Extract: The New Statesman Essay – Europe

Entitled ‘The Great Reckoning: Why the European ideal is under threat‘, written by Mark Mazower for The Centenary Issue of the New Statesman, this essay is an insightful critique of the ongoing economic crisis in the Eurozone. It questions Europe’s dependence on the financial sector for economic and social stability, arguing that money, since The Second World War, has generally been used ‘to make money and not things’, whilst it also examines the paradoxical role of globalisation in Europe’s financial influence worldwide, culminating with the global economic crisis that begun with the bankruptcy of the Lehman Brothers in 2008, more commonly known as The Great Recession. Consequently, having thoroughly enjoyed reading it, I have quoted what I think is the crux of the essay’s argument, a small section of fantastic political prose that might make you, in the same way that it made me, think about the financial situation of the Eurozone.

‘Today the consequences of financialisation, within and outside Europe, are clear enough. Look at average growth rates during the Trente Glorieuses and during the past 30 years: the comparison makes sobering reading. Banks and hedge funds may have increased their profitability, but national and continental economic performance have lagged sharply behind. One reason for this is that globalisation has made the world more crisis-prone, not less so: nostalgia for the dictator António Salazar in Portugal or communism in Russia reflects how the greater self-sufficiency of the years before 1980 brought greater predictability and stability. And it has also made the world much less equal or fair. The trend towards equalisation of wealth and incomes that occurred within European societies between 1945 and 1975 has been stopped, and the curve, without exception in Europe, now points the other way, towards an ever-widening income gap, which is forcing large sections of the population to recalibrate their social expectations for themselves and their children.

In so far as the EU stands for the defence of the single currency, it thus finds itself aligned against those very priorities – ­stability, solidarity, equality – that helped restore the legitimacy of democracy to the western half of the continent after 1945. The recent divide between creditor north and debtor south makes these problems far more acute, but in fact they existed before the crisis hit. Even then, they lay at the heart of the fundamental political challenge that financialisation has produced, the challenge posed by the decoupling of political from economic power. The euro-crisis has made this challenge evident, and more morally troubling.

In these circumstances, what demands explanation is not the emergence of organised protest, but the lack of it. Why, we need to ask, do people find it so hard to imagine alternatives? Taxpayers are bailing out the financial sector. So why haven’t they demanded more regulation, more control of pay, and ultimately a rebalancing of relationships between finance and manufacturing, between global liquidity and nationally rooted communities?

The main reason is the absence of widely believed alternatives. The revolutionary left, whether communist or anarchist, has failed at the ballot box, which may not matter to its adherents but signals its lack of political weight. In the few cases where it has succeeded, as in austerity-riven Greece (with Syriza), its recipes for the crisis are scarcely revolutionary. People may have soured on the globalisation dream but politicians continue to regard the financial markets as indispensable in more or less their present form. Domestically, what is striking is the degree to which recovery programmes today rely simply on expanding liquidity through the banking system rather than by means of the kind of ambitious public works projects that characterised recovery across Europe after 1945. Thus, while the left hand of Whitehall chastens the banks, its right hand begs them to kick-start a new boom’.

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