After the Crash: A Time for New Bearings

A world age ended with the Great Crash in the autumn of 2008.

We live in a time when technology and science have given people in the rich countries the sense that, serious crises aside, things will go on as before, and life may even improve if technology, science and common sense are permitted to have their way. For Canadians, who last saw their world torn apart, and paid in blood with tens of thousands of soldiers killed, in the 1940s, the past sixty years, on the whole, has been a comfortable time. Over these decades, to be sure, there have been booms and recessions, natural disasters, human tragedies such as the Air India bombing in 1985, the ugly loss of Canadian lives in Afghanistan and the near division of the country in the Quebec referendum of 1995. But on the whole, Canadians have been traversing one of the sunny uplands of history. For most of us, this experience has given us our bearings for navigating the world.

Now it's time for us to acquire new bearings. A world age has ended, which is something that happens more often than Canadians generally think. While there have been some long periods of time in which life went on much as before and the great questions appeared to have been answered---the Roman Empire, for instance, during the second and third centuries A.D.---shock and transformation have been the regular accompaniments of human existence. Think of the fall of Carthage or the peoples of the Americas undergoing European conquest and you are on the way to conceiving of human existence as rife with swift change and destruction.

The age that ended in the autumn of 2008 was the American-centred age of globalization. That age had been a long time in the making. It had taken shape as a consequence of the interactions of forces of different durations. A central narrative in its construction was capitalism, technology and science. Another narrative, closely associated with the first, was the rise of the United States and the American Empire to the zenith of global power, an achievement fully realized in the decades following the Second World War, and consummated in triumph with the collapse of the Soviet Union and its empire between 1989 and 1991. A third narrative, more limited in time, was the methods and practices of capitalism over the past thirty years, a time of global markets, de-regulation, and neo-liberal ideology.

Not without an element of perverse humour has been the launching of schools of business on university campuses around the world in recent decades that are dedicated to training business executives, economists and accountants imbued with the propositions of neo-liberalism. These propositions have played a not insignificant role in driving the world economy over the precipice. The hundreds of thousands of graduates of these business schools now must make their way in the world equipped with notions about economics that have as little explanatory value as Ptolemaic astronomy, Thomist theology, or King Canute's ideas about the workings of the tides.

While human beings are adaptive creatures, otherwise they would not have survived, they also have a remarkable capacity for rigidity, stubbornness and a ferocious attachment to ideas that are no longer useful. One of the benefits, perhaps dubious, of civilization is that provided there is a sufficient surplus for some to live off the labour of others, institutions, organizations, temples, churches and political parties devoted to keeping alive useless and counter-productive schools of thought can exist. They can even thrive. During difficult times, the attraction to the occult, to the reassurance of fundamentalist simplicities, and to wacky new age fantasies is very great.

In the political sphere, the pull to the irrational can also be very strong. Take for instance the case of the Republican Party in the United States. Having led the United States into unsustainable current account and government deficits, wars that have become quagmires, and the ballooning of the housing bubble that has now burst, one might have anticipated reflection and rethinking among influential party leaders.

Exactly the opposite has occurred. Talk radio powerhouse Rush Limbaugh, a man who proudly denies that human activities have caused global warming, has become the party's leading figure. In his bombastic, bullying manner, he is unashamed to proclaim that he hopes President Barack Obama fails. Limbaugh and less extreme Republican leaders have responded to the global financial crisis with a return to the old verities. Instead of generating stimulus through direct government spending on infrastructure, transit systems, refitting homes for energy efficiency, education and health care to offset the descent into depression, the Republicans favour tax cuts and cuts to government programs, the very recipe that fostered the economic crisis in the first place. Small government remains their cherished ideal even though it was the Republicans who insisted on gigantic military budgets, trillion dollar wars, and an agenda that made the super rich grow richer while the rest of the population faced rising debt and income stagnation. The Republicans contributed greatly to breaking the system that made their backers wealthy and helped ring down the curtain on a world age. This monumental failure, however, has not prevented the Republicans from calling for more of what did not work.

Over the past month, those who believed that this sharp crisis would soon give way to an early recovery have been shown to have been profoundly wrong. As it turns out, neo-liberalism, a system designed to reap the surplus from production the world over for a tiny minority of the population, impregnated the global economy with worm holes of debt that lead everywhere. The full extent of these multi-trillion dollar forms of indebtedness is not yet known, indeed in the case of derivatives, it is unknowable.

Bailing out a system that has rotted from within may be undoable, even with the brilliant and effective Barack Obama at the helm of the Titanic.

A new world age has begun. Canadians continue to be led by politicians who have remarkably little inkling that everything has changed. It should be noted that for the past couple of decades, Canadian politicians have not made any basic decisions about the economy. All they’ve done is to administer the neo-liberal system on behalf of those who have been running it. It’s not easy for such people to deal with the prospect that they might have some real decisions to make in the future.

We need new bearings to cope with a new world. Then we can rid ourselves of the political leadership we have had so we can construct a new and sustainable Canadian economy, with different rules about the distribution of rewards that can endure in a new age.