CAMBRIDGE LETTER
Trickle down effect
BILL KIRKMAN
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As the global financial crisis touches people’s lives, outbursts of public anger become more widespread.
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Anxiety, frustration and stress, not surprisingly, have been clearly and increasingly apparent as the worldwide economic crisis has continued and developed. As each week passes, predictions of the length of time that it will continue become more stark and the ways in which it is affecting every aspect of people’s lives increase.
There has also, of course, been anger, particularly directed against the bankers, whose poor judgment, bad decisions, and greed were largely responsible for the crisis. The fact that many of them have been reluctant to accept publicly any responsibility for what has happened, and have indeed continued to expect, and accept, large bonuses, has made matters worse. President Obama has spoken strongly against their “arrogance and greed”.
In the past few days the fact that anger has become much more widespread has changed the situation significantly. It is no longer directed simply at greedy bankers, and it is no longer focused just on the financial basis of the crisis, but on its effects, as they touch more and more people’s lives.
In Paris, we have seen public demonstrations and strikes in protest against President Sarkozy’s handling of the financial crisis, and against cuts in the public sector. There has been a wave of protests in Russia, reflecting discontent at the handling of the financial crisis by the Russian government, and constituting a potential major challenge to the Kremlin.
In Ireland, a decision to shut down manufacturing at Waterford Crystal, part of Waterford Wedgwood, which went into administration and receivership early in January, provoked a large demonstration.
In the United Kingdom, a strike at an oil refinery, protesting at the recruitment by a European contractor of Italian and Portuguese workers, spread quickly to other parts of the country, as other workers staged sympathy strikes. The protests have been fuelled by a speech made (unwisely) by Gordon Brown, the Prime Minister, in 2007, promising to bring in “British jobs for British workers”. The gloss on that promise now is that he was talking about giving British workers the skills that would enable them to get jobs that would otherwise go to foreign workers, but clearly, at a time when thousands of people are losing their jobs that does not carry much weight with the unemployed.
The whole issue is extremely complicated, for a number of reasons.
In the first place, citizens of European Union member countries have the right to take jobs anywhere in the EU. That of course works in both directions: British workers can, and do, work in other EU countries.
More generally, whether we like it or not, the global economy is a reality. The international nature of the economic crisis is just one demonstration of that. A protectionist policy is, bluntly, not a reality.
The problem is that, faced with unemployment, and the loss of their livelihood, people do not see it like that. Foreigners getting jobs when there are not many jobs to get is inevitably a cause of great anger, and the kind of anger that wells up without dispassionate analysis of the constitutional and legal position.
Inherent in that is a real risk that the anger will be directed not just against the government, but against foreigners as people. In other words, there is a risk that it will be transformed into racism. Extreme right-wing parties throughout Europe will undoubtedly seek to benefit from this. In the UK, the trade unions and the workers whom they represent certainly do not seek or want the support of racist parties, but the danger is real.
For the British government, which is currently not enjoying high approval ratings from the public, this is just one more serious problem that needs to be faced. The governments of other countries which have been experiencing strikes and demonstrations face similar problems.
The strategic issue of the global economic crisis is crucial, and the world leaders who have met at the summit meeting in Davos have rightly concentrated on it. There is no obvious solution on the near horizon, and one does not need to be wholly cynical to believe that finding a solution will require some pretty robust reappraisal of the received wisdom of the financial “experts” whose policies created the crisis.
In the meantime, in the U.K. certainly, efforts to find the global economic solution should not be allowed to obscure the domestic political issues which themselves constitute a potentially major crisis. Whatever the legal and constitutional position, widespread public anger must be taken seriously, and its causes addressed.
Bill Kirkman is an Emeritus Fellow of Wolfson College Cambridge, UK. Email him at: bill.kirkman@gmail.com
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