“(Europe) has the capacity to provide housing or adequate shelter, healthcare, food, education, substantial employment and other resources for all its inhabitants. It is not an act of nature that makes this impossible. A balance has to be struck between need and greed. Certainly it is not government alone that denies people their basic needs, for the capitalist mode of production commodifies some of these.” — Paraphrasing Raymond Suttner, former ANC underground activist and presently Professor at Rhodes University speaking about South Africa
During the “Cold War” era which lasted from the end of the end of World War II to 1989 with the fall of the Berlin Wall the world was meant to be constantly living on the brink of a nuclear deflagration. The menace was real as was aptly proven by the Cuban Missile Crisis which lasted for thirteen days during the month of October 1962.
On that occasion US President John F Kennedy and the Russian leader Nikita Krushchev “stood eyeball to eyeball, each with the power of mutual annihilation in hand.” Finally reason prevailed. The end of the bipolar world consecrating the “victory” of the free-market liberal model on socialist-planning was famously hailed as marking the “end of history” – a cryptic way of postulating the end of conflicts, namely ideological conflicts.
Yet paradoxically enough when one looks back to that era, the world order was hugely less complex and threatening than the one we are living in today. The recent events in Paris and the paralysis of Brussels at the beginning of this week are stark reminders of the terrible plight with which most Western capitals are now faced. The whole complexity of this emerging landscape is arguably linked to the type of globalization to which the world has been subjected over the past three decades or so.
While to its full credit, it is known that globalization has contributed to pulling large swathes of people from absolute poverty and helped to spread new knowledge and technology to farflung countries, it has also given birth to what is according to many studies one of the most unequal and unfair archetypes of socio-economic structure in human history.
The notion that greed and cupidity have become the motivating force of this new phase of post-industrial capitalism replacing the sense of mission and enterprise grounded in the puritan tenets of thrift and hard work which used to drive the first pioneers of the “bourgeois revolution” may seem a little trite.
Yet, as we shall illustrate in the following paragraphs, the present situation bears some of the trademarks of a morally defunct system with less and less to show in terms of human development. A possible cause, admittedly a partial one, of the kind of atrocious urban warfare which we have witnessed in Paris recently and which is now threatening Brussels and other capitals which remain on high alert.
For a few decades after the Second World War, economic growth was the engine of wealth creation. It ensured, even under a skewed distribution system, that each generation could look forward to a better living standard than their parents. Ironically enough it was under the umbrella of the “Cold War” regime that Western nations felt they had to cater to the aspirations of their working and middle classes so as to counter the appeal of the socialist ideology. Those were the days when political power in developed countries used to alternate between centre right and centre left parties.
For a long time the Welfare State became the preferred instrument for ensuring social transfers from the wealthy to the poorer sections of society, and political debate essentially revolved around how to improve the workings of the system rather than questioning the foundations of the Welfare system itself. That was until the end of the Perestroika, a term used to describe a vain attempt by the Russian leader Mikhail Gorbachev to salvage a regime which was utterly rotten from the inside, leading to the formal dissolution of the erstwhile Union of Soviet Socialist Republics (USSR).
A triumphant Ronald Reagan in the United States and his alter ego Mrs Margaret Thatcher in the UK led the charge of the Anglo-Saxon model of unbridled capitalism. Deregulation and liberalization were the order of the day and the overarching mission was the dismantling of the social-democratic architecture of western societies. The dominant mantra of maximization of shareholder value creation took precedence over all other considerations including the longer-term viability of the system.
Safeguards against excesses and the “countervailing powers” so dear to the great economist JK Galbraith were systematically removed, all in the name of freedom of markets. The trader Gekko who took the traits of actor Michael Douglas in the epic film ‘Wall Street’ (1987) epitomizes the spirit of those days when he loudly proclaims that “greed is good”. As we all now know, it all ended miserably with a number of corporate scandals in both the US and Europe (Enron, WorldCom, Vivendi in France) and finally the Great Financial Crisis in 2008.
What we are concerned with here is another aspect of this transformation. Between 1979 and 2013 compensation for men without a high school diploma (predominantly black Americans) in the US fell by 21% in real terms (inflation adjusted). The trend in other parts of the developed world is not any different. Driving these trends is the change in the nature of work.
New technology and “intelligent” machines are rapidly displacing many types of low skilled workers in both manufacturing and services sector. Most of them – in the true spirit of the extreme free marketers — are left to themselves and are inevitably led to drop from mainstream social activities, and to fare for a living in the often more murky marginal world of illicit and dangerous occupations.
In multicultural societies, as most of the capitals of the Western nations would now be characterized, the problematic consequences of such marginalization are compounded. Xenophobic, extreme right nationalist parties feed on the pervasive insecurity to engage in populist and even racist politics. Extremists of all hues take advantage of the resulting feeling of insecurity and anxiety to appeal to ethnic and religious solidarity in the face of such “rejection” of their fellow religionists.
We have insisted earlier that the problem of “terrorism” is hugely complex and does not lend itself to simple solutions. There are multiple and deep-rooted causes which are all linked to result in a messy condition which favours the designs of the religious fanatics such as the leaders of Daesh.
What is postulated here is that one of those root causes is closely linked with the model of economic development which aims at dismantling the State in favour of the impersonal forces of the market as the driving force of change.
The same causes leading to the same effect, it would be futile to expect a solution without a serious reconsideration of a model which has not only failed in achieving economic growth globally but has simultaneously contributed to the rise of “terrorism” as a defining characteristic of the foreseeable future.