The effects of this orientation towards the market go far beyond the diminution of the role of the state in economy and society. While success has eluded the market in the privatisation of air, as some market theorists advocated (the major market effect has rather been to treat the biosphere and our oceans as commons to be taken for granted as dumping grounds), it has had greater success in shifting the ethic of intellectual inquiry towards selfinterest and the profit motive. This has left the university in a depleted state. Its once proud traditions, grounded in relations of inquiry that supported the free circulation of ideas, are not beyond retrieval, but they are a fading memory. This same market has also made over family and community institutions, emptying their reciprocal, noncommodified processes of that substance which gave them a basis outside of market forces.

While no one knows how far the current plunge of financial and capital markets will go, there can be no doubting the seriousness of the crisis on Wall Street and in global financial markets. Nor can it be doubted that it will reach significantly into the economy proper. How far that may go depends very much on leadership and political judgement. But this very special neo-liberal market, composed of computerised techniques and global satellite communications, together with an ever-expanding range of engineered financial instruments, has allowed twenty-five years of enhanced leverage of debt. This alone will call out massive contractions now that the worm has turned. It is not merely the fact that the cheap debt that allowed business and individuals to fund projects on a grand scale over the past decade has disappeared. Far more seriously, the availability of credit for everyday working capital and other transactions can no longer be assumed to be available, not even to a state like California. If this situation is unable to be corrected it is likely to be a prelude to a more encompassing social collapse affecting all the institutions.

For a generation now the rule of the market has been taken for granted by a growing proportion of the general and educated public. It was supported by the work of philosophers like F. A. Hayek who, although seeing an irreducible contribution made by the family, denied primacy to any ethics beyond that sustained by the market. It was as though the market became the only defensible social institution. Yet after the Wall Street bailout there is little doubt that this same neo-liberal global market, so central to all levels of contemporary social, economic and cultural affairs, and the major prop for neo-liberal ideology, now faces the most profound challenge to market organisation since the Great Depression. Arguably, this neo-liberal market, even if not the market as such, is in its death throes. It is a failure so significant that it may well turn out to be definitive in terms of the demise of the United States as a superpower.

The enhanced credit leverage of the global market supported a bubble in asset values. Cheap and seemingly endless debt translated into excess. But the demise of this easy money is more than a typical burst of the market bubble as found in the history of the last 400 years. The way in which the neo-liberal market has failed will leave investors and the public wary for many years to come — not merely of the consequences of a bust, but something far more damaging. What we are witnessing is not the result of a series of mistakes, such as subprime lending and excessive borrowing. The core issue is not even evoked by Kevin Rudd’s term ‘extreme capitalism’ because it relies too strongly on a notion of individual weakness (greed).

Rather, it is the composition of the global market as a system which has come into disrepute. The issue is not merely a matter of this or that category of lender losing financial credibility, but is rather a function of the global market as a set of practical circumstances. Financial engineering through the market removes identifiable obligations so far from actual lenders and borrowers that we cannot know who owes money to whom. It becomes impossible to evaluate financial standing. It is a system that builds into its structure a tendency towards poor credit evaluation, a tendency that eventually issued in the subprime crisis. This is a crisis of the financial system as a system, one that will prevent a return to anything resembling the system before the bailout, related guarantees and government buy outs.

There have been many significant economic commentaries in the last year on the meaning of the collapse of capital markets, culminating in the October 2008 crash. However, most commentators have been silent for the past twenty years about the structure of the new financial markets and their special vulnerabilities since their emergence in the 1980s. It is relatively easy once the dominos begin to fall to piece together the dynamics of an unfolding situation. Acceptance of any critique in the face of an ascendant orthodoxy was a very different matter.

