 'free market' unregulated capitalism, where the big banks
pretty much hoovered up their smaller competitors in the years before the
collapse (the one legacy of Thatcher that's never talked about is the
eradication (with a few exceptions) of our building societies). The same thing
happened with the electricity and gas companies, which were rapidly smothers
and absorbed to leave us with the unpalatable, untouchable 'Big 6' cartel
members - who continue to squeeze their customers and monopolise the so called
'free market'.
Somehow, while Westminster and Washington were distracted or disinterested we
ended up with privately owned, privately funded institutions that had become
'too big to fail'. Their financial misdemeanours largely went unchallenged,
un-investigated and unreported (save by a few honourable individuals at
Westminster who did their level best to shine a light on the nefarious activities
of an increasingly unregulated banking sector).
One take on this is that the Westminster elite (elected and non- elected) have
for far too long been far too closely involved with the pernicious influence of
the city. It has always been too easy for the Westminster elite to flit back
and got into and out of lucrative employment in the City (and back again) with
little beyond half-hearted ineffective scrutiny.
This was as true under the long Conservative period of
governance between 1979 and 1997 as it was under the New Labour governments
between 1997 and 2010 and to a great extent remains largely unchanged if not
unchallenged. The questionable privatisations under the Conservative, New Labour
and Con Dem governments certainly provided plenty of opportunities for cosy
well salaried non executive jobs on the board.
This combined with the blending of private capital with the public sector,
begun under John Major, accelerated by Blair / Brown and continued by the Con
Dens blurred the boundaries between the public meant that when the crash
happened there was real panic, followed by the handing over of significant
amounts of public money to private business (banking) concerns pretty much will
little regulation of what was done with it (hence the continuance of the
business as usual banking bonus culture even within those banks that ended up
effectively under public ownership).
After the current crash, unlike after the crash in the 1930's there has been no
period of reflection of reform and very little legislative or regulatory action
to try to ensure that the circumstances that led to the crash don't happen
again. The speed with which the current unrestrained Conservative government
has moved to lighten the tax load on the big banks and to reduce corporation
tax - something that a former New Labour government would have probably done -
reflects the continued unhealthily close relationship between the City and
Westminster.
When the crash happened governments and internal financial institutions stood
blinking like rabbits gazing into the headlights of an oncoming car - the hard
impact that followed left the rabbits stunned and in shock rather than dead.
There has been no fix beyond collective wishful thinking that it won't happen
again and perhaps a silent hope that some other financial rabbit will take the
head on impact next time.
The 'free market' ideology that we have got lumbered with is perhaps the
adoptive child of all those other financial experts who were proved so wrong by
John Maynard Keynes (back in the 1940's). Certainly the 'free market'
economists have re-shaped (shattered) or shaken our world since the late 1970's
and unleashed a ‘free market unregulated capitalism' onto the developed, the
developing and the former communist worlds - with some pretty dire
consequences.
Whether you live in Russia or the old West by and large (although with a few
healthy exceptions) former state / publicly owned enterprises and assets are
largely no more. They were depending on how you see it, privatised (on the
cheap) or plundered by a new class of carpet baggers who enriched themselves at
our collective expense. In the East the process was more brutal and profits of
the oligarchs larger and even more unregulated. Embedding and developing
democracy was always secondary to making a profit - something that has not
helped ordinary people very much at all – but has made the city traders very
happy!
