Creating A Crisis

It’s terrible. It’s a disgrace. It’s a disaster. It’s a catastrophe. Terms that immediately make you think something is seriously wrong and terms being regularly applied to the state of the British economy. Public spending is unsustainable, the deficit is frightening, the only solution is tough.

What do you think when these terms are used or, more importantly, what are you meant to think? How do you think you should respond to these multiple crisis? Carry on the same – surely that is what got us here in the first place. Take drastic and decisive action, mark this necessary action out as different, unusual, the inevitable response to a break with the past, a rupture with normality, the only solution to a crisis?

Naomi Klein in The Shock Doctrine outlined the need for a crisis to be recognised and diagnosised as new and different for radical solutions to be acceptable to the public. Create crisis and the public are softened up, ready to accept the harsh medicine. The current language being used by the British coalition government seems to fit within the framework outlined by Klein. So is Britain heading for an application of ‘shock’ therapy?

The signs are not good. The crisis narrative or story is focused on debt, specifically the debt created by public spending. The argument is that the previous government created such a massive difference between government income and expenditure that the resulting debt puts the country on a precipitate of finance disaster. Do nothing and the whole country goes over the edge, plummeting into a downward spiral of bad credit and bankruptcy and the risk of being shunned by overseas investment. Fortunately, for the country, the current government has recognised the scale of the problem just in time and has a solution and one that is approved by those that oversee international investment. Only trouble is the whole thing sounds very familiar.

The neoliberal solution is as it has always been, a variant of the Washington Consensus. Public is bad, private is good. The market is the saviour and governments should surrender to market forces. It is a strategy tried and tested in South America, Africa and most of the world. The state is hollowed out; services removed from the public sector and placed in the hands of, usually, a few trusted companies and individuals. The state pays them for their experience in reducing costs, in making the services more efficient. Complain and you clearly don’t understand the scale of the crisis this drastic action is having to deal with. Complain and you don’t understand the inevitable economics of the situation. We have to act, we don’t want to do it but we have to. The language, the narrative of a disaster doesn’t call for debate or discussion it calls for action. The narrative of crisis has its own logic, its own structure – you have all seen enough disaster movies to know how it should unfold. Heroes, villains, innocent victims scattered about the set, an inescapable and desperate plan that succeeds at the last moment. Some die, some live.

Personally, I am still unclear whether the mountain of debt includes the money used to bail out the banks? If it does then the crisis seems to be one made by the same institutions that insist we must reduce the debt, the same institutions that are now advocating giving all the services to them. Even if the massive injection of capital that ‘saved’ the banking system isn’t included in the debt, then serious questions need to be asked about the crisis that has been and is being created. What is the debt and how was it created? Not the rhetoric of politics but a sober account of what the debt consists of and how it emerged over time. What would happen to the debt if nothing was done? Not the gnashing and wailing of the self-appointed international credit bodies but the analysis of how the debt would reduce, increase or stabilize if no action was taken. Why is there only one solution? This is probably the most interesting and important question of all. The government is presenting the pain of service reduction, budgetary cuts and privatisation as the only solution. Why? This will be theme I will unravel in subsequent blogs as the details of the ‘only’ solution for each sector of the economy and public services are wheeled out to a public bombarded with the rhetoric of crisis.