Nevertheless, there have been some critiques, none more impressive than Peter Warburton’s Debt and Delusion (1999). It identified precisely the attraction to central bankers of the new financial markets. In particular, Warburton argued how the de-regulation of financial structures created new forms of debt via investment banks (like Bear Stearns and Lehman Brothers) that bypassed the conventional banking structures and, among other things, helped to control general inflation for twenty years while financing excessive government budget deficits in many parts of the world. In a short time, general inflation had become a thing of the ‘past’, an achievement of neoliberalism, while asset inflation, promoted by the new forms of debt, came to be seen as an acceptable form of alternative income. This led to practices such as the constant re-valuation of housing in order to borrow against, and live off, the enhanced values. This process gained positive recognition as a new wealth phenomenon by Alan Greenspan. In other words the benefits felt in terms of lower general inflation led to turning a blind eye to asset inflation and to the deterioration of credit evaluation which accompanied the new financial markets. What would normally have been regarded as practices especially in need of regulation — hedging, options and non-bank financial instruments — were allowed to multiply to the point where they came to be so dominant they were beyond the control of central bankers. This was the fateful pact between central bankers and the financial markets born in the 1980s.

There is much to be admired in the way Warburton predicted this ‘capacity to transmit violent financial disturbances to [every citizen as well as to] communities, regions and entire nations’ via a massive potential collapse of derivatives markets. However, as an economic critique even it is largely blind to the larger forces that framed the emergence of the new financial markets. These markets, whose trade-mark has been to construct debt that concealed those responsible for it while generating ‘instruments’ radically distant from the familiar everyday world, do not engage in such processes arbitrarily. Rather, such practices and markets reflect a more general principle now at work in global society as a whole: the loss of tangibility in our relations with others, as the face-to-face community of persons is significantly displaced by relations that predominantly work at a distance. In short, there has been a gradual emergence of a world that abstracts us from the settings of our common humanity.

While all markets have this effect to some degree, the global financial markets took this tendency to a new level. This is a crucial matter if the way these markets construct their own self-referential world set far apart from the world of ordinary people is to be understood. Firstly, they did this in their own right because they rely upon the computer, the internet and global communications generally to build their structures. Secondly, this was an aspect of a larger process whereby the whole of contempary society has been substantially displaced by a global order constituted in the new forms of communication and production made possible by high technology. That is, the financial revolution is situated within a larger social and cultural revolution. The silicon chip and computerisation, bio-technology, instant communications: these are products of a social revolution that has transformed society over the past thirty years. Global society is defined by a more abstracted way of being, the ‘knowledge’ society, mediated by the way that tertiary institutions have come into a special constitutive relation to society. The high sciences, via high technology, are re-shaping the human and natural world.

Financial engineering in global markets — the construction of instruments that few people can actually understand — corresponds to the engineering of nature in the pursuit of growth in global society. The indifference to others within global markets corresponds to the indifference to nature in a society removed from nature. All areas of society move away from communities composed in regions and known others towards an order constructed around constant global movement, pursuing the ‘liberations’ and instant gratifications offered by high technology. If the contradictions of financial markets that no longer work through tangible lenders and borrowers are now confronting us, this is only the tip of the iceberg of a new order of conflicts.

The crisis of the new financial markets immediately leads to the question of whether this is a pause in the momentum of capitalist growth, be it one year or ten, as most commentators would have it, or a more fundamental historical moment. Does it mark a new realisation of the limits of where the capitalist order can take us? At the very least it seems we are now entering a period of profound uncertainty that will include hardship for many, perhaps most of us. But it could also be a period of genuine possibility. We should keep in mind that the world is not only facing the limits of a now collapsed financial order but also the limits posed by a ravished nature, growing food and resource shortages and unsustainable levels of population. There are movements, however partial, that are seeking to move towards a more rounded life, more in touch with nature and those around them. The ‘food miles’ movement or alternative markets like farmers markets, are cases in point. No particular example is adequate to the task, but these tendencies have deep support; they could quickly take practical institutional shape in today’s circumstances. The need for a social order that entails a more modest demand upon nature and is able to regenerate dense regional social relations that stand in a viable relation to global interchange is an ideal to be pursued. If we are to avoid becoming merely spectators in a world dissolving before our eyes, the organisational stages and processes needed to move towards this ideal should be the subject of intense discussion and practical endeavour.

