Why do all the polls indicate that Gordon’s Bust will be Gordon’s salvation? Why is Obama’s generosity with other people’s money so attractive at a moment when people can suddenly afford less?
Clearly, there has been a fundamental change in the political outlook of the Anglosphere. In the past, voters turned rightwards when they were in trouble, and leftwards when they were confident. In this country, victory in '45 brought us Attlee, the swingin' sixties Wilson, and the Tory economic miracle of the ‘90s brought the rise of Blair. Conversely, the geopolitical fear of the early ‘50s brought back Churchill, the dismal end to the 60s ushered in the odious Heath, and out of the disaster of the ‘70s the Age of Thatcher was born. When caution fixed things up, people felt confident enough to give these compassionate higher-tax chappies another go: we could afford to be 'nice', after all. And then when they mucked it up we’d once again feel the need to look after our own and come limping home to common-sense.
Now though, the public is deliberately and explicitly turning leftwards in a crisis. This is surely culturally significant in a way which nobody seems yet to have appreciated. This suggests that our instincts have been drastically altered away from opportunity as a default mode and towards security as a default mode.
Practically speaking, of course, this means the compounding of economic mistakes – doubling up at each loss at the roulette table. Turning towards Keynes right now means trying to fix the problem with higher taxes and borrowing to flood the economy with money in order to stimulate demand, when in fact that could serve pretty well as a summary of precisely what the government has been doing for the last ten years and has caused the problem in the first place. After all, they've just pretended that it wasn't what they were doing: charging the MPC to set interest rates to control inflation only counts as supply-side fiscal control when you don’t shamelessly fiddle the inflation figures as an excuse to keep interest rates artificially low and thereby stimulate the demand-side. Brown has been Keynes masquerading as Friedman, and he now seeks to undo the damage by removing the mask. [Click 'read more' to continue...]
It is the moral implications, however, which are more interesting. What this tells us about who we have become is that what made us unique, and uniquely successful - self-reliance, the acceptance of risk, the cultivation of the spontaneous as the economic bedrock of society - has quietly died. We no longer believe that self-reliance is a Good in its own right, that risk is an inevitable part of life, that spontaneity will tend over time to create good and bad ideas but that the bad ideas will fail and the good ones prosper, and that that's fine. Now, instead of believing that providing universal security is a luxury to be afforded only in good times, it is the potential for downside risk which we believe can only be borne in times of prosperity.
I believe that this is because the unparalleled sustained growth and prosperity engendered by the 1980s reforms have rendered us utterly unable to cope, materially or psychologically, with any economic pain. Just as the short-term electoral advantage of conservatives was self-liquidated by their own economic success, so too have their long-term electoral advantages been obliterated by the economic infantilisation of electorates who have actually come to believe that financial hardship is unrelated to their own behaviour. Such a mentality is not kind to capitalist politicians.
And that is why we're all doomed and why Anglo-American civilization is in deep trouble.