Many commentators have compared recent state interventions in the banking sector as a return to Old Labour policies of the 1980s. Others have referred to Trotsky and the old call for the state to take control of the ‘commanding heights’ of the economy – heavy industry and financial institutions. These are interesting times indeed.
A good deal of blame is being thrown around. Bankers have been heard recently blaming the lack of regulation. The government should have stopped this. They were responding to the rules and incentives that were set by government and are not to be blamed for the consequences. The government, and even the Tory opposition, have pointed the finger at greedy bankers and have questioned the incentive structures, bonuses etc. And, initially, a good number of Europeans and others suggested that this was a particular problem associated with an Anglo-Saxon model of capitalism – profit above all else. Such grubby motives did not affect the more corporatist continental models of governance.
However, it is a little too easy to point the finger. And there is a tendency for us, the general public, to look on as if it were nothing to do with us. We are unfortunate victims off other people’s foolishness. How can we ignore the fact that it is we who were taking out mortgages we could not afford? Who is pointing the finger at us and out thirst to own property in the belief that, somehow, house prices will always rise? Just as the consequences of the current crisis are complex and fall upon us all, so are the causes. To blame a part of the system for the failings of the whole system is to misdiagnose the problem.
So where are we now going? I have joked recently that the Masters in Public Administration will soon need to be teaching new subjects. In particular, retail banking will be a new skill in demand in the civil service! But on a more serious note, events will change a lot of discussions. For many years, deregulation of the financial services sector has been a central demand made of developing countries seeking assistance and international aid. Perhaps we might now see the taming of some of the ideologues that push these ideas. Perhaps the WTO etc. will need to review the direction of change? All is not right with the Anglo-Saxon and Western models.