Two stories sitting next to each other today suggest that people still don’t really understand the underlying economic problems we face
On one page – hurray! The Fairtrade economy is growing a bit. Capitalism works after all! Good, moral business leaders show us that good, moral economy is just round the corner. On another page – oh no! The big energy companies are unfairly overcharging 5 million Britons for heat and electricity. Perhaps capitalist nirvana isn’t just round the corner after all.
It is of no real surprise. Despite three and a half years of economic crisis and recurring human catastrophe, still we don’t really have a proper public story about what happened and what is going on. People grasp quite a bit of it, and people who have taken the time to watch any of the documentaries on the subject will very possibly have had a good sense of parts of it. But it remains an elusive story, in part because it is so complex and yet in part because it is so simple. Anyone who watched the excellent documentary Inside Job will have realised the stunning corruption, venality and stupidity that got us here. But for how long can you retain the facts in your head? I’ve now read detailed definitions about Credit Default Swaps and derivative markets many times now but if I was pinned down to explain it in detail I would struggle. It’s just so complex.
But that’s the detail. The big picture is much more straightforward. A combination of a virulent ideology (free market neoliberalism), weak democracies in the west, the overwhelming power of big money and an ineffective opposition to any of this means that quick profit trumps all other things. People think it is about ‘banks’. ‘Finance’ would be a better phrase, but people don’t really understand the difference between a bank and the wider system of finance which has absolutely nothing to do with the high-street entity they think of as a bank. But it isn’t just finance, it’s the core working of business. We see people like Donald Trump and Alan Sugar and we are told these are ‘business people’. What most people don’t really understand is how they make their money. There is an assumption that they run companies making things. But they don’t. Alan Sugar did once but every time he tried to make something he lost money at it. Trump didn’t really try. Instead they function in a sort-of off shoot of the finance business, speculating on property mostly. People go on about ‘developing property’, but again and again we discover that all this means is that land value was used as a speculative tool much the same as financial markets. The fact that (from memory) something like seven out of ten of Britain’s richest people are ‘property developers’ tells you all you need to know – it is simply the case that post dot-com the safest speculative game in town was property. So that’s what we got. Not what we needed (such as a proper sustainable economy) but what people could get rich on – cheap, overpriced private housing sold on often crazy mortgage terms. Which then pulled down the economy.
Most people don’t understand this. They watch The Apprentice but fail to connect Alan Sugar and his wealth to the economic crisis impacting all our lives. There isn’t a story that connects all the individual failures into a straight line that people can understand. Instead of an awareness that people like Sugar and Trump caused this by undermining the real productive economy in favour of fast, speculative wealth we are sold the story that they are the solution. Or that, like today, somehow there are ‘good bits’ of the system which just need to grow to make the system ‘good’.
But this is just like saying ‘here, this Actimel has good bacteria in it. Perhaps we should be less negative about the Black Death.’ A little fair-trade sugar to help the medicine go down. Or more exactly, a little niche market product at an inflated price to make the comparatively affluent feel better which we fleece the poor for every penny they’ve got just to heat their house. This is not to be opposed to fair trade, a very valuable thing. It is to state with urgency that capitalism simply isn’t going to reform itself from inside. We should stop believing the fairytale that it can.