The Crisis Point
It is sometimes said that politics operates like a pendulum: over decades, it drifts from left to right, and right to left, each fluctuation taking 40 or so years from its birth to its crescendo. During its momentus swing, a consensus emerges in which a compromise is reached, and society coalesces around a particular social settlement. Such a process can be observed twice in the 20th century.
Firstly, with the ascension of Keynesian demand side economics bolstered by the production necessitated by the second world war, what is now commonly referred to as the ‘Golden Age’ of capitalism materialised. When the laissez faire model of capitalism collapsed in the Great Depression of the 1930’s, a British economist called John Maynard Keynes developed a critical theory to explain the downfall, and an alternative model with which to replace it. His book, The General Theory of Employment, Interest and Money, challenged the idea that the market operated efficiently of its own accord, placing at the centre of economics a mode of government involvement that sought to end the boom-and-bust cycles that unregulated capitalism was so disastrously adept at delivering, thereby forming the theoretical underpinning of the post-war consensus. Characterised by the goal of full-employment, deficit spending for productive investment, the establishment of a comprehensive welfare state – and progressive taxation to fund such programmes – the post war consensus delivered one of the largest reductions of inequality in European history. Attlee’s Labour government implemented the Beveridge Report, intent on tackling the five ‘Giant Evils’ of want, ignorance, squalor, idleness and disease. To do so, our universal health service, the NHS, came into being, supported by cradle to grave welfare that lifted many millions out of the Dickensian extremes of poverty they had been suffering.
From around the 40’s to late 70’s, the dominant political structure could be described as a sort of reluctant alliance between industrial capital, the state, and empowered trade unions, cooperating to raise living standards and manufacture economic growth on a scale not seen since. This political project – Labourism – positioned the progression of the industrial working class as its primary goal and presided over some of the most successful years of social justice. But it too had its drawbacks. Beyond the inertia of the states bureaucracy, and the political classes reluctance to accommodate labour organisation outside of its traditional channels, social democracy was soon to become a victim of its own success. As the tension between the actors within the pact increased, the Keynesian settlement fractured under the weight of the conflicting demands it had been constructed upon. Against the backdrop of a global economic shock precipitated by the oil crisis of 1973, wherein the Arab Petroleum Exporting Countries put in place an embargo, the antagonisation of capital by a unionised and increasingly powerful workforce led to a crisis of profitability. The precarious compromise between labour and capital shattered in the wake of economic ‘stagflation’ in which stagnating growth and high inflation plunged the economy into deep recession. And from this crisis of social democracy, a counter ideology arose, contesting the hegemonic position that Keynesianism chaotically vacated.
What took its place is known as neoliberalism, an ideological position first analysed by the cultural theorist Stuart Hall in his essay The Great Moving Right Show. It reached national prominence with the election of Margaret Thatcher as Prime Minister in 1979, shortly followed by the election of Ronald Reagan in the United States the year after. The coordinated predominance of these twin politicians, and the free-market reforms they enacted, liberated capitalism from the constraints imposed by social democracy. Thatcher, as her epithet as the Iron Lady implies, was a ruthlessly effective politician. As Hall observes, her articulation of the “aggressive themes of a revived neoliberalism – self-interest, competitive individualism, anti-statism” came in the form of a populist anti-collectivism:
the essence of the British people was identified with self-reliance and personal responsibility, as against the image of the overtaxed individual, enervated by welfare-state ‘coddling’, his or her moral fibre irrevocably sapped by ‘state handouts’.
Thatchers strength laid in her capacity to meet the frustrations of the British electorate, who had come to reject the alienation and stagnation of their experience of the corporatist state “not as a benefice but as a powerful bureaucratic imposition on ‘the people’”. Indeed, for a counter hegemony to obtain the level of potency required to break through and banish the remnants of what it opposes, it must appeal to the intuitions of injustice and the disillusionment this gives rise to; the product of the failures of the current social arrangement. Hall continues:
‘Thatcherism’, far from simply conjuring demons out of the deep, operated directly on the real and manifestly contradictory experiences of the popular classes under social democratic corporatism.
She rejected the way in which the “state has become a massive presence, inscribed over every feature of social and economic life”, and offered in its place a radical individualism, encapsulated in her notorious proclamation that “there is no such thing as society.” This perverse atomism, formed a component of a discourse of self-interest that sought to breed an entrepreneurial spirit, encourage accumulation and rationalise greed. As such, an ideology of ‘freedom’ was thrust through the stifling conjuncture that defined the last days of social democracy, wherein “‘the state’… above all, interfered, meddled, intervened, instructed, directed – against the essence, the Genius, of the British people.”
