Renaissance: Futuresphere reborn. We’re back, baby; yeah.
Futuresphere was originally founded in London in 2013 to respond to what has subsequently been termed ‘poly-crisis’. In the wake of the global financial crisis, the ensuing UK banking crisis and Eurozone debt crisis, as well as the global climate crisis, a group of like-minded professionals believed that corporations, financial institutions and governments had to change how they thought about and understood the future. But ‘day jobs’ took priority; the initiative stalled.
A decade later, the original Futuresphere is not the only thing that has been revealed to have stalled. While time has quieted some of the most vociferous complaints about the wounds of 2008, it has done little to address the structural problems and contradictions that led to the 2008 global financial crisis; action on reducing greenhouse gas emissions has been nugatory and certainly has not kept up with the lofty and pious rhetoric of Paris in 2015 or of national politicians since then.
The long-term policy response to the global financial crisis of 2008 has been bitterly disappointing compared to that of the Great Crash of 1929 and the global depression that followed it. While then US Federal Reserve chairman and respected economic historian, Ben Bernanke, has expressed his belief that the initial financial shock of 2008 was more severe than the 1929 Wall Street crash, the ensuring recession was not comparable. The difference was the policy response. The US Treasury Department’s decision in mid-September 2008, more than a year ater the first signs of the crisis emerged, to allow Lehman Bros to collapse resulted in a freeze in the inter-bank credit market and the imminent collapse of AIG, one of the world’s largest insurers of credit default obligations (CDOs). The immediate response was to attempt to reorganise financial assets through hastily-arranged mergers of troubled institutions with institutions whose balance sheets were less exposed to instruments tied to the already-collapsing real estate market, from which the crisis originally emerged. The more substantive intervention came in the form of measures in the US and UK that largely protected financial institutions’ shareholders and debtholders and limited the extent of transmission of the banking shock to the real (or non-bank) economy, at least in the short term.
While some attempts to limit amplification and transmission of bank failures have been implemented and prudential regulatory capital and liquidity provisions and supervisory schemes strengthened, this is merely the tip of a giant political-economic iceberg that continues to endanger the proverbial sea-lanes of global business and the satisfaction of global needs and wants through free markets and private enterprise in the twenty-first century. We see sticking-plasters rather than reformist zeal, tinkering incrementalism rather than new thinking based on underlying principles. The is no Roosevelt-like New Deal, no TVA. Even the disastrous repeal (by the Gramm-Leach-Bliley Act) in 1999 of the New Deal’s 1933 Glass-Steagal Act, which forced institutional separation of retail and investment banking and insurance functions, has not been reversed, although key some stability measures have been introduced, and some separation re-introduced in the US, UK and the eurozone.
The bailout of US and UK banking sectors by taxpayers is widely regarded as a success rather than as a severe structural failure of regulation and an abomination and distortion of the key disciplines of capitalism; taxpayers rather than debt-holders or equity-holders assumed the already-incurred and manifested risks and liabilities. The salutary effects of failure, a key discipline of capitalism, have been squandered. There has been no gale of creative destruction experienced in the financial sector and, as a result, little creativity, little real change. In the US and UK, the finance sector has become a corporate-statist hybrid game of disguised Stigleresque regulatory capture. The UK Government’s response to COVID-19 — effectively partially underwriting the entire wage- and salary-earning sector — has reinforced and validated this hybrid approach across all corporate sectors with the costs of the resulting government fiscal austerity felt most strongly in the most vulnerable income deciles of the economy. The corporate capitalism of the 2020s, evolved only marginally from the corporate technostructure and planning functions described so vividly by Ken Galbrath in the late 1960s and early 1970s, would be unrecognisable to Frank Knight, let alone Adam Smith. It seems highly doubtful that even the ever-sanguine Milton Friedman would approve.
