This is important and I know only one way to emphasise it — to repeat it over and over again. We need some clarity, some light of expert knowledge — independently generated expert knowledge of the sort that is not tethered to some vested interest — on our thinking on inflation. A sustained increase in the price level in any economy, of the sort that Pakistan has seen since 2005, certainly brings tremendous damage to the livelihoods of millions of people. But it’s effect go beyond this damage. It also magnifies dissensions in society, wrecks all attempts to bring economic stability by eating away productivity gains, destabilising currency valuations and straining fiscal resources.
No ruling party can remain in power for very long in the face of dire economic facts, such as prolonged inflation or unemployment. This was the lesson that Gordon Brown learned when the UK economy tanked in 2008 and growth rates turned negative. It is the lesson Barack Obama is on course to learn by 2012, if the unemployment rate is not brought down below eight per cent by then, an outcome looking less and less likely. It is also the lesson the present government in Pakistan will learn if it does not take the inflationary pressures in the economy seriously.
Whether it is unemployment or inflation, the facts of economic life have a way of protruding into political matters in a way that leaves incumbent powers clutching at straws. Take the way inflation is intruding into the political life of the country in our time. Listen to the way it is talked about in TV talk shows, written about in the papers, invoked in casual conversation or in debates over legislation on tax reform and you will notice that the word, the concept, is being used in a vast array of contexts, carrying a million different meanings.
In fact, the word ‘inflation’ has turned into a ‘floating signifier.’ It’s a word that has acquired so many meanings for so many people that it has lost any real meaning altogether. The best example of a ‘floating signifier’ I can think of is the word ‘freedom.’
Think about how George Bush used the word when he crafted his post hoc justification for the invasion of Iraq and compare that with how Martin Luther King used the word in his famous “I have a dream” speech. And then imagine the vast spectrum of meanings the word has carried in American political life between these two extremes.
There are two words in our present public discourse that have become floating signifiers in a very significant way. These words are inflation and corruption.These words are, in fact, the gateway through which the hard facts of economic life are entering into our public discourse and bringing with them all the energies of a teeming, disaffected population stewing in constant price increases and rising unemployment.
Remember that floating signifiers have been used in the past to justify invasions and the overthrow of governments. Their power should not be underestimated. We need to understand the underlying economic realities that are channelling their way into the language of our discontentment if we don’t want the errant and erratic power of floating signifiers to carry us away once again. Political power in democracies is almost always acquired through the seductive power of language, of rhetoric. But it is equally inevitably lost to the facts of economic life.
Published in The Express Tribune, December 9th, 2010.
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