On the cultural plain, the economic dynamism of pro-corporate reforms unleashed a wave of conspicuous consumption, expressed aesthetically in the excess of the trading floors of the international stock market, freed from the inertia of regulation; the flamboyance and allure of fashion and mass produced goods; and the ostentatious egotism of the ‘Yuppies’. This was capitalisms period of maturing, increasingly moving economies away from manufacturing, a sector often dominated by well organised labour forces, and towards financialisation – an inherently extractive form of banking that acts as a ‘parasite’ on the productive economy. Under the guise of incentivisation, the neoliberal inoculators dispensed sharply with any genuine egalitarianism, nurturing steep inequality. Such inequity was legitimized as the effective distribution of resources that only a free market could deliver, rewarding ‘value-creators’ for their ‘hard work’.
Once the Berlin wall fell in 1989, signalling the collapse of Europe’s tumultuous and repressive experiment with Stalinist communism, neoliberal capitalism was the only system left standing. It was at this point that the political left here and across the Atlantic capitulated to the ideology of their opponents, deflated by the realisation that ‘there is no alternative’. Thus the ‘Third Way’ was born, and it was clear that we were deep in the midst of a new point of consensus – the pendulum had once again reversed. Embracing the deregulatory agenda and discarding any commitment to outright socialism, Clinton and Blair sought to humanize neoliberalism by using the influx of wealth generated by corporate avarice to invest in education, healthcare and other forms of social provision.
And for a while it seemed to work, until the whole world realised it didn’t.
Predictable Convulsions
So here we are. An ideological hegemony has descended upon much of the global elite. This managerial class, committed to the neoliberal consensus of globalisation and market efficiency, is essentially given carte blanche to tune our social structures, whilst we sit back, sheltered and distracted, seemingly content for others to make decisions on our behalf. Characterised by the ‘end of history’ mentality, this managerial elite sees free-market, liberal democracy as the be all and end all; the protector and cultivator of advanced civilisation, a beautifully sane moderation that guarantees prosperity. Leave it to the technocrats, they know what they’re doing. Or so the theory goes.
Unfortunately for such technocrats, and their tinkerers and accomplices in government, the inevitable stability of the rule of market forces is illusory. As we look around us, the world is a far cry from the Panglossian narrative fed to us by the architects of this social arrangement. Whether manifest in stagnating living standards and the concentration of wealth, and subsequently power, into fewer and fewer hands, whilst communities that used to be bastions of industry are left to suffer silently in the post-industrial world of globalised production. Or in poor air quality and beaches smothered by plastic, with weather systems punctuated by catastrophic events like Hurricane Maria that battered Puerto Rico or the raging wildfires that burned mercilessly through California. It is clear that this system contains critical structural flaws. And the failures inherent in this model of liberal capitalism, willfully ignored by its proponents, are what has led to our global lurch toward volatility. Truisms and assumptions of this systems benevolence have been revealed as demonstrably false in the light of the financial crash and growing inequalities. Now the public is beginning to feel this injustice, implicitly understanding that the story they’ve been told – that a rising tide lifts all boats; that the market is always right; and that government is there to save them – is a fiction, woven over decades to secure our consent and approval toward a corporatist agenda. As a result, a reactionary disillusionment courses through the body politic, polarising opinions and hollowing out the centre ground. Frenetically, without structure or coherent direction, there is a deep emotional pull away from the political and economic establishment.
Throughout Europe, centre-left parties offering little in the way of a decisive break with this economic orthodoxy have been annihilated. Once mighty electoral forces have been reduced to rubble. France’s Socialist Party achieved but 6.4% of the vote in the 2017 presidential election, whilst Germany’s Social Democratic Party was gifted with 20.5% – the worse result they have ever had. Over in the Netherlands, the Dutch Labour Party mustered a fifth of the vote they’d previously managed, and in Italy, the situation is no better, with the leader of the Democratic Party – Matteo Renzi – stepping down after gaining the worst electoral result since its creation. The phenomena – termed ‘Pasokification’ after Greece’s centre-left party Pasok suffered a dramatic reduction in their share of the vote, falling from 43.3% in 2009, to 4.7% in 2015 – is but one element of the political shockwave that has defined the post-crash world. The anger of the global economic collapse of 2008, and the project of globalisation which has failed so many, has only just begun to be processed by the political sphere, with resentment of the status-quo delivering rejection after rejection after rejection to those considered to be the defenders of it, rippling across continents.
