The world economy is now beyond the control of individual democracies

The economy is now beyond the control of national governments, and therefore outside the remit of democratic politics. It has become truly global, and thus a law unto itself; nation states have gone broke in their attempt to feed its gargantuan appetites for consumption and debt. The remedies for this began in panic and are now ending in delusion: first the banks went bust and were bailed out by governments; then the governments went bust and needed to be bailed out by – whom? International funding agencies which get their cash from – where? From central banks which will have to print gigantic amounts of money to replace all the money that simply disappeared in the bad debt that bankrupted the banks in the first place. And if we all agree to accept the illusion that this newly printed cash has actual value – if we all clap really hard and say that we believe in fairies – then the whole show can get back on the road and we will be rich again…

So the only way that the World Economy, which has now become an apolitical, undemocratic, supra-national force of nature, could be brought under control is to erase the divisive historical memory of nations and create an equal and opposite force of World Government. This, of course, is just what the EU was designed to do on a continental scale, and that hasn’t quite worked out. The official solution – endlessly reiterated by increasingly desperate European commissars – is to eradicate more forcibly than ever the messy democratic accountability of national governments to their people…

A really serious cutback in state spending – not the Osborne nibble but drastic, meaningful reductions in the size of government – could reduce the dependence of democracies on global capital. It is government entitlement programmes which devour wealth and produce nothing in return. If they were stripped away – and if government got out of the wealth redistribution business – taxation could be reduced. So instead of “stimulating” the economy by offering more debt (as Mr Osborne proposed at the Mansion House), and so getting even deeper into hock to the Beast, we might get the genuine stimulus that comes from people spending money that they have earned.