Global financial crisis undermining our democracy

Ireland’s economic future is being decided by events far beyond our shores, which we cannot influence, writes ELAINE BYRNE in the IRISH TIMES May 11 2010

DEMOCRACY IS a fragile thing. It becomes even more delicate when taken for granted. For many, the duty of citizenship to democratic action ends when a vote is cast at election time. In the period between the translation of individual choices into the formation of power, apathy and complacency captures public participation, and people just stop caring.

The ugliness of public debate matters too. People become tired of participating in something they no longer believe in. At no other point in Ireland’s history since independence has public trust and confidence in politics been so intensely low. The deep sense of public contempt for the political class has cannibalised the belief in the very possibility of political action. The perception that a country’s institutions are weak, ineffectual and illegitimate feeds into the destructive notion that politics is futile.

Politicians, civil servants, academics, civil society and media commentators are struggling to grasp the complexity and nuances of the various policy decisions introduced since the onset of the economic crisis in October 2008. The bank guarantee, austere budgets, Nama, the McCarthy report, the Croke Park deal, the risk of sovereign default, the nationalisation and recapitalisation of our banking system, the deficit and the implications of Greek contagion just become one thing after another. This was particularly evident on March 30th, when Brian Lenihan announced in the Dáil a capital bailout of the main banks totalling some €32.8 billion, and an average haircut across the banking institutions of 47 per cent. Most people were stunned at the scale of the State’s liability to the banks. That day crept up on public discourse because many had simply stopped trying to understand how big the country’s economic problems were. Words like billion and trillion have quickly lost their meaning.

This disengagement was again evident in the public discussions on what the hell to do with the albatross that is Anglo Irish Bank. A balance sheet on what the losses to the taxpayer would be of winding up or keeping Anglo as a going concern has not yet been provided.

People stop caring when the integrity of the debate is weakened by the absence of clear and complete information. The natural and rational inclination of those in power is to protect themselves first. In this scenario, the definition of the public interest becomes identified with self-interest. The boundaries between national and personal interest become blurred. Power is biologically self-perpetuating. It convinces itself that because the public fails to understand the convoluted intricacies of various policies, that those in authority, therefore, are justified in interpreting what the interests of the public are. When the belief reigns that something is too big to understand and must instead be translated by those that think they know, then the basis of democracy becomes corrupted.

“A nation can survive its fools, and even the ambitious,” Marcus Tullius Cicero wrote in 45BC. “But it cannot survive treason from within. An enemy at the gates is less formidable, for he is known and carries his banner openly. But the traitor moves amongst those within the gate freely, his sly whispers rustling through all the alleys, heard in the very halls of government itself.

“For the traitor appears not a traitor; he speaks in accents familiar to his victims, and he wears their face and their arguments, he appeals to the baseness that lies deep in the hearts of all men. He rots the soul of a nation, he works secretly and unknown in the night to undermine the pillars of the city, he infects the body politic so that it can no longer resist.”

Ireland’s economic future is now being decided by events far beyond our borders. Greek instability has warranted the unprecedented intervention by the International Monetary Fund to a member of the EU. A necessary evil of IMF intervention in domestic policy-making is the introduction of conditionality to every aspect of internal decision-making. The economic effects of conditional lending are now being felt on the streets of Greece.

The political consequences of conditional lending, however, are not always immediately obvious. IMF policies have in the past been accused of being insensitive to their social impact. When the burden of structural readjustment falls disproportionately to those who depend on social and public services, the upshot is civil unrest. Like what is happening in Greece, governments feel that they have no other option but to limit civil liberties in the attempt to subdue social unrest that results from the stark structural adjustment prescribed by the IMF.

The reality of IMF participation in a country’s domestic affairs is potentially the decline of democratic practices. The concept of democracy, which comes from ancient Greek words for people (demos) and rule (cracy), hence democracy – “rule by the people” – is categorically undermined when the policy straitjacket of conditionality is worn. The chance to participate in sovereign decision-making is made redundant.

Aside from the IMF, the EU will probably introduce new budgetary rules in the near future which will require that all member states submit their budgets for prior approval.

The international financial crisis has given birth to a corrupted, traitorous definition of democracy.

We just don’t know that yet.

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