Lately, at least since 2008, the injustices of our economic system have been on a bit more of a public display. How can it be that we reward big banks for losing our investments, and reward them with our own money through public dollar bailouts? Sure, that didn’t happen here in Canada, but that’s only because Canada’s neo-liberals, who were clamouring for more deregulation of the financial sector, couldn’t figure out a way to seize power in the 1990s. Of course, they’re in power now, and determined to do what they can to cater to the bankers, although deregulation now is a political no-go.
But a Tobin Tax isn’t. Out of all of the measures I identified before which would generate revenue for our governments to pay down the debts, out of all of those measures, why did I refrain from discussing new taxation? Well, politically, it’s just not on the table right now, I think because Canadians don’t understand the true extent of the mess that we’re in. Sure, we don’t have it as bad as some, even as bad as most. But when a ship is sinking it doesn’t matter whether we’re stowed in the hull or sitting atop the highest mast: we’re all going to end up in the same place. Sure, maybe by staying up top we prolong the hope of being rescued, and that might work in a ship-sinking scenario. But in this case, it’s our global economy which is sinking; it’s not as if there’s another economy out there steaming along the horizon which might catch site of us before we go under.
There has been talk of implementing a tax on financial transaction. This would have the effect of both raising revenues for governments and minimizing the sorts of casino-style banking speculation which has gone on in the financial system and which led in part to the 2008 collapse. Like heroin, banks remain addicted to risky financial behaviour, even if their habits haven’t been in the news as much lately. The reason for their addiction is simple: they are still making gobs of money from speculation, and will continue to do so until it all comes crashing down again. Back in 2008, some of the biggest banks in the world almost went under. Had not the United States and other nations injected massive amounts of taxpayers dollars into the banks, they would have collapsed. Back in 2008, our governments could, just barely, afford to engage in these actions. Now that the United States is running a trillion dollar deficit, will it be able to afford to do so again in the future?
Well, maybe. But they’re going to have to get public spending under control first, which means more cuts to social programs. Or at least they could stop financing one or two wars (why do you think Obama is finally bringing the troops home from Iraq an Afghanistan?). If the U.S. can squeeze every penny out of its budget by cutting public services to the bone, they may just find enough money to hand over to the bankers when the next crisis hits.
Sounds like a pretty lousy proposition for the public, doesn’t it? The problem is, though, that having these banks fail might be an even worse proposition. Sounds like a “damned if we do, damned if we don’t” scenario, doesn’t it? So where does the real problem lie?
The Real Problems: Economics & Democracy No More
Those currently down at Occupy Sudbury know the answer. The problem lies with our current economic system. The one which must be fuelled by constant growth, or else it doesn’t work. That’s part of the answer. The other part of the answer is a governance model which will continue to put the interests of the rich corporations ahead of the interests of the rest of us.
Remember, for a moment, what happened back in the fall of 2008 in the United States. George W. Bush, who was on his way out as President, tried to push a stimulus package through Congress. The lower house, the House of Representatives, initially balked, and refused the package. The more well-heeled Senate, however, was on board, and eventually the House of Reps was bullied into making a decision to hand over billions of dollars of taxpayers money to the banks and auto sector. That elected U.S. officials were able to change their minds so quickly says a lot about the governance system in place there.
But not once did anybody ever think that maybe this sort of unprecedented public spending initiative should receive the blessing of the People. There had just been an election in the United States, the one which brought Obama to power. Yet stimulus spending was never raised as an issue beyond Obama and his Republican Party challenger John McCain agreeing to do whatever would need to be done. Not exactly the sort of public discourse which was being considered by Greek Prime Minister George Papandreou (who by the time that this is published may no longer be Greece’s Prime Minister) when he said that there would be a referendum. Of course, it’s been remarked that elections generally aren’t the best of times for serious public policy discussions. Which leaves me with this question about the United States: given that the U.S. political system is in constant election mode, when does it find the time for the sorts of adult public policy conversations it needs to have with its populace?
Oh ya. That’s right. It doesn’t.
Of course, here in Canada, things were different. Nobody was talking about bailing out banks in the fall of 2008. In fact, the Prime Minister was openly musing about the excellent opportunities being presented for investors to make money as people were being thrown out of work. And you know what? Stephen Harper was quite right: it was a great time for the richest to get even richer.
