crisis » 21stCenturyFix.org.uk

I’ve loosely translated this decalogue from the Spanish original below, which was tweeted originally here and came my way via Ada Colau. The original text is by a clever soul called Pepe Quiralte.

And as you can see, in the top right-hand corner of the image we have a picture of the Spanish President, Mariano Rajoy, doing what so many Western leaders are doing best right now: destroying their peoples’ livelihoods, dignities and hopes for the future.

There’s no work for anyone, but we are supposed to work until 70 and at weekends.
We combat tax fraud by offering an amnesty to those who commit tax fraud.
Consumer spending collapses? We cut salaries and increase taxes.
We had 4 million unemployed so we passed labour legislation to make EREs* [mass layoffs] and redundancies easier to implement. Now we have more than 6 million unemployed.
The whole construction industry goes belly up and so we cut research and development by 50 percent.
We increase VAT and income tax but SICAVs** remain intact. Capital escapes at unheard-of levels.
We cut health and education, but if you talk of cutting official cars or expenses they accuse you of demagoguery.
We make thousands of scientists unemployed but battle to get EuroVegas***.
The problem is the deficit and we acquire a debt of €100,000 million to save the banks so that they can continue evicting us.
The regions ask the state to save them, which asks the EU to save it and we allow ourselves to become indebted in order to pay the debt.

As a final thought, I assume when it says “An idiot’s guide to the 10 biggest economic mysteries (though there are more)”, it means more mysteries and not more idiots.

But perhaps, on second thoughts, that’s more idiots as well?

____________________

Footnotes:

* ERE as per Wikipedia en español (robot English translation here).

** SICAV as per Wikipedia.

*** EuroVegas as per the Guardian newspaper.

The last couple of years of lurching institutional crisis here and abroad have often been couched in terms of moral decay. From phone-hacking newspapers to MPs who rob the taxpayer blind, little which comes to the notice of the public sphere seems to demonstrate any kind of moral fibre at all.

Yet I wonder if what we are witnessing has less to do with morals – and far more to do with managerialist tendencies to unsustainably top those pyramidal organisational structures with foolishly overpaid CEOs utterly incapable of adequately performing their functions. A couple of examples to follow:

Rupert Murdoch argued that the reality of the News of the World so totally escaped him because he was simply not duly informed of its activities over the years. In effect, to know about such matters was someone else’s responsibility, and he trusted those individuals.
George Entwistle, DG of the BBC for a very short time, only recently admitted in an interview broadcast by the same organisation that he hadn’t been able to be on top of the repercussions of what became a journalistic catastrophe at “Newsnight”. He’d been out.
Today, meanwhile, the most recent occupant of the latter role, Tim Davie, has just proceeded to march out of an interview with the Sky news channel. It’s tough out there, being a madly positioned CEO.

http://youtu.be/6py-nM8Fp9U

So as you can see, this may not be a moral question after all. Is it really reasonable to suggest that all the people involved in these organisations – at lowly and high levels, in the middle and sub-contractually – are as corrupt as a moral explanation for what is happening to our civilisations would suggest is the case?

I find it difficult to believe. In my experience, people follow procedures reasonably faithfully – and where they don’t, managers are generally fearful enough to ensure it doesn’t go and happen again. So if we can discard the explanation of lack of adequately moral fibre, what else can we use to inform our understanding of the societal collapse we are witnessing?

Is it that our medieval and pyramidal structures are truly flying past their use-by dates? Is this a process not of moral decay but of simple organisational and structural decline? We relied for so many centuries on that king atop a pile of courtly middle-managers, interfacing with occasionally revolting serfs and peasants, that even as we are dragged fighting and kicking into the 21st century, we are entirely unable to leave those olden ways of working behind.

And what is happening now isn’t so much paedophilia on a mass scale or evil corporate wrongdoings everywhere or a degree of political chicanery never seen before this moment in time but – rather – the creaking contradictions and result of this crisis of medieval managerialism.

A level of sustained managerialism, in fact, as applied to a series of 21st century needs quite different to those the managerialists would appear to be choosing – or, indeed, wanting – to address.

It’s not the morals, stupid – it’s the KPIs!!!

This isn’t a people’s revolution but a technocratic implosion.

And it’s not that the wrong people are in the job – it’s that the jobs we’ve created are impossible to do. Even for the minority who, wishing to earn what they do, claim to properly possess the ability to carry out the tasks in question.

Our decline isn’t moral, after all – it’s entirely systemic.

But who’s going to want to notice it in time?

This is indeed a lost generation. The country of my wife and children, Spain, as reported by the Telegraph yesterday, now has a youth unemployment rate of 51.4 percent. Meanwhile, as painted by the English version of the Spanish El País newspaper, the wider picture is just as terrifying:

According to the National Statistics Institute’s (INE) latest quarterly Active Population Survey (EPA), the unemployment rate climbed from 21.5 percent in the third quarter to 22.85 percent in the period October-December. The ranks of the unemployed swelled by 348,700, while the number of people who lost their jobs during the whole of last year amounted to 577,000. The number of people out of work at the end of the year stood at a record 5.273 million.

The solution to this problem? As follows:

The gloomy figures underscored the dire need for an overhaul of the labor market, a task the government wants to complete in the first quarter of this year.

But with an important proviso:

“This shows that the government has to carry out a labor reform that focuses on incentivizing hiring, rather than just on cutting firing costs,” Bloomberg quoted Estefania Ponte, chief economist at Cortal Consors, in Madrid as saying. [...]

And I thought capitalism had all the tools it needed to sort out – all on its lonesome – the pretty mess someone, or something, has got us into.

Oh! It does …

In 2011 Spanish luxury goods sales were up by 25% despite the economic climate in the country.The luxury goods sector brought in 4,500 million euros up to the end of this year.

