More than 5 years into this crisis, and there is little sign of long lasting recovery. In fact, if the warnings of non-orthodox economists are to be believed, then we face an even starker future ahead.
There will be much ink spilled (and maybe blood and tears too) over whether it is the “state” or the “free market” that has caused this crisis. This argument has filled many a blog debate over the years, and has also gestated fringe movements as the Tea Party and Occupy.
However, much evidence does point to an unholy collusion between state and “free” markets. Again, much ink could get spilled in unpicking whether there has always been this alliance of interests. As only when the tide is going out can we see who has been swimming a bit too close to whom.
In the end, both the state and the free market are both ambiguous social conventions, and so straw men of only moderately differing qualities (but also of nebulous identity) will be attacked and defended in equal measure.
At their core, both social conventions of state and market are ultimately comprised of individuals. Many of these individuals deftly segue between private & public roles (e.g. Robert Rubin, Hank Paulson and our own Tony Blair) to the point that they can effortlessly appear on whichever side of the argument they choose.
However, what the current and past elite cannot avoid is their personal accountability for specific decisions and actions that they took whilst in positions of power and influence (whether privately employed or state representatives). They may proclaim that they made decisions in good faith, just a shame about the outcomes. However, they cannot be allowed to absolve themselves entirely from blame. At best their defence could only consist of admitting “economic manslaughter through diminished responsibility”.
This crisis is more than just a collective failure of ideology. It has been based on poor decision making by people who did know better, and yet actively dismissed warnings. Above all else, the position of power bestows on them perpetual accountability. They cannot have power without responsibility.
If we allow ourselves to engage in theoretic debate on such an abstract level of state versus free markets, we merely grant the real perpetrators immunity from their specific and individual culpability, regardless of which side of the fence they sit.