Societies in Crisis, Globalisation challenged.
Signs of Hope?
Global meta-trends from early 1980's:
- Free Market theory coalesces around the University of Chicago department of economics
- The elision of the free market and “democratic Freedom” espoused by Margaret Thatcher and Ronald Regan
- Massive programmes of deregulation initiated in UK and US
- Deregulation and free market practice spread across the globe through the IMF, World Bank and the “Washington Consensus”
- Several economies collapse as a result of international deregulation, but the principles of the free market become embedded in the global economy through the financial system and the emergence of global corporations
- Superficially, it appears that globalisation is growing the world economy and spreading prosperity,
- But under the surface, rampant inequality and the exploitation of labour in both emerging and developed becomes evident, despite the denials of economists and politicians
- The condition of societies steadily becomes worse, widespread popular protests grow and are ignored
- Election in America and the European referendum in Britain reveal the strength of popular rage.
- The recent UK election surprises the establishment by causing the defeat of the Conservative party and an apparent popular uprising
- The future of economics and the cohesion of societies has become quite uncertain – What will happen next to the social and political order?
Is there Hope?
The roots of the current crisis
It can be argued that since the collapse of the financial markets in 2008/9, the world economy has been in a state of crisis. The epi-centre of this rolling disaster probably lies in the United States, with the United Kingdom following close behind. Individual countries such as Denmark, Norway Sweden and Germany have been less drastically affected by the financial chaos, having maintained a Social Market version of capitalism, in which the state played a vital role regulating the economy and maintaining public services.
The roots of the crises are complex, but can be simply stated as the acceptance by politicians led by Ronald Reagan in the US and Margaret Thatcher in the UK that free societies would be best served by loosening the bonds of the state and allowing the free market to prevail. Both politicians denied that the state was capable of preserving and promoting freedom, rather it was the enemy, preventing free peoples to behave as they wanted to promote their interests. This led in both countries to massive programmes of deregulation of the banking and financial systems and a withdrawl of state participation in the industrial economy. True freedom could thus be realised by enabling people to optimise their happiness by the consumption.
Thus began a massive series of rolling changes in the very nature of Society in both developed and emerging economies.
In summary, the effects rooted in the free market were:
- Consumerism and booming consumer debt which had many roots, but were mainly caused by inappropriate expectations of the “good life”, and static or falling wages for large parts of the populace in the US and to a lesser degree in Britain. People therefore resorted to borrowing to support lifestyles that they were persuaded were a right. This caused, and is still causing, an unsustainable rise in private debt.
- The erosion of social bonds. The extended family was already breaking down as a result of dying industries and internal migration. This process was accelerated by atomisation of communities caused by increasing self-centeredness; founded on the idea of citizen as consumer and self actualisation as the highest goal. Social altruism was seriously weakened.
- Burgeoning inequality and the ability of the rich to avoid their responsibilities to society by tax evasion fostered serious social schisms, leaving many excluded. It suited much of the political class and media to deny compelling evidence that inequality causes widespread damage.
- Grossly irresponsible behaviour by the banking industry that cashed in on the boom and magnified it hugely. As is well known, banks indulged in an immoral splurge of lending and speculation, taking and hiding huge risks with other peoples' money. The boom was magnified by advertising and political encouragement.
- The wrong-headed convictions of many politicians, who became hooked on the idea that “the market” was the solution to economic success and improving health and social welfare; despite common sense and overwhelming evidence that unregulated free markets result in speculation, short-termism; and most seriously, gross inequality. Free market thinking became axiomatic in the political mainstream.
There are four distinct effects of the “Marketisation” of society:
- An erosion of the effectiveness of democratic institutions, undermined by the power and aggressive influence of massive banks and international corporations over government. It is probably true to say that governments in the UK, United States and some other countries currently find it almost impossible to pursue agendas that go against the interests of corporate power.
- Increasing instability in the economy, and long-term underinvestment in productive industry, especially in advanced sectors of technology. Governments deliberately backed off from a constructive role in industrial strategy, and the investment banks had never been enthusiastic about long term investment in complex technologies. It was if the investment lifeblood was being sucked out of the UK and many other economies and blown on speculation and consumerism.
- Burgeoning inequality and social exclusion, leaving up to one third of the population in some rich countries living in social ghettos, often close to the bread-line, denied opportunity and social mobility. Economic and social exclusion are becoming a permanent state for many in such countries as Britain and America, causing immense damage not only to society but also to the economy.