Truth of the matter is that capitalism by itself offers no convincing solutions for a broader society. It can’t. It’s been so vigorously – and for such a long time – a fundamental part of the problem.

And as any good experienced teacher would tell you, there is no one methodology in the world which can ever teach you everything you need to know or do. We must apply the same principle to economic practice.

Instead of building these self-justifying barricades between different classes and ways of seeing.

I do wonder if the crisis isn’t rather more profound, mind. What if the deficit isn’t really financial? I mean obviously there’s a shortage of political will to spend our way out of encroaching crisis, as perhaps we have preferred to do so on previous occasions – but, in reality, perhaps the problem is actually that we simply no longer have enough jobs to go around. No mystery here – nor a particularly perceptive remark. But, nevertheless, maybe – in the circumstances – worth revisiting. As the past century progressed, automation struck in more and more professions: we now learn by ourselves; medicate ourselves; bank by ourselves; book our holidays by ourselves; even get to the point where we contemplate the possibility of legally representing ourselves. And maybe – just maybe – all the aforementioned just goes to show that the balance generated by our economic structures between jobs and consumers is suddenly and irrevocably tipping in favour of the latter.

That is to say, our latterday Western economies – as they are set up and structured these days (and for some reason my unpractised eye is totally unable to fathom) – require far more of us to play the role of passive consumers than that of productive workers.

Does it have to be that way? I really don’t know. Wasn’t there a time, for a while, in the last quarter of the last century, that a potentially halcyon period of generous leisure activity began to be promised to our future generations? I can certainly remember the predictions made by the technologically minded stories and thinkers who dominated my scientifically influenced thought processes in my more tender years.

Of that – however – we hear little these days, it would seem. Instead, the things they tend to say now remind us we must work for less; work more flexibly; work more insecurely; and, above all, expect no guarantees whatsoever.

Stability of personal income is no virtue or given of modern Western society. As an American called Kirk (and spookily so) apparently said at Davos today:

US trade rep Kirk: “More and more Americans question value proposition of trade… think weve traded jobs for cheap t-shirts /iPads #Davos

And it’s not just the jobs – it’s the nature of those jobs.

For Christ’s sake capitalism – get your bloody act together before it’s too late!

You’d almost think your proponents thought there was no alternative.

But there always is – to everything.

So where have all your competitive instincts gone? Is it in fact – and here perhaps we have a horrifying unspoken truth – that, after so much time spent managing and manipulating and operating in monopolistic markets, our capitalist captains have forgotten what real free markets feel and look like? As well as the instincts which should correspond to such mindsets?

Fearful figures, indeed, then, on the verge of an economic breakdown.

All of us, that is. Sooner or later.

This is how I reacted recently, in a rather visceral way, to what I saw as rank injustice in Greece. First, a contextualising quote from Wikipedia; second, my reaction:

The 1997 Asian financial crisis began as the property bubble in the Far East began to burst in Thailand, causing large financial losses in those countries that greatly affected foreign investors. While Bill Clinton was preoccupied with the Monica Lewinski scandal, Robert Rubin took control of foreign policy and forced loans onto the affected countries. However, after each country agreed to IMF bailout loans, foreign investors immediately withdrew their money, leaving the tax payers with enormous debts and triggering massive economic disasters.

Perhaps Greece is not so much a foretaste of things to come as a reminder of things that have gone.

Daylight robbery is what this is really all about. A daylight robbery which channels the livelihoods of ordinary folk into the pockets of the rich and undeserving. Greece may not be a case of a property boom gone bad – but it is most definitely an example of a wealthy world which doesn’t know how to function on behalf of the opportunities and welfare of the majority. And there the parallels are absolutely in sync.

And this is what the Guardian reports today (via a tweet from zopalok and another here) on the subject – again – of what are clearly looking to be big-time speculators (the bold is mine, and you have to be very eagle-eyed to even alight on what the paper seems to see as a throwaway line of little importance):

Steven Major, global head of fixed income research at HSBC, warned that events in Greece could have far-reaching consequences if they are not controlled. “It matters to the UK economy,” he said. This is because a default by Greece or a renegotiation of a bailout could be taken as a signal by the Irish and Portuguese governments to alter their own bailout terms: “This is why it starts to matter. The UK has very little exposure to Greece, tiny exposure to its bonds and the inter-bank market. But the UK has much larger exposure to Ireland and Spain.” He added that some speculators were hoping to profit from a default.

Meanwhile, from the same story, we have further confirmation that the oxymoron of brilliantly clever financial idiocy leads to results which no one – right now – knows how to predict (again the bold is mine):

Danny Gabay of City consultancy Fathom said the major concern for central bankers if the chaos in the eurozone deepens is banks’ indirect exposure to it through complex financial products such as credit default swaps.

“We have absolutely no idea where this is going to end until somebody pulls the plug,” he said. “I don’t know what the FPC can possibly do about this: there are no levers we can pull except ‘sell, sell, sell’, but who’s going to buy?”

Great stuff, ain’t it? And there was I, feeling bad for acting all emotional, as I argued that in the case of Greece the world’s financial institutions would be looking to allow their friends in high places to bail themselves out before finally shutting up shop.

But isn’t now exactly the time we should be using our emotions? Isn’t now precisely the time we should be aware of how this is going to affect ordinary blameless working people?

And if it isn’t, then tell me why I’m wrong – and explain clearly the alternative.
____________________

Further reading: this article appears to suggest the black economy is part of the problem. I would suspect, knowing as I do quite intimately Spanish culture and its mores, that, for the Greeks, their black economy has been part of the solution. The real issue may lie more at the feet of a system of government which has rarely functioned fairly. The black economy is therefore a simple mechanism used by ordinary men and women for dealing with systemic injustice. But I may be wrong.