Brian Micklethwait's Blog

In which I continue to seek part time employment as the ruler of the world.

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Thursday December 04 2008

I continue to brood over what is the underlying ideological story working itself out in the world just now.

The Official Story now is that “unregulated capitalism” has tanked, and that regulation and government money must solve the problem.  Idiot bankers caused the problem, and only the government can solve it.  But I think that it is starting to be popularly understood that it was government borrowing on a huge scale that is what caused this mess, so how can government borrowing on an even huger scale get us out of it?  Or to put it another way, the government and the idiot bankers were all on the same side.  And if the Official Story is wrong – mega-wrong, disastrously wrong – about that, then is the Official Story perhaps wrong about the regulation bit also?

“Socialism”, in the sense of spraying government money around, is looking more and more like a rich guy’s racket.  Taking money from poor people in rich countries and giving it to rich people in rich countries.  But if idiot bankers caused this, why give them more money? Why not just let them starve, or get jobs as roadsweepers or in call centres?

My understanding of depressions, which is what we are talking about here, is that they discredit whatever is the Official Story, and credit whatever is the Most Confident Alternative that is being put about, even though it takes a while for the Most Confident Alternative to get a respectful hearing.

The Official Story in 1930 was: hurrah for capitalism.  Just do more of that.  (This was what FDR originally promised.) But as the bad times stayed bad, the Most Confident Alternative gained more and more ground.  Set up governmental organisations!  Build dams!  Manipulate farm prices!  Put socialists in charge!  Plan!  When the depression did finally end, all that nonsense got the credit, and was enthroned as the Official Story from then on.  Capitalism was rescued by being set aside for the duration of the crisis.  World Wars set the same story in institutional concrete.

So it is that the Official Story now is: we have ourselves another crisis, caused by the capitalists, and the government must get us out of it by spending more, and regulating more, just like FDR did.  The Most Confident Alternative says: spend less, and regulate less.  Make the idiot bankers and the idiot politicians who were in bed with the idiot bankers do road sweeping and call centre-ing.  It will be horrible, but it will be horrible anyway, and it will be more fair.  The idiots will suffer more than the rest, and quite right too.  Get the horribleness out of the way.  If the bad times now stay bad, and the more spending and regulating there is the more true that will be, then the Most Confident Alternative is liable to gain strength, and may even become the new Official Story.

Most of the pessimistic responses to all that involve reference to the numerous Interests, that Won’t Allow That.  Rich bastards being bailed out.  Poor bastards on benefits.  Government bastards doing government bastard jobs they insist on keeping.  But Interests always stand in opposition to the Ideological Truth.  Evil Capitalists have spent my entire life-time fending off New Deal economics, of the sort that almost all of Academia and all of Polite Society was demanding of them.  Now we are entering the age of the Statist Interests versus the Capitalist Rescuers.  The Statist Interests will do quite well, because Interests always do.  They will pocket their ill-gotten gains, but will know even as they do this that they are ill-gotten, a reward for idiocy.  The Capitalist Rescuers will make the ideological running.  They will be the ones with the sense of their own rightness, not the Interests.

Well, that seems to me just as plausible as the claim that, ideologically speaking, we are all doomed, doomed.