Dumping Humpty Dumpty

Lebanon’s protests were sparked by economic misery, especially the decline of the long-standing currency peg. What is surprising about the currency collapse is not that it happened at all, but that the country’s unsustainable economic model avoided it for so long. A unique coalition had kept the system going: central bank and finance ministry created rents, banks appropriated rents, politicians were sharing rents, diaspora remittances kept rent-creation going, and foreign governments were tolerating or even underwriting the mechanism. This rentier coalition has now fallen apart. Protestors and critical economists, meanwhile, remain locked out of decision-making by an unaccountable political class. Options for the future include chaos and predation under militia rule, an International Monetary Fund agreement bringing privatisation and austerity, a growth-oriented interventionist state put together by technocrats of the left, and grassroots initiatives of mutual aid pioneered by protestors.