John Hinkson

Slowly the poison the whole blood stream fills.
It is not the effort nor the failure tires.
The waste remains, the waste remains and kills.
It is not your system or clear sight that mills
Down small to the consequence a life requires;
Slowly the poison the whole blood stream fills.

William Empson, ‘Missing dates’ (1937) in Complete Poems (2000)

During the 2001 electoral campaign (as for years before) political journalists puzzled over the personality of Tony Blair. The American observer Joe Klein, for example, commented after a day on the campaign trail:

Blair does have a rather synthetic quality, ‘A man without a hinterland’ Roderick Nye, the policy director for the Tories, says. And there is an indescribable something missing from his public persona … He recently acknowledged enjoying The Simpsons. But he always leaves one wondering if moments like The Simpsons revelation are, somehow, tactical — the latest planned attempt at humanization. (New Yorker, 4 June 2001)

He compares Blair to President Clinton in this respect. However comparable in policy terms, he says, the two remain oceans apart as public personae. On election day itself the Guardian published another attempt by Klein at reading the oracle:

Even now, as he approaches a likely second landslide, no-one seems to know how Tony Blair feels as a person or, more to the point, who he is. This is both extraordinary and mystifying. He is about as familiar as a public figure can be. We know that he is religious … But there remains an ineffable something missing. There is an antiseptic, impenetrable, stainless-steel brightness to Blair. There are no rough edges, few edges of any sort …

These are very perceptive comments, but they may also be out of focus. The absence of a readable ‘hinterland’ and of ‘rough edges’, spontaneity somehow rendered contrived or deliberate, a somewhat super-human demeanour salted by affectations of impulse or immediacy: these are indeed enigmatic as individual traits. However, they are also perfect descriptions of Britishness. They seem to delineate a social, collective ethos rather than personal idiosyncracies.

The identity which they replicate is also rather out-dated: a ‘Britishness’ which was — rather than the confusion of the present. But there may be good reasons for this. Like Blair’s increasingly prominent religiosity, it may be felt as a necessary condition of acceptability. After all, we know political parties are among the most conservative of social bodies, and in this case they live in the most profoundly conservative of states. These frameworks compel the present to embody the past — however much ‘radicalism’ is spouted at the same time.

The effect is indeed that of a magician who has made a compact with a ghost — the haunting presence of a spirit, ‘elusive’ mainly in the sense of significantly detached from interlocutors and the contemporary public. Yet the detachment gives him a certain leverage over his audience. The mixture of phlegm and steeliness which Klein noted creates a space of surmise. Beholders are usually tempted to think that if they behave correctly, then he might still produce what they want out of the enigmatic hat. Blair never quite escapes the suspicion of not quite being himself — as distinct from pretending to be his own self. But this edgelessness can also be interpreted as a constantly moving promise. Liberal commentators who on 6 and 7 June ended up urging readers to vote New Labour after all (‘critically’, in spite of blatant failure, etc.) did so entirely in those terms: ‘He may yet still … ‘ (and so forth).

‘Identity’ in this sense is a fusion of the personal and the social, which also means ‘national’. Nobody ever doubted for a second that Mrs Thatcher or John Major were English, however loudly they orated in the name of Britain. No one would see Gordon Brown as other than Scottish, however hard he fights for the Union. The Welshness of former party leader Neil Kinnock was legendary, even though he opposed Welsh devolution as expensive parochialism. But Tony Blair? The absent or fog-shrouded hinterland means that he is somehow just ‘British’, or possibly English-British — enough of the former to reassure, but with the emphasis strongly on the latter. This is surely the source of that ‘synthetic’ dimension Klein identifies.

‘Britain’ is of course by definition a nationless identity. Different components of it tend to project on to it what they wish or need to see. Immigrants hope ‘nationless’ means (or can be made to mean) ‘multi-national’, or ‘multi-cultural’. Fascists hope it means ‘racial’, the figurative common blood of Aryanism. Middle-Englanders trust it will go on just meaning what it used to mean, ‘for all practical purposes’. The Scottish, Welsh and Ulster-Unionist servants of synthetic statehood want it to go on including them — which it can now do only if everybody is kept in line and forcibly restored to British belief and traditions.

