Banker Bashing Is Useless

By Pablo de Orellana

In the aftermath of the Great Depression and World War II, social democratic ideals including welfare, social rights and moves towards equality became the basis for the transformation of European and North American societies through governmental intervention in social and economic dynamics. Considering present US reticence to federal taxation and spending, it is hard to believe Franklin Roosevelt's New Deal. In the present crisis, the state of emergency is thwarting democratic debate to the extent that realist urgency, emergency and necessity are fast becoming the only currency of political debate, the only valid principles. 

The 2008 general reaction in the UK was not a fierce debate of political principle and ideas; for a few years several British parties agreed on austerity. In the crisis, necessity, urgency, realism and responsibility, became the only beliefs.

In the UK the crisis sounded the retreat of all other political beliefs and of much of the debate of matters of principle that underpins political exchange and conceptualisation. Improving lives, social justice and other principles were sacrificed to the gods of financial emergency. For the last four years the British political scene has been depoliticised, in a state of national emergency, a faux realism in which "we are all in this together" has settled. The entire country is expected to make sacrifices to save our way of life. Except that fiscal austerity is itself a political principle.

This is the great achievement of neo-conservatives. At its root lies the saturation of political space for debate and challenge with the survivalist need for financial salvation, and the resulting shift in political paradigms. Neo-conservative political discourse has successfully replaced terms of debate, the terms of political engagement, with its own parameters and its own worldview. This is why it seems so unbelievable to us, 30 years after Thatcher and Reagan's rewriting of reality as a supply-side economy, that a US government would ever spend as much of its GDP on welfare as it did during the 1930s New Deal or that in 1947 the top rate of income tax in the UK was 83 per cent.

The current coalition government did not initially argue its case for the reduction of state expenditure in terms of principle - at least in public. Returning to Thatcher's 1980s good housekeeping slogans, the Conservative party argued for reduction of welfare, education and indeed most spending except for Trident and the NHS. Austerity is necessary this time round, they argued, not because they opposed redistribution of wealth but because the government will otherwise fall into bankruptcy like Greece, Chancellor Osborne told us. That disaster has been avoided so successfully that the Chancellor was recently able to inform Parliament that the UK has not paid interest rates this low since the Napoleonic Wars. The pace of UK austerity is so fast that even the IMF advises against it in terms of economic health. 

Finally, Prime Minister David Cameron declared at Bluewater on 25 June, that beyond austerity, the withdrawal of welfare was itself a principle as well as a necessity. Belief and principle, not just need, were there all along it turns out.

So why not debate principle? The second half of the 20th century saw the establishment of social and human rights in Western Europe. Citizens have the right not to starve, the right to fair trial, the right to healthcare and others. To withdraw these rights claiming the apolitical aim of saving the economy, rather than by debating these rights and the provision of their related services, is to undermine democratic principles. Welfare and other rights provision ought to be debated as principles; "should we or should we not provide healthcare to citizens?", rather than portrayed as economic emergencies. I was told by an MP that principles are debated, but within Westminster; it is quite telling that they choose not to do so in public.

This is not another article bashing bankers. The current crisis is not only a failure of honesty, regulation and financial foresight; it is most importantly a political failure. To some extent our society has learnt long ago to expect that many financial and business activities will go as far as it is legal or permissible in search of profit; greedy businesses are not new. For a genealogy and explanation of the current crisis we should return to the Big Bang deregulation of the UK financial industry in 1986, the still extant passions for deregulation, self-help as social justice, and thus to politics. That would not be convenient for any political party in the UK. The Conservatives would have to admit that their present emergency political discourse is exactly the same as in 1980 (see this 1980s parody of Conservative economic policy for an illustration and a reminder that 1979 was also perceived as a crisis and austerity the only solution) and that under their watch - and as a result of their ideals- deregulation that spawned the current financial system. Many of the practices that caused the 2008 crisis were illegal before 1986. Labour would have to admit to having been, in Miliband's words, dazzled by globalisation and faith that the financial hen would continue laying golden eggs. 

Now that the diseased hen is devouring all and everything in is debt-fuelled starvation, the only remaining political principle offered is to save it. This is not only a failure of bankers or greedy financiers; the crisis was caused by their legal activities. This is a failure of politics, it is a deficit in political ideals, the fault of the depoliticisation of political discourse during the crises of the 1980s and the present, in which political ideals - and inventiveness - were quashed by political discourse based on a critical need. Dramatically, current debate on the crisis still takes place along the same lines of discursive engagement: financial health is economic health and social justice; it must be obtained at any price, even at the expense of society.

It is time to admit that our political scene is a stultified barren wasteland dominated by an unchallenged discourse: economic need as biopolitical need; the health of the financial system as the health of the nation, its survival as paramount. This discursive trend has been overwhelmingly and globally powerful since the Reagan-Thatcher alliance of the early 1980s. Its greatest achievement, and one that is still unmatched by any other discursive trend since, is to have depoliticised all political debate - ostensibly on the grounds of urgent economic necessity, not principle - and offered itself as the only solution. We might decide that there is more than one possible solution. 


Pablo de Orellana is currently researching for a doctorate at King's College London on the theoretical and empirical dynamics of the diplomatic phenomenon he identified as international sponsorship. Other research interests include nationalism, part-taking in democracy and contemporary fine art.


15 July 2012