Saturday 31 January 2009

The Future of Globalisation? - Part 1

The unrest has started. Across Europe, the discontent is starting to spill over into action. In Greece, riots over the death of a teenager have been replaced by protests by farmers. In Latvia, protests are turning into riots. In Lithuania, the same. In France, a general strike disrupts the country. In Iceland, quiet little Iceland, protesters and riot police share the streets, and a government falls. And in staid, polite old Britain, wildcat strikes are occurring.

At the World Economic Forum, politicians and plutocrats haunt the stage of their old successes. They appear shell-shocked, stunned by how quickly the world they built, the system they created, has started to crumble around them. Like Miss Havisham, they are unable to move on from the scene of their humiliation and disaster.

It isn't meant to be like this, they tell themselves. For decades, people in Europe have taken to the streets to demand a move to their capitalist system, for ever greater 'reform' of their economies. Look at the states of eastern Europe - they have raced to remake themselves as zealots of capitalism, rushing to embrace membership of the EU to calcify the market's grip on their countries.

But now...

It's not hard to see why this is happening. Not surprisingly, people are worried. No, more than that, people are scared. They are afraid of the chaos being unleashed around them, chaos that is starting to expand and endanger their livelihoods, their families, their well-being.

But in addition to that, people are angry. They are angry that those widely seen as having caused this chaos are not only getting away with it, but have taken vast sums of money for their troubles. They are angry that banking executives seem to believe that taking money from the tax-payer for themselves is acceptable. They are angry that politicians are letting them get away with this. They are angry that those who caused this, in business and politics alike, seem to be those who will be least effected by it.

And it is this potent mixture, of fear and rage, that is driving people onto the streets. And our current crop of politicians, brought up in a culture of managerialism, of bureaucracy, of technocracy, don't know how to react to so much naked emotion on display.

But the people out protesting aren't protesting just because of the state of the economy right now. Yes, that has been the trigger, but it is only providing the catalyst for other, and longer held, dis-satisfactions to rise to the surface.

Look at France. The ostensible reason for the general strike was that the government was bailing out banks and fat cats, but not protecting jobs and helping workers. But France has been a simmering cauldron of unrest for a long time now. Sarkozy came to power promising a broad swathe of reforms to the economy, to French society. The generalised unrest this has provoked in a significant section of French society has been galvanised by the current economic crisis.

In the Baltic states, there is rioting on the streets. There are predictions of dire economic collapse - 4.5% in Lithuania, 7% in Estonia, and an incredible 10% in Latvia. The fear this causes has joined with the anger over the steady reform of their economies to fit in with the rest of the EU.

And now Britain. No, we're not rioting. We generally leave that to the hot-heads on the continent. But we have seen a sudden and unexpected flurry of wildcat strikes. At almost 20 locations, across England, Wales, Scotland and Northern Ireland, workers have walked out, held protests, demanded to be heard. These are unofficial strikes, illegal strikes, acts that could see these workers losing their jobs. But they went ahead anyway.

I've heard claims that there is no way these actions could spread, that these are just minor blips. The argument goes that people won't strike, because they would be too afraid of losing their jobs. But if workers are already scared about losing their jobs, if they already feel powerless, what is going to stop them?

And don't fall into the easy trap of believing the only people who would join these protests, the only people who could possibly object to foreign workers, are racists, closet or otherwise. No, in a situation like this, where it appears a company is bringing in cheaper labour from elsewhere, it is not racism for these British workers to act against it.

They are simply acting in their own economic self-interest - by attempting to stop companies undercutting the prevailing wage rates. It is the same economic self-interest that causes people to join unions. And yes, this kind of protectionism can be bad for the economy as a whole. But people will act in their economic self-interest, we are told. Just as bankers acted in their own economic self-interest, to the ultimate detriment of the economy as a whole.

A capitalist system requires people to act in their own economic self-interest. That self-interest has to be moderated by the rules and mores of a society, from government, from the people. We need to provide incentives to act in a way that is good for society as a whole, or disincentives to behaving in a way society doesn't want. At the moment, the disincentives towards taking action aren't working.

So what do we do? How do we deal with this? This is not a matter of dealing with this narrow sector of industry, that of construction contractors in the energy industry. We have seen the wave of unrest and protest that is sweeping the continent. All it needs in any country is one small spark. (And yes, despite the left-wing leanings of many of the protests, I think a country run in fear of revolt is a bad thing, because I'm a "democratic socialist" - the first word is important too. In addition, any protest that the BNP sends supporters to runs the risk of stopping being about protecting workers, and becomes about victimising different workers.)

Continued tomorrow...

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