The New Global Crisis Makers: Economic Intervention and the Loss of Strategic Leadership

Graeme Snooks

No 9, GDSC Working Papers from Institute of Global Dynamic Systems

Abstract: The “crisis exaggerators” are telling us that current economic conditions amount to an “unprecedented” global economic recession. This is historically incorrect. What is unprecedented is the degree to which economic commentators and political leaders are talking up economic downturn. What is their agenda? Could it be an attempt to prepare the way for an “unprecedented” degree of government intervention in the economy? The “new interventionists” – some of whom, like Kevin Rudd, are now calling themselves “social democrats” – have attacked neoliberalism – the prevailing philosophy of Western governments over the past three decades – for failing to provide the direction and regulation needed to prevent the emergence of global financial crisis. But this misses the real point. Neoliberal governments have in fact been dangerously interventionist. Owing to the inflation-targeting policies they have championed, the dynamic mechanism of modern society has been disrupted, economic growth has slowed dramatically, and unemployment has risen – just as I warned in The Global Crisis Makers in 2000. The new global crisis makers are these new interventionists, who, ironically, not only accept neoliberal policies of inflation targeting but also intend to launch massive Keynesian and climate-mitigation programmes of intervention that will throw our strategic life-system into a downward spiral from which we will recover only with great difficulty and cost. Modern governments have lost the age-old art of strategic leadership, which once facilitated the effective operation of humanity’s dynamic life-system.

Keywords: global crisis; neoliberalism; social democracy; strategic leadership; economic intervention (search for similar items in EconPapers)
JEL-codes: E31 E32 E42 E50 E60 O11 O47 O56 (search for similar items in EconPapers)
Date: 2009-02
New Economics Papers: this item is included in nep-fdg and nep-hpe
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