Thursday, May 28, 2009

Rearguard Semantics: GEC or GFC?

It's about nine months now since the invisible hand gave us the finger.
When Lehman Brothers and Bear Sterns collapsed in September last year, the term Global Economic Crisis was quickly coined, while its abbreviation, GEC, fast came into common usage. This snappy phrase seemed to sum up the crux of the issue; that the post-1979 consensus of supply side economics, pursued by governments of left and right across the Western world, had caused this disaster and was collapsing alongside Wall Street's biggest names. We were able to put a pithy name to the beast facing us.

Then a funny thing happened - the term Global Financial Crisis began to be thrown about in competition with Global Economic Crisis. This slight adjustment results in a term with very different implications. Where GEC implies a crisis of the entire politico-economic settlement of the past three decades, GFC merely describes a crisis in one sector of the economy, subtly avoiding questions of politics. Where one phrase expressly implicates the neo-liberal project the other vindicates it.

Like the banker show trials in the UK, the term Global Financial Crisis is a distraction from the main game. It presents a symptom as the cause and protects the vested interests that allowed the disease to develop. Look, for instance, at the ferocity with which David Cameron has attacked the greed of the City in Britain, whilst simultaneously putting together a neo-Thatcherite manifesto. Gordon Brown too has got on the banker-bashing bandwagon, desperately trying to obscure the fact that they were merely doing what he has allowed and even encouraged them to do in the past 12 years of Labour government.

This crisis is not the fault of a few bad apples on Wall Street going too far, it is endemic to the ideology that has prevailed for the past three decades. It is the natural conclusion of thirty years of asset-stripping presented as government policy, of social stratification presented as liberty, and of rapacious greed presented as virtue. This is political and economic crisis and a new political and economic settlement is required to tackle it.
The question is, what form will it take?