Dan Hind, author of the brilliant The Threat to Reason, has a new, short book on the recent economic crash and our government’s sickening attempts to rescue us from it by giving all our money to the guys who caused it.
This once broadly welcomed project, to put an end to financial turbulence and the miseries it brings with it, you know, unemployment, political extremism and global war, became increasingly controversial in intellectual circles in the decades that followed [the Bretton Woods conference]. Some felt that the maintenance of peace and prosperity came at too high a price in terms of freedom for capital. What good was peace and prosperity, if capitalists had to make do with less than a license to do what the fuck they wanted all the time, everywhere?
I’m not an expert on financial matters, but some of the aspects of our situation seem inarguable. It’s possible that the global financial markets performed valuable functions at one time, but they now appear to be deliberately contrived to siphon money from those who could have used it to those who already have too much. But it’s worse than this. They are set up to skim off so much money that the people who are forced to use them can go broke. That is, the markets can destroy people — except for the people who designed and maintain the markets. Somehow, the architects of the system continue to collect their staggering fees, no matter what. Why do we allow this?
This then was the accident waiting to happen — debt was deployed as the solution to flat buying power. Debt counteracted the effects of stagnant real wages for as long as it expanded. As a result economies could continue to grow even as they grew more unequal. Notional gains in asset wealth encouraged workers to borrow ever more money.
So there was only one problem with the organization of political economy in the period after 1970; it was always, eventually, going to end in disaster. Other than that it was a great idea.