When a welfare state run amok borrows in perpetuity to give free stuff to citizens who aren’t paying taxes, what do you call that? When anybody who has bothered to take a single lesson in economics can tell you that this is completely unsustainable, but banks, corporations, and governments continue to lend them money on the expectation that some other government will bail them out, what do you call that? When said bailout comes, the government is compelled into austerity, and the people who have become dependent on said government riot in the streets, what do you call that? When those people elect a communist government to default on the debt, institute capital controls, and demand more bailout cash, what do you call that?
Well, not if you have any semblance of economic literacy, of course. To work at The Guardian however, economic literacy is basically a disqualifying factor. In a spectacular display of ignorance, Jennifer Hinton writes of the Greek debt crisis “Neither austerity nor government stimulus will ever be able to address the debt crises and recessions of the twenty-first century because what we’re dealing with here is an inherent contradiction of capitalism.”.
Hinton’s driving thrust is that capitalism requires perpetual growth, that perpetual growth is impossible, and thus capitalism is inherently contradictory. Her solution is, you guessed it, for the government to manage the economy, but Hinton adds an interesting twist, one that I think we’re going to be seeing more of in the near future. The government should manage the economy, in a manner that prevents, instead of facilitating, economic growth.