Over the past few years, Ireland managed to turn a banking crisis into a sovereign debt crisis, and in turn a full-blown crisis of democracy. This year, the rest of Europe, and even the US, finally caught up, writes FINTAN O'TOOLE
THE MILLENNIUM was a bit of a disappointment for doom-mongers: the apocalypse failed to arrive. By 2006, however, there was new hope of global catastrophe on the horizon. The prophets of doom discovered that the Mayan calendar, allegedly, predicted the world would end in 2012. As the western economy plunged into crisis, one of the few growth industries was in the thousands of books and hundreds of thousands of websites predicting the imminence of the last days.
Cranks are always drawn to the exotic and the arcane, but the evidence that we are living through some version of the last days was, throughout 2011, much more obvious and mundane. It became clear that the institutions, assumptions and systems that have shaped the western world since the end of the second World War are in deep crisis.
This was the year in which it became impossible for all but the most blinkered to believe the global recession is merely a temporary shock, a normal downward phase in the regular cycles of global capitalism. Much of the western world became, to a greater or lesser extent, like Ireland.
Misery, they say, loves company – and company was about the only kind of love Ireland got in 2011. The consolation was scant, but Ireland at least got the Close Encounters message: we are not alone.
For three years, the State was imagined as a leper colony, an outcrop of infection that must be isolated, kept with Greece and Portugal at arm’s length from the healthy European mainstream. The key word was “contagion”. It implied a definite view of the crisis: that the core of Europe was sound and would remain so if it could place the sick periphery in economic quarantine while administering the stiff medicine of austerity. That view was always delusional and in 2011 the delusion was exposed. The core – not just the euro zone, but the United Kingdom and the United States as well – is no more immune to the disease than Ireland is.
Ireland, indeed, began to look less like an exception and more like an accurate harbinger of what was in store for the rest of the West. As the purest experiment in neoliberal globalisation, the Celtic Tiger was an extreme expression of a more general phenomenon. Its collapse was more dramatic and catastrophic, but the broad shape of the crisis in Ireland foreshadowed with some precision the way the crisis of the West unfolded in 2011. In Ireland, a banking crisis was escalated into a sovereign debt crisis, which in turn was ramped up into a full-blown crisis of democracy.
It took some time for the rest of Europe to catch up with this dizzying progress, but it did so in 2011. The EU finally completed the journey from credit crunch to panic about sovereign debt to a virtual suspension of democracy.
It is poignant to reflect that, in other circumstances, 2011 might have been remembered as a triumphant year for western US-led democracy. After all, three of its more monstrous hate-figures of recent decades got rough justice: Osama bin Laden executed in his compound in Pakistan; Muammar Gadafy lynched on the street in his hometown of Sirte; Ratko Mladic arrested in a Serbian farmhouse and extradited to face charges of genocide at the International Criminal Court. (It would be unforgivably facetious to add Rupert Murdoch to that list of fallen dictators, but his humbling appearance before a British parliamentary committee contained a tiny hint of the same moral tale of the mighty laid low.)
The Arab Spring that swept from Tunisia to Egypt, Libya, Syria and beyond showed to a startling degree the irrelevance of what had been seen for a decade as the greatest threat to western democracies: the terrorism of al-Qaeda. The demands of the protesters were for the classic forms of democracy in Europe and North America: free elections, an independent judiciary and civil society, accountable government.
All else being equal, 2011 would have featured in the history books under chapter headings like “The Triumph of the West”. But all else was far from equal. Even in the US, the euphoria that was released by bin Laden’s execution, and the boost in popularity for US president Barack Obama, were shortlived, trumped by the continuing evidence of American economic and geopolitical decline. Even the Arab Spring can be interpreted very differently – as evidence of the inability of the US to prop up its preferred dictators. (It took the Obama administration an uncomfortably long time to distance itself from president Hosni Mubarak in Egypt, leaving the impression that it would have been happier with the continuation of a stable dictatorship.) And everywhere there was the evidence of western democratic institutions in deep trouble.
Here too, Ireland was an exemplary case. The Irish went to the polls and delivered the most dramatic result in the history of the State, inflicting an unmerciful beating on one of the world’s most successful political machines, Fianna Fáil. But to what effect? For all the talk during the election of radical renegotiation of the so-called bailout deal with the troika, the effect of the electoral earthquake was minimal. The troika remained in charge. The mountain laboured and brought forth a mouse.
But in this crisis in democratic governance, Ireland was emphatically not alone. Yet another Japanese prime minister resigned, defeated by economic and political stagnation. In the US, the “gridlock” that is now embedded in the system almost turned into a motorway pile-up, as the world’s richest nation came close to default because the president and Congress could not agree on a routine rise in the debt ceiling. The Republican Party primaries, meanwhile, threw up a series of increasingly unlikely frontrunners, as the polls showed a public almost equally contemptuous of Democrats and Republicans, president and Congress.
