Nick Cohen's article for the Observer on Sunday blamed the "left" for the financial crisis, yet he barely scratched the surface of the left's real role in the financial crisis. The problem isn't just that the left accepted the laissez faire market conditions, but rather that since the end of the cold war it has offered no real alternative to the current system. There seems to be a general lack of knowledge of economic matters among the members of Cohen's "left", including liberals, third-way politicians and the human rights community.
The fall of communism radically shook western politics, affecting many areas, not least of all economics, which had always played a central role in leftist politics. The idea of unequal economic power was a fundamental issue for the left and was exercised through collective action and trade unions. After the end of the cold war, most left-leaning people retreated from economics, focusing their attention instead on civil and political rights rather than social and economic rights. Crucially, the left neglected those social and economic rights enshrined in the Universal Declaration of Human Rights. Such rights were included at the time of that document's drafting, largely due to the Soviet Union's influence and the leftist politics of that country. Despite this, or perhaps because of it, social and economic rights have been ignored ever since the demise of the USSR both by states and by most activists.
The knock-on effect of the demise of communism has led to human rights becoming the cause celebre of the left. A well-known human rights activist recently said: "I was a socialist in the 1980s until I saw the size of the gulag … then I became a human rights person." These human rights activists, and academics, do a tremendous amount of important work in the UK, such as being at the forefront of protests for the ideal of fairness to apply in state dealings with individuals. Unfortunately, the human rights community has rarely, if ever, been willing to tackle domestic economic issues. Therefore the retreat of left-leaning citizens into the human rights world has left a lack of leftist voices in the economics discourse. The vacuum created over the past two decades, has allowed the Alan Greenspans of the world to run amok. This in turn created a lopsided system which seemed above criticism; leaving such a lack of balance that could never provide for a healthy or stable system.
The members of Cohen's "left" should not be entirely blamed for the current crisis. It would be churlish to blame the left when, at best, they are indirectly responsible for this crisis. It is the political "right", the neo-con economists, that have been proven utterly bankrupt of thought by this crisis. It is the Thatcherite economic theories and ideas of the right that have gotten us into this mess. For the past two decades, everybody in politics, left and right, has acted as if the unregulated free market was the only show in town. Any whiff of state intervention would have been shot down during the boom times. Nonetheless, the boom was built upon overestimated credit levels and imaginary assets. The economic growth of the last decade looks good on paper, but we are now paying for it. The system enabled a glorified form of gambling, nothing more, yet, despite this, the same free-marketeers who have argued for total deregulation are now desperately trying to justify the massive state intervention in the market.
Ultimately, state bail-out, and in some cases nationalisation, of banks is the supposed answer to our economic troubles. This is clearly a form of socialism, but a rather "through-the-looking-glass" one, with maximum state liability and minimum state benefit. We, the taxpayers, are in a far worse situation than a normal investor such as Warren Buffett. We exist in this bizarre world where the notion of state benefit, which is in all of our interests, is still impossible no matter how many toxic assets we swallow. Many of the high earners in the City of London did everything legally possible to avoid paying tax over the last 20 years. Meanwhile, future generations of tax-paying citizens will foot the bill for the excesses of the few. As the extent of the crisis deepens, the vacuum continues. It is as though we are without language. We cannot even find the terms to explain the basic unfairness of our worsening situation. Nor are there any voices on the left that can articulate our frustration, due mainly to the dearth of economic understanding among this movement.
The left may have fallen asleep on the economy for the past two decades, but there is an opportunity now for new ideas to come forward. The basic idea of fairness should once again be the most important principle for debate over the state of the British economy. It is possible for a healthier state of affairs to emerge out of this quagmire, but the success of this depends on the willingness of the left to re-engage with the domestic economy of the UK, using the idea of fairness and the principles of social and economic rights. However, such readjustment of our economic understanding depends not only on the left finding its voice on such issues, but also on the politicians and economists of the right to echo Greenspan by admitting "I was wrong".