Riots in Britain

To those of us who saw the coverage of riots in London, certain issues may seem inexplicable. What was the reason for the riots? We get myriad explanations; inequality, rich poor divide, 'children of Thatcher did it', austerity measures (which are yet to kick in!) and so on.

The evolution of the modern social welfare model of Western society can be traced to the New Deal of 1933 brought in by FDR. Consolidation of economic power in the hands of the developed world took place post 1945 with the emergence of two global financial institutions IMF and the World Bank. Since the establishment of these two institutions IMF has always been led by Europe and World Bank by USA. These institutions dispensed ideas and advice for the third world on management of economies and promoted the concept of free trade. Their prescriptions for economic emancipation remained standard; allow competitive pricing, eliminate government subsidies, improve governance, reduce the role of government in the market to just set the rules and regulate. The wheel turns a full circle. Will IMF prescriptions for the third world be applicable for the First World?

The concept of cradle to grave welfare was adopted by Western Europe and the same was implemented through a lesser degree by the USA. I will not spend time in discussing the merits or demerits of adopting that approach. The fact remains that the model worked for a long time. Western world saw unprecedented levels of prosperity (with some dips in between) from that period till now. As we stand today, that welfare model seems to be outdated as the respective economies seem to be no longer capable of supporting the type of expenditure.However the societies are still not in a position to accept this reality. John Authers in Financial Times says that the need of the moment is 'Strong Leadership'. I wonder. Is the West ready for strong leaders? If there was a strong leader what would he or she say honestly? Let me start guessing!

• Folks! You borrowed more than what you can afford. It is pay back time now!

• There is no shame in doing menial jobs! Instead of hanging around for food stamps and unemployment doles, you better start soiling your hands now!

• After having taking loans, it is despicable to talk of not repaying them!
• You cannot live on borrowed money forever. It is time to tighten our belts.

Let me now ask a rhetorical question. A hungry, unemployed Indian or Chinese or South American does not riot. Even if those riots take place, the items stolen would be those that relate to hunger - food may be? The question worth reflecting upon is that Why were the stolen items composed of televisions, mobiles and designer apparel?  There can be many sociological reasons like rich-poor divide, sense of alienation and so on. The same conditions exist in other societies but they do not go on rioting. Why?

In the developed world, Germany probably is the only country that still has a population that does not mind working with hands, does not depend on government doles and believes in doing things by itself. The bitter experiences of war reparations after WW1, the hyper inflation of the Weimar Republic which gave birth to the phenomenon of nazis, the reconstruction of Germany post WWII and the problems faced after reunification with East Germany stand Germany in good stead till date. The rest, preferred opting for white collar jobs shunning those which involve labour.  The social welfare model encouraged the youth to acquire skills which promised a comfortable life at the cost of tremendous loss of jobs which needed a different set of skills. 

It is not that the developed world does not have jobs even now. Only that they have the hispanics, the turkish, the polish and the albanians to do it for them. The riots in London are all about greed and not about need. And the party has just begun.