Everything we’d been told for the last decade turned out to be a lie. Markets did not run themselves; creators of financial instruments were not infallible geniuses; and debts did not really need to be repaid – in fact, money itself was revealed to be a political instrument, trillions of dollars of which could be whisked in or out of existence overnight if governments or central banks required it. Even the Economist was running headlines like “Capitalism: Was it a Good Idea?”
It seemed the time had come to rethink everything: the very nature of markets, money, debt; to ask what an “economy” is actually for. This lasted perhaps two weeks. Then, in one of the most colossal failures of nerve in history, we all collectively clapped our hands over our ears and tried to put things back as close as possible to the way they’d been before.
Perhaps, it’s not surprising. It’s becoming increasingly obvious that the real priority of those running the world for the last few decades has not been creating a viable form of capitalism, but rather, convincing us all that the current form of capitalism is the only conceivable economic system, so its flaws are irrelevant. As a result, we’re all sitting around dumbfounded as the whole apparatus falls apart.
What we’ve learned now is that the economic crisis of the 1970s never really went away. It was fobbed off by cheap credit at home and massive plunder abroad – the latter, in the name of the “third world debt crisis”. But the global south fought back. The "alter-globalisation movement", was in the end, successful: the IMF has been driven out of East Asia and Latin America, just as it is now being driven from the Middle East. As a result, the debt crisis has come home to Europe and North America, replete with the exact same approach: declare a financial crisis, appoint supposedly neutral technocrats to manage it, and then engage in an orgy of plunder in the name of “austerity”.
The form of resistance that has emerged looks remarkably similar to the old global justice movement, too: we see the rejection of old-fashioned party politics, the same embrace of radical diversity, the same emphasis on inventing new forms of democracy from below. What’s different is largely the target: where in 2000, it was directed at the power of unprecedented new planetary bureaucracies (the WTO, IMF, World Bank, Nafta), institutions with no democratic accountability, which existed only to serve the interests of transnational capital; now, it is at the entire political classes of countries like Greece, Spain and, now, the US – for exactly the same reason. This is why protesters are often hesitant even to issue formal demands, since that might imply recognising the legitimacy of the politicians against whom they are ranged.
When the history is finally written, though, it’s likely all of this tumult – beginning with the Arab Spring – will be remembered as the opening salvo in a wave of negotiations over the dissolution of the American Empire. Thirty years of relentless prioritising of propaganda over substance, and snuffing out anything that might look like a political basis for opposition, might make the prospects for the young protesters look bleak; and it’s clear that the rich are determined to seize as large a share of the spoils as remain, tossing a whole generation of young people to the wolves in order to do so. But history is not on their side.
Research now shows the uprisings in North Africa and the Middle East this year were triggered by spikes in global food prices fueled by speculators betting on the price of agricultural commodities [see my earlier piece Freedom to Riot: On the Evolution of Collective Violence]. This is the conclusion of a new study released today by Marco Lagi, Yavni Bar-Yam, Karla Bertrand, and Yaneer Bar-Yam of the New England Complex Systems Institute in Cambridge, Mass (pdf here). This financial speculation was made possible thanks to market deregulation under the Commodity Futures Modernization Act of 2000, the same legislation that introduced obscure financial derivatives like “credit default swaps” into the American lexicon and ultimately caused the collapse of mortgage and stock markets in 2007 and 2008.
“This analysis,” conclude the authors, “connects the bursting of the US real estate market bubble and the financial crisis of 2007-2008 to the global food price increases.”
Following this collapse many investors shifted their assets into “index funds” that allowed them to bet on the likelihood that commodity futures would increase. These index funds would be purchased by commodity traders and then repackaged as derivatives to be resold for twice or three times the initial purchase price. According to data from the United Nations, this investment rose from $13 billion in 2003 to $317 billion in 2008 (pdf here). This flood of cash caused intermittent bubbles as prices increased under artificial demand only to crash because there was no consistency in actual supply and demand (see Figure 1 below). In other words, as the price of food shot upwards many people were unable to buy the food that was actually grown.
