New world disorder

The world at the end of 2008 is suddenly a very different place from the world of twelve months ago. The global financial crisis and the “collapse of world capitalism”, apparently narrowly averted, have left millions of people fearful of the future as we face an uncertain economic outlook after a period of unprecedented prosperity. Furthermore, the spectres of war and terrorism are still with us, as this summer’s events in Georgia and this week’s events in Mumbai have demonstrated.

At the same time, there is a certain spirit of hope, symbolised by the election of Barack Obama as the next President of the United States. Yet even this hope is tinged with uncertainty. The candidate who promised change appears to have metamorphosed into a president-elect practising extreme caution - a development as reassuring to America’s conservatives as it is disturbing to Obama’s supporters on the left. What further twists and turns will there be when the new president takes office?

In times like these it is natural, even essential, to question and reassess fundamental assumptions. Have the financial shocks of recent months discredited free-market capitalism in the same way that old-style socialism was discredited in the 1970s, and if so, where do we go from here?

The signals are indeed mixed. The “solutions” towards which Gordon Brown has been guiding us and attempting to lead the international community are counter-intuitive. A crisis caused by phenomenal levels of debt is being tackled primarily by massively increased borrowing. While there is some logic in governments acting to counter the effects of the economic cycle, it is hard to see how in the long run this will help. We are in the mess we are in because everybody up to including the people who inhabit the boardrooms of the world’s banks have forgotten to balance the books. If this underlying problem is not tackled at some point, we must surely be heading for an even greater catastrophe at some point down the road.

The underlying problem is less a political one than a cultural or even a moral one. Generally as a society we have become accustomed to divorcing actions from their consequences. True liberalism relies upon self-discipline in order to function. In the absence of self-discipline we have anarchy - in the worst sense of the word.