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Things I Wish I’d Blogged in 08: It’s Not the Economy, Stupid! It’s the Stupid Free Market Economists!

January 14, 2009

Ever since September, when even the privileged classes in America could no longer deny the economic crisis of the neo-liberal global economy (the poor in United States and the developing world have of course been on the front lines of this crisis for decades,) there has been a struggle underway to define what it means.

Like many long-standing critics of the free market, privatized consumer economy that has taken shape over the past thirty years the poor have been forced and the relatively privileged bribed to accept, I am not surprised by this crisis. An economy driven by ever-increasing discretionary consumer spending (i.e., mostly unnecessary if not harmful consumption), facilitated by an ever growing mountain of personal and corporate debt, has always seemed to me to be a pyramid scheme – a deadly one that will not only deprive the poor and destroy the environment, but inevitably collapse and leave all but the wealthiest in deep trouble. I am afraid the current crisis is the first of a large, ill-omened flock of chickens coming inevitably home to roost. We had better wake up and start thinking about a different kind of economy – responsible, sustainable, fair. The old economy of boundless greed and growth has run its course. The only question is whether we will accept this and build alternatives of our own choosing that can sustain a good life, or whether we will ignore it and wait passively for catastrophic collapse.

Obviously, the current crisis provides a fresh incentive to consider big questions like this for the multitudes who have gone about their lives with little awareness of the social and environmental consequences of participating in a runaway consumer economy. But the mainstream news, punditocracy and most politicians, well-kept by their corporate masters, continue to do their best to make alternatives to the status quo seem unthinkable if not immoral. This year’s anxiety about whether consumers would indulge in an orgy of holiday shopping sufficient to keep the economy going was tinged with desperation; commentators could be heard on NPR talking as though the decision to scale back on spending was an irrational, even a selfish decision.

One of the most appalling examples of this could be found in Adam Gopnik’s commentary in the Jan 5th New Yorker, which compared the sour mood of the American consumer to a child who has bumped its head on a doorknob, and is breathlessly poised to throw a tantrum, but holds momentarily back, distracted by something perhaps more interesting on the horizon. The parents of course, hold their breath with the child, wondering which way it will go, hoping “that this time the child will somehow compose herself, see that her injury isn’t life-threatening, take a breath, find distraction in a bright, shiny object, and laugh.”

Gopnik argues that in the present moment, Americans are acting like that child who has bumped her head:

Economies are emotional processes. The child’s gasp is its first try at an economic act, with utility, emotion, fear, and calculation all boxed up in a single red-faced package. Consumers have stopped consuming, the papers say, for the same reason that the child has decided to cry: I’m really damaged, we want the world to know; attention must be paid. The stimulus package to come is meant to serve as our shiny distraction on the horizon, to induce us to think, O.K., maybe it’s not that bad—I may as well take a breath and shop. When you turn to wise men for wisdom now, you learn that feelings—the interplay of fear and faith—generally trump rational economic decisions. The psychology of bump and wait and cry, it turns out, always trumps political economy—or, rather, it is political economy.

Far from adjusting our expenditures to the needs of the moment, it seems, we tend to wildly overswing, according to our mood. The difference between the provident ant, who cautiously saves up for winter, and the carefree grasshopper, dancing and hopping, is a matter of what Keynes called “animal spirits.” It is better for the common lot if each of us is a hopper (and a shopper) rather than a hoarder. Being a nation of grasshoppers is allied to being a nation of hope.”

That’s as nice a statement as you’ll find of citizenship in a free market consumer economy: the citizen is reduced to a consumer; anything but more consumption is regarded as irrational, never mind what is being bought or for what purpose; thrift and providence are suspect at best; spending is the surest way to serve the common good.

Is this the kind of world you want to live in? Of course not. Most people have never accepted that a world whose dominant value is the personal gratification of every whim through mindless consumption is a good one. But they have unfortunately been persuaded by the global power elite that it’s the only world possible.

But it’s not at all clear that people will continue to accept the inevitability of the status quo as the global economy continues to unravel. What is clear is that the struggle to define this crisis is on, and the future of the country, of the world, is at stake.

So make a resolution this year to talk about the big questions with your family and friends, to play an active part in this great struggle. You don’t have to just suck up and buy it anymore.

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2 Comments leave one →
  1. January 14, 2009 1:55 pm

    Very interesting arguments … thanks a lot …

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  1. 10 Things I Wish I’d Blogged in 2008 « A Little Bit of Change

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