No doubt much in Blair’s personal story contributed to today’s persona: the Scottish and North-Eastern background, formation at Fettes Public School, on the ‘outer ring’ of the old indoctrination system; an ideologically salient environment (Communism to Thatcherism); ‘finishing’ in Oxford, where with a rock band he underwent a famous Zeitgeist moment of adaptation; and then his legal training with Lord Irvine of Lairg. A leader persona is formed by the synthesis of such factors with institutional constraints — in this case, the ultra-Great-Brit Labour Party, which just as Blair joined up was discovering that it could lose its Socialism a lot more easily than its Britishness. It needed a figurehead shaped for the latter, and relatively uncontaminated by the former. And in Tony Blair, it found (so to speak) Dr Jekyll without Mr Hyde: a rare hybrid capable of ‘fronting’’the Movement’s transformation into the neo-liberal world bequeathed by Mrs Thatcher.

The factors making Blair ideal for ‘New Labour’ also help to dispel worry about what he may turn into. After the election, for example, we find one of Scotland’s finest political analysts still perplexed by the problem. ‘Will the Real Tony Blair Stand Up?’ Iain Macwhirter asked in the Sunday Herald (10 June 2001). ‘It is strange and a little scary, that we know so little about the Prime Minister’, he comments, even after electing him with two landslides:

In the past, Tony Blair perhaps felt that he had to be all things to all men — and women. That to make Labour electable it had to win Sun readers as well as the Guardian’s. But after Landslide 2 he has no longer any excuse for ideological evasion (and) … can no longer allow his party and personality to look as if they are a media creation. He now has to walk the walk. And this he intends to do.

Labour is going to get much tougher, he concludes. I’m sure this is right. But I doubt if it will be because the ‘real’ Blair finally emerges. What we have seen so far is what we are likely to get. No alter ego is waiting to pounce. But there is a seriously threatened Britishness, which New Labour’s leader is bound to take ‘personally’. Quite apart from the vexing dilemma of the Euro-currency referendum (which will have to be won in all four countries of the United Kingdom), there is the question of the Barnett Formula and winning the next elections in Scotland and Wales — while keeping the Northern Ireland Agreement alive. All these will require a sustained barrage of no-nonsense Union triumphalism from the Prime Minister and his watchdogs (primarily the Scottish contingent).

Tony Blair is essentially a vehicle of ‘transformism’ — trasformismo as it was once called in Italy — the mechanism of theft and adaptation by which Left becomes Right, or vice-versa, always in the name of the State. No longer possible without devolution, New Labourite transformation demanded in compensation an ultra-British accentuation of the dominant climate, and a corresponding change in popular attitudes — precisely what the aggravated, even hysterical, populism of the first New Labour government has been seeking to achieve. The Greenwich Dome was intended to be a mighty landmark for that direction in affairs — the enduring symbol of a United Kingdom reborn and ready for another century. As the whole world knows, it was a farce. There was nothing — or nothing suitable — to fill it with. Like ‘Britain’, its historic contents and purpose had been lost, and no amount of money and cultural striving could put them back again. So it turned almost at once into a poison sac, an abscess of miserable disputes and corrupt hand-outs which was miraculously kept more or less out of view during the recent electoral campaign. ‘Dr Britain’ was triumphantly reinstalled on a quarter of the votes. Now the poison will have at least four more years, and quite possibly nine or ten, to slowly fill the whole bloodstream of the British state-nation.

In retrospect one may also see the sense of the Blair-Brown conundrum more clearly. Whether or not, as was rumoured, they arrived at some kind of compact about leadership after John Smith’s death, the choice was never between ‘England’ and Scotland. Labour may indeed have been chary about another Scottish leader, but the quandary was in any case resolved by Blair’s Britishness. It is doubtful if many wanted an English captain in any emphatic or ethnic sense. Absence of ‘hinterland’ and cloudy religiosity were much safer, and made up for suspicions of shallowness or brashness.

