Monday, 28 November 2011
For most of this year the global financial markets have been giving their verdict on the political classes of Europe and the US – and it’s a sell. The financial crisis has locked together a political crisis with an economic one, exposing political classes with neither the ability to inspire confidence nor mobilise support for austerity.
At the core of the economic problem is the growing uncompetitiveness of the US and Europe, especially relative to Asia, and for which the political classes on both sides of the Atlantic have no solution. So it is more convenient to blame the financial system for the mess when in reality it was covering it up. That is why, while blaming the financial system, both European and US governments are frantically trying to rebuild it.
This propping up by the financial system is centred on two great axes. The first is the propping up of US debt by China (and Japan), with the US relying on the coincidence of interest with a Chinese Communist Party that would rather deal with foreign capital than face the threat from their own. The second is Germany’s pumping credit to its European neighbours under the guise of a currency union that makes its own industries more competitive than a realistic currency arrangement would. While German politicians preach frugality at home, their export-driven economy relies on the maintenance of precisely the opposite in the rest of Europe.
The dragging of a developing economy like China’s into a central global economic role makes it difficult for the US to counterpose itself to it, and ask others to as well, in a way that was much more possible with an isolated Soviet Union. This is nothing so simple as China having the potential to be an economic rival to the US, as some talk about; something that is a long way off, if it happens at all. But that right now China is playing a central role in propping up the debt of a country that only a few months ago was toying with default. It virtually guarantees that any attempt by Obama to build an alliance in the region on containment of China will not only be incoherent, but has the potential to cause more problems than it solves.
Yet if the US’s political problems from the financial arrangements are in the possible future, Europe’s are happening now. The turning of the banking crisis of 2008 into the sovereign crisis in 2011 in the Eurozone has brought the political weakness of the governing classes in Europe to the fore, culminating in the replacement of the respective right and left governments of Italy and Greece with a technocrat model.
Politicos, and especially the anti-EU crowd, like to talk up the anti-democratic nature of these governments. What they omit is that such a move only came after the domestic process had already hollowed out, with governments of both left and right incapable of commanding enough social support for an austerity program with which they themselves had no problem. When Greek Prime Minister Papandreou proposed a referendum on the cuts, it wasn’t because he was a democrat, but as a last-ditch attempt to drum up some legitimacy that he didn’t have. If the technocrat governments have no legitimacy, neither do the Parliaments that voted them in.
There is a tendency to see this as no more than the interim measure it is being proclaimed as, but that would be to underestimate what is happening to the political system in Europe. If neither the left nor right have the ability to provide the answers when they are most needed, during an economic crisis, it undermines their ability to claim credibility during any other time as well. This is a body blow to the European body politic from which it is hard to see how it will recover.
That such an overt erosion of the two party system is happening in Europe is especially ironic given that for years, left commentary, especially in the liberal press in the UK, have been banging on about the rise of far right extremism. Raising the far right bogeyman is something that has ebbed and flowed to varying degrees of hysteria over the years, probably reaching a height when Le Pen got to the second round of the French Presidential election in 2002. Yet far from there being a solid right base from which such a far right could gain its own momentum, what we are seeing now in Europe is what is happening in 2011, not 1933, with the social bases of both the left and the right draining away.
The scaremongering about the far right by the left is merely a crasser example of the way both sides of the political divide have used each other to prop themselves up. But both sides are increasingly struggle to be justified in their own terms, rather than scare us about the other, and so are caught in an ever diminishing dialectic to the end point we see in Rome and Athens.
In Australia, as usual, things are clearer. Our technocrat government of 2007 – 2010 came through an electoral reaction to the exhaustion of the programmes of both major parties, rather than supranational edict. The attempt by the parties to take back the leadership from the ‘Party Thieves’ and pretend its “game on” again, has only reaffirmed it.
While the Golden Age of the Technocrat has passed, the two party system revived last year is definitely past its sell-by date. For the time being at least, the fault line will remain with the former Prime Minister whose relative popularity has been revived by his dumping on the back of the widespread recognition that the ALP v Coalition ding-dong has had its day. His speech on the weekend has at least removed the pretence that any return to the leadership would simply be a poll-driven matter, but is around the same political issue that saw him dumped last year. This is not about giving more voice to the dwindling membership of the ALP, but the destruction of the power bases that actually run it.
Posted by The Piping Shrike on Monday, 28 November 2011.Filed under International relations, State of the parties