According to Bar-Yam and colleagues, by September 2010 there was 140 million metric tons of grain sitting unsold in storage facilities around the world, an amount that would normally feed 440 million people in a single year. In the face of widespread global hunger, playing with food prices as if it were a casino pushed them beyond the ability of people to pay in regions of the direst need. Jean Ziegler, the UN Special Rapporteur on the Right to Food, has called this “a silent mass murder,” entirely due to “man-made actions.”
“We have a herd of market traders, speculators and financial bandits who have turned wild and constructed a world of inequality and horror. We have to put a stop to this,” he said.
The model that Bar-Yam and colleagues developed had earlier predicted the uprisings popularly known as the Arab Spring. On December 13, 2010 the researchers submitted a report to Congress warning of the link between rising food prices and global unrest. Just days later uprisings began in Tunisia followed soon after by Libya and Egypt, eventually spreading to 30 countries and toppling multiple governments. However, Bar-Yam and colleagues also predict that if global food prices continue to rise at their current rate the threshold that resulted in uprisings in the Arab world will become global between July 2012 and August 2013. In this context, the riots in London could be an early warning of greater conflagrations to come.
Repetition, according to Hegel, plays a crucial role in history: when something happens just once, it may be dismissed as an accident, something that might have been avoided if the situation had been handled differently; but when the same event repeats itself, it is a sign that a deeper historical process is unfolding. When Napoleon lost at Leipzig in 1813, it looked like bad luck; when he lost again at Waterloo, it was clear that his time was over. The same holds for the continuing financial crisis. In September 2008, it was presented by some as an anomaly that could be corrected through better regulations etc; now that signs of a repeated financial meltdown are gathering it is clear that we are dealing with a structural phenomenon.
We are told again and again that we are living through a debt crisis, and that we all have to share the burden and tighten our belts. All, that is, except the (very) rich. The idea of taxing them more is taboo: if we did, the argument runs, the rich would have no incentive to invest, fewer jobs would be created and we would all suffer. The only way to save ourselves from hard times is for the poor to get poorer and the rich to get richer. What should the poor do? What can they do?
Luckily, I managed to get a partial recording of the speech. Transcribed below, it began with Evans referring to a recent episode of BBC’s Newsnight, during which former Sun editor Kelvin Mackenzie dismissed any attempt to understand the wider context of the riots…
… The presenter turned to Kelvin Mackenzie and said to him, “don’t you think we should try to understand these riots?”
He said, “no I don’t think we should”. And there we have it. The lack of understanding; the wilful ignorance. To try and come to terms with what’s caused this trouble in our society and this alienation where one large section of society just doesn’t want to think about the people who are involved in it [the rioting]. And wants to write them off, criminalise them, and put them in to a sort of box where they don’t have to be thought about.
I think that is what has characterised the coverage of the riots. I think it has been a particularly grim period for journalism. It was led that way, in many ways, in the initial outburst of violence by the 24hr rolling news.
I found it staggering, the way news presenters were editorialising. They were showing film of what was going on in Tottenham, and they were saying: “there is no political element to this, this is just vandalism, this is just people looting” … without any sense of what the background to this was. Without any attempt to put it in its context.
We saw Sky News reporters walking down the streets, filming people on their phones and saying, “I come from round here, I can’t believe what I’m seeing, are you proud of yourself?” As if they were headmasters.
That’s not journalism. Journalism should be the pursuit of the truth and the pursuit of knowledge. And we weren’t seeing knowledge there. We were getting the vicarious thrills of being in the middle of a riot. The Daily Mail’s view? “Give this man an award”. I don’t think it’s award-winning journalism personally – because it told me nothing.
It told me nothing because I’ve been in a riot. I’ve fought with policemen. I’ve kicked in shop windows. I’ve stole from shops. Alot of people haven’t, but I have. And I understand the frustrations that come from being in that underclass, where you’re written off, where you’re given no opportunities. And you’re demonised. You’re demonised by the media and you’re demonised by the political system. It was 30 years ago, but I felt the same way they [the rioters] did.
