The emperors have lost their clothes

Nick Clegg’s statement that "the pillars of the British establishment are tumbling one after the other," should be taken seriously. The question is why now? What is driving the break-up of the institutions that rule Britain? And what follows?

The deputy prime minister has no intention of seriously upsetting the apple cart of British politics, but he has put his finger on an important insight. But the News of the World scandal is part of a wider, systemic crisis.

For prime minister Cameron, his connections with disgraced former News of the World editor Andy Coulson and through him to Rupert Murdoch, have rocked his already unstable government. Peter Oborne’s account of Cameron was drawn into Murdoch’s embrace – after some initial reluctance – is worth reading because it shows how fragile the political establishment is.

Whilst there are separate and independent reasons for flashpoints in the “parts” – the media, financial system, the police and parliament – together they constitute a “whole” which is also known as the capitalist system in Britain (and its relationships globally).

The unravelling of the unsavoury networks which constitute the power structures sheds a powerful light on this interconnectedness. And, crucially, the ruling class’s ability to rule relies on these connections remaining as secret as possible.

Trust - not only in the news media but in politicians and the venal connivance of the police (who had their own fingers deep in Murdoch’s pie) - is sinking at an unprecedented rate.

Murdoch’s chief executive Rebeka Brooks, who now faces questioning by the police, was not only a neighbour and family friend of the Camerons, but she is a crucial link in the spider’s web that embraces the Royal Family, the Blairs, and major corporations like the De Beers diamond dynasty and, of course, the media empire that is News Corp.

In the first years of the last decade, while the credit boom was in full swing, the phone hacking was put on the back burner by the police and the New Labour government. It must have seemed secondary to the mountains of “wealth” generated by the financial sector.

The crash of 2008 not only devastated the economy but it also shattered ordinary people’s faith in the market economy. This in turn led to a loss of confidence in ruling circles. The system was shaken and the skeletons fell out of the cupboard at the News of the World in the wake of the MPs’ expenses scandal, bankers’ bail-outs and bonuses and the resulting stalemate election of 2010.

And while many in ruling political and media circles are working feverishly to restore a modicum of confidence in the British state, the global economy and its financial system is heading for another meltdown.

Still reeling from the near default of Greece, the Eurozone is now staring into a new abyss: the spreading of “fiscal contagion” to Italy, the world’s seventh biggest economy. As one economics writer says: “It’s just too big to bail out. While the Eurozone could perhaps survive a Greek default, an Italian debt failure would mean all bets are off”. In the United States, a $4 trillion cuts package is seen as the only way to avoid a dollar default.

Separating out the political crisis in Britain from the continuing and worsening global debt crisis would be to ignore the reinforcing interactions which characterise the deep crisis of an entire system. That’s why stuffing the ugly genie that the News of the World scandal has revealed back into the bottle could be impossible.

The least we can do is to understand how fragile – ideologically speaking – the arrogant façade that the ruling classes deploy to intimidate those below them actually is. Each side of the crisis – political, economic, ecological – are parts of a rapidly changing whole reacting upon each other to create something quite new.

The rapidly-developing political crisis at the top cannot be patched up, not least because the economy is staggering from bad to worse. Down in society itself, a massive social upheaval, driven by a lack of confidence in the ruling classes, is brewing for which there is no obvious outlet. A heady mix indeed.

Corinna Lotz

A World to Win secretary