In the meantime, other problems have proliferated both domestically and at home. Despite (or, perhaps, because of) diplomatic progress between Sunni-dominated Arab countries and Israel (surprisingly, during the Trump Administration), the Middle East remains in perpetual crisis; now, open conflict between Israel and Iran and its regional proxies risks escalating to regional war. Theocracy remains in control in Iran and has re-captured Afghanistan. Sunni-Shia tensions play out as unresolved conflicts in Iraq and Syria, as well as between Saudi Arabia and Houthi rebels in Yemen. Although the worst excesses of (Sunni) Wahhabist Salafism have been suppressed, at least for the moment, fundamentalist Quranic literalism remains widespread and increasingly influential, often, troublingly, amongst young, disaffected, unassimilated (or, at least, poorly acculturated) offspring of Muslim immigrants to Europe. At the very least, such aberrant views legitimise the rhetoric of exclusion and victimhood, by appealing, ironically, to the very rights and freedoms their nominally-preferred ideology would obliterate. This represents a colossal failure of social and political imagination and will, as well as further evidence of the decline in confidence in the Western liberal democractic project among those democracies’ publics, the effects of which will reverberate for decades.
The world’s largest constitutional democracy, India, has been gripped by sectarian enmities in the form of resurgent hindutva nationalism. It’s competitor and neighbour, China, has materially curtailed the freedom of Hong Kong SAR repudiating the handover agreement timeline of 50 years, defying its agreement with Britain that secured Hong Kong’s local democracy until 2047. It has hardened its rhetoric over its claim to Taiwan and increased its military provocations against Taiwan’s territorial waters. Similarly, China’s rejection of and response to the 2016 ruling of the (First (1899) Hague Convention’s) Permanent Court of Arbitration, denying China’s claim to the disputed Spratly Islands in the South China Sea, does not bode well for long-term stability of that vital and contested transitory region.
Ground war has returned to NATO’s Eastern flank courtesy of an expansionist Russian autocrat with delusions of tzarism emboldened by placatory western passivity over Russia’s 2014 annexation of Crimea. In response, NATO, previously sclerotic and under attack from Trump, has been revivified and grown, adding Finland and Sweden. Ukraine, the invaded party, has signalled its intention to move from the Russian to the western, European orbit, going so far as to change its calendar to reflect the Roman rather than the Orthodox timing of the observance of Easter. In contrast, there has been a steady rise, especially since the onset of the eurozone crises, in EU countries’ publics’ frustration at unrepresentative centralism and a perceived tone of moral superiority emanating from Brussels.
The tenor of debate around the structural problems and contradictions of capitalism which existed prior to, and contributed to, the global financial crisis has deteriorated. In most western jurisdictions, attempts at microeconomic reform have stalled as the world has had to confront a pandemic zoonotic virus released from a poorly-controlled experimental laboratory in central China. We have all had to confront the ignorance of ‘anti-vaxxers’ as just another recent example of sophistry and the ignorance it enables in a ‘post-truth’ world. We will spend years servicing and retiring the debt that has been added to many Western countries’ balance sheets.
Across the West, trust in government has fallen precipitously. A strain of authoritarian populism has infused the body politic of many erstwhile liberal democracies.
Britain has not shown itself to be immune.
From routine discharge of raw sewage in to rivers and coastal contamination to ‘bankrupt’ local councils to failing infrastructure and a festering housing crisis, from threatened rail re-nationalisation to a cost-of-living crisis, from crumbling schools crisis and ongoing NHS crises (plural), to a ‘small boats’ migration crisis and proposed deportation from the UK of asylum seekers from those boats being flown to Rwanda, a country unilaterally declared ‘safe’ by UK parliamentary fiat less than 25 years — a single generation — after a genocidal civil war killed 800,000 people and led to 2 million people fleeing the country; from these and other perceived crises, Britain seems in a state not only of poly-crisis but of ‘perma-crisis,’ including many crises of its own creation, albeit, unintentionally. Its politics and its people appear fixated on distractions, personalities and trivialities; increasingly lost, rudderless and despondent as well as increasingly dislocated from allegiance to the liberal institutions of which the country has, historically, been so formative. Britain seems increasingly intent on following its historic Atlantic progeny down the rabbit hole of bread, circuses and divisive political ‘culture wars’ although, thankfully, with fewer guns.
Along with many other western polities, Britain’s political class appears bereft of ideas that can achieve more than to funnel additional wealth to the wealthy, consolidate inequalities and pander to vocal political interests. Its politicians appear impotent to address the unintended consequences of even incrementalist policy agendas; purposive social action has earned a ‘bad rep’. Doing nothing avoids being blamed for screwing up.
