The real crisis is about the government’s role
Ever since 2008, the economic crisis has been called many things: the subprime, credit, banking, sovereign debt, monetary etc. crisis. But in fact, its scope is probably much broader, as it involves a systemic issue. At stake here is the exercise of power by States, torn as they are between versatile global enterprises and public debts that have to be refinanced in order to safeguard the social order.
Riddled with debt, States are the captives of the banks, which in turn are the prisoners of the central banks, which are themselves having to keep private enterprise going with cash injections.
In 2008, States saved the market economy. It was society as a whole that saved private enterprise. That bailout was justified, as the banks by their very existence “manufacture” cashflow. So they are inherent to the formulation of money itself. Abandoning the banks would have been tantamount to demonetising debts and repudiating the public debt. States also brought in what are known as economic stabilisers, i.e. countercyclical measures that consist of increasing public spending and reducing the tax take during an economic downturn.
However, contrary to the situation that would have enabled them to save the economy in 2008, States are being dominated by stronger, more powerful enterprises. In other words, by enterprises that make their own law – that is, standards that they set for themselves, in the name of self-regulation.
Nations, delineated for the most part by 19th-century borders, are now being diluted in favour of geographical poles that are themselves engaged in a synthesis of languages and cultures. All this recalls the predictions of Alain Minc who, back in 1993 in his book The New Middle Ages (Le nouveau Moyen-âge), foresaw polymorphous continents devoid of organised systems and the disappearance of any centre of gravity - in other words, a world characterised by uncertainty and fudging. He visualised the world as reorganising in line with concentrations of capital, like some immense kaleidoscope of wandering, constantly renewed shapes.
So the role of States could change, as territorially-based laws sit uneasily with vanishing economic borders. The sectors in which the public authorities have traditionally held sway (health, education, even public security) could gradually slide towards a market logic – i.e. they could be contracted out to the private sector. The notion of the public good would then disappear. A dramatic situation could arise in which private enterprise destroyed the most basic public good – money. A diversified portfolio of shares in global enterprises (thus removed from the control of any State) would become a supracurrency.
Over the coming years, the real ideological debate will be about the dialogue between the State and the market, between the collective and the individual, and between public debt and private property. So the question is what balance will be struck between the role of the State and the business economy, given that these two actors are interdependent. This is a truly ideological debate about social models. And it is a debate without any fixed centre of gravity.
In fact, this is no longer about whether we need to shrink the State at all costs. Rather, it is about how the State, i.e. we collectively, can be part of harmonious social, collective and individual relationships. We should be quite lucid about this – even if the State weighs too heavy within the economy, that weight is not about to be drastically reduced. The absence of growth, within a deflated economic context, is such a brake on growth that balance will demand a State ordering of the economy.
More and more, I believe that the current crisis is revealing the end of a model. The end of a model of complacency, lack of vision and few prospects. We are going on as though we had never learned anything from history. That history, which we are commemorating one century later, should remind us that cynicism is an odious thing. But are we really learning that lesson? I doubt it.
Are we not slipping back into a market economy whose sole moral value is individual prosperity? Have we not been a little too keen to scrap the role of the public authorities and “Reaganise” the economy, knowing full well that those selfsame public authorities have stumbled into a headlong financialisation due to their unbearable indebtedness?
Have we taken the full measure of the rising generation, whom we are asking to square the circle by paying off their elders’ debts while living in a jobless economy?
Finally, it may be that the European model, with all the religious and military turmoil that it has been through, will set the example for the business economy of the 21st century – that is, an economic model providing more linear but also more egalitarian growth.
