Throughout the squall over the new British coalition government, the interests of one constituency dominated all others. It has no lawmaker, nor can it claim any actual voters. Yet in all the coverage of the results and the Cabinet-broking, one question came up again and again: Would the markets like it?
In the afternoon of May 10, BBC political editor Nick Robinson was on TV heckling Liberal Democrat negotiators: “Are you not in danger of playing both sides while the country waits and the markets quake?”
True, Robinson never makes an intelligent point when a bad jingle will do, but there was also Peter Riddell of the Times, the venerable archdeacon of lobby (parliamentary) journalism, musing: “The main challenge [for a Labour-led coalition] would be financial. Could [it] gain and retain the confidence of the financial markets?”
Nor was it just Westminster-types.
The Daily Mail’s financial editor warned: “The markets have no appetite for political horse-trading. Instead, they are demanding decisive action.”
Never mind that on the day the Telegraph led its business section with “Political deadlock spurs fear of sell-off,” the FTSE shot up 200 points. Overlook how, when the government went to the markets last week to borrow some cash, eager lenders practically bit its arm off and forget that what’s really sowing panic on trading floors isn’t the gestation of a new government in a small and stable democracy, but the existential crisis in the 16-nation eurozone.
So the idea that British Prime Minister David Cameron and Deputy Prime Minister Nick Clegg were playing Keanu Reeves and Sandra Bullock in a Whitehall version of Speed — urgently patching together a coalition agreement before a ticking time bomb in the financial markets went off — turned out to be a fiction.
If this was just about journalists over-applying the melodrama, the matter could rest there, but what should trouble us is the notion that the markets are now the all-powerful referee on the democratic process.
Rather than being one all-knowing entity, financial markets are a convenient term we apply to the hundreds of thousands of daily deals between buyers and sellers and middlemen. When the FTSE goes up, the price of government bonds normally goes down and what the Swiss do with their interest rates can cause all sorts of mischief for the British pound.
Nor do employees of financial institutions know better than everyone else. As one former fund manager recently put it to me: “The idea that traders in bond markets are coolly weighing up the economic data is just nonsense; they jump around according to the first headlines they see on their Bloomberg terminals.”
Yet we’ll hear many more appeals to the market over the next few months. If form is anything to go by, every time Chancellor of the Exchequer George Osborne takes the axe to public services, he’ll say he is only acting in accordance with the market’s wishes.
There is certainly an argument to be had about how the UK cuts its overdraft, but voters aren’t getting that debate — instead they have to contend with the mafioso-like figure of the market. In this way, finance is supplanting democratic argument.
How do we explain this process?
The theorist Mark Fisher describes it in the title of his new book as Capitalist Realism, meaning “the widespread sense that not only is capitalism the only viable political and economic system, but also that it is now impossible even to imagine a coherent alternative to it.”
Or perhaps we should turn to anthropology, because what seems to be happening here is the establishment of a new primitive religion — with the markets as a bloodthirsty god.
According to the classic definition by anthropologist Clifford Geertz, a religion must be “a system of symbols” — for which read the FTSE and the pound. It has to incorporate “conceptions of a general order of existence” — in our case, the idea that markets know best. Then, Geertz says, it should give “these conceptions ... an aura of actuality that the moods and motivations seem uniquely realistic.”
Which is where we are. Don’t fancy a Cameron government, but that’s what the market wants. The market must be propitiated with regular sacrifices. Only by following the way of the market will the UK find its salvation in a recovery led by the private sector.
The US got here first. In 2001, Thomas Frank published his seminal book One Market Under God, about how Florida retirees were filling their boots by day-trading on Internet stocks. In the dotcom boom, voters trusted the Wall Street Journal more than they trusted the White House. True to national tradition, the British did not choose such sunniness. Their God is a vengeful God.
Just heed this comment from one Labour doyen, the late Robin Cook: “The markets always know and they impose a heavy penalty. The discipline of the market is not always welcome, but it is a powerful ally of truth, efficiency and transparency.”
Just as the old faiths expire, under the deathblows of Richard Dawkins and his droogs, so rises a new one. As I type this, Osborne is on the radio describing how he will begin £6 billion (US$8.7 billion) of cuts today — and reveal a new austerity budget in a few weeks.
The market’s will shall be done.
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