ASA Globalog

A Return to “Business as Usual”?

Unlike other contributors, I have no training in anthropology – unless one counts a first-year course taken 45 years ago, when I was introduced to the debate between, among others, Raymond Firth and Karl Polanyi, on formal versus substantive economics. My background is in sociology and political science and I am an autodidact in the critique of political economy – albeit not through first hand experience accumulated by Keith Hart in currency speculation or high tech bubbles of the kind. I will use my blogs to supplement the interpretations already aired by cultural, economic, and social anthropologists. In particular, I want to introduce some further dimensions and considerations that might help us to better understand the nature and dynamics of the crisis and some of its consequences. Before proceeding, let me apologise for the break in blogs – I have been suffering in the last few days from another aspect of globalization, a mild bout of swine flu and am now recovering.

Over the last month or so I have attended four events on the crisis – at an elite German research institute, a United Nations agency in Geneva, a global gathering of radical scholars in London, and an activist evening workshop in Amsterdam. What has impressed me most from these events is the broad consensus. Specifically, following the initial shock of the crisis and the fears, hopes, or blind panic that followed the collapse of Lehman Brothers and characterized the “exciting times” of September-November 2008, there has been a return to “business as usual”, which is a delightfully polyvalent term. Some of those who share this reading consider it as a sign of the flexibility of capitalism, some that it is a serious blow to the Global South, others that it is a sign of the failure of the left to prepare for crisis and to take advantage of the crisis – leaving the space open for recuperation by capital and its representatives, and yet others that the form of the recovery reinforces the need for a Green New Deal to be developed, ideally, from the bottom up rather than through securitized markets in carbon credits. It is also worth noting that discussions were courteous but heated: the nature of the crisis and its solutions were clearly politically contentious and not just matters of academic debate.

This small personal example illustrates the complexity of crises and the problems of interpreting them. I am sure that Gillian Tett must have experienced this many times over, even at banking conferences. This complexity has been evident from the initial signs of crisis in the first quarter of 2007 onwards and poses interesting questions of a more general nature about how complex events come to be interpreted.

Crises of the kind experienced in the last couple of years are hypercomplex. They are overdetermined moments of indeterminacy, providing historically conditioned challenges and opportunities for decisive intervention. Crises typically provoke profound theoretical, paradigmatic, policy and practical disorientation insofar as they disrupt actors’ previously taken-for-granted understandings of the world and how to “go on” within that world. This opens space for strategic interventions to redirect the course of events rather than ‘muddle through’ in the hope that the situation will eventually resolve itself. Crises never produce a particular response or outcome on their own. Responses are mediated through debates and struggles to define the nature of this crisis (and its uneven spatio-temporal incidence), to ascribe (rightly or wrongly) material, institutional, organizational, and personal responsibilities for the crisis, to assess whether it is a crisis ‘in’ or ‘of’ the relevant system(s), to chart alternative futures, and to promote specific lines of action for particular forces over different horizons of action.

Thus the forms and purposes of responses and their relative success or failure depend not only on the (typically contested) objective nature of the crisis but also on capacities to define its nature. Included here is the question of whether the crisis is one in or of a given structural or strategic context. Where a crisis is successfully defined as one within a system, it is likely to lead to a more reformist approach as compared to when it is defined as a systemic crisis, i.e., one that affects the survival of the system. Yet, if the crisis is systemic and the crisis is interpreted in reformist terms, the resulting measures will be insufficient to deal with the full depth and breadth of the economic, political and social repercussions of the crisis. Systemic crises of the global economy – especially when coupled with failures of governance on a global scale – are particularly likely to impact developing countries and/or the weakest and most vulnerable groups in all societies. Indeed, a useful definition of power, proposed by Karl Deutsch, is the ability not to have to learn from one’s mistakes – because their costs can be displaced or deferred elsewhere unless some form of de-coupling is possible.

Economic and political ideas, models, and paradigms play a key role in reducing complexity as actors seek to render strategic and policy problems manageable in real time. This matters especially in crisis periods. In the current period, the crisis has been variously defined as a crisis of global capitalism, a crisis of globalizing neo-liberalism, a crisis of finance-led capital accumulation, a crisis in the pathological co-dependence between China and the USA, and so forth. It also has important regional and local dimensions. Definitions of the crisis also vary in terms of durée (e.g., short-, medium- and long-term, tied to the temporalities of financial or industrial capital, to the dynamics of political hegemony on a global scale or electoral cycles), in terms of geographical scope (e.g., global, triadic, city networks, national, regional, local), and in terms of the principal site of crisis (commerce, industry, finance; politics; hegemony; legitimacy; representation, and so on). It is particularly important to distinguish different accounts of “the” crisis because “its” manifestations vary significantly according to the position of particular economic and political spaces within the overall division of labour at a world scale as well as in terms of historically specific features of each social formation that is affected by the crisis in its various manifestations. In short, there is extensive scope for variation in narratives of crisis and, hence, in the responses to crisis that are likely to follow.

