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Gary Younge
The people have spoken. Don't let the markets shout them down

Last Thursday in Sheffield Hallam students who did not have a chance to vote tried to block the path of election officials taking away ballot boxes. In Hackney police broke up a sit-in of voters who were in a similar situation. In several other cities across the country police were called to stem or prevent unrest as disgruntled and disenfranchised voters were turned away by incompetent officials. In Sheffield roughly 100 staged a demonstration outside Nick Clegg's house and tried to post their ballots through his letter box.

The spontaneous militancy, presumably by voters from across the electoral spectrum, to defend the right to vote on election day in the UK was heartening. (Perhaps if Floridians had been that resolute in 2000 the last decade might have looked quite different.)

It was also encouraging to see more than a thousand people demonstrate on Saturday in favour of proportional representation outside the building where the Liberal Democrats were meeting to discuss their next move. When Clegg goes behind closed doors it's important that he has the demands of his base ringing in his ears.

The struggle to be able to cast your vote and then have it counted in a fair way is an essential element of any democratic tradition. But by no means does this mark the end of the process. There is more to democracy than voting, and more to power than office. When the polls are closed and the tellers returned, none of this matters very much if the primary arbiters of political power in your society remain unelected and therefore in no way accountable to the public.

People did not queue up for hours in the rain to vote in an advisory body, but a sovereign government. If that is what they want then they will have to keep on protesting.

For whomever Clegg decides to go to the ball with, when it comes to the most crucial issue of the moment – the public debt – he and his partner will be dancing to the markets' tune. True, there was no Bankers party on the ballot papers, a fourth place set for bond traders in the TV debates, or journalists following around the CEOs of the ratings agencies during the campaign trail. But maybe there should have been. For ultimately it is they who will decide how swift and savage the impending cuts to public spending shall be, and it is their endorsement – not the electorate's – that the politicians both seek and feel they need. And if they had been on the ballot they would almost certainly have lost.

There is no "new politics" worthy of the name that demonstrates at polling stations and in Westminster for proportional representation and does not then go to the City to demand the democratisation of our financial sector.

Not long ago such a demand would have seemed both radical and unfeasible. But no longer. For the stark evidence of recent years is that even though markets remain omnipotent, they are by no means omniscient and anything but infallible. Far from it. The very governments those markets turned to, to prevent a collapse of the financial system during the credit crisis, must now assert their democratic will as that same system seeks to dictate terms over the coming weeks.

This particular contradiction between democracy and capitalism is not new. But during this period of economic and financial crisis in Europe it has become particularly acute.

For the British election took place as though on a split screen. On one side there were debates, polls, gaffes and manifestos at home – all the tropes of a healthy democracy. On the other, Greece burned and other democratically elected governments across the Mediterranean panicked after ratings agencies downgraded their public debt – all the indications that whomever you vote for, the markets get in.

The notion that these ratings agencies are simply passing judgment on the creditworthiness of nations ignores how poor their judgment has proved to be in recent times, and in whose interests those judgments have been made.

These bodies that see public debt as a burning issue today foresaw no problems with the unsustainable private debts of the banks investing in sub-prime holdings a few years ago. "The vast majority of the analysts at Moody's [one of the leading ratings agencies, and seen as the most likely to move on the UK's debt rating] are honest individuals who try hard to do their jobs," Eric Kolchinsky, a former managing director at Moody's told a US Senate subcommittee on investigations a few weeks ago. "However, the incentives in the market for rating agency services favoured, and still favour, short-term profits over credit quality."

There's a reason for this. These agencies are primarily funded by the banks that they are supposed to be rating, creating what several former officials testified was a fundamental conflict of interest. In the words of Upton Sinclair, "It is difficult to get a man to understand something when his job depends on not understanding it."

So the very sector we bailed out with public money, run by incompetent people who are once again paying themselves bonuses, is now threatening to destabilise the next government unless it fires thousands of low-paid workers, cuts their wages and withdraws the services to millions of mostly poor people.

It's as though you borrowed money against your home to save a wayward relative from penury only to have them roll up a week later in a brand new Porsche and tell you to cut your food bill or they'll repossess the property.

Precisely what this will mean for Britain may play out dramatically in the coming days, weeks and months. The problem for the markets is not the politicians. Nationally, the choice on Thursday was between one party that wanted to implement the severest cuts since the second world war and two others that wanted to oversee the most swingeing economic retrenchment since the 1970s. Given the consensus, the markets didn't really care who won or even if there was a hung parliament. Just so long as there was a government that was prepared to wield the knife. All they wanted was stability and austerity.

Their problem is with the public. It's not difficult to see why. An FT/Harris poll in key marginals before the election revealed that only half the voters agreed the public sector should be cut back. There are many ways of tackling the deficit that don't hit the poorest hardest; but those are not the ways the markets are most interested in.

Understanding that they couldn't win if they told the truth about their intentions, the parties refused to divulge any details about precisely how they would go about tackling the deficit. So long as the electoral contest did not reflect these views of the electorate the market was happy. The trouble is the election results have produced parliamentary permutations that make stability unlikely in the face of the market's dramatic demands for a swift and severe austerity plan.

The people have spoken. We should not now let the markets dictate.

More election comment from Cif at the polls

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