An economic crisis or a democratic crisis?

The democratic pillars of western society have been dissolved by the economic
crisis. In the last few months the European governments hurried to justify their
behaviour in front of the real power based in Wall Street and the London City in what
was the staging of the most evident submission of politics under economics.
Politicians are certainly a discredited group but, even so, they have been
democratically elected by the people. However, nobody elected the managers of the
companies whose main activity consists in speculating in the finance market. And these
non-elected businesspeople are precisely the ones who are making decisions about the
organisation of society, who decided that all of us went too far with our welfare state,
who say that we lived beyond our means.
But look back and analyse what happened in the last few years. Everything
started when Central Banks decided to bring down the price of money to stimulate
economic activity. The price of money is the rate of interest applied by Central Banks
when they lend money to private banks. Having cheap money, private banks began a
loan race to gain more and more borrowers. That easy availability of money fed a
rocketing spiral of prices in real-state sector and this dramatic rise triggered even more
loans given by banks and finance corporations. When they realised the difficulties to
recover some of those loans they disguised them into packs of sophisticated investment
products which started to flow in the finance market. When the payments began to fail,
panic appeared, loans stopped, the real-state bubble burst and the word crisis emerged in
every news around the world.
In the meantime, the debt rating agencies and the audit firms weren’t able or
didn’t want to identify these practices which were going to cause the big recession.
So, the beginning of the crisis wasn’t due to public expenditure, to labour market
or welfare state. It was produced by a runaway finance market, looking for bigger and
bigger profits, which created opaque products that ended up spreading a crippling lack
of trust within the finance market itself. However, if we pay attention to the news, the
responsibility for the market collapse seems to lie with the state pensions system, wages
and severance payments.
Furthermore, everybody seems to accept the ideas released from the centres of
economic power as an absolute truth. The same experts who were incompetent to
forecast and avoid the disaster now make an analysis a posteriori blaming the citizens
and telling that the worsening of people’s lives is the only feasible solution. And the
message goes ahead because most people believe that economics is a science whose
secrets can only be managed by the above mentioned centres of economic power.
In the last two decades they spread the idea that there is only one way to
organise the economy and that’s a blind liberalism. We are told that free movement of
money is a supreme value and that states have to facilitate it even at the expense of
harming some other rights of individuals such as the right to have enough means for
living. They say that public debt has to disappear whilst they defend indebtedness as a
natural way to finance companies. They announce the necessity to privatize public
banks but they don’t hesitate to ask for help from the states when private banks aren’t
able to run in the system designed by them.
The economic system is really far from being a perfect machinery. Economy has
to be at the service of citizens trying to improve their lives and not asking people to put
themselves at the service of the economic system. If welfare state, decent wages and
stable employment are incompatible with the current economic system, this system is
the one which has to be changed and not the opposite.
The chaos in the finance world has proven the necessity of state-owned banks
performing as a buffer and moderating the market. In addition, to set up a tax for
finance transactions is a very effective way to settle down the current hysteria in finance
economy, turned into a casino really alienated from the needs of productive economy,
and to obtain resources for social programs.
The finance market has become a threat for social coexistence and for
democracy. We got used to hearing frequent statements of politicians saying: “we are
doing that to calm markets down”. Are markets so dangerous that society has to calm
them down to avoid worse damages? What would we have thought if these same
politicians had said: “we are doing that to calm the army down”? We’d have thought
that democracy had been kidnapped by the military power. Something like that has
being happening in western countries in the last few years.
The interests and the decisions of citizens, which theoretically are articulated
through democratic systems, have given in faced with the purposes of non-elected
people hidden in the shade of markets. These ones have forced the governments to
change their settlements under the threat to make everybody’s life even worse.
 But market dynamics isn’t an unavoidable natural phenomenon like the eruption
of a volcano or floods. Markets are a human creation, a device whose performance can
be changed in order to work in favour of citizens and not against them.
For that purpose a determined action from governments is needed. But
governments have to notice the pressure of citizens to change their attitude.
Democracy will be just a word without any contents, a pending concept after
two centuries of existence, until that change happens. Let’s focus on the problem. We
aren’t talking just about economy, we are talking about democracy.