Global capitalism in turmoil

We are witnessing the unravelling of large sections of global capitalism, starting with supply chains. The trigger is the coronavirus but the genesis can be found in the economic ructions of the last 40 years.

The Dow Jones Black Monday crash in October 1987, shed 22 per cent of its value and sent shock waves across the global financial system.

Some may remember the recession of 1991. Tens of thousands of men and women lost their jobs. Some older men never worked full time again.

The GFC in 2008, rocked the global economy and like an immune disease, has weakened the most powerful economies in the western world. A kind of chronic fatigue which never ended.

In the last two weeks, we have seen more than $500 billion wiped from the ASX. That's 25 per cent of its value, due in large part to panic caused by the spread of a novel form of the Coronavirus.

The suits who control our financial and banking system – which the Australian taxpayer saved in 2009 – don't want you to panic.

Those faceless men and women who run our superannuation accounts, don't want you to panic. Even though a contributor on a standard investment portfolio, would have lost around three years of savings so far.

Prime Minister Scott Morrison – who I call Billy McMahon in a baseball cap – doesn't want you to panic.

The question is, 'when is it a good time to panic if not now?'

In truth, panic will do no good. Normally pump priming the economy works (for a while) but it's short-term government-funded jobs building community based projects that saves the day.

This is not the GFC. This is the unravelling of large sections of global capitalism, starting with supply chains and which ultimately, will end with the banks.

The real pain will be felt by the punters. Flat wages over the last five years has hit household savings and shredded the retail sector.

Working and middle-class families don't have the savings to pay for serious adverse events such as a major operation, high-end dental surgery or car repairs over $1000.

City folk are about to get a taste of what their country cousins have endured for seven years, due to the drought. People who have lived on credit for the last 20 years, should prepare for a very hard landing.

While the Four Horsemen of the Apocalypse may ride hard over an indeterminate future, we can take some assurance that the world won't end. But some Australian cities, such as Adelaide, will become retail husks.

What will end is neoliberalism and the further pauperisation of working and middle classes.

Since the early 1980s, neoliberalism has been the default economic paradigm of developed nations. Neoliberals believe in free and unfettered trade, deregulation, privatisation, slashing government expenditure and restraining workers' pay.

They believe competition is the defining characteristic of human nature. Citizens are consumers, not members of a society. The market rules all.

Hard line right wingers in both the ALP and Liberal parties, used to say that people who got angry at CEOs and bankers "earning" multimillion-dollar salaries suffered from the politics of envy.

It's not envy – it's incredulity, and it shows how deep and wide the chasm is between the rich and poor in Australia.

Remember the great run on toilet paper stocks? That's not only evidence of stupidity but of the atomisation of civil ties. We are not 'all in this together'. We are islands of self-interest, who until recently, floated in a sea of indifference. Now the sea is pouring over the decks.

I've seen market crashes come and go. I've lived through three recessions and my Father taught me enough resilience to probably handle a depression.

My pessimism lies in the fact that the liberal democratic experiment born from the American and French Revolutions, is dying. Reason has been in retreat for 40 years, as political chaos marches on Britain, Western Europe, America and Australia.

Trust in politicians, financial institutions, the media and the church, has crumbled. It's an odd sociological phenomena, that the more we distrust those in power, the more we want them to restrict our civil liberties.

We lost our vision for Australia and forgot our history – or were never taught it. We no longer fight for the underdog. We're too busy fighting among ourselves.

As Leonard Cohen sang in 'Democracy':

From the homicidal bitchin

that goes down in every kitchen

to determine who will serve and who will eat…

Economic change also creates organisational change. KPIs have replaced collegiality. Bullying is rife. There's a raft of middle managers who make Richard III look like Kimba the White Lion, as workers toil in institutional psychic prisons.

Neoliberalism can't take all the blame. The funeral pyre of the liberal democratic tradition has taken on a life of its own.

We rage against our politicians and their Punch and Judy antics but they are glove puppets. We can see the dismal future of democracy. Elections are held, governments are formed but the system fails to deliver. Democracy has become impotent and decrepit.

What will replace it? I have no idea. I suggest it may mutate with a stronger focus on grass roots issues. But having seen how local councils work, I'm not embracing that idea with gusto.

In the meantime, I have dug out my Mum's copy of the Green and Gold CWA cookbook, on making cheap meals. The belt-tightening may take some time.