Financial instability is inherent to our system. Our economy is cyclical. Keynes knew this, and like the other men whose thoughts defined a century, he knew because he learned fromthe last incarnation of this multifaceted crisis. From the polemic of Economic Consequences of the Peace, to the roughly drawn out Theory of Employment, Interest and Money, the lessons he learned as the last incarnation of this crisis led to two global conflicts defined generations. Hayek learned from watching the same crisis from a different perspective, and the thinkers we turn to to understand what is happening, from Orwell to Polanyi. saw the same dynamics.
Each of these men was a finite being in an infinite universe trying to learn from a crisis which has been repeating since the Bronze Age when our first experiments with a de facto currency brought us to the limits of our civilisation and left scars so deep that when the iron age emerged centuries later, we didn’t use iron as currency, we used grain.
When the last period of laissez faire capitalism run amok led to world changing devastation that ended with Nagasaki and Hiroshima and the birth of the post war settlement, we had to theorise and romanticise the society we were in, to create a new political economic settlement that would see us through several generations.
As as always been the case, the cumulative flaws at the birth of that settlement at the root of the crisis which will lead to the next one. The institutions shaped by the tribes who took Hayek and Keynes names, are at the root of the system failure we are in the midst of. Our benefits system showing most clearly how tribalism and the symbiosis of central planning and the free market ideology which would harness it, can bring an institution to toxic limits.
The blindness of Keynes to inequality and his failure to articulate his belief in instability, and the unhinged misinterpretation of Hayek, gave birth to policy created by tribes who could never meet, and has led us to the newest incarnation of this crisis. Hyman Minsky, who clarified Keynes thoughts on instability realised long ago that private debt was at the root of why stability creates instability. One of the drivers of this endless cycle, that appetite for risk increases during periods of stability, bringing on new crisis. Keynes did not understand inequality. but the institutions concerned with social reproduction he created, failing as they are, mean we will never again have to romanticise or theorise how a financial crisis translates to a social and political crisis. When these crisis have played out, the information we need will be there for us to use as we come to a new settlement.
The ‘death of the liberal class’ who act as a barrier to change is slow this time, but the media cultures who benefitted from a transition to world where power was held by the projection of an idealised political self through media, so everyone outside that perfect self image could be exploited, have provided more information with which we can learn next time.
There is no way to tell how the rest of our debt crisis will play out. With the BBC playing Hunger Games, and no democratic brakes available to stop what is developing, the next few years will be ugly. Many of us will pay a heavy price for the failure of our financial institutions and hope seems foolish to grasp.
But there were things wrong with that post war settlement. The only democratic representation we ever had, saw us as Labour and only that, and the inequality that defined the 20th century could not be addressed without the crisis that are opening up. It was a system for white men in one place, created and designed using the lessons of posh white men in that place, designed for a world they could not imagine would change. The blindness that gave them, creating the crisis which reveal what needs to change next time.
There is no need to change a system that is dying, it cannot be done, but for the first time since 1945 a situation is opening up which guarantes that the changes which seemed unobtainable are there for the taking.
The mechanics of a political economy dying as a new one comes to birth, that inspired Marx, Hayek, Keynes, Orwell, Polanyi and many others, are revealed again. Not only can we revisit their words but we can see what they saw and learn from their failure. The next ten years will define a century and change is not only achievable but it is certain, and for the first time since the post war settlement was born, the kind of change that will define generations is within our grasp.
It won’t be given freely, but for this period, as our political economy crumbles, the rules are all gone and we can rewrite them ourselves. The rules of a left who believe we should audition to them for patronage as they use our crisis to further their own aims, irrelevant to all of us. The rules of a right who believe everything should be liquidated to inflate a private debt bubble unsustainable as this crisis reaches its peak.
Their tribalism no longer binds us and the rules are ours to write. A future where those whose power is that of the intermediary, dissolving in real time. The means of production, the money supply and the control of information, being thrown into our hands and at the root of why this system is crumbling.
There is no end and no beginning to evolving world systems, and the process you can trace back to warring kings and tribes, will continue long after the next political settlement has expired. Each age is a dream that is dying, or a new one coming to birth, and even as people give up hope in the face of a cruel hegemony that cant be opposed right now, that hardship is what will cause our understanding of power to reconstruct.
A system that relied on shocks, now educating us with every jolt. Our failures now will be at the root of the expiry of the political and economic settlement we create in generations time, but for now change is not only possible but guaranteed and we don’t need blind hope to know it is in our hands. If all you can do is crawl keep crawling, but remember history is now being written by the participants on the same platform as the winners and that is new. Each and every perspective is important and the information recorded now, will be what defines generations to come.