Joyce McMillan: World's unjust economic system is heading for a crisis

World leaders need to rediscover how to provide ordinary people with hope and security, writes Joyce McMillan.

Supporters of Alexis Tsipras, Greece's prime minister, attend a No rally against accepting the EU's bailout conditions in Athen's Syntagma Square in 2015. (Picture: Bloomberg via Getty)

It’s just a week since the publication of the Sustainable Growth Commission report on the economic future of an independent Scotland; and already, a conventional wisdom is beginning to emerge about what kind of report it is, and what it represents. It is, we’re told, a report that exposes the 2013 Scottish Government White Paper on Scotland’s Future as a work of fantasy at best, and that offers a much grimmer and more realistic take on Scotland’s prospects outside the UK – a vision of a Scotland that would, to the dismay of the yes-voting left, remain chained to sterling for a decade or more, and would have to continue to meet austere public spending targets, in order not to frighten global markets.

Now in fact, this is a fairly reductive account of the Growth Commission’s long and subtle report, which explicitly rejects the UK model of austerity as damaging to sustainable growth, and certainly foresees a much more prosperous long-term future for an independent Scotland that can set its own priorities. It is not, in that sense, a gloomy document; but it certainly pours cold water on some of the sunny hopes cherished by those who took part in the “Summer of Yes”, and offers what many No supporters in Scotland will see as a well-deserved rap on the knuckles – or smack in the face – to the “fantasy politics” of Alex Salmond’s yes campaign.

Yet before Scotland concludes that it should forget about independence and eat its UK Brexit cornflakes like everyone else, we should perhaps pause to notice something familiar about the language of this debate, and how it chimes with an increasingly insistent pattern of politics across Europe and beyond.

The picture goes something like this: ever since the crash of 2008 – and for some years before it – it has been increasingly obvious that the economic system as it stands is no longer delivering very well for ordinary Western workers and their families. As capital – and the people who own most of it – becomes less well regulated and more mobile, tax bases erode, and expected dividends rise. People begin to notice the decline in their own security, and in the prospects for their children, while elite earnings and bonuses soar; they drift away from the old mainstream political parties, and begin to vote for those – from left-wing Syriza in Greece to Donald Trump in the United States – who are willing to acknowledge these failures, and to propose possible solutions.

And while the global system seems able to tolerate the rise of populist politicians of the right, those who threaten to meet popular discontent by moving to the social democratic left tend to find the international bailiffs on their doorsteps within days, demanding that they cut rural bus services, reduce retired schoolteachers to penury, or do whatever it takes to restore their credibility in the eyes of the markets. Hence the decade of suffering just endured in Greece and the current row in Italy, where the two ill-assorted anti-establishment parties that currently form a majority – the Lega on the xenophobic right, and the Five Star Movement somewhere towards the left – are simply being told, by assorted establishment figures, that they cannot appoint the ministers of their choice, because the system does not like them.

What is going on, in other words, is something much more profound and far-reaching than a mere recognition that an independent Scotland would have it tough, at first. It’s rather a world-wide effort – by those currently in power – to close down any proposal which suggests too strongly that the world could, by political action, be made a systematically fairer and more sustainable place. From the SNP’s baby box to Five Star’s promise of a basic income for all Italians, it’s almost as if current power-holders, and their apologists, are frightened to let such hopeful language and thinking find a foothold in voters’ imaginations; instead, it must always be dismissed as “fantasy”, unachievable in the “real world”.

So before we accept the hopeless perspective offered by these “realists” of the centre and right, we should perhaps pause to ask ourselves whose “reality” it is that is dictating how much our governments may spend on their people, and their welfare. In the postwar period, with a devastated world in desperate shape, the nations of the West sat down at Bretton Woods in New Hampshire and created a well-regulated global financial system that, for 30 years, successfully allowed governments to invest in their countries and people, and led to an unprecedented period of growing prosperity and equality across Europe and the United States.

Since the 1970s, by contrast, there has been a sustained campaign to change and deregulate that system, so that today we have a structure that seems mainly designed to enable the massive accumulation of offshore private wealth by individuals who are already absurdly wealthy – sometimes on a scale large enough to pay off the entire debt of a small nation or two.

And now, naturally enough, this blatantly unjust system is reaching a crisis-point. There is unrest, and an increasing withdrawal of consent from mainstream political parties; and it will take more than another establishment talk-down of the prospects for Scottish social democracy – or a manoeuvre by senior bureaucrats against an anti-Euro Italian finance minister – to make that restlessness and dissent go away. The fundamental job of the world’s leading statesmen and women, in the end, is to enable a politics that offers hope and security to ordinary citizens, and the promise of a better – or at least a more sustainable – life for future generations.

And insofar as our global system is now failing to provide that, for millions if not billions across the Earth, it seems to me clear that that system is broken; and that the masters of our financial universe now need to gather again, to reset the priorities of the global financial system, and to stop trying to pass off as some kind of force of nature – and unavoidable “reality” – a system which was made by powerful human beings to serve their own ends, and which should surely now be remade, to serve a wider common good.