In the UK, it is manifest in the totemic vote to leave the European Union in June 2016, a democratic expression of anti-establishment sentiment that rattled markets and sent the pound tumbling, foreshadowing the way in which the unpredictable was soon to become normal, and the unthinkable was soon to become inevitable. The fingerprint of this rejection of political orthodoxy was further evident in the supposedly impossible rise of Jeremy Corbyn’s as leader of Labour Party. A Bennite that had been kept out in the political wilderness since New Labour’s inception, Corbyn was nominated by a selection of MP’s for the leadership contest out of pluralist inclinations, hoping to broaden the ideological choice offered to members. He won with a landslide, commanding 59.5% of votes. When his tenure as leader came under threat from a revolt within the Parliamentary Labour Party (PLP), the main ‘Chicken-Coup’ challenger – Owen Smith, an embarrassingly anodyne centre-left Welsh MP – secured only 38.2% of the vote, whilst Corbyn increased his majority to 61.8. Despite all the media’s eulogies to the Labour parties death under a leader as unelectable as the scruffy leftist Corbyn, he succeeded in depriving the ruling Conservative party – whose sitting Prime Minister Theresa May called a snap election, held in June 2017, to ‘strengthen her hand’ in negotiations with the EU – of their majority in parliament. Corbyn’s Labour is the only centre-left party in Europe that has avoided the fate that befell its sisters, delivering the largest increase in Labour’s share of the vote since the Attlee government of 1945.
In the US election the year before, the Democratic primaries witnessed a heated battle between Hillary Clinton, the wall-street friendly, establishment candidate (and overwhelming favourite to win both the nomination, and the presidency itself), and Bernie Sanders – a cantankerous, yet evidently empathetic old man from Vermont; an obscure senator who proudly declared himself a democratic socialist in a country that views the S word as if it were some malevolent demon. And whilst Hillary won, Sanders carried 23 states and garnered over 13 million votes – all in a country where it was presumed such radicalism would be electoral suicide. Of course, the greater surprise came in the election of Donald Trump to the role of President – an openly bigoted, belligerent buffoon of a man who makes even Boris Johnson seem relatively respectable, capturing the electoral college vote on the back of lies, bullying and collusion.
Strange times we live in, indeed. But they are dark too. Trump’s platform blended ethno-nationalist appeals to border walls and mass deportation, with economic populism centred around infrastructure programs and opposition to trade deals which have ravaged America’s ‘rust belt’, embodying an archetypal strongman to which insecure masses flock in times of crisis. Perhaps if Trump were competent enough to act upon his authoritarian instincts, we may witness a ‘democratic backsliding’ – in which democratic norms such as the free press, freedom of association, and the system of checks and balances that hold the executive to account, are eroded and attacked to make way for ever greater centralised rule – similar to the like witnessed in Turkey under President Erdogan, or Hungary under Viktor Orban, or Poland under the aggressively nationalist ruling Law and Justice Party. A rejuvenated right, capitalising on the indignation of the majority, is in ascendence around the world: from Alternative For Germany becoming the 3rd largest in the Bundestag in the elections of 2017, a deeply xenophobic far-right party which employs iconography and rhetoric deliberately reminiscent of the nations Nazi past; to the second place of islamophobic Party for Freedom in the Netherlands, whose policy amounts to the systemic and aggressive marginalisation of the entire Muslim population, lead by a man – a sort of Dutch Trump by the name of Geert Wilders – who has called Moroccans “scum”.
But like a pincer, the weakened establishment is under siege from the Left too. Beyond the mirror insurgency of aged socialists Sanders and Corbyn on either side of the Atlantic, in late 2017, Iceland’s electorate delivered a victory for the radical Left-Greens as leading partners in a coalition, lead by democratic socialist, and now Prime Minister, Katrin Jakobsdottir. Jacinda Arden, New Zealand’s youngest leader since 1856 and leader of the Labour Party, has scathingly criticised capitalisms disregard for the poor, branding it a “blatant failure”. And in Spain, the anti-austerity Podemos, which arose out of an obscure political talk show, itself an offshoot of the Indignados movement that rocked the country in protest against the financial crisis and the austerian reforms it precipitated, sits as the third largest party in parliament.
My point here is that rather than being disparate, independent occurrences, such political convulsions are symptoms of a failing social order; one that has enabled mass changes in demographics whilst systematically siphoning wealth away from those communities faced with such rapid cultural change. One that has falsely conflated personal freedom with market freedom. One that tells us to sit back, to consume, to stay out of the way of our employers, and to leave government to the technocrats. One that gradually and anaesthetically removes the levers of control we once had over our lives, and delivers them all to the Market.
A Sickly Regurgitation
So If these are the products of globalised neoliberalism, what is the context they arose from? How has all this come to be? Why exactly is it that neoliberalism has given way to reactionary nationalism and radical leftism, and in what ways has it failed to deliver on its promise?
