It's big, it's bad, and political choices still matter

Until I read Adam Tooze's Crashed: How a Decade of Financial Crises Changed the World, the economic upsets of early 21st century global capitalism had mostly registered with me through the Wall Street melt down that confronted Barack Obama on taking office in 2009 and the grinding Great Recession of Main Street America that fed the resentments of his detractors. Somehow the Obama administration never seemed willing or able to turn its economic policies to the needs of ordinary citizens.

Oh, I knew that what seemed to begin with casino-gambling with home mortgages by the sleazier elements of US finance had somehow nearly brought down the whole world economy -- I read books that sought to decode what they had been doing. (Gillian Tett's was a good one.) And I encountered a Spain in 2013 where the economy was still somehow leveled by the backwash of these shenanigans. And I even knew all this somehow fed those pratfalls by English-speaking democracies in 2016: Brexit and electing Donald Trump.

But until I read Tooze -- he's an erudite Brit who has landed teaching history at Columbia -- I lacked a global picture to put all this together. Crashed does that. It's a masterly account of intricate financial systems and above all their dysfunctional politics. If you suspect any discussion of global capitalist economics is no more than a morass of high falutin jargon, you are usually not wrong -- but Tooze draws a path through vast swathes of human activity and suffering, of myopic leadership and occasional brilliance. I found it fascinating,

This is how Tooze introduces the grand scale of his subject matter:

The events of 2003, 2008, and 2017 are all no doubt defining moments  of recent international history. But what is the relationship among them? What is the relationship of the economic crisis of 2008 to the geopolitical disaster of 2003 [Iraq invasion] and to American's political crisis following the election of November 2016? What arc of historical transition do those three points stake out? What does that arc mean for Europe, for Asia? How does it relate to the minor but no less shattering trajectory traced by the United Kingdom from Iraq to the crisis of the City of London in 2008 and Brexit in 2016?

... the idea that was so prevalent in 2008, the idea that this was basically an American crisis, or even an Anglo-Saxon crisis, and as such a key moment in the demise of American unipolar power, is in fact deeply misleading. ... It pleased people around the world to imagine the hyper power was getting its comeuppance. ... Contrary to the narrative popular on on both sides of the Atlantic, the eurozone crisis is not a separate and distinct event, but follows directly from the shock of 2008. ...

Unexpectedly -- to rest of the world and possibly also to elements of the US political elite  -- the Obama administration and most critically the central Federal Reserve Bank, proved quite adept at saving floundering wealth institutions. Their prescription -- a sophisticated application of "print money" and give it away to rich people -- broke with academic economic orthodoxy, and succeeded. Ordinary citizens remained screwed -- but hey, at least the whole capitalist economy didn't grind to a halt.

However unprecedented and effective the Fed's actions might have been, even for those politicians whose support for globalization was unfailing, its practical implications were barely speakable. Though it is hardly a secret that we inhabit a world dominated by business oligopolies, during the crisis and its aftermath this reality and its implications for the priorities of government stood nakedly exposed. It is an unpalatable and explosive truth that democratic politics on both sides of the Atlantic has choked on. 

... America's crisis fighting exhibited massive inequity. People on welfare scraped by while bankers carried on their well-upholstered lives. But though the distribution of costs and benefits was outrageous, at least America's crisis management worked. Since 2009 the US economy has grown continuously and and least by the standards set by official statistics, it is now [pre-pandemic in 2018] approaching full employment.  

By contrast, the eurozone [the European Union countries that share a currency], through willful policy choices, drove tens of millions of its citizens into the depths of a 1930s-style depression. That tiny Greece, with an economy that amounts to 1-1.5 percent of EU GDP, should have been made the pivot of this disaster twists European history into the image of bitter caricature.

And then there's China, whose burgeoning capitalist command economy might also have been dragged down amid these flailings and which both wavered and grew exponentially. Nobody's financial elites look like geniuses in this telling

Until I read Tooze, I had no idea that Obama's foreign travels were usually more about trying to nudge bankers and global financial elites toward what the US thought was economic stability than about arms control, or recovering from the global opprobrium which George W Bush's wars had seeded, and or even climate change. It's an enlightening perspective.

None of this suggests happy prospects for economic justice, democracy, or even truth as Europe and America have known it.

It was the current president of the European Commission who announced in the the spring of 2011: "When it becomes serious, you have to lie." At least one might say, he knows what he is doing. If we believe Jean-Claude Juncker, a posttruth approach to public discourse is simply what the governance of capitalism currently demands.

In the 19th century, economics was sometimes labelled "the dismal science" because it was the study of why human beings would always lack for our basic needs, for food, clothing, and shelter. Modern global capitalism has proved capable of building the components for those needs beyond the wildest dreams of pre-capitalist economists, though it usually flunks the equitable distribution part of the problem.

The crux of Tooze's argument about the unfolding of the crisis of 2008 is that it turns out that contingency, accidents, and politics still matter despite the enormous scale and complexity of financial systems interwoven with modern states. It's possible that global capital has stamped out the possibility of democracy and we didn't notice. But also it's possible that's wrong.

There are ways of describing the operations of these systems that void the presence of politics. But if a history such as this has any purpose, it is to reveal the poverty of such accounts. Political choice, ideology and agency are everywhere across this narrative ... Success and failure, stability and crisis, can indeed pivot on particular moments of choice. ...

Not a bad thought as we enter a different, hopefully better, US political era ...