Keith Hart www.thememorybank.co.uk
The fall of the Berlin Wall was famously heralded as ‘the end of history’, but in fact it restored a sense of history for many of us by catapulting us back to before the Cold War and even to the origins of the USSR in the Russian revolution. Questions that had been frozen for decades reappeared, such as ‘What will be the glue of the new Russian Federation?’, ‘Will Germany resume its dominance of Central Europe?’, ‘What should be the boundaries of the European Union?’ and so on. The war in former Yugoslavia reopened the history of genocide in Europe and Serbian nationalism confronted the complacent powers of Western Europe with an ugly reminder of their own history.
The failure of the New York investment bank, Lehman Brothers, in September 2008 triggered a financial collapse whose ramifications are still with us. Predictions of the outcome of the ensuing global economic crisis vary widely. Following a sustained equities rally in mid-2009, some commentators now argue that the recession following Lehman’s demise is already over and the free market ready to assume its inexorable rise, while others talk of a double dip recession, persisting debt deflation and a recovery that could take 25 years.
From the beginning this crisis has invited speculation about the closest analogy in the twentieth century to our current experience. Most commentators were sure at first that we were entering a period unprecedented since the Second World War. Roosevelt, Keynes and the other principals of the Great Depression became familiar figures on the oped pages. Was 2008 like 1929? No. More likely, 1931 or 1933; some said 1938. Which was the greater threat, inflation or deflation? Cue in the history books once more, since deflation had been unknown since the 1930s.
These comparisons lacked an overview of what led up to the Great Depression, namely three decades of financial imperialism that ended in 1913 with what Churchill called ‘The second thirty years war’ as its aftermath. No, world war was not thought to be likely; but, after three decades of neoliberal globalization, when the science of free markets ruled for ever, the shock of the ‘credit crunch’ certainly renewed the interest of the chattering classes in history. Then suddenly the apparent recovery of stock prices emboldened even bailed out bankers to sing the praises of the market once more.
A break in economic history did occur in 2008. After the fall of the Berlin Wall, it was claimed that the world had entered a new stage of economic evolution to which all countries would eventually have to conform, where money flowed without political restriction and the market penetrated everywhere. There were a few doubters, of course, who identified the shaky foundations of the boom long before it crashed. But it took courage then to go against the prevailing orthodoxy that all was best in the best of all worlds. What happened next did change a lot, if not everything.
Economic growth can now be seen to have been sustained by a regime of cheap consumer credit, especially in the United States; many banks and other financial houses, notably the insurance giant AIG, exposed themselves to unacceptable levels of risk, particularly in the new market for credit derivatives; these became ‘toxic assets’ which were bought by taxpayers at huge cost in order to preserve the banking system as a whole; access to loans dried up overnight, despite these government subsidies; the leading exporters of manufactures, such as China, Germany and Japan, suffered massive reductions in demand for their products; the newly ‘liberated’ Eastern Europeans went into free fall, as did countries like Ireland (hitherto a ‘Celtic tiger’) and Spain; despite governments printing money like there was no tomorrow, the threat of deflation was real; business bankruptcies and rising unemployment contributed to the economic malaise in rich and poor countries alike.
The economy, which had been understood as an eternally benevolent machine for growth, was suddenly pitch-forked into the turmoil of history. The market was now seen to require massive state intervention if it were to have any chance of surviving. The financial ‘masters of the universe’ quickly brought out the begging bowl and in some cases had to suffer nationalization. Anglophone governments who once claimed to be leading the world to a free market future, desperately embraced remedies they called ‘Keynesian’, incurring the risk of hyperinflation if the bond market collapsed. The French ‘social model’ suddenly looked a lot better than it had before, not least to its ex-Thatcherite president, Nicolas Sarkozy. After the dust settled, the so-called ‘emerging markets’, particularly China, India and Brazil, were seen to be doing not as badly as once feared. The global shift of economic power from the West to Asia has probably been accelerated by these events. It is all rather murky, but even at the best of times the present is like that.
Whatever place the ‘credit crunch’ eventually finds in economic history, one certain victim of the crisis has been free market economics. It is impossible any more to hold that economies will prosper only if markets are freed from political bondage. Attacks on the economists by politicians and journalists have become commonplace. Even the Queen of England asked publicly why none of them saw it all coming. The ideological hegemony of mainstream economics, especially since the 1980s, has been holed below the water. This is not to say that the free marketers have been silenced, but public acceptance of the notion that the economy is social, institutional and in need of political guidance is now commonplace. And Karl Marx, after being sidelined for decades, is once again a best-seller in Germany.
It has long seemed to me a defect of economic anthropology that we don’t engage with historical questions of the sort triggered by the economic crisis in the real time context of the daily news. Of course to do so would expose us to the need for continuous revision of our ideas and facts. But suppose we wanted to, how could it be done? I had been mulling over this question and had some provisional answers which I rolled out on my website as soon as Lehman folded. Ideas are cheap. Everyone has ideas. That’s why writers and artists come cheap too. New social and intellectual forms for expressing our ideas are scarce, however. So I turned to fictional dialogue as a way of engaging with history and the news. ‘Conversations with Abdul Aziz’ was the result.
I divided myself into someone called Abdul Aziz and an academic called me. I did not advertise the fictional basis for the exchange, but was prepared to if asked. (No-one did, but several expressed disappointment to learn the truth later). “Abdul Aziz (not his real name) is a minor Saudi royal with a degree in economics from a Midwestern university who now lives in London where he manages some of his immediate family’s wealth.” This allowed me to express both sides of the pressing questions of the day: Was Obama the world’s saviour or just another failed US politician? Were we on the cusp of a great depression or world war? Was Britain a basket case or brave beneficiary of an early devaluation? How long would the recession last? Was it safe to buy assets again or not? And so on.
The online format allowed me to insert links to articles from the newspapers in weekly instalments (like a serialised Dickens novel!) and many of these came from participating in Twitter, the network that has been called the first real-time medium for the expression of human consciousness. I enjoyed making predictions that could be contradicted at the time and revised a week or two later. I realised that a life of betting had prepared me for a career as a small-time prophet. My two characters began to assume stable positions on either side of some big questions. But I grew tired of it by the New Year and gave up. More than anything else, I escaped from academic responsibility for a while. I doubt if I will convince my anthropologist colleagues that this experiment has anything in it for them. I learned a lot.