As the global credit crisis lurches out of control, you can always find some consolation if you look hard enough, especially if you are a Guardian columnist with words of advice for the political and financial élites who are allegedly in control.
Economics editor Larry Elliott believes that financial market mayhem makes the case for returning to some golden age of regulated capitalism and the policies of the economist Keynes, after which everything will be more or less just hunky dorry. Unfortunately for him, the globalisation of financial markets alongside transnational corporations make this scenario a pipe-dream.
But wait. Today, comment editor Seumas Milne sees hope for the future in the actions of the state in response to the convulsions in the global financial system. “What,” he writes, “last week seemed outlandish becomes today's common sense”. After rather stupidly attacking the Tories for being “irrelevant” (if only that were true!), Milne says the scope for “piecemeal interventions may be coming to an end”, adding:
“In particular, if the HBOS deal, the last rampart of a private solution, were to unravel, there is already speculation that wholesale nationalisation of banks could become unavoidable.” Milne, who likes to think himself as a man of the Left, is particularly infatuated with what’s going on in America, declaring: “When a US Republican treasury secretary comes up with a $700bn bank rescue package, the potential of what governments can do with political will is thrown into unusually sharp relief.”
So all that’s lacking is the “political will”? Milne’s touching faith in the state to provide the answers and solve the crisis is extremely dangerous as well as naïve. When he writes that “the battle has been won over the necessity of intervention”, he is reinforcing the illusion that the crisis can some how be brought under control by a set of rational actions drawn up by the Guardian.
This assumes that the state is actually capable of imposing some sort of order and that this in itself would be a good thing. All the evidence is that recession is turning to slump and the state can do nothing about it, except try to save capitalism from itself at the expense of jobs, homes and living standards. And lest Milne, who has a reputation as an apologist for Stalinism, has forgotten his history, we should remind him that when the capitalist state comes together with corporate and financial power it equals fascism.
We have a double bind. The mass of the people are disenfranchised because the major parties stand for the same thing. And the state is openly the plaything of big business and finance. So the challenge is to create a new democratic politics and state that can propose a sane economic system based on production for need and not profit. Working on that project would be more fruitful than expecting the capitalist state to somehow become progressive in the midst of the gravest crisis since the 1930s.