- A marked decline in public morality. Markets in themselves are amoral. But the behaviour of powerful players in the markets is often quite immoral. Banks and corporations have behaved disgracefully, avoiding legitimate taxes, exploiting customers, attempting to deceive the public and using their power to further anti-social agendas. Many rich individuals have sheltered their earnings and wealth in tax havens.
The result has been a decline in trust generally and in many quarters ethical standards have fallen with the prevalence of values that condone amoral behaviour.
The loss of Meaning in Work and Community life
There is much evidence to indicate that the quality of working life and the relationships between individuals and their employers have become degraded in recent years.
Outsourcing of work, the creation of a large group of employees which have temporary, part-time and often insecure work patterns, together with the wholesale automation of significant areas of work, which is liable to become more extreme in the future; have all contributed to a loss of Meaning deriving from the workplace.
The behaviour of many top managers in large corporations, driven by the demands of the financial markets, has had a significant impact on trust and confidence on the part of the wider workforce. There is still a significant part of the workforce in Britain and America that can see an important relationship between their work and the performance of the wider organisation, but there is good evidence that this is decreasing and will continue to do so.
The same applies in communities, many of which have been degraded by the loss of significant employers that provided work for whole families and a sense of history and connectedness between the past, present and future. John Lewis Partnership, a very large British retailer that in the main has Partners rather than employees, provides a wide range of social and sporting facilities for employees. This has a strong effect of binding the community. When I started work in 1960, the large chemical plant that I worked in had many sporting teams, and supported a community theatre that put on plays for the local area. The sports teams played in local leagues against other works teams and also community teams as well, thus creating strong binding forces within the local area. That plant has closed, as have many others, and the community has become weakened by the forced departure of many people to seek work and life elsewhere.
Margaret Thatcher’s remarks about the insignificance of Society demonstrated a signal lack of understanding of the value of community as a provider of Meaning, and protector against atomisation of Society.
The following article by Ameiti Etzione gives a clue to the underlying dynamics of Free Market “Consumer” societies:
“What needs to be eradicated, or at least greatly tempered, is consumerism: the obsession with acquisition that has become the organizing principle of American life. This is not the same thing as capitalism, nor is it the same thing as consumption. To explain the difference, it is useful to draw on Abraham Maslow’s hierarchy of human needs. At the bottom of this hierarchy are basic creature comforts; once these are sated, more satisfaction is drawn from affection, self-esteem and, finally, self-actualization. As long as consumption is focused on satisfying basic human needs — safety, shelter, food, clothing, health care, education — it is not consumerism. But when, on attempts to satisfy these higher needs through the simple acquisition of goods and services, consumption turns into consumerism — and consumerism becomes a social disease.
The link to the economic crisis should be obvious. A culture in which the urge to consume dominates the psychology of citizens is a culture in which people will do most anything to acquire the means to consume — working slavish hours, behaving rapaciously in their business pursuits, and even bending the rules in order to maximize their earnings. They will also buy homes beyond their means and think nothing of running up credit-card debt. It therefore seems safe to say that consumerism is, as much as anything else, responsible for the current economic mess.
Consumerism, it must be noted, afflicts not merely the upper class in affluent societies but also the middle class and many in the working class. Large numbers of people across society believe that they work merely to make ends meet, but an examination of their shopping lists and closets reveals that they spend good parts of their income on status goods such as brand-name clothing, the “right” kind of car, and other assorted items that they don’t really need. This mentality may seem so integral to American culture that resisting it is doomed to futility. But the current economic downturn may provide an opening of sorts.
So far, much of this scaling-back has been involuntary, the result of economic necessity. What is needed next is to help people realize that limiting consumption is not a reflection of failure. Rather, it represents liberation from an obsession — a chance to abandon consumerism and focus on... well, what exactly? What should replace the worship of consumer goods?
It must be a culture that extols sources of human flourishing besides acquisition. The two most obvious candidates to fill this role are communitarian pursuits and transcendental ones.
Communitarianism refers to investing time and energy in relations with the other, including family, friends and members of one’s community. The term also encompasses service to the common good, such as volunteering, national service and politics. Communitarian life is not centered around altruism but around mutuality, in the sense that deeper and thicker involvement with the other is rewarding to both the recipient and the giver. Indeed, numerous studies show that communitarian pursuits breed deep contentment. A study of 50-year-old men shows that those with friendships are far less likely to experience heart disease. Another shows that life satisfaction in older adults is higher for those who participate in community service.