The general, almost invisible forfeiture of agency at the hands of globalised capitalism and its institutional actors is the most, in my mind, convincing cause behind the current resurgence of nationalism. As people feel their influence over, and the significance of, their lives slipping away, they cling ever tighter to the bosom of the only political structure that has ever nurtured them – the nation state. And yet, rather than redefine its role as a powerful player within the web of capital, now woven so tight that it entraps any hopes of democracy, or the empire of technology that stretches beyond even those imperial formations of the past, nationalism turns inwards, attempting to reconstitute the glory of the previous century. Either through symbolic gestures of self-imposed ostracism, sickly regurgitations of thought to be cleansed ethnic tensions, or dangerous slides toward the dark order of repressive authoritarianism, nationalism is unable to pull us out of the hole we find ourselves.
Indeed, it will most likely only exacerbate this predicament, thwarting our capacity to cooperate on an international scale – vital to deal with the collective tasks of climate breakdown and refugee floods. And in the process, it will further marginalised those communities of migrants who have fled their own countries exploitation for a better life, using them as scapegoats with which to channel the anger of the masses; an icon of rage used to divert our attention away from the true complexities of this volatile conjuncture. Of course, this is how fascism operates
The insurgent nationalism, feeds off economic crisis. Italy’s newly appointed coalition of far right populists – the League and the Five Star movement – are particularly strong in rural areas confronted by a severe loss in living standards. Donald Trump’s election, with his so called zero-tolerance immigration policy, as well as the frightening success of Marine Le Pen’s vehemently xenophobic Front National, are demonstrations of. This is not to say such bigotry can be simplistically analysed as only a consequence of economic matters – of course, it’s roots go far deeper than that. But it is to point out that there is a damaging link between the two, the dual phenomena drawing strength from one another.
Tolerance, harmony, and respect – the pillars of social cohesion – are chipped away, defaced and ultimately overturned by the severe discontent that unjust economies and decades of alienation foster. In their place stand anger, hostility and insularity, with such foundations unable to support necessary civility. The reactionary right fan the flames of these tendencies, upon which they hope to structure regimes that are disturbingly reminiscent of those abominations of the 20th century that Europe, and indeed the world, thought to have dispelled.
Matteo Salvini, the Leagues leader and deputy Prime Minister, has already began calling for a census of Italy’s Roma population, commanding significant appeal in rural areas strangled by austerity and years of recession.
The Trump administration presided over the systematic break up immigrant families, locking children as young as three in infant sized cages, littered with foil for blankets. Recordings obtained from investigative journalists reveal the screams and wails of these abandoned children, ripped from their mothers arms to be placed in concentration camps. Greece, as a result of government after governments capitulation to the fiscal asphyxiation of this indebted nation, dictated to the crucible of democracy by the unaccountable and unelected technocrats of the troika – the IMF, ECB and the European Commission – has witnessed the rise of the Nazi Golden League.
This collection of repugnant proto-fascists derive great strength from a social order that is collapsing, pointing to scapegoats and offering no genuine solutions. Instead they merely act as a vehicle for the anger of so many tired and impoverished peoples; directing and concentrating this discontent towards the weakest in society through inflammatory rhetoric (Salvini routinely speaks of the ‘invasion’ afflicting Italy) and vague, baseless promises for change. The reality is that instability engenders further instability. Contempt for democracy, autonomy, the slow entrenchment of uncertainty into people’s lives, has produced the conditions within which violent nationalism can fester. When prosperity recedes, and cultural change occurs, the former makes the latter toxic. The coinciding of an influx of migration with less job opportunities, widespread poverty or falling wages, is easily exploited as cause and effect. It is thus little surprise that the rallying cry uniting these serpent heads is the call to put ‘America First’, or ‘Italians First’, the implication being that the destruction of the host populations livelihood is intrinsically connected to the welcoming of foreigners.
Brexit offers an interesting case study here. Whilst it was in some sense animated by a rejection of free movement, aided by the Leave campaign’s reckless dog-whistle racism, the idea that such antagonism toward migration can be understood solely as a convulsion of irrational xenophobia by an undereducated and bigoted underclass (as some aggrieved and absurdly fatalistic Remaners hold), is at once a wholly incorrect and condescending analysis. In a recent report released by the governments social mobility commission, 60 of the 65 social mobility ‘coldspots’ in Britain voted for Brexit. Communities up and down the country, after years of austerity, neglect and economic desolation, delivered a load ‘fuck you’ to the congregation of industry leaders, politicians and media elites that implored them to remain.