Viewed in these terms, the leading interpretations of the crisis have been scaled down in the past year compared to the initial period of maximum disorientation and panic. What has emerged and been consolidated is a reading favoured by the dominant transnational economic forces and superpowers that this is a crisis in finance-led economic expansion and inadequate regulation. This interpretation is used in turn to justify modest reforms within the existing neo-liberal order. One of the most surprising features of this account is the extent to which leading economic and political forces at national, regional, and the global scales have committed themselves to work against protectionism, to strengthen free trade, and to scale back the public sector even as the state acquires emergency powers to deal with the financial crisis. This has marginalized those most badly affected by the crisis, not only in the global north, but also, more significantly, the ‘global South’. How might we understand this? I sketch one approach below and will illustrate it in more detail in my second blog.

The first phases of a crisis trigger massive variation in interpretations, which appear in the form of narratives, arguments, etc. The plausibility of interpretations and their associated strategies and projects depends on their resonance with the personal (and interpersonal) narratives of significant classes, strata, social categories, or groups affected by the crisis and hence on their capacity to mobilize these forces. Much of this variation is arbitrary and short-lived, lacking long-term consequences for overall social dynamics; but some accounts and their associated practices are selected as the basis for strategic and policy initiatives in what becomes the second phase of the crisis. Where the latter gets defined as a crisis in the prevailing system, this sustains an impression of ‘business as usual’, consistent with routine crisis-management measures or minor reforms – responses that will last only as long as these measures to work. Otherwise, we have a crisis in crisis- management, which adds additional complications that need to be integrated into the analysis. If this fails or the crisis is initially interpreted primarily as a crisis of that order, more radical changes may be explored. In both cases conflicts are likely over the best policies to resolve the crisis and allocate its costs as different social forces propose new visions, projects, programmes, and policies and a struggle for hegemony develops.

What seems to have happened – and evidence will be provided in the next blog – is that the extent of the crisis, once its real magnitude became evident in September 2008, justified exceptional measures taken in a highly condensed time frame that by-passed normal political routines (including considered debate in legislatures) and concentrated crisis-management powers in the hands of a few key figures within a broader context of high-powered lobbying from key financial interests. The speed with which decisions were made effectively marginalized most social forces – apart from expressions of populist outrage against greedy “bankers” that were easily finessed in the short-term through rhetoric and symbolic punitive fiscal measures. Together with the billions of dollars (or their equivalent) invested in rescue packages and the return to profitability of major financial institutions (thanks in no small measure to effectively free money released through quantitative easing and the opportunities created by the crisis) has given the semblance of ‘business as usual’. Another part of the story here is the inability of forces on the centre and the left to exploit the crisis to provide a powerful alternative account of the crisis could challenge the progress of financialization and neo-liberalism, propose an effective set of short-term policy alternatives and a longer-term strategy to address the deeper causes of the crisis, and, above all, to translate these alternatives into effective policies in a period when power was being concentrated and centralized. In this sense the crisis can be seen as a crisis of the “left” as much as it is a crisis in neo-liberalism.

The effective spectrum of debate that has immediate policy relevance in the advanced capitalist economies is largely confined to six main approaches: (1) a return to a bastardized Keynesianism to boost demand; (2) recapitalization and re-regulation of banks; (3) calls for a new international financial architecture; (4) efforts to re-moralize capitalism by a stronger emphasis on responsible lending practices; and, in the medium term, (5) efforts to roll back public spending, the public sector more generally, and the roll-back of social rights; and (6) a Green New Deal that will help to resolve the environmental, food, fuel, and water crises that were temporarily knocked off the global agenda by the urgency of the financial crisis and its global repercussions. In all of these approaches, including the Green New Deal in its neo-liberal variant (oriented to market solutions to environmental crisis), the interests and views of the “global South” have been largely marginalized as have the views of social forces around the globe that question whether further economic growth can ever be the solution to current global challenges. Addressing such issues requires us to go beyond multi-site ethnographies of economic and political practices to consider bigger questions of economic, political, and social domination – to understand why, in short, some are better placed than others to ignore the lessons of their mistakes.