Government by Market


Upheavals in the eurozone raise questions about democracy, ‘governance’ (a term much in vogue, more elevated than ‘government’) and the role of the market in our lives. While governments were called upon to rescue banks too big to fail during the crisis of 2007-8, no such safety-net apparently exists for governments that have squandered resources – even when these were spent on saving the banks.

Whenever packages, bailouts and rescues are negotiated, the outcome may not be put before the people, as the anger engendered in European ruling circles over the Greek government’s brief proposal to hold a referendum clearly demonstrated. The electorate, in this instance, is cast in the role of bystanders, spectators of economic inevitability, caught in the crossfire between government and market, and subject to austerity, cuts, disemployment and impoverishment.

How is this compatible with the supremacy of the popular will? Whichever government is in power – in Greece, Italy or anywhere else – it has no choice over its implementation of measures that satisfy the markets, whose governance is of a higher order than its own.

Whoever voted for markets? Clearly these are autonomous and unbiddable, set above mere politicians and humble electorates. The appeasement by governments of markets is strangely resonant in Europe; for it represents, not the placating of dictators and ideologues bent on control of the world as in the twentieth century, but the soothing of numinous god-like forces – unidentifiable, faceless and incorporeal – whose objective nevertheless mimics that of tyrants of flesh and blood.

While the West is busy making the world safe for democracy, and introducing its version of liberation to the dark places of earth, it seems in its heartlands, democracy itself has become something of a qualified ideal. A recent Guardian commentator observed ‘Democratic legitimacy empowers governments and the international institutions in which they confer, but it does not solve problems. Democracy can even make problems harder.’

From all that has appeared in the continuing crisis, it seems governments are supposed to manage systems, in the liberation of which from their own dead hand they have not only colluded, but made the highest virtue. During the renaissance of laissez-faire under the Washington consensus, the mantras were deregulation, liberalisation and the dissolution of agencies that reined in what used to be known as the excesses of capitalism, but are now taken as natural wonders of the world.

In other words, we are living with the elective powerlessness of governments over an economy become global. National entities have chosen impotence, as they have given way to the supremacy of markets; while the people, most of whom remain captive in the territories in which markets operate, do not enjoy the agreeable mobility with which money and goods seek their own destination.

While the present government in Britain declares its dedication to the abolition of controls, what it still archaically calls red tape, it remains devoted to expanding the liberties of capitalism, and effacing itself to facilitate this happy state of affairs. At the same time, it must also speak of national sovereignty; and indeed, UKIP, the BNP and those Conservatives who would ‘repatriate’ powers from Europe to the United Kingdom, are representatives of a national (if not imperial) pride, which believes we can stand alone, fiercely independent, even though we have long abandoned the manufacture of all items of daily utility, and depend to a disproportionate degree on a narrowing base of inward investment, armaments, finance and ‘cultural products’.

Above us, majestic and implacable, stand ‘the markets’; a homely term, suggesting primitive trestles on town squares heaped with locally produced goods, rather than a demented lightning network of impenetrable electronic transactions, over which control would be as vain as bidding the waves of the incoming tide to recede.

All societies elevate something above themselves which they regard with awe and reverence – indeed, they cannot function without it. Durkheim observed ‘The most barbarous and the most fantastic rites and the strangest myths translate some human need, some aspect of life, either individual or social.’ So it has been with us. The market is a fitting object of veneration in ostensibly secular societies. Its aetiology is lost in time, while the more recent narrative that emerged of ‘the invisible hand’, a distant extremity of the Creator, and the ‘discovery’ that the laws of political economy are laws of nature – all serve to command popular faith in a knowing and cynical age.

Of course, the supreme Market has its intermediaries: ratings agencies which determine the creditworthiness of economic entities, companies, corporations and countries; economists who are the interpreters of the signs and portents it gives of itself; financial experts are its representatives on earth, the privileged prophets of the Market; sometimes fallible, but devoted to explaining and forecasting its intentions and tendencies.

But when democracy, freedom, choice and all the other big words of Western civilization must be subordinated to economic reason (that exaltation of the irrational), we arrive at a seemingly irreconcilable contradiction. For out of the mysterious workings of the market arise, in theory, all the liberties we are supposed to enjoy; and yet the market itself, unfathomable and unknowable, at the same time, curtails them according to its whim. We are called upon to bow before these mysteries, much as the people of a more faith-imbued age yielded to the holy words of more ancient scriptures.

Responsibility for our fate shifts between the unappealable and impenetrable mood-swings of the market (now nervous and volatile, now exuberant and self-confident), and those to whom the task of ‘governance’ has been entrusted. The equivocation among politicians in the West over what they will do, when they gain or regain power, depends upon the nimbleness of their dance with economic necessity. In this context, alternating parties serve as a useful foil for blame for their ineffectiveness, citing ‘global interdependence’ for their paralysis. The difficulty facing Greece in creating a ‘government of national salvation’ suggested, not disunity, but a reluctance of politicians to acknowledge their own (self-imposed) limits, and a desire to conceal these from the electorate.

Perhaps this is why we see in global leaders, not the statesmen or women of stature we might expect, but mediocre, status-seeking opportunists, since the most adroit and competent have deserted national politics for a supraterrestrial position in the global economy, that empyrean from where they can exercise real power, and where, because of their proximity to the sacred Market, they can get away with self-serving practices no longer open to the fallen of politics.

November 2011

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