What about the Other Credit Crunch?
When the opening ceremony of the London Olympics was on the look-out for established British institutions to celebrate, it found the National Health Service – and precious little else. Can one imagine a comparable celebration of, say, the Mother of Parliaments, the City of London, the Murdoch media, the police, the courts or the Ministry of Defence?
In five years since the Credit Crunch began, virtually every pillar of the British establishment has fallen into discredit of one kind or another. The crisis of credit lies not just in the banks and money, but in the very power structures of British society. Little established opinion has been offered that might help to explain this, the Other Credit Crunch, or why it is happening now.
Surely it’s not so difficult. After all, in the Credit Crunch every bank came to suspect that if all the other banks were behaving anything like it was, then they were not to be trusted. So they all stopped lending to each other at once. Nothing much has changed since. Yet ‘financial markets’ are, if anything, more powerful now than they were in 2007.
Why, and by whom, have they been accorded such power? Why, if financial markets have no ‘confidence’ in themselves, should any confidence whatever be bestowed on them? It can scarcely be surprising, then, that the Credit Crunch looks set to persist indefinitely – or that discredit has gone on to engulf public ‘sovereign’ finances too, as private banking boondoggles proliferate.
Early in 2009 Alistair Darling, the then Labour Chancellor, while pouring unlimited public treasure – spirited up as if from nowhere – into the hands of bankrupt private banks, declared that governments are not in the business of running banks. The ability to hold two mutually contradictory positions at once has sometimes been taken as a sign of genius, but in this case surely not the kind of genius that is likely to resolve the contradiction.
Culture of mistrust
Britain remains more dependent than most on financial markets. The culture of mistrust they exemplify has seeped deeply into its institutions. So, at precisely the moment when Alistair Darling was nationalizing the banks, Parliament was preoccupied with its own scandalous abuse of lavish expense accounts. The corporate media, which failed so spectacularly to chronicle the looming fiasco of financial markets, promptly sank beneath the ‘hacking’ scandal that engulfed the almighty Murdoch empire.
Implicated in that scandal were the Metropolitan Police, who refused to investigate it. Indeed, since their killing of my friend Blair Peach in 1979, it has been plain enough to me that the police in Britain have come to rest on a culture of impunity, compounded by the indifference of the courts and the justice system as a whole. The revelations of police duplicity around the Hillsborough stadium catastrophe, more than 20 years ago, dramatizes a culture that encompassed the miners’ strike in 1984-85 as well as the deaths of Stephen Lawrence, Jean Charles de Menezes and Ian Tomlinson, among many less-publicized others.
Meanwhile, the marshal state – President Eisenhower’s ‘military-industrial complex’, if you will – has been waging calamitous wars in Iraq and Afghanistan, rivalled only by finance in its ability to spirit public treasure from nowhere and carry it off into a wasteland of pointless destruction, suffering and death.
Can it be possible that the people we charge with enforcing the law are getting away with murder; that the people we charge with looking after money are stealing it; that the people we charge with democratic accountability are selling it; that the people we charge with telling truth to power are telling lies to everyone else; that the people we charge with making peace are warmongers?
The possibility is unsettling and most people would doubtless prefer not to contemplate it at all. Maybe exposure is a reassuring sign that things are on the mend – that free markets are ‘self-correcting’ after all, that powerful people and institutions actually know what they are doing, and are doing it all for the best.
No-one, but no-one, seriously believes that about financial markets. If anyone thought that real change had come to the police or the courts, consider the consequences of the killing of Mark Duggan in London as recently as last August, the violence that followed and the summary justice dispensed thereafter. Who can be even moderately confident that Iraq and Afghanistan will not soon be followed by Iran?
Swamp of discredit
So we seem to be stuck with a dud: with banks that don’t lend, with people who can’t spend, with a government that won’t offend markets, all lost in a swamp of discredit without end.
What makes escape more difficult is a protagonist that avoids discredit only because we scarcely dare speak its name: corporate power. If it is referred to at all, it is as an angry investing god that must be placated at all costs. So, alongside tax cuts for the rich we have a surreptitious but substantial cut in corporation tax. At the same time, corporations are hoarding literally hundreds of billions of dollars and thereby promoting the single biggest cause of the Age of Austerity. Some of us are evidently more ‘all in this together’ than others.
So what connects all of this discredit, and why now? My own best guess is that both stem from the fatal hollowing out over the years of any sense of what the public interest is, where it might lie and how it can best be expressed. In its place we have a confection of closed corporate cultures whose only interest in the public interest is to privatize it. The more privatization turns out to be a scam, the more superior it is held to be. This accompanies a ritual humiliation of us all by the accumulation of grotesque private fortunes alongside spiralling inequality, its translation into hopeless aspiration for the majority, the banal assertion that everyone has an equal opportunity to get away with it too.
Perhaps, at the outset of the Credit Crunch, I was a little too sanguine. I foresaw, in place of an Age of Austerity, an Age of Possibility. I believed then, as I still do now, in the power of imagination. There is, in truth, no shortage of practicable proposals for a more durable future, even as our survival is cast into ever more serious question. The priority seemed to me then to be to provide answers, to devise alternatives, to advocate positive options.
But the Other Credit Crunch has taught me something rather different. Much of the discredit has come to light not because anyone charged with the task has done it, but because those who have suffered from the consequences have been left to their own devices, often in the most contemptible manner. What these supposedly passive victims did was to ask the right questions. They banded together to strengthen their hand, and they went on asking the right questions until they got answers they knew to be right.
Just as the Other Credit Crunch has fallen over British society at large, so its resolution falls to British society as a whole to devise. It is unlikely to look much like the present, and can only begin by asking the right questions. For the time being, at least, I’m quite content for there to be more questions than answers. It’s called democracy.
Help us produce more like this
Patreon is a platform that enables us to offer more to our readership. With a new podcast, eBooks, tote bags and magazine subscriptions on offer, as well as early access to video and articles, we’re very excited about our Patreon! If you’re not on board yet then check it out here.