The Economic Crisis
by Elaine Graham-Leigh
One of the strengths of speculative fiction — one of the reasons I write speculative fiction — is its ability to examine systems. Whether a story is set in a dystopia a few years from now, or a long time ago in a galaxy far, far away, SF lets us ask what happens when systems break down, when economies collapse, when the government falls; and what we might put in that broken system’s place. We might not have planned on going through an economic crisis ourselves, but hey, (as I told myself when I lost the day job), at least it’s material.
Just as the space race gave birth to a whole new era of SF, so, I’m sure, will the new depression, and I’m looking forward to reading and writing it. But the best SF comes from a clear analysis of the contemporary situation, and I’m not sure I agree with Gabriel Timar’s or with Bertil Falk’s response.
Both Timar and Falk locate our current problems in the behaviour of individuals. They both agree that leaders have climbed to the top of major corporations who are motivated only by self-interest and whose ‘ability to do what they are supposed to do is nil’ (Falk). Timar also picks out reckless spending by ‘Joe Public’ chasing an egalitarian dream of having it all, as another significant factor in the credit crunch.
If individuals were the problem, then regulation might indeed be the solution, but it goes deeper than that. The hard truth is that this crisis is simply part of capitalism.
The rate of profit — the ratio of profit to capital invested — inevitably declines, and the capitalist business has to expand to compensate. In the last thirty or so years, corporations in the Western world have sought to compensate for the declining rate of profit by driving down wages, then outsourcing as much of their production as they could to the Third World. That enabled them to make more profit; but as Timar points out, it could also have threatened their markets. An impoverished, unemployed Western workforce wouldn’t buy many consumer goods.
The answer was the credit boom, a way for corporations to make money out of lending Western workers the money they no longer wanted to pay them in wages, and thereby keeping the whole market afloat. It was a bubble, and like all bubbles, it burst. That wasn’t a result of ineptitude from the CEOs of Lehman Brothers et al., it was the boom and bust cycle inherent to capitalism.
Of course, the boardroom isn’t the only source of potential individual mistakes: for Timar, the War on Terror is a significant contributor to the crisis. As a founder member of my local Stop the War group here in the UK, since 2001 I’ve spent more hours than I can count on marches, platforms, lobbies, etc. against the wars in Afghanistan and Iraq, so I was glad to see that Timar shares my opposition. It seems however, that his reasons and mine are different.
Looking at the cost of modern wars ($601 billion for the U.S. in Iraq so far), it’s easy to see it as Timar does as a massive drain on national resources. In fact, military spending has been a major prop of the post-World War 2 U.S. economy, and for many major corporations, the War on Terror is a profitable part of their business. It’s worth remembering that the 1930s Depression finally ended with World War 2. War, like globalisation and boom and bust, is what capitalism does.
It’s futile to think that we can allow wars but only short ones or that we’ve somehow been holding back and that an extra display of ferocity will give us summary victory over the ‘terrorists’. I think the present and past inmates of Guantanamo Bay, let alone Abu Ghraib, Bagram, Diego Garcia or the other secret prisons around the world, might raise an ironic smile at Timar’s assertion that the U.S. should now consider breaking the Geneva Convention. As for the suggestion that the Israelis should deal with Hamas rockets by bombing Gaza; well, they tried that, and, leaving aside moral and humanitarian considerations, I don’t think it worked.
In theory, the recession/depression/crisis will be over eventually. Some corporations will make enough profit out of the ruin of the others to restore the rate of profit and the whole thing will get going again. But even if that’s true, millions of people will suffer hugely in the process.
I’m not as sanguine as Timar seems to be about the African villagers, or even poor old ‘Joe Public’, who has to learn that there are some things he just isn’t rich enough to deserve. I believe that there has to be a better system than this, and that this crisis gives us the opportunity and the impetus to find it. Perhaps part of our job as SF writers and readers is to imagine it.
Copyright © 2009 by Elaine Graham-Leigh