Anti-immigrant sentiment was no doubt present, but the message of its deleterious effects would be impotent if there were no symptoms of economic failure with which to link it. The official remain campaign rolled out then chancellor George Osborne who, after inflicting brutal and draconian spending cuts that battered the most disadvantaged regions in the country, warned of the financial dangers that awaited the UK should the public dare to vote Leave. Of course, such cautions were in vain, as the remain camp failed to recognise the mindset of those who were most susceptible to Leave’s rhetoric: what does it matter if the nation ends up a little bit poorer, if you already have nothing to lose? Unfortunately, the tragic irony of Britain’s decision is that the true architects of our misery were not the targets of our ire. Immigrants, indeed Brussels itself, were portrayed as the root of all our issues, ignoring the concurrent ineptitude of domestic governments and the ever-increasing power of global capital.
In Sophie Fiennes’ The Pervert’s Guide to Ideology, the philosopher and social critic Slavoj Zizek provides a commentary on Spielberg’s Jaws to articulate the ideological operation of this proto-fascist demonisation. Whilst the shark has been said to symbolise many distinct anxieties that reside within American culture, Zizek’s contention is that “the function of the shark is to unite all these fears so that we can, in a way, trade all these fears for one fear alone”, producing “an experience of reality” that is considerably more simple, and thus more potent. Reducing the totality of societies antagonisms to one race, ethnicity or religion allows the powerful unmatched control, placing themselves at the holy end of a battle between the cohesive force of good and the corrupting force of evil. The rapid uprooting of people’s lives by neoliberal globalisation, and the disorientation that follows is a catalyst for nationalism; it makes the offer of racial or ethnic dichotomies, authoritarian strength and chauvinism seductive in a way that a stable, prosperous and liberated society could not.
Broken Promises
But this isn’t a particularly controversial observation. To say that the protracted, painful demise of liberal capitalism, of which we appear to be observing throughout the globe, is caused in large part by the failures of its own proposed panacea – the institutionalised doctrine of free trade – is largely accepted by the political mainstream, at least by those who are sharp enough to have their finger on the pulse. Even those advocates of the project like the economist and columnist Paul Krugman, or former chief economist of the World Bank Larry Summer, who were so quick to shoot down the protestations of the alter-globalisation movement that rocked the world during the 1990’s, have come to accept the inadequacies of the rapid extension of corporate power they were cheerleading. If only the establishment, who at the time were utterly convinced as to the benevolence of globalisation, listened to the warnings of that international alliance of environmentalists, socialists, anarchists and anti-racists, perhaps we could have avoided the conditions which allowed strongmen and xenophobia to fester, inevitably seizing the fractured body politic they emerged from.
Their predictions – that structural adjustment programs imposed by the IMF, pro-business and anti-localism clauses in trade deals, as well as corporate outsourcing to the developing world, were to hit workers in both the global North and the South more severely than the proponents of globalization had been expecting, were depressingly accurate. Lower skilled American and European workers suffered a 20% real terms decline in the value of wages since the dawn of neoliberal globalisation, a central factor behind the animosity of working people toward political elites and the vociferous economists which assisted them in nurturing this state of affairs. Nevertheless, these consequences were dwarfed by the increase in growth and reduction in poverty that its proponents promised would materialise. Yet, as economist Grace Blakeley writes in a essay for Novara Media:
Several papers have shown that the alleged links between capital mobility and growth haven’t materialised, whilst others have found that capital mobility has increased the likelihood of economic crises… the IMF recently argued that capital account liberalisation increases inequality and reduces the labour share, and now advocates the use of capital controls in some cases.
And whilst the drop in wages and underemployment that afflicted the developed world as trade globalised may have been unforeseen, hasn’t this programme significantly improved the livelihoods of those in the developing world, now reaping the wonders of capitalisms benevolence? Some improvements have indeed occurred, although these are usually concentrated in China and East Asia – the only parts of the developing world untouched by the Washington Consensus’ imposition of free-market reforms, thereby entering the global economy on their own terms, allowing protections for nascent industries. But the broad picture is that neoliberal globalisation has hindered rather than assisted the world’s poor. As the insatiable forces of capital were released from its cage into the pasture of new markets, instead of global inequality narrowing as was predicted, it has gotten far worse. Since the 1960’s, the per capita income gap between the Northern region and Southern has tripled, whilst the number of people living with less than $5 – the ethical poverty line, known as the minimum income without which life’s core essentials are unobtainable – has increased to 60% of the world’s population.
But, to no one’s surprise, the egos of many prevent them from giving credit to the vindicated Left, with many still refusing their solutions and ideas with the same fervour as has always been present. It strikes me: how many times must the Left be proven right before others have the modesty and courtesy to listen, instead of discarding our analyses and elucidations as the ramblings of an eternally discredited ideology. I cannot help but be reminded of the words of German philosopher Arthur Schopenhauer: “All truth passes through three stages. First, it is ridiculed. Second, it is violently opposed. Third, it is accepted as being self-evident.” Now, almost two decades since the anti-globalisation movement fizzled out in the wake of 9/11, it appears we are in the third stage.
