The Financial Crisis Lives

Ignited by the financial crisis. London riots, August 2011.

The crisis never really ended. We just forgot about it. Everything that has gone wrong, from Brexit to Trump, is down to the crash.

I remember the financial crisis as an angst-riddled student at William Morris Sixth Form. I was studying A-level economics and philosophy, just as the world as we knew it was teetering on the edge of an abyss. It was perfect timing to come of age as a leftist. It was a crash-course (literally).

I had the fortune of growing up under New Labour. Like many of my generation, the Blair years confirmed that the Labour Party was not nearly left-wing enough. This might have seemed different had I been born in an earlier decade and came of age in the midst of Thatcherism.

One of the advantages of social democracy is that the limits of it can show you where to push on. It may sound counterintuitive but a childhood on benefits had prepared me for an adulthood of austerity. I was hard-nosed enough not to buy into easy answers, even more so as I gained my political agency.

Yet there were plenty of socialists claiming that the capitalist system had finally reached its terminal crisis. Even when I was a naïve 17-year-old, this just did not seem probable. It was much more likely that the ruling class would seize the moment to make the system tougher and leaner. This was the strategy known as ‘austerity’.

Some hoped of mass outrage and protests across the land. It didn’t happen, at least not on the scale necessary to force governments to change. There was very little uproar permitted in the mainstream discussions of these events. Instead, the media decided to channel our anger elsewhere.

We quickly went from talking about the queues of people outside Northern Rock to the collapse of Lehman Brothers and the bank bailouts to having very different conversations. Everyone soon agreed that the Labour government had crashed the economy and overspent on welfare benefits and public services. It didn’t matter that it wasn’t true, it was believable.

Members of my family would regurgitate these falsehoods and I would try to explain it all away. It never worked because the right had dominated common sense in British society for several decades. The official story was that the UK had to get its spending under control to pay off its debts.

Luckily, the Tories were here to put us back on track! The answer: tax cuts for the rich, public spending cuts for everyone else. The famous stiff-upper-lip came into force on the surface of British life, but underneath the surface, the crisis was still there.

Economist Doug Henwood observed that the right often does better out of financial crises than the left. The right had a ready-made set of tropes it could turn into a simple narrative on the cuff, while the left was in no position in 2008 to dictate the terms.

The fallout of the crash finally caught up with us in 2016. In the US, the fallout took the name of Donald Trump; in the UK, it was Brexit. Perhaps it was irresistible, the populist upsurge against the establishment. It was like walking into a dream.

Except there had been signs early on. We had the student protests in 2010, the London riots in 2011, the rise of Occupy Wall Street and the resurgence of nationalism everywhere. But we all mistakenly believed that the status quo would just keep going, and it did for a while.

All the conventions of the past 25 years fell away in a matter of months in 2016. The Cameron era was brought to an end and Theresa May set about trying to rearticulate the centre-ground on a nationalist basis. Meanwhile, the Trump insurgency inside the Republican Party seized the White House. Both events shocked world leaders.

Even when the crash first hit, the ruling class just didn’t believe that we might be living through an era comparable to the Great Depression and the rise of fascism. It took eight years, but the sky has finally turned black with chickens coming home to roost.

Photograph courtesy of Joel Schalit. All rights reserved.