The EU seemed determined not to lose out in the competition with the US and Japan for the display of inertia, wrangling and an apparent death-wish.
In one sense, the EU returned to its post-war origins as a Franco-German axis, quietly setting aside its complex machinery of consent. A new, informal entity with no basis in EU law emerged as the union’s effective governing body, comprising Nicolas Sarkozy and Angela Merkel, along with the EU economics commissioner and the heads of the International Monetary Fund, the European Central Bank, the EU Commission, the EU Council, and the euro group. The replacement of elected by technocratic governments in Italy and Greece merely made explicit the wider sense that there is a deep tension between the need to satisfy markets and shore up the financial system on the one hand and democracy on the other. When, as Greek premier George Papandreou discovered to his cost, the most incendiary word that could possibly be uttered was referendum, that implicit tension became explicit.
This virtual suspension of democracy might at least have led to clarity and decisiveness. But for most of the year, while the markets picked off countries like lions savaging the weakest members of a herd of antelopes, the only thing the new leadership could agree on was that the problem was all the fault of small countries like Ireland, Greece and Portugal. It was only when the markets moved their attention on to Italy that the emergency finally began to be framed as a systemic crisis demanding a systemic response.
Through all of this, the unthinkable was becoming vividly imaginable.
Notions that had been the currency of cranks – that the US could default, that the euro could collapse, taking the EU as we know it down with it – became the staples of mainstream analysis.
It was not, after all, entirely surprising that western leaders were struggling to get to grips with their crises. The problem was not that they lacked charisma or leadership skills: the superstar Obama was every bit as impotent as the dull Merkel. It was, rather, that they were working with a set of assumptions no longer adequate to the task of understanding, let alone coping with, the challenges of a world in which all bets are off. The notion that some great leader might emerge on the world stage to make everything right was never a runner, and in any case it fell apart in a Sofitel hotel room in Manhattan. This time last year, the optimists were saying the new Moses would be a brilliant, charismatic, economically literate French politician called Dominique Strauss-Kahn.
The crises in the EU and the US suggested, rather, that the economic model that has dominated since the 1980s – based on ever-increasing, debt-fuelled consumption in the West – is incapable of sustaining itself without, at the very least, radical reform. Its unhealthy effects have been all too visible, not just in the body politic, but in the body.
There is something apt about the way, in 2011, obesity seemed to break through to public consciousness as a critical issue, not just for individuals, but for societies that cannot hope to pay for the health services that will be needed if current trends continue. Those trends were alarmingly detailed in the two Growing Up in Ireland studies, one of three-year-olds, the other of nine-year-olds, showing a quarter of each group already overweight. The effects of overconsumption are not merely economic. They are evident in everything from fat children to global warming.
This dawning understanding that the way of life that has been dominant in the Western world for the last 30 years is unsustainable is what may, in retrospect, mark 2011 as a historic year. For an even more basic assumption than the economic and political orthodoxies of the EU and US was being challenged: the idea that the West itself is the dominant force in the world. There has been talk for a decade now of the emergence of China, India, Brazil and Russia, but this was the year when the implications of shifting geopolitical power really came home to ordinary citizens.
Two moments summed up that shift. One was the sight of the head of the European Financial Stability Facility, Klaus Regling, in Beijing in late October, seeking Chinese loans for an enhanced fund. As EU leaders dreamed that China’s $3.2 trillion foreign-exchange reserves might be the pot of gold at the end of the rainbow, the Chinese enjoyed playing it cool. Two centuries of humiliations at the hands of European powers had reached an almost surreal conclusion.
The other moment was the more or less spontaneous beginning of the Occupy Wall Street movement in the US and its subsequent spread to Europe. There was something radically innovative at work here, and it wasn’t just the critical role of digital media. Never before in history has a new democratic political movement in the West acknowledged its origins and methods as being inspired so directly from beyond the western world. The young protesters in New York and London looked for their models to a place very few of them can have heard of even 12 months ago: Tahrir Square in Cairo. While the riots that swept England in August had no clear political focus, the movements in the Arabic world seemed to open up the possibilities of new forms of political engagement, coupled with a very old demand: democracy.
In this regard, the brightest moment of the year may have come at one of the darkest. Immediately after Anders Breivik murdered 77, mostly young, people, the Norwegian prime minister Jens Stoltenberg responded with a demonstration of grace under appalling pressure. The answer to such an act, he said, was “more democracy, more openness and greater political participation”.
If such things can be the answer to murderous nihilism, perhaps it is also in Stoltenberg’s prescription that the ultimate response to the economic and political crisis may be found.