Despite this point of agreement, the lefts analysis of this crisis point goes further, with others remaining constrained by their own ideology. The issue has not only been globalisation, per say, but the system of thought that both engendered and defined it – neoliberalism. Before corporations were free to transmogrify into the multinational incarnations that stand above us today, first the shackles of nation state Keynesianism and the post-war settlement had to be removed. This process: the dismantling of regulation, the liberalisation of corporate structures and trade law, the gutting of the welfare state, vast reductions in tax rates, and the financialization of the economy, is neoliberalism, a loose set of ideas largely oriented around the extension of the market into all domains. Like all hegemonic ideas, it receded into the supposedly non-political ‘common sense’, with politicians across the political spectrum not only accepting its core tenets, but also the impossibility of any alternative. Ideological assumptions – that the state is bad, and the market is good; that there is no such thing as society; and that what is good for business is always good for us – suddenly became accepted as truisms; believed to be inescapable facts about reality. And if you did not subscribe to this world view, you were mad at best, and a communist at worst. All were told to be quiet, do your jobs, and sit and wait for the great wealth that was trickling down from the enterprising top.
Of course, this miraculous trickle down did not occur. The rising tide did not lift all boats. The average wages of American workers have stagnated or declined for 40 years, whilst the wealth of the richest top 1% exploded. Inequality too skyrocketed in the United Kingdom, and across the advanced economies of the global north, the share of GDP going to workers shrunk dramatically. This deflation was mirrored by the manufacturing sectors, as corporations, now free from the demands of unionised workers and currency controls, shifted production offshore to capitalise upon even weaker labour protections and even cheaper labour. All this occurred whilst the finance industry grew and grew in its power. In the UK, Thatchers deregulation of the City – ‘the Big Bang’ – and the dismantling of Glass-Steagall in America, facilitated the creation of complex speculative instruments and derivatives, whilst removing any ethical restrictions or regulatory oversight that was deemed too intrusive. As wealth was concentrated into fewer and fewer hands, so too was the political power, putting paid to the democratic ideal of one person, one vote. Now, if you are rich enough, you can essentially draft policy for government; donate huge sums in return for implicit favours; and have access to the ear of a Prime Minister or President over a lavish dinner. Regulatory agencies have been defanged through the revolving door, and lobbyists have infiltrated the hearts of power.
Now the market and the wealth creators were free from the interference of career bureaucrats and central planning, neoliberalism has delivered chronic insecurity and stifling inequality – far from providing the inclusive growth, advancements in living standards and economic efficiency promised. As the economists Michael Jacobs and Mariana Mazzucato note in a piece for Dissent magazine “prior to 1970, bank crises were rare.” But:
between 1970 and 2007.., the International Monetary Fund recorded 124 systemic bank crises, 208 currency crises, and sixty-three sovereign debt crises. For modern capitalism, instability has become not the exception, but the rule.
Moreover, the rate of growth in the post-war period exceeded that of the proceeding neoliberal era, with average per capita growth rates declining from 3.2% to 2.1%. Indeed, what little growth did occur in the Anglosphere was driven by an asset price bubble, fuelled by cheap credit that financed personal consumption, masking the failure of the Third Way ‘boom years’ to provide the rise in living standards that were promised. And whilst the rest of us were borrowing to plug the holes in our stagnant wages, the rich have been getting even richer. The Gini coefficient of the United Kingdom – the statistical measure of a country’s economic inequality, with perfect equality sitting at 0 and maximal inequality at 1 – rose from 0.26% in 1961 to 0.34 in 2015–16, with the top 1% gaining 20% of new income between 1975 and 2012. In America, the picture is even more severe, with 47% of the income generated in that period funneling into the pockets of the top 1%. Globally, a report by Credit Suisse found that 41 men own more wealth between them than the bottom half of humanity. The average British FTSE 100 CEO earns 386 times more than the national living wage, a multiplier that is drastically larger than it was 3 decades ago. According to the ILO, productivity (output per hour) has increased 3 times the rate of real wage growth, meaning the majority of the gains in efficiency and efficacy have gone to owners rather than workers.
Beyond these dour statistics, such an assault on the material conditions of the majority have been intrinsically connected to an assault on the power of them. Through the introduction of stringent anti-trade union laws, the outsourcing of public provision to private companies, and the systematic weakening of the state, which, for all its flaws, is the only dominant institution which can claim to be democratic, neoliberal capitalism has stolen our freedoms from us. Freedom of the market, does not, in fact, equal freedom for the people. As the R.H. Tawney, a British theorist hailing from the Christian socialist tradition once remarked, “Freedom for the pike is death for the minnow.” Should we venerate the freedom of the financial elite, who in their unchecked avarice, brought the entire global economy to a stand still, leading to the loss of millions of jobs, home foreclosures, and widespread suffering as the state tightened its belt, imposing an unnecessary and inhumanely punitive austerity regime on those least fortunate?
