1. This is a global crisis; its socioeconomic center is the US and its intellectual center is Europe.2. This is the very crisis of modernity.
3. It is a crisis of the inability to make sense of new human mobility patterns. Currently, the earth is experiencing a new trend in human mobility, and the modern world cannot quite comprehend it.
As you will remember, in October 2008, Germany, France, Spain, the UK and Austria decided to inject $470 billion, $360 billion, $100 billion, $39 billion and $85 billion, respectively, into markets in an effort to overcome the crisis. Previously, US President Barack Obama had announced that he would transfer $825 billion to the markets, and he practiced what he preached. Thus, the money injected into the world markets totaled about $2 trillion, which later reached $3.5 trillion. Currently, the world seems to have lost its grip on the economy as one-sixth of the world’s total gross product has been injected by the states into markets. No one has a clear idea about when they will put an end to the process of using public funds as props for the markets. New unforeseen crises entail new measures. Greece being on the brink of total collapse has urged EU countries to take new measures. Alarm bells are ringing for Spain, Portugal and even Italy, as well.
Obama declared that out of the $825 billion injected, $275 billion would be distributed to underprivileged groups and used as support for small and medium-sized firms so they do not lay off personnel, and $550 billion would be used for public spending, clean energy, education, infrastructure and public servant recruitment. The second measure was to reform the World Bank, the International Monetary Fund (IMF) and the World Trade Organization (WTO). The third set of measures provided for cooperation with poor and developing countries.
The interesting bit here is that in addition to the measures to boost the markets, the state is poised to interfere with education and health. The state is openly meddling with markets. But a free market economy is one of the three major values for the US and the EU. And the state is transferring significant amounts of money into markets in both basins. The groups in the US who do not want to participate in spending on health have launched major campaigns against Obama. Although he enjoyed a certain success in the first stage, it would not be prophetic to say that these reactions and objections will shift from being political to questioning the epistemic and systemic foundations.
For the short term, everyone is wondering whether these “non-market” measures -- which are completely against the basic discursive assumptions of a liberal economy -- will be sufficient to overcome the current economic crisis. This is certainly an important question.
I believe that they would not suffice for two reasons. First, the measures in question are palliative and do not tackle the true source of the crisis. Second, although it may appear that the injected money will be transferred to underprivileged groups, certain mechanisms or instruments will ensure it will flow back to the rich people who caused the crisis in the first place.
There are two factors that lend support to these arguments: (a) Indications are strong that liberalism with all its fundamental assumptions is on the wane. (b) Fukuyama announced that with the collapse of the Soviet system, we had reached the end of philosophy as there was no alternative left other than liberal democracy and liberal capitalism. Now, the end of philosophy is declared; that is, the last words of the West are collapsing. It may be doing its best to hide it, but a major cause of this crisis is the US occupation in Afghanistan and Iraq. According 2006 estimates, the cost of Iraq’s occupation would be $2 trillion and the income of the US and the UK from Iraqi oil would be $2 trillion. Now it is claimed that the occupation will cost more than $3 trillion.
In other words, they miscalculated. Even for the initial estimate, the US would pay out $2 trillion in the occupation but obtain the same $2 trillion in return. What would be the US’s gain? The US financed the occupation by collecting taxes from US taxpayers, but the $2 trillion from Iraqi oil flew to the oil companies, arms dealers and lobbies. This is the most important cause of the current economic crisis.
