A dangerous feebleness in the face of a slump: These are scandalous failures in economic policy and they are bitterly resented

Click to follow
The Independent Online
'THE SABBATH was made for man, and not man for the Sabbath.' That text from St Mark's Gospel ought always to be in the forefront of politicians' minds. The structures and laws of the political and economic world also exist to benefit the people who are governed by them. If the structures fail to deliver the benefits, they have to be changed, and in the end they always are changed.

This applies to Europe. The purpose of the European Community is to improve the standard of living of the people whose nations belong to it. That was why Britain joined and it is why we remain in membership. If the Community ceases to provide that benefit, it will have failed and it will fall apart. The same is true of the exchange rate mechanism. The ERM has no value in itself - it either helps to make us more prosperous or it does not. If not, then we should leave it. If so, we should stay in. 'By their fruits shall ye know them.' Jesus applied the pragmatic test.

The failure of the Munich summit of the Group of Seven industrialised nations has shaken people's confidence in the ability not just of Europe, but of the world's political leaders, to deliver prosperity. In Britain, we have had more than two years of recession; one can fairly call that a depression. We face another year, perhaps another two years, of recession or at best weak recovery. Unemployment in the EC has reached 9.5 per cent and is rising; real interest rates average more than 6 per cent.

Whatever happens from now on, these are scandalous failures in economic policy and are bitterly resented. We have seen that resentment in France, where they have had to send in tanks to clear the motorways. There is much resentment in Britain, despite the election result. In many European countries there is new support for right-wing extremists.

The Munich summit was disturbingly reminiscent of the Thirties. Those of us who are old enough can remember the extraordinary impotence of the world's statesmen confronting both the slump and the dictators. There were some sinister characters, such as Von Papen or Laval, but most of them were quite respectable in their useless ways: Ramsay MacDonald, Stanley Baldwin, Neville Chamberlain, Daladier from France and President Hoover. They went to world economic conferences, they spoke at the League of Nations, but nothing came of it. They could not master the challenge of events.

Munich was like that last week. No progress on world recovery; no progress on interest rates; despite John Major's plea, no progress on the General Agreement on Tariffs and Trade; no progress on what was Yugoslavia; a little progress on helping Russia. It was unutterably feeble. The failure of the leaders of the world's most powerful nations is politically dangerous. If people become convinced that their existing systems cannot deliver prosperity and stability, they will look first for other men, and, if that fails, for other systems. The spectacle on the television screens of the collective incapacity of these great leaders will not have been lost on the world audience.

In the United States, this natural reaction is already evident. After a period in which Ross Perot has been attacked, very professionally, by the negative campaigners of the Republican Party, he is still in the lead in the latest Wall Street Journal opinion poll. As has already been reported in the Independent, the lead is not large: 33 per cent for Mr Perot, 31 per cent for George Bush, 28 per cent for Bill Clinton. But the economic competence questions, which tend to have good predictive value - they consistently put the Conservatives ahead in Britain this year - show much wider margins.

Mr Perot leads as the candidate best able to handle the economy, by 37 per cent, to Mr Bush and Mr Clinton, with 16 per cent each. Those are extraordinary figures. On trade - the protectionist issue - he leads by 37 per cent to 27 per cent for Mr Bush and 9 per cent for Mr Clinton. On taxes - a vital issue in the last three elections - he leads by 33 per cent to 17 per cent for Mr Clinton and 15 per cent for Mr Bush. These margins could win him the election, and they come after he has ridden out the first big counter-attack.

In the Thirties, the failure of the democratic politicians resulted in an upsurge of support for Fascist ideas. Mussolini himself had come to power in the early Twenties because Italian democracy had failed. In the late Twenties and early Thirties - before his invasion of Abyssinia and pact with Hitler - he was widely admired, even by politicians such as Winston Churchill. The Second World War destroyed the support for Fascist dictatorship, and the collapse of Communism has further discredited the totalitarian idea.

The failure of dictatorship does not mean that all the ideas of Fascism, those ideas that made it so attractive in the Thirties, have also been discredited. The central appeal was that it promised action. Where the democratic leaders appeared to believe that nothing could be done about the slump, the Fascists were willing to use all the resources of the state to overcome the problems of the nation. They were activist, populist, interventionist and nationalist. They used power, even if, like Mussolini or Peron, they used it disastrously.

Of course, these themes - and the related themes of the cult of leadership, of youth, of family, of the community - have also been adopted by democratic politicians both of the left and of the right. Even Labour's great 1945 election victory came as a reaction to the failures of the politicians of the Thirties. Roosevelt's New Deal was a reaction to the slump; he was activist, populist and interventionist - all Fascist themes. De Gaulle's regime in France after 1958 was activist, authoritarian and elitist, and he was a leader who claimed heroic national status.

When incumbent politicians declare publicly that they cannot solve problems of great concern to the people they govern, they invite other politicians to take up the Fascist weapons. We already have genuine Fascists in Europe, with rising support in France, Italy and Germany. We should also expect what could be called Demo-Fascism to gain support in all countries. After two years of depression and with unemployment at around 10 per cent, people demand effective action, not unreasonably.

In the United States, Ross Perot has already been called a Fascist, in a long article in the New Republic. He does indeed have much of the Demo-Fascist appeal: he is activist, populist, anti-establishment, nationalist and protectionist. He lends himself to the cult of the man of action. Because of their past association with Fascism, these appeals may be suspect, but they cannot be dismissed. Activism is often good, populism is often good, nationalism is often good, though protectionism is always dangerous. These are strong emotional appeals that have been part of the armoury of many major democratic leaders, including Churchill, Roosevelt and De Gaulle.

In any case, the public will insist on what it feels that it needs. The Munich failure, the inexorable rise in European unemployment and the constraint of the ERM have created an overwhelming impression of the impotence of major European governments, including France, Italy and Britain. George Bush is regarded as an impotent leader of the United States.

Of course, the G7 governments may be saved by an unexpected but spontaneous economic recovery, little as they have done to deserve it. But their position is a dangerous one; it is usually fatal in politics to say that nothing can be done. In the depression of the Nineties, the world has a great hunger for strong leadership.

Comments