As a system of private property defined by a hierarchy between capital and labour, capitalism is inherently undemocratic. The power relation between owner and worker resembles more the absolute rule of a monarch than the parliamentary democracy we enjoy (or should I say tolerate) in the political sphere. It’s presence in all aspects of life should therefore precipitate genuine concern from all true democrats. When Thatcher declared ‘with conviction’ that it was time ‘to put the people’s destinies in their own hands’ this was merely rhetorical flourish, co opting the ideal of autonomy – an ideal that the Left, ensnared in its own bureaucracy, had forsaken – to masquerade a political project, that had as its centre the destruction of such empowerment, as liberation. Noam Chomsky, arguably the most prominent intellectual alive, expressed a similar sentiment in an interview with The Nation:
[Neoliberalism’s] crucial principle is undermining mechanisms of social solidarity and mutual support and popular engagement in determining policy. It’s not called that. What it’s called is “freedom,” but “freedom” means a subordination to the decisions of concentrated, unaccountable, private power.
The Choice
An economy producing such a perverse, distorted distribution, characterized by omnipresent instability and a level of inequality not seen since the Gilded Age of the 1920’s, can not survive. The semblance of control provided by unions and the power of the state has vanished, making way for unaccountable ‘efficiency’ and globalised finance. In this context, we are faced with a crisis point; a rapidly degrading social settlement, unable to maintain the coherence of the narrative that held it together. And it’s destruction will only be galvanised as the spread of automation pushes more into joblessness and destitution; as big tech consolidates its grip over our everyday lives; and climate change tears apart the land upon which we stand.
There is room now for a new common sense; a counter hegemony to challenge Neoliberalism for global dominance. But the left is not the only player in town, for the resurgent right too has its eyes on the reigns of power. Those centrists that reject both insurgent movements as equally divisive threats, retreating to a doubling down of market freedoms, free-trade, and light regulation, are in denial. As the current order crumbles, ideology prevents them from recognising what others are seeing: that capitalisms pathologies – instability, poverty, inequality, illiberalism – are systemic, and so its solutions must also be. Rather than seeking to analyse the crisis in which we find ourselves and advancing a critical alternative, they only parrot the same doctrine that got us into the mess, albeit with minor adjustments.
It is no surprise after all. “Practical men”, wrote Keynes in The General Theory, “who believe themselves to be quiet exempt from any intellectual influence, are usually the slaves of some defunct economist.” Such is the case with the defenders of a system in free-fall. Their appeals to pragmatism and circumspection are thus nothing of the sort, but an expression of tunnel-vision and paralysis in the face of volatility. Denying legitimacy and room for a radical alternative, they bolster the fascism that will emerge from capitalisms deterioration. Despite the false equivalency that centrists continually insinuate between the neo-nazi, xenophobic extremists on the right, and leftists who desire universal health care, higher education, green investment and democratic workplaces, the similarities extend only to the fact that such visions contest the same ideological space; the vacuum left by establishment parties following capitalisms collapse in 2008.
In reality, these contesting counter-hegemonies of progressive leftism and regressive nationalism are diametric opposites; the more compelling nexus is to be found between the so called ‘liberal’ capitalist establishment and the agitators to its right flank. Recent evidence from David Adler finally put to bed the Horseshoe theory – the idea that the further you go toward the left and right poles in political orientation, the more similar they become in authoritarian tendencies – demonstrating that in Europe and North America, it is centrists who are “the least supportive of democracy, the least committed to its institutions and the most supportive of authoritarianism.” Indeed, as Yanis Varoufakis has noted in a piece for the New York Times, the establishment is in some sense benefitting from the advance of right wing outsiders: “these combatants are accomplices, as much as foes, creating a feedback loop of mutual reinforcement that defines them and mobilizes their supporters.” He continues:
In the United States, the outsider in chief, Mr. Trump, formed an administration made up of Wall Street executives, oil company oligarchs and Washington lobbyists. As for France, the anti-establishment new president, Mr. Macron, is about to embark on an austerity agenda straight out of the insiders’ manual. This will, most probably, end by fueling the current of isolationist nationalism in France.
