The global economic crisis is not just a financial crisis. It is a crisis of western capitalism in its post-industrial, post-modern form. The debt-fueled hyper-consumption that has driven growth in the West for the last two decades has come to its inevitable terminus.
This process had to end at some stage, either through the contradictions built into the financial system (endless growth based on easy credit can't go on forever) or through the contradictions between the economic system and the limits posed by the natural environment.
Despite the wishful thinking of the world's politicians and business leaders, climate change and the broader environmental crisis always would have halted this mode of production at some stage. The question was whether the system's own contradictions and instabilities would preempt the greater calamity of environmental crisis. Only the scale and rapidity of the systemic collapse of the post-modern capitalist model is truly surprising.
Most of the politicians of the world, Australia's included, have predictably and unfortunately shown themselves once again to be men and women of limited vision. Their solutions reveal them to be devoid of imagination. They are bound by what they have known rather than animated by what could be.
The outcomes of the G20 meeting in Brazil demonstrate this clearly. The differences between the Europeans and the Americans, emphasised in many media reports, amounted to little more than the precise placement of the deckchairs on the Titanic. They neither fundamentally questioned the endless growth model, nor acknowledged the scale of the environmental crisis and its ramifications for global economic recovery.
We should not portray governments as white knights coming to the rescue of a failing system. Nor should we target bankers as greedy and irresponsible, as if they were somehow different from the rest of us.
We all had a stake in this system. The bankers were merely at the pinnacle. They oiled the machinery of easy credit that fueled rampant house price increases. We could all then feel so much wealthier, encouraged to go out and buy big Tvs and new lounge suites to fill our ever-expanding houses — all on credit, of course.
Governments such as Australia's provided subsidies for home buyers that simply drove house price inflation: they subsidised the housing industry, not home owners. Tax cuts of all sorts further encouraged unsustainable asset price increases and the diversion of resources into unproductive speculation in property.
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