After the uprising of the 17th June
The Secretary of the Writers Union
Had leaflets distributed in the Stalinallee
Stating that the people
Had forfeited the confidence of the government
And could win it back only
By redoubled efforts. Would it not be easier
In that case for the government
To dissolve the people
And elect another?
Bertold Brecht, The Solution, 1953
Brecht's acerbic irony came to mind after reading the umpteenth piece of right-wing post-Budget punditry justifying severe, long-term cuts in public spending and debt because otherwise – to paraphrase – governments will forfeit the confidence of the markets.
This nonsense turns democracy on its head. Decision-making by elected governments is in thrall to those same markets whose judgments have been palpably wrong for the last 20+ years: consistently marking up the value of equities, Sterling and USD on the myth of stable, unstoppable growth while the debt crisis quietly accumulated, followed by the abrupt volte-face of demanding deficit reductions that threaten to choke off such feeble recovery as some economies have managed since 2008. The analysis ought to be that the markets have forfeited the confidence of governments – and more importantly of the people who elect them. So: why can't the people dissolve the markets and – well, not necessary elect another, but replace them with democratic mechanisms for providing liquidity?
The economy, and the question of public sector deficits in particular, has been a near-taboo subject during most of the Labour leadership election so far. But when Andy Burnham broke cover recently, it was to say Labour shouldn’t be "in denial" about the need for deficit reductions. The logic of private markets infects all. The real point of this paper is this. The cuts agenda, now revealed as the price of solving a crisis in private markets, makes it no longer possible to avoid a simple choice of political position. We are either for an economic system based on the dominance of markets, or against it. And if we’re against it, then what we now need to provide is a carefully constructed, popular set of arguments in favour of something else.