Is Something Happening?
There seems to be a growing backlash in many parts of the developed world against the established order created by neo-liberalism and the previously unchallenged dogma of the free market. Much of the energy behind the protest has been negative, taking the form of riots and the rise of protectionism and nationalism – in other words a rejection of the forms of globalisation driven by free market capitalism.
The election of Donald Trump in the United States can be argued to have roots in anger and protest against the state of society. A parallel event with maybe similar roots was the voting in the EU referendum. Both were rooted in anger, protest and negativism.
Green Shoots of Hope?
But behind the scenes, something different was stirring.
In the US, Democrat contender Bernie Sanders was rousing passionate support for a platform that challenged the free market and all its offspring. Sanders characterised himself as a Socialist on a platform which attacked the whole basis of the free market establishment. He came very close to winning the primary elections, being beaten by Hillary Clinton, a more conventional establishment politician, who could be argued to support the essential trappings of the free market. Clinton failed to carry the election, leaving the field to Donald Trump, whose ideology is almost totally confused.
In Britain, the Brexit vote in the referendum raised just over 50% of those who participated, leading eventually to a general election triggered by Conservative premier Theresa May, who claimed that she would provide strong and stable leadership for taking the UK out of the European Union.
The Wild Card in this complex muddle has been the role of Jeremy Corbyn and the Labour Party. Corbyn, somewhat like Sanders, is a left wing politician who entered the lists on a platform that challenged the fundamentals of the free market and proposed a far larger role for the state in social and economic affairs. The irony in all of this is the fact that Corbyn was not supported by a majority of Labour Members of Parliament, who adhered to a pro-market stance.
Corbyn therefore lacked the support of his party in parliament, but attracted a passionate following in the country, making the UK Labour party the strongest in Europe in terms of membership. Social media has played a large part in the rise of the Labour Party.
Twenty days out from the June 2017 general election, it was clear that May’s “strong and stable” mandate would sweep the board, consigning the Corbyn radical change platform to the dustbin of history.
This platform strongly attacked the free market and proposed a far greater public involvement in the regulation and management of public utilities , transport and a huge increase in investment in health education and social care, especially of the elderly. Most of this would be supported by increased taxation on corporations and wealthy citizens.
The media and political establishment rubbished this agenda, arguing that it was impractical and would lead to economic collapse.
So, come the election, the country sat back and awaited a strong Conservative “steady as she goes” result. The actual results were dramatically different. The “hopeless” Labour Party made substantial gains, the Conservatives lost seats and also lost an overall parliamentary majority.
But what may be even more interesting from a longer term perspective is the voter breakdown in the UK election:
- The overall turnout was over 70%, the highest for years
- The turnout of younger, under-40’s voters was exceptional and weighed heavily in favour of the Labour party. The crossover level which marked the switch from Labour to Conservative was 47 years
- The Labour Party scored particularly heavily with educated voters, with university degrees
- Membership of the Labour Party is the highest of any political party for years. Conservative membership is much lower and older, particularly amongst the over-60’s
If these trends are solid, it may just be that voters are showing signs of having had enough of the current politico/economic system and are beginning to move against the alliance between big finance and business and the political establishment.
This opens up a very interesting field of possibilities, in which the state eventually regains a role in the control and regulation of the market!
In the US, matters are more complex. Bernie Sanders, a self-declared “Socialist” candidate, scored very heavily with younger white voters, whilst Hillary Clnton, a more establishment candidate, scored particularly heavily with black and Latino voters. And Clinton lost the electoral college (but not the popular) vote to Trump. Trump’s support came mainly from older white voters – hardly a long-term sustainable position for him or the Republican party.
It may just be that conservative politics, especially the variety that denigrates the state as being a corrupt influence and the Market a source of freedom and prosperity is approaching the point where free market ideology is no longer axiomatic.
Unfettered globalisation of markets is being shown to create disruption, poverty and social misery in both developing countries and the developed world – to the point that previous advocates of global free markets are beginning to question previous verities. Free market academics and politicians alike are finding their comfortable axioms about globalisation coming under (belated) challenge.
It is becoming evident that a portion of the populace in both Britain and America is no longer blindly buying the virtues of consumerism and beginning to think about what might constitute a good society. The future outcomes of such stirrings are not at all clear – but another (very likely) full-scale financial and economic breakdown could increase the pressures for dramatic change. The pity is that the cultures of Britain and America are very different to those of the Scandinavian countries, which offer a ready-made model of a “Good” Society.