What was safer then is probably even more necessary now. ‘England’ has become more politically salient since 1995, and the Scottish Parliament is likely to challenge the economic basis of the 1998 Scotland Act — the fiscal dependency of the block grant. However, these and other problems seem likely to underwrite Tony Blair’s leadership rather than demolish it. Who else in the ranks of New Labour can ‘speak for Britain’ in just his easy fashion? None of the Westminster Scots, for sure. Soon, they will all be preoccupied with ‘saving the Union’, a project even more hopeless than the Millennium Dome.

Tom Nairn is Professorial Fellow in Politics at Monash University

The horror is occasioned not by the disease itself of course, but by the decision of the Western pharmaceutical companies — Big Pharma — to resist any attempt by governments of the South to obtain cheap generic versions of the branded medicines which are effective in slowing or preventing the development of full-blown AIDS in those who are HIV-positive. Their use of international trade legislation to attack the South African government, which is attempting to buy generics from Brazil, has laid bare to many the ahuman character of the global neoliberal order. It was ever thus in everything from cash crops to infant formula of course, but the spectacle of snatching medicines from the mouths of the dying brings into clear focus the capacity of capital to turn something into its opposite, healing into killing.

The coincident publication of John Le Carré’s The Constant Gardener, in which he turns his attention from the cynicism and amorality of Cold War politics to the cynicism and amorality of one-world economics, only served to intensify the scrutiny of Big Pharma in the West. Faced with a public relations disaster, the explicit opposition of a number of Western governments, and the lack of enthusiasm of the Bush administration — the Clinton/Gore team had been happy to bully South Africa on their behalf — they would appear to be backing away from blanket prosecution of their global intellectual property ‘rights’.

Big Pharma argues that the prices they charge for their branded medicines — which push the price of drug-based AIDS treatments towards $20,000 a year per patient — are a measure of the extremely high costs of developing a new drug. Five-hundred-million dollars is the figure usually quoted but it is a fiction. The bulk of the costs are those created by the demands of intellectual property laws. Thousands of virtually identical compounds are tested because each can be copyrighted and used as a spoiler should a similar compound developed by a rival prove valuable. Similar treatments are created and then pseudo-differentiated for the same broad condition. An army of sales reps tours the GPs and specialists. When you add in the lavish conferences, the political lobbying and the lawyers to protect patent applications, $500 million is easy to rack up. Little wonder the ferocity with which markets are protected and forms of distribution which would undermine markets are crushed.

In light of this it has been suggested that Big Pharma should be asked to voluntarily suspend some of its patents in areas worst affected by the AIDS crisis. And so it should, but more important in the long run is to challenge the entire apparatus which maintains the notion of ‘intellectual property’.

The patent system which undergirds not only Big Pharma, but the whole biotechnology push was never developed with a view to being attached to the life sciences — to life itself. Originally established to facilitate the development of mechanical invention, this nineteenth-century knowledge industry was restricted to the visible and ‘invented’, and the notion that one could lay claim to the naturally occurring and ‘discovered’ was not entertained — otherwise the Curie family might have a claim to radium. The expansion of intellectual property to genes and chemical compounds occurred after the fact — when molecular biology had begun to develop the capacity for manipulating and transforming the material it studied. The establishment of this principle at the global level via the free-trade apparatus marks the single greatest transfer of common possession to private property in the history of the world. It’s the knowledge industry’s equivalent of the enclosures.

Yet though it is vaster in scale, its authority has come under assault in a more concerted and immediate fashion. The global and universal setting in which neoliberalism occurs makes a global and universal response more possible, and it is this enhanced capacity that has caught the corporate world by surprise. The biotechnology industry takes that process to the extreme. It is the primary agent of the ‘postmodern’ economy, in which nature itself is entirely dismembered for commodification and circulation.

Minor fiddling with the institution of patents only serves to legitimise it. The entire notion of ‘intellectual property’ as the given character of knowledge needs to be repudiated. Of course there is a need for a combination of licenses, royalties and public funding to maintain incentive and investment in knowledge development. But more importantly, nature and knowledge must be affirmed as a common and collective possession and practice. There is no need to look into the future to see what happens when this is not the case. It has already begun in Africa where one by one the hospitals are becoming hospices.