Business writer Umar Haque, on the riots in the UK, austerity, and the failure of elites:
From Tahrir Square to Syntagma Square to Puerta del Sol Square, social upheaval’s spreading — sometimes in droplets, sometimes in floods, sometimes placidly, sometimes…not so placidly. Each example is very different from the others. Yet, the underlying ruptures might be said to be similar: What happens when a nation willfully ignores perhaps the most fundamental lesson of economics, and hopes rent-seeking will equal real prosperity? This does. What happens when a nation either loses, or prevents, a stabilizing middle class? This does. What happens when a government — any government — gets so out of touch with the governed? This does.
Our institutions are failing — they’re failing us; failing the challenge of igniting real, lasting human prosperity. If institutions are just instruments to fulfill social contracts, then ours are shattering because the social contracts at their hearts have fractured.
I call it a Great Splintering — not purely an economic phenomenon, as in “Great Contraction,” but a social one: an era when social contracts are being torn up, abrogated, betrayed, abandoned, by accident, by design, by “regulatory capture,” or simply by polities too gridlocked to progress. Broken social contracts aren’t just tidy abstractions, empty of visibly real consequences, disconnected from the noise and clamor of our messy human lives. As they break, yesterday’s ways of living, working, and playing rupture; yesterday’s organizations, from corporations to banks to nations, creak and crack.
It’s important that this is not just happening in the UK. It’s happening throughout the Eurozone – Greece, Ireland, Spain, Portugal, Italy and France. It’s happened in Egypt, Tunisia, Libya, Syria, and Yemen. It’s happening here in the United States. Economic and political elites have crashed economies and destroyed governments. Rather than account for their failures honestly, they have tried to fix them on the backs of the poor and working class people of their country. This has lead to outrage, protests, riots and rebellions. The consequences continue, but so do the bad decisions which are destroying peoples’ lives and, in course, destroying countries.