speri.comment: the political economy blog

Once upon a time in the West

Andrew Gamble’s new book offers an unrivalled account of the neoliberal fairytale

Craig Berry, Deputy Director at SPERI

Craig BerryThe West – the informal club of the world’s very rich nation-states – has no greater exponent than Andrew Gamble.  That’s not to say that Gamble’s account of the financial crisis and its aftermath, Crisis Without End: The Unravelling of Western Prosperity, is not hugely critical of much of what now passes for normal in many Western countries, such as the endemic power of the global financial system and a disavowal of the state’s vital role in serving citizens’ well-being.

Rather, it is to acknowledge one of the underlying themes of Gamble’s book: namely, that many of the political ideas and practices underpinning Western power have been an emancipatory force for much of the last century.  Yet freedom has always been a contradictory impulse, enslaving citizens to a capitalist economic order over which most have little control, and at the same time heralding the birth of human rights and an unprecedented period of relative security for most of the West’s inhabitants.

Crisis Without End, ultimately, is a book about the perversion of Western ideals into neoliberal ideology.  As such, it continues the intellectual endeavour that has underpinned much of Gamble’s work to date.  Here indeed lies the book’s great strength.   Gamble shows very effectively how the gravest crisis faced by the West in living memory is not an aberration, but has actually been deeply embedded in the nature and contradictions of the Western-led capitalist world order.

The book’s key chapter in this regard is chapter four.  Having detailed the unfolding of the crisis across Western countries in the earlier chapters, ‘The global shift’ focuses ostensibly on the redrawing of the international political order in the wake of the West’s economic weakness.  In exploring this issue, however, Gamble shows how the crisis is a product of the way Western power has been structured on a global scale.  For instance, he demonstrates how the dollar-based international monetary system has been designed (and occasionally modified) to suit the United States’ economic and strategic interests, but then argues that its inherent flaws lock the world, including the United States itself, into unsustainable development paths.

Paradoxically, however, its inherent flaws are also the source of its enduring resilience.  Few countries have the resources to go it alone, to resist Western power, without inflicting severe hardship on themselves.  Even at the point of an apparent existential crisis, there is no obvious alternative to the Western-led capitalist order.

As Gamble explains in chapter one, it is this kind of dynamic which means that the West remains at an impasse: no longer in recession, but unable to resolve the crisis.

Bouncing off Joseph Schumpeter’s gloomy 1942 appraisal of capitalism’s future, Gamble offers a disarmingly simple account of ‘the growth conundrum’ in chapter six:

‘The growth conundrum in capitalist market economies can be stated quite simply. Markets need households and states to reproduce the social, political and cultural conditions which sustain them. Capitalist market economies work by privatizing gains and socializing losses, but this requires specific institutions to allow this to happen, and there is much room for mismatches and frictions as a result, particularly in distributing the burden of the costs. Under the neo-liberal order an acute form of this conflict has emerged because of the enthusiasm of neo-liberals for giving incentives to the pursuit of private gain by cutting taxes and trying to pay for it by cutting the social costs of reproduction.’

This is a startling passage that encompasses, remarkably elegantly, the whole spectrum of political economy as a field of study and set of real-world practices.  It points a way back to prosperity for the West by offering a simple account of how capitalism can be done both effectively and equitably, yet without minimising the nature of the political and ideological blockages.  It is a recipe surely for the kind of compromise that capitalism’s apparent champions are all too often reluctant to make.

No book, especially one with such a broad geographical and historical scope, can tick every box for every audience.  There are seven highly lucid pages on our planet’s environmental crisis, which again detail exactly why the West is unable to find a solution to this problem of its own making – at least not without contradicting its founding philosophy of perpetual progress and, just as importantly, ruffling a few feathers in the current distribution of wealth and wealth-creating opportunities.  Some will undoubtedly argue, however, that this aspect of the crisis deserved greater prominence.

Similarly, chapter seven, entitled ‘The fiscal conundrum’, focuses on the self-defeating challenge to the legitimacy and resources of public authorities in the United States and the Eurozone and does so acutely enough.  But a fuller discussion of the enhanced ability of the state to intervene in the economy by manipulating financial markets, irrespective of its ability actually to raise revenue, would, nevertheless, have been welcome.

The book’s final chapter outlines four possible paths to the future, looking beyond the short term.  While the prospect of a renewed multilateral order is more appealing than the prospect of, for instance, a new struggle for supremacy between China and the United States, in each scenario the conundrums over growth and governance will continue to hinder the financial and indeed physical security of much of the planet.  Andrew Gamble, it seems, finds the likelihood that the West might live happily ever after fairly limited.  He suggests therefore that the West’s best hope is probably to find accommodation with the alternative world order offered, albeit clumsily so far, by Eastern countries, principally China, before its authority is dismantled completely by a deepening economic crisis.  Only if newly combined with an admittedly uncharacteristic modesty, Western values might yet survive another century.

Print page

Categories: British growth crisis, Civic Capitalism, Development, Economics, Environment, Global crisis, Inequality, Political theory, SPERI Comment | Tags: , | Leave a comment

Articles and comments posted on this blog reflect the views of the author(s) and not the position of SPERI or the University of Sheffield.

Leave a reply

Required fields are marked *