The way the media was quick to put it all down to a sense of consumerism. “They’ve all got Blackberrys”. Well, a Blackberry doesn’t cost very much actually. But I’ll tell you what – what alot of the kids who where there [rioting] don’t have is expectations. The poverty of expectation, the poverty of belief in what you can do with your life…
But of course, the newspapers were more concerned with taking the opposite view. The Daily Express – the headline – “Flaming Morons”. Which says to you: these people don’t deserve to be treated well, they don’t deserve to be regarded as human beings. And all through that whole week of rioting… the narrative was all about that. It was all about criminality. It’s all about not being able to explain, about not being able to understand. As if this came all out of the blue and surprised us.
This has been building for four or five years. And the only people who appear to be surprised about it are journalists and politicians. So we have this situation where the government now is allowed to move the dialogue on and suddenly blame gangs. And the newspapers are rushing to report this, and agree with it.
In every time of economic turmoil, where poverty is building, there have been riots over the years. There has also been the instinctive urge to blame gangs. It goes back to the 1870s and the 1880s and the High Rip [gang] in Liverpool. So they [gangs] are easy targets.
And what it does: you don’t need to get beyond the surface, you can just point fingers. And this is what’s disappointed me from the newspapers especially in the last few weeks.
I can understand the superficiality of television. But you know, I can’t understand that newspapers, where you’ve got time, you’ve got the chance to talk to people, the anonymity that’s guaranteed in print, that no one’s gone out to talk to the people who were doing this, who were out there.
… Sky News ran a piece with four kids, where they discussed the reason that they rioted. And they were very articulate about it. They talked about how they had attempted to fit in to normal society, but had been turned back at every turn. You know, it’s easy to understand. But again, that piece was undermined by the payoff, which talked about criminal behaviour. If this was about criminal behaviour, if this was about violence, if this was just about feral kids running out of control, we’d see it every weekend.
We saw spontaneous outbursts of it because this society’s mantra is “there is no society”. Why would you expect these kids to care about people around them?
And yet, there was no sense of blaming the politicians for this environment that they’ve created. It’s all about punishment. It’s all about victimisation, it’s all about marginalising people who’ve got the least voice. That’s what’s really disappointed me. And I don’t see it getting any better.
Unfortunately I don’t think there’s a will to understand in this country. And I also think there is an instinctive fear in some journalists – quite alot of them – to actually confront the preconceptions of the mass of the British public.
This is a time when journalism has been trusted probably about as little as it’s ever been trusted. And what people don’t want to do is say to the people who say “they’re louts, send them to the army, hang them, shoot them”, no, you’re wrong, think about it. It’s easier to go along with public perceptions…
But that’s not our role. Our role is to come up with the truth. And I don’t believe we’ve got to the truth in the last few weeks.
So capitalism is looting the public sphere. Services that citizens have for a hundred or more years considered to be public goods and not to be exploited for the profit of a few – health care, care of the elderly, education, unemployment benefit, old-age pensions, fresh water, sewers, waste disposal, roads and footpaths, urban and rural planning, the postal service, the telephone service, the police, and so on – are subject to systematic and sustained pressure aimed at breaking the link between the citizen and the service. No longer should we think of these things as ‘ours’, except in the sense that we can say a bank is ours. These things are provided to us as goods and services by companies which exercise their right to make a profit out of them – out of us really, out of our pain, our parent’s old age, our children’s childhood, our money troubles, our environment. Citizens are to be redefined as consumers of services. The sole function of the state is to regulate the activities of companies so that monopolies do not develop.
The police function as the guarantor of profit. The police are ‘ours’ only in the way the taxman is ours. The police thus find themselves increasingly (for it was ever thus) with their backs to the corporate wall facing a disinherited citizenry for whom the state is a hostile force. This makes the police political for it is a mistake to think that the looting of the public sphere by corporations and individuals is not political. Of course, nobody on the corporation side wants to call it that. They want it to be understood as common sense. The state is ‘broken’, they say, or it has ‘failed’. Only profit-making companies can do the job efficiently and give good value for money to the consumer. What they really mean is ‘We’re going to take the money and run’. When you’re down and out, feeling low, check your credit rating.