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The unending economic crisis makes us feel powerless – and paranoid
The sense that there is no way out is destroying our confidence in dealing with risk
Future seems far from bright … George Osborne at the Conservative party conference.
Six years into the economic crisis we can still get days – as with last week’s market correction – where the froth blows off the recovery and reveals only something flat and stale beneath. The fundamental economic problems have not been solved: they’ve just been palliated.
In today’s economy we never quite seem to turn the corner towards rising growth, falling poverty, stabilised public finances. Not so much winter without Christmas, but winter without ever getting to the shortest day. And that is doing something to our psychology. It is destroying our confidence in “agency” – the human ability to avoid danger, mitigate risk, regain control over fluid situations.
You see it clearest of all in people’s attitudes to war and disaster. Earlier this year the editor of the BBC’s Today programme admitted they were having trouble retaining listeners in the face of relentless bad news: Syria, Isis, Libya, Gaza. It was not the scale of the horror that turned them off: it was their own powerlessness in the face of it.
And it is logical to feel powerless if you witness the best educated and briefed people of your generation flounder – as politicians and diplomats have – in the face of a collapse of global order. But for economists – veterans of Lehman Brothers, Enron and the dotcom boom and bust before them – there is a feeling of deja vu. We know what it’s like to get all your preconceptions blown out of the water, and see talented people flounder.
In economics, big, uncontrollable forces are the norm; but by understanding them – by charting the rules of the game we’re supposed to play – we gain the ability to act. So, as one Lehman trader anecdotally told his new recruit before the crash: “Stay here, keep your head down, do nothing extraordinary and in 20 years you will have a Lamborghini, just like me.” Agency in a normal capitalist system is about knowing the rules.
But in a disrupted system, power flies to the extremes. The majority of people feel powerless because the rules no longer apply: you can keep your head down, do nothing extraordinary, and still leave the building with only a cardboard box. Meanwhile, for a tiny minority, disrupted systems seem to endow them with kryptonite powers.
Such people set up companies and close them down with ease, long before any requirement to file accounts comes due. A whole new international class of scam-trepreneurs has grown up: running island nightclubs, free porn sites, car-wash businesses we never realised we needed, and finance companies for which there is no adequate label.
Crisis makes such people hyper-free, but can leave the rest of us paralysed. And with paralysis comes paranoia. For the paralysed individual, nothing is really true; everything seems fabricated by the powers that stand above them.
In the face of all this, the average person learns the true meaning of “inshallah”: the Arabic phrase denoting resignation to the will of God. We become resigned to the economy being screwed, resigned to the rich getting richer; resigned to the fact that all wars end in failure, fiasco or injustice. And we’re resigned to the possibility that all political heroes – however noble – will betray us.
In the 1930s “agency” was restored in dangerous ways: nationalism, fascism, civil war: it was only four years from the Wall Street crash to the rise of Hitler. Our crisis has lasted longer, and although less severe, what it’s doing to our heads may be just as corrosive.
Rebuilding the economy, stopping Ebola and bringing order to the Middle East are tasks too big for individuals. But the fight against fatalism starts in the democratic republic of the brain. Of all the civilisations pummelled by austerity, Greece is in deepest. I am amazed by the capacity of its young people to resist fatalism and innovate, whether it’s anarchists trying to set up the biggest legal squat in Europe or the entrepreneurs inventing new models or forming startup businesses in the face of withering fire from the Greek bureaucracy.
When the Lehman crisis erupted I saw it initially in terms of right v left, Hayek v Keynes. Six years later, I’ve become used to meeting people who believe crisis is the normal state of things, and that they are powerless. The agency problem is clear: too many bad people have the power to act; the vast majority of decent people don’t. So regaining our power to act can feel almost more important than what we actually do with it.
Right now, hundreds of our fellow citizens – civilians and soldiers – are in West Africa voluntarily risking their lives to fight Ebola. That is agency in full working order. If you look at the people clamouring to save Kobane – who include Turkish anarchists, Kurdish guerrillas, freelance journalists and RAF Typhoon crews – that is also agency in full working order.
It’s in the economy that agency remains weak. There is no “medical Swat team” for the world economy, no peshmergas. There are only politicians, central bankers, business managers, workers and consumers, and a lot of them are gripped by fatalism. So one of the most dangerous things about the present is not wild swings in the stock markets – it is the mass psychology of powerlessness. We have very little precedent for understanding its longterm consequences.
