Money Talks: Budget Deficit Crises Considered as Social Mechanisms in the Global Political Economy

The argument to be made here is that the deficit discourse is best understood as a product of a set of conditions which bring into question many of the core ideas, institutions and material capacities that have been at the center of the dominant system of wealth-creation and social control since World War II. These conditions include low growth, a perceived failure of state activism to solve poverty and crime, hypercompetitiveness, and a disenchantment with elite political administration. An important strategic initiative in response to this set of conditions (or threats) on the part of globalizing elites, has been to generate what Gill has identified as "new constitutional" governance devices. This new constitutionalism can be understood as "the political project of attempting to make liberal democratic capitalism the sole model for future development," through the creation of a defensive system for the new spatially-extended relationships that comprise an increasingly global economic system. I argue that the deficit discourse is closely related to this development, and operates as a way, mentally and in practice, of closing sets of practices off from contestation, or at least of greatly narrowing the parameters of the public debate in ways that sustain a globalizing hegemony. An important feature of the discourse has been the propagation of a framework of thought centring around what are called synchronic assumptions, in which policy issues are increasingly interpreted in elite circles (Cox with Sinclair,1996: 179-183; Sinclair, 1997). Synchronic assumptions, which dominate financial markets, are short-term in nature, and are at odds with the planning, research and development logic required of diachronic or productive processes that underpin the maintenance of social cohesion and growth (Cox with Sinclair, 1996: 181). The propagation of this infrastructure of thought and practice by means of the deficit discourse may be the discourse's most important impact in the long run.