The persistent contradictions of a laissez-faire version of corporatist capitalism have not been addressed substantively in decades, least of all mastered. Despite routine lip-service, the liberal aspiration of justice as fairness (in Rawls’ great phrase) seems to be faltering, if not almost extinguished. Enormous structural impediments to Rawls’ opportunity principle are better recognised than they were in 1972, but it is doubtful that gender-neutral references to women as “people with a cervix,” “uterus havers” or “menstruators” will improve clarity or reproductive or mental health. The on-going failure to treat Rawlsian and Nozickian concepts of justice as reconcilable— to recognise them as the same problem set viewed merely through different lenses, and to attend to both process and outcome of justice, and to act accordingly — continues to supply the fuel to sustain the fires of culture wars across the West.
Camille Paglia might have been right that Allan Bloom’s 1987 Closing of the American Mind was the “first shot in the culture wars,” but after almost four decades, progressives appear to have lost their way and conservatives appear to have lost their hearing. Neither faction appears remotely ascendant, but both seem to have become so distracted by the tactics of the fight that the original goals and meaningful strategies for achieving them, which would necessarily involve co-operation and compromise, have been discarded or forgotten. The voting public expresses its disdain for the protracted and endless wars through abstention, growing apathy and declining faith in politicians. Direct protest and throwing stones or bottles at police officers seems more invigorating to a new generation of disaffected youths, returning us, on campuses in major cities across the US, to scenes of the late 1960s (though with many more designer labels in view).
Even in the face of claims of an imminent global climate catastrophe, Western governments appear frozen in the headlights. Policy responses are timid, vacillating, contingent and certainly inadequate to address the dangers of global warming as they have been described by, for example, the International Panel on Climate Change (IPCC). Some of the IPCC science remains far more actively disputed than they or climate activists choose to admit, and estimates of costs of transfer of energy-productive technologies from hydrocarbon-based to sustainable sources read like comparing apples and Pluto. Such policy impotence speaks more to the veracity of Downs’ political discount rate than to the potential severity of the perceived climate problem or the seriousness of intent with which it has been addressed. Windfall taxes on oil and gas extractors may appeal to a naive electorate, but they do nothing to address underlying economic imbalances at macro- or micro-levels. At the meso-level, they merely serve to underscore the abject failure of modern economics to incorporate institutional insights of economic or political power, capture or other vital aspects of the reality of ‘lived’ political economy, or to regulate externalities or require proper allocation and internalisation of social costs.
Reform (the process, not the political party) and a solution to Britain’s persistent ‘productivity puzzle’ that could reverse its slide in to being, in the recent words of former BoE governor Mark Cairney, ‘Argentina on the Thames,’ seem a distant prospect.
We are, at present, unavoidably embroiled in an unfolding and consequential dialectic of progress.
If competitive, liberal, market-based economic institutions and pluralist, liberal democratic institutions are to be preserved and promoted in the West’s future, even its near-future, there must be a full-throated fight-back against illiberal sophistry, ignorance, vapid incrementalism, despondency, dogma and doctrinality, attempts to curb legitimate dissent and heterodox thought and action, and institutional capture. Such a fight-back is not merely desirable; it is unavoidable. We must fight to retain or, perhaps to realise for the first time, an open society. In doing so, we must form and cultivate a reflective consciousness, a sustained critical facility about our assumptions and biases, a reflective skepticism. We must wear, proudly and honestly, a Rawlsian veil of ignorance: we must acknowledge our privileges openly and accept that others have a right to seek such privileges. Instead, we hear periodic, often jingoistic, whimpers, typically focused on impending electoral challenges, often tested before focus groups, lacking authenticity or any vestige of intellectual or ethical leadership. From corporate business, we hear uncontroversial platitudes calculated to be inoffensive. We have come to expect and to accept the logics of ‘greenwashing’ and amoral vacuousness. Something, indeed, many things, have to change. We must cultivate fortitude.
In any dialectic, evidence and reasoned argument are necessary to dislodge the previously understood orthodoxy, to reveal anomalies, to achieve the Hegelian moment of instability. Only then can we realise a speculative moment, a positive rational moment in which the dialectic is resolved and genuine progress realised.
We need, now more than ever, sound standards of research and data gathering, methodologically robust and penetrative analysis, original ideas and pragmatic realism about how the past and present can, and how it cannot, inform us about the future. And we need all this to be shouted from the rooftops.