The 2008 financial crisis spread economic shockwaves across the world. In the following years, millions of people lost their jobs, currencies crumbled, and entire countries had to be bailed out. Seemingly, the perfect solution, espoused by the global economic centres of Japan, North America and north-west Europe, was to embark on a programme of severe cuts to public expenditure and crippling austerity in order to balance the books. There was only one solution to the lack of regulation that had allowed the flow of capital from banks to swell to such unsustainable proportions: to use public capital to rescue the anarchic trans-national financial regime, giving them a free pass and even more freedom to create the economic growth we so desperately needed.
The Conservatives’ “long-term economic plan” has, superficially, managed to resuscitate the spluttering economy they “inherited” in 2010. Much has been made by the government of its record concerning both GDP growth – which has been hovering around the 1% mark since 2010 – and the 3% decrease in the total working -ge population who are unemployed. These kind of statistics make a good noise for the core Tory-voting block of middle England, looking for evidence of the triumph of a low-tax, low-spending British state. There is, however, a catastrophic lack of foresight displayed by the myopic, politico-economic vision of our Etonian-elitist government. In spite of their positive clamouring, the signs of an embryonic global economic crisis are unfolding before our eyes.
The FTSE 100 Index has fallen by 17% in ten months. In the same time period, the Japanese Nikkei has fallen by 20%, and, perhaps most worryingly, the Shanghai stock exchange has crashed by 45%. Other economic indicators tell the same story. Inequality has risen in most industrialised nations; interest rates are as low as possible, in a desperate attempt by central banks to bring life and activity to a stagnant, putrid economy; the price of oil, an important signifier of economic health, is so damagingly low, owing to a combination of overproduction and a consequential lack of demand, that the economies of some countries, such as Russia and Venezuela, are sliding into a dangerous rut.
The evidence is there in plain sight, with even the most basic independent research: the crash is, most assuredly, on its way. The primary questions now are how far away it is, and how severe it will be. It is inevitable that many people will lose their jobs and that standards of living will drop. How could such a thing be welcomed with open arms?
Somewhat ironically, the Tories’ “long-term economic plan” will leave us with a state that is incapable of the most basic and fundamental safeguards necessary to protect our society from the economic uncertainty that lies ahead. Our state cannot tackle the threats to economic stability that inequality both at home and abroad pose to us; nor can our state, legislatively crippled and threatening to leave the EU, challenge the free reign of exploitative, multinational companies, or help to provide an effective international solution to the impending ecological disaster poised to engulf our world.
This next recession will expose the fallacy of the “long-term economic plan”for what it is: an ideological mission to shape the world into a centre-right, free-market paradise for the well-to-do. The recession can act as a turning point, and wake the world up to the need for real change, giving the social-democratic left an opportunity to seize the moment and garner the support of the common person for the fairer, more sustainable existence it failed to provide an option for in 2008. Like it or not, the recession is coming, and we need to be ready for it.