Canadians returned Harper and his Conservative Party to government with a larger mandate in 2008, as they had campaigned on making government smaller, decreasing spending, and getting the deficit under control (the deficit which the Conservatives themselves had created through irresponsible cuts to consumption taxes, of course, but that rarely came up during an election in which the media was fixated on pooping puffins and the Leader of the Opposition’s difficulty speaking the English language). That what Canada ended up with once in power was a Conservative government which created the highest deficits ever seen in this country was another thing. Here in Canada, there was no public discussion about bailing out the “too big to fail” sector, or providing economic stimulus through even more revenue-killing tax cuts. Our elected officials made those decisions on their own, without our specific consent. And this has been a bit of a problem with regards to the legitimacy of stimulus spending ever since.
What we Canadians got instead was a Prime Minister who flouted our democratic conventions and prorogued parliament in order to avoid a confidence vote which would have removed him from power. What Harper did in 2008 is not all that different from the situation in Greece today. In both cases, the democratic will of the people has taken a back seat to those who wield power. Back in 2008, that wasn’t apparent to many Canadians, who viewed the Constitutional Crisis as some arcane political manoeuvring, or an attempt at the electoral losers to seize power from its victors. That the media gave great comfort to those who held those views did not change the fact that the prorogation of parliament in 2008 by Stephen Harper was one of the worst abuses of democracy in Canadian history.
That elected leaders in the European Union are now publicly declaring that the interests of investors and the economic elite must be considered greater than the democratic rights of Greeks to choose their own destiny is further evidence that democracy just doesn’t matter as much as it used to. Clearly, if the public is going to accept the coming austerity measures, the public must do so as quickly and quietly as possible, preferably before they understand what’s really going on. Papandreou wasn’t prepared to force-feeds the Greeks Buckley’s Mixture, even if he thinks that they need it. The rest of us will be given the same choice when the time comes (which is to say, none at all), unless we start to wake up and do something about it now.
The Middle Class: Waking Up is Hard to Do
I attended an event on Wednesday night at which poverty activist John Clark spoke about the coming austerity crisis. What struck me as most poignant was that Clark said that if activists think that we can change the game through tactics which have been employed over the last several decades, we are bound to fail. That Clark would not discuss in great detail the tactics which he thought would be successful in changing the minds of government was, to me, a little telling. For I have no doubt at all that Clark has given this a lot of thought. So have I, although I’m not an activist, and I’m especially not an activist versed in the tactics of the Labour Movement out of which Clarke and most of those in attendance at last night’s meeting emerged.
If the recent tactics of organized labour will not work in delaying or minimizing the austerity measures, what will it take? Clark suggested (and I agree) that there will need to be a broader-based public acceptance of the movement opposing austerity. In Greece, certainly it’s not just the Unions who are on the front lines in Athens – it’s pensioners, youth, women and all of those who have a lot to lose when the austerity measures are imposed. But it’s also not enough, for what’s really missing in Greece is the participation of the broader middle class. Sure, there are some there, engaging in the protests, but the middle class in Greece, as the middle class throughout the world tends to do, remains unengaged. Sure, they probably believe that they’ll be impacted by the austerity measures, but…
But surely it won’t be so very bad, will it? It’s not like they’ll all lose their jobs, their homes, their abilities to feed their families, right? Surely that’ll happen to some, they think, but not to most. Not to me. And they’ll be right about that. Until it happens to them.
As long as the middle class remains unengaged, those pushing austerity are sure to succeed. And it looks like the middle class in North America at least, is taking zero interest in engaging. If anything, the middle class is being convinced by corporate propagandists and astroturf movements like the Tea Party to vote against its own economic interests and support wasteful tax-cutting measures which will only decrease the relative health of our governments and their ability to service the debt. Which can only mean that the middle class itself will need to be squeezed even further in the name of Economic Growth.
It seems clear that the only way to truly succeed will be to engage the middle class to a significant degree, and to have the middle class actively participate in a way which would make the middle class entirely uncomfortable. And I’m not sure that seems a likely prospect. Who likes to be removed from their comfort zone? I mean, if it’s not happening in Greece, how can we expect it to happen in Canada?
Which is why I don’t expect the middle class to become engaged in time to stave off the austerity medicine which we will be force-fed. And that’s why I lament the future world which my own children are going to inherit, because with austerity being the name of the game, we still will not have addressed the real problem, which is our current economic system.