Paul Mason is the economics editor of Channel 4 News. Follow him on @paulmasonnews
The sense that there is no way out is destroying our confidence in dealing with risk
Future seems far from bright … George Osborne at the Conservative party conference.
Six years into the economic crisis we can still get days – as with last week’s market correction – where the froth blows off the recovery and reveals only something flat and stale beneath. The fundamental economic problems have not been solved: they’ve just been palliated.
In today’s economy we never quite seem to turn the corner towards rising growth, falling poverty, stabilised public finances. Not so much winter without Christmas, but winter without ever getting to the shortest day. And that is doing something to our psychology. It is destroying our confidence in “agency” – the human ability to avoid danger, mitigate risk, regain control over fluid situations.
You see it clearest of all in people’s attitudes to war and disaster. Earlier this year the editor of the BBC’s Today programme admitted they were having trouble retaining listeners in the face of relentless bad news: Syria, Isis, Libya, Gaza. It was not the scale of the horror that turned them off: it was their own powerlessness in the face of it.
And it is logical to feel powerless if you witness the best educated and briefed people of your generation flounder – as politicians and diplomats have – in the face of a collapse of global order. But for economists – veterans of Lehman Brothers, Enron and the dotcom boom and bust before them – there is a feeling of deja vu. We know what it’s like to get all your preconceptions blown out of the water, and see talented people flounder.
In economics, big, uncontrollable forces are the norm; but by understanding them – by charting the rules of the game we’re supposed to play – we gain the ability to act. So, as one Lehman trader anecdotally told his new recruit before the crash: “Stay here, keep your head down, do nothing extraordinary and in 20 years you will have a Lamborghini, just like me.” Agency in a normal capitalist system is about knowing the rules.
But in a disrupted system, power flies to the extremes. The majority of people feel powerless because the rules no longer apply: you can keep your head down, do nothing extraordinary, and still leave the building with only a cardboard box. Meanwhile, for a tiny minority, disrupted systems seem to endow them with kryptonite powers.
Such people set up companies and close them down with ease, long before any requirement to file accounts comes due. A whole new international class of scam-trepreneurs has grown up: running island nightclubs, free porn sites, car-wash businesses we never realised we needed, and finance companies for which there is no adequate label.
Crisis makes such people hyper-free, but can leave the rest of us paralysed. And with paralysis comes paranoia. For the paralysed individual, nothing is really true; everything seems fabricated by the powers that stand above them.
In the face of all this, the average person learns the true meaning of “inshallah”: the Arabic phrase denoting resignation to the will of God. We become resigned to the economy being screwed, resigned to the rich getting richer; resigned to the fact that all wars end in failure, fiasco or injustice. And we’re resigned to the possibility that all political heroes – however noble – will betray us.
In the 1930s “agency” was restored in dangerous ways: nationalism, fascism, civil war: it was only four years from the Wall Street crash to the rise of Hitler. Our crisis has lasted longer, and although less severe, what it’s doing to our heads may be just as corrosive.
Rebuilding the economy, stopping Ebola and bringing order to the Middle East are tasks too big for individuals. But the fight against fatalism starts in the democratic republic of the brain. Of all the civilisations pummelled by austerity, Greece is in deepest. I am amazed by the capacity of its young people to resist fatalism and innovate, whether it’s anarchists trying to set up the biggest legal squat in Europe or the entrepreneurs inventing new models or forming startup businesses in the face of withering fire from the Greek bureaucracy.
When the Lehman crisis erupted I saw it initially in terms of right v left, Hayek v Keynes. Six years later, I’ve become used to meeting people who believe crisis is the normal state of things, and that they are powerless. The agency problem is clear: too many bad people have the power to act; the vast majority of decent people don’t. So regaining our power to act can feel almost more important than what we actually do with it.
Right now, hundreds of our fellow citizens – civilians and soldiers – are in West Africa voluntarily risking their lives to fight Ebola. That is agency in full working order. If you look at the people clamouring to save Kobane – who include Turkish anarchists, Kurdish guerrillas, freelance journalists and RAF Typhoon crews – that is also agency in full working order.
It’s in the economy that agency remains weak. There is no “medical Swat team” for the world economy, no peshmergas. There are only politicians, central bankers, business managers, workers and consumers, and a lot of them are gripped by fatalism. So one of the most dangerous things about the present is not wild swings in the stock markets – it is the mass psychology of powerlessness. We have very little precedent for understanding its longterm consequences.
Paul Mason is the economics editor of Channel 4 News. Follow him on @paulmasonnews
