Sunday, September 25, 2011

On the Crisis of the West

It has become commonplace to hear questions wondering why the current economic predicament occurs. What is wrong with the western world and how come Europe and America have such huge debts? It is no mystery whatsoever when looking at the bigger perspective.

The West has during the past century built up living standards never seen before, and has gone from trying to avoid starvation to consuming for pleasure. Under such circumstances, when the population does not have to worry at all where the next meal comes from, politics and economics become naive. As if they were tools for delight rather than dealing with what is realistically achievable. Many politicians dress in the clothes of Father Christmas and elections turn into contests of wishing and campaign promising. Somehow the marxist term alienation comes to mind when describing the entire spectacle.

What has happened during the past decades is that production and refining in large has moved to other parts of the planet. Meanwhile the West act as if nothing has happened, despite the fact that big revenue no longer is here. Many politicians naively argue that we should compete not with labour but with brains, as if they do not have universities with unpampered and very motivated students in India and China. In the interim, in order to satisfy the population and become re-elected, more public spending on loaned funds is prioritised.

Some primitive folk even argue that the West should go on a spending spree with cash we do not have, as they believe it would ease us out of the crisis in order to live happily ever after. Coming with such an analysis today sounds like the manic idea from someone out of the drugged generation of 1968. It has perhaps once or twice been less false than it is now, back when the West still owned the means of production and controlled the economy. But we are not discussing a regular slowdown of the economy this time. We are no longer the King of the Hill. It may come as a surprise to some, but we will need tough structural reforms where the welfare state is narrowed down to its important core in order to save just that core.

Two thirds of the population can not live either on benefits or work in the public sector if only one third is paying. Likewise the medicines and machinery I use in my profession every day, as a publicly funded physician, is not probable to become relatively cheaper when a much bigger and global crowd is demanding them. The fountain is not infinite. Do your maths. The social material for building a strong civil society, where we take care of one another and the important institutions of our civilisation, is not in the best of quality today. Not entirely a whining party of spoilt brats, but partly so. Nonetheless, it is what we have. The facts of life.

Parts of the welfare state are very good inventions indeed, and are part of a morally decent culture. But these undertakings does not come for free just because we regard ourselves worthy of them. Managing our society does not include living over our income, leaving a burden of debt for future generations. The shoulders of the giants we are standing upon require hard work.

There is no mystery, just lack of sobriety. Economic reality will demand sound future policies. Everything else is barbarism.
Johan Christian Dahl (1788-1857) Skibbrudd ved den norske kyst/Shipwreck on the Coast of Norway (Nasjonalgalleriet, Oslo).