The European Union is languishing in a perpetual economic autumn whilst bankers, with the connivance of politicians, apply rudimentary quack remedies such as Quantitative Easing in the vain hope that somehow they’ll skip a couple of seasons and as if by miracle, an economic summer will materialise out of the murk.
Last year I wrote that modern global economics owes as much to Chaos Theory as it does to Keynes and has mutated beyond the competence of mere politicians. Economic evolution has overtaken the ability of those who traditionally administer the remedies when economic sickness hits.
The mechanisms which are needed to be put in place to even begin to have any effect on economies are so diverse and complex as to make present economic theory, especially that tainted by political dogma, almost redundant. The best that a politician and his advisers can do is to prod a small corner of the economic matrix in the hope that eventually a positive effect is somehow brought-about.
It is fair to say that politicians are no longer shapers of an economy but have now been diminished to mere observers.
The post-war years have seen such an incredible acceleration in all the factors which affect us – from technology to global financing, that it is only now becoming apparent that old solutions will NOT cure new problems. Sometime in the not-too-distant past, the “butterfly effect” became the wing-flap of the American Eagle – until the eagle itself became subject to bouts of economic coma .
Now it is probably the hot-breath of the Chinese dragon which will burn economies.
It has been universally established (even by China and Russia) that Capitalism is the way forward. However, it is no longer the gung-ho, asset-and-natural-resource-stripping capitalism of the past. A democratic and more ethically accountable flavour of capitalism is now needed.
For instance, “business” ought to be an activity which strives to maximise market share and commercial efficiency, i.e it should be inwardly-focused with profits as the essential by-product which is then used to disseminate wealth.
What we currently have is a business model where the rationale is primarily concerned with the maximisation of shareholder profits which concentrates wealth into comparatively few hands. Hence the 21st century craze for moving money in order to generate money without the added old-fashioned complication of production. A virtual world generates virtual money with a virtual value.
“Ah!” you’re thinking. Socialist!! Nothing could be further from the truth.
Let’s keep it simple and look at the two extremes.
The Left (Socialism, Labour, U.S. Democrats, EU) dreams of public or community ownership and what you might call “forced distribution” which unfortunately needs to be underpinned by bureaucratic control and masses of public expenditure.
The Right (Conservatives, Republicans) dreams of privatisation. That has absolutely nothing to do with the individual. It is to do with corporate power.
So, at one extreme, we have unsustainable and forever expanding bureaucracy and on the other we have unacceptable (to the individual) accelerating corporate power.
Western political systems have now become nothing more than a tension between those two extremes. For instance, witness the “Punch and Judy” politics of America and the United Kingdom, as currently exemplified by the quality of the United Kingdom’s EU referendum debate and the antagonistically offensive quality of the USA’s 2016 Presidential campaign.
Currently, there isn’t a better example of extreme corporate power than that exhibited by the banking system. A debt-fuelled crisis, which was accidentally engineered by the banking system ………aided and abetted by politicians who continue to have absolutely NO idea how to deal with it, except by assuming that the problem has gone away. They have adopted the “rabbit-staring -into-headlights” technique and have even been reduced to appealing to the bankers better nature, by inviting central banks into the economic driving seat!!
Paradoxically, the only people who will be able to clean-up the financial mess are financiers. Unfortunately, the type of financier that is needed is not the traditional self-serving, avaricious, unprincipled type which we have all come to love.
It is an as yet undiscovered species. The socially responsible financier who, with the assistance of the politician can generate new ideas which will, in turn, evolve into a NEW Capitalism which places the individual and not the corporation at its nucleus.
The financial crisis happened in spite of politics and will eventually cure itself in spite of politics. Chaos has its own mysterious mechanisms.
It is obvious though that the Darwinian aspects of world economics have outstripped the development of both our politicians and our economic theories.
…..and as China is demonstrating….it is the Survival of the Fittest…..and as the #EU is clearly demonstrating, the answers do not lie in organisational chaos, bureaucracy and huddling for political and economic warmth with people you wouldn’t normally invite into your home.