Tuesday, 25 November 2008

Keynes and the Tailor

In advanced capitalist societies the standard form of governance is pluralist democracy. It produces stable, safe nation states with high levels of co-operative contribution from citizens. It reduces risk. The United States has just given a demonstration to the world of how it's done.

The United Kingdom suffers from a burdensome democratic deficit. It is all very well saying dismissively that the Constitution is what we do, when we are relatively independent in choosing how we act. But that independence comes from a productive, vibrant, growing economy that provides a sufficient standard of living to the populace for them to behave as if they are within a pluralist democracy. When the economy threatens to collapse, when its survival becomes dependent upon investment by others in the United Kingdom, then the nature of its political and constitutional settlements gains as much importance as its economic and financial parameters.

Who would lend to an economically unstable state that does not enjoy either a democratic and written Constitution enforceable under the rule of law? Where the means to affirm their continued co-operation, if not their content, with their form of government is not available to the people except when the Executive is good and ready to permit its expression, rather than constrained to meet the people's judgment. And if such a fundamental part of a modern state is set up as 'what we do', where does that leave property and contract?

Loans of the order of trillions of pounds cannot be sought, and will not be given, on the word of Gordon Brown and Peter Mandelson. They do not have the reputation, even if they think they have the power. The power and the reputation rest with our country and without a general election and the restoration of democratic government in the United Kingdom there will be large premium to be paid by us all.

As we know from our hurried reintroduction to keynesian analysis, there is always a price at which payment can be delayed; until, that is, doubt as to capacity to meet, or be held to, the debt asserts itself.

We cannot afford New Labour ; international capitalism charges for risk, including that of political and social instability generated by under-determined institutions of the state.


Old BE said...

Who would trust a nation that uses its anti-terrorist laws to steal money from a foreign bank?

hatfield girl said...

Precisely, Blue. In the financial and then economic debacle we have not been looking at the impact of the New Labour political deficit on our country's international standing.

Nor at the impact of the decoupling of the regime from the country's consent. Now we need to borrow these gobsmacking sums, it becomes very expensive to have arbitrary, authoritarian, unelected rule. It's not what lenders like to see in an advanced capitalist west European state; pluralist democracy under the rule of law, and clearly set out, is what carries the least risk. Other systems are acceptable as long as they are stable and clear cut - but they tend not to need to borrow on this scale.

How much is it going to cost to borrow more than say Germany has to pay? Particularly as the real economy folds and winter advances, and things get close to lots of people.

Electro-Kevin said...

Commeth the hour commeth the man.

This can't happen with Nu Lab sucking our energy - to a great degree the Tories too.

Though I know what the country needs I have no hope or vision at the moment because no-one is offering it.

Anonymous said...

I don't think a British general election, resulting in the return of another local government - of whatever party - really counts as the restoration of democracy.

We cannot claim to restore our democracy as long as the real power lies overseas, with an unelected and unaccountable Supreme Government over which we have no democratic traction whatever.

hatfield girl said...

What do you mean 'man' ? E-K.

Last time it was a woman who sorted out the Labour mess.