The Only Long-Term Solution: Changing our Economic System
Look, I’m not an anti-capitalist. I just believe that a system which depends on growth and which can not grow is a system which isn’t working any more. And like a lightbulb which was useful when it worked, but no longer useful now that it’s burned itself out and needs to be replaced with something that does work, I believe that it’s time we got serious about changing our economic system. Sure, that’s going to be a monumental undertaking, as it will pose huge challenges to the rich who control the system and to the labour movement which operates within the system, but, like changing a blown lightbulb, if we want to carry on it’s got to be done. We can’t let Big Money, Big Government and Big Labour get in the way here. Not when our future is at risk.
We must transform our current economic system into one which has at its heart the concept of sustainability, rather than the concept of growth. That may sound simple, but in our consumerist society, it’s not going to be. We need to start putting a dollar value on waste and other externalities, and building those costs into the prices of goods and services. Only by monetizing waste and all externalities will we be able to achieve innovation in production and service delivery. Nothing makes business and industry want to innovate faster than saving money!
Rather than living in a throw-away society which emphasizes a culture of convenience (for those who can afford it), we will instead prize durability and energy efficiency. Instead of an economic system which can only function if we mortgage our children’s future, we can and must create a system which leaves our children a better planet than the one that we have inherited (and seem intent on passing along to our kids). Instead of exploiting the next seven generations so that we may live in (relative) luxury, we need to consider and plan for the needs of those seven generations, and actually take the actions necessary to ensure that there’s more than enough left for those future generations.
And before you start thinking that’s all well and good and “kumbayah” Steve, let’s revisit why sustainability has to be the way forward. Our current economic system is not broken: it’s doing exactly what we should have been expecting it to do. It has served us well, some of us much more so than most of us. But now our economic system, which requires Growth to function, has run into a circumstance where growth can only be achieved by impoverishing ever more people in the same way that a parasite feeds on our blood for its own sustenance.
Our Current Economic System as a Blood-Sucking Parasite
Our current economic system must be recognized as a threat to our own well-being. And if not a threat to our own personal well-being, certainly a threat to the well-being of our neighbours, family and community. And if left unattended, this threat will grow into a clear and present danger to our children, even while making us sicker and sicker.
Our only long-term solution is to remove the parasite, as difficult as that will prove to do. In the end it won’t matter to the parasite anyway, because the parasite itself is doomed. Whether that doom comes through its exorcism from our bodies, or whether it comes because it has sucked our lifeblood dry doesn’t matter – at least not to the parasite. It may matter to us, sure. But what’s more important here, us or the parasite?
Judging by what’s going on in the world, clearly prolonging the health of the parasite is much more important than you or me. Does that make any sense?
There will come a time when the middle class will need to figure out where it stands, but I fear by then it will be too late. Unless we can figure out a way to wake more people up, the austerity deed will be done without our consent. We may even believe that the medicine our governments are force-feeding us is for our own good, and we’ll accept it like sheep who can’t see the world beyond their own pens. And it may keep us going for a while, sure. But at some point in time in the not too-distant future, likely in my lifetime and certainly in the lifetime of my daughter, our economic system which requires Growth will again butt up against natural barriers which will constrain growth. They will be the same barriers: peak oil and ever-higher energy prices. And our governments will again demand more sacrifices from the public; only the next time we will have found ourselves in a situation where we are likely unable to resist.
And then it will happen again. And maybe again. Maybe the next time it happens, rather than force more austerity measures on us, we will choose instead to eliminate those factors which contribute to economic competition over the remaining scarce resources, in order to allow those remaining resources to be used by more efficiently by fewer corporations and people. By that, of course I mean some kind of significant reduction in human population, which would be achievable only by war, mass famine, or some kind of health care crisis, real or manufactured.
These fluctuations in our economic system, these ups and downs, will continue to happen as long as we try to implement short-term solutions to a long term (and terminal) problem, that being the end of an economic system which can not function without perpetual Growth. It will happen until the whole system stops working. And it will happen because an economic system which needs to grow has to be and will be constrained by a natural system which is finite.
The answer isn’t to continue to feed the system, the parasite. The answer must be to jettison the parasite and create a new system. And that’s not going to be easy. Far from it. But it’s what we must do.
You can see why I’m in a very bleak headspace today.
(opinions expressed in this blog are my own, and should not be interpreted as being consistent with those of the Green Party of Canada)