This tentative pact between these two forces may not always be mutually beneficial. But whilst big business breaks from the Trump administration on trade tariffs and the Paris Climate Agreement, they aid and abet him as he ploughs on with his pro-corporate redistribution upwards. The financial links of the ‘Bad Boys of Brexit’ – Nigel Farage, Aaron Banks, among others – reap the rewards of shorting a fall in the pound, whilst United States poultry manufacturers await giddily in the wings to undercut British welfare standards in the wake of deregulation and backroom trade deals. Disaster capitalism, it seems, is alive and well.
The danger is that as capitalism further deteriorates, the authoritarian tendencies of those in power, which were in full display in the crushing of the Greek Spring by their troika of creditors, and indeed in the imposition of weakening labour standards, privatisation and deindustrialization on many of the other worst victims of the euro crisis, will evolve. A Faustian bargain – in which capitalism sells its soul to the nativists in order to defend its own dominance; to hold tight its power over the populace as climate change, economic instability and refugee flows threaten civilisational destruction – could emerge. Fascism is often the friend of capitalism, using bigotry to conceal common economic interests and thus neuter class solidarity. The mutation of regimes across the world toward authoritarian control, particularly in the rapidly accelerating economies of China and India under strongmen leaders Jinping and Modi respectively, as well as Turkey’s Erdogan, portend a post-liberal capitalism, one that must abandon its claim to democracy to maintain stability in an increasingly unstable world.
As such, there are two main potentialities. Either a proto-fascist, nationalist, authoritarian capitalism crawls out of the carcass of neoliberalism and claims itself king of what is, by this point, an earth with a climate beyond repair, presiding over an immense concentration of wealth enabled by widespread automation of labour. Or, the New Left, adopting an anti-bureaucratic, decentralised platform of economic democracy, decommodification and radical environmentalism, that, harnessing revolutionary advances in technology, defeats the last remnants of the neoliberal consensus in the ‘war of position’. And thereby begins to heal the ecology we have spent the last century hatcheting, whilst extending people’s personal and collective freedom beyond any point advanced society has seen before.
Demand utopia, or we get dystopia. The choice is simple.
First We Must Think
So once we have chosen which future we aim to realise, the question now becomes: how do we get there? There is no straight answer to this, and before we begin tearing down the structures that define this increasingly misanthropic world around us, and erecting in their place our own models of organisation, we must first think.
Theory informs action. It gives it shape, direction, longevity. Action without purpose is reckless, merely a strike in the dark. In a political sense, if you do not know first what you are up against, exactly why it is objectionable, how you can get the upper hand, and what can replace it, your action will be futile. It will amount to nothing but a lashing out, soon to be nullified by the opposing reaction. There will be no different world, no alternative, if you cannot already understand the one we are living in. How can we know what needs to be done without first knowing what is wrong?
Indeed, whilst a comprehensive analysis of the current predicament informs what the world will look like on the other side, it cannot give all the answers. Nothing can. To formulate a coherent vision of the future should be a task that is shared, evolving and reflexive. But to a certain extent it cannot be complete. Previous attempts at utopian social engineering have ended more toward the inverse, resulting in oppression and totalitarian control. To be wedded to an immovable, unchangeable blueprint echoes the perverse authority of the literal reading of religious texts, breading unfreedom and heretics and concealing the values and principles contained inside. It is these which should be obeyed; ideals which can be realised by a multiplicity of policies, laws and institutions, allowing room for adaptation to the vagaries of human society. It is these core principles which are revealed and fleshed out through the process of a contemporary, holistic critique.
To call for thought therefore is not to call for inaction, but to provide the spearhead of change a thrust – a direction of movement. The ultimate domain of revolution must lie in the immediate sphere of politics: the organ of governance, and the extra-parliamentary movements defending any radical administration from below as it clashes against the interests of capital. But such an undertaking requires a plan to save it from its own potential impotence. Only by stepping beyond vague protestations about exploitation and rampant inequality, embodied by the spontaneous ‘folk politics’ of Occupy Wall Street, can we hope to clear a path for the Left’s ascent. However important and inspiring these pockets of spontaneous direct resistance are, they cannot defeat the power of domestic capital by themselves, let alone that of global corporate institutions, whose reach outstretches the jurisdiction of national organising. This is not to downplay the usefulness, for example, of targeted protest movements in raising consciousness or precipitating policy change, but is to point out that civil disobedience can only ever supplement a vision of radicalism; it cannot establish that vision by itself.
If we do not think ahead, we will be left paralysed and purposeless at the most important conjuncture in human history, vulnerable to the forces of bigotry, extremism and desperation that have seen our species err so catastrophically before. As Gramsci observed many years ago, “the crisis consists precisely in the fact that the old is dying and the new cannot be born”. The collapse of the neoliberal consensus offers the Left a chance to bring that New which Gramsci spoke of into being. Not to resume the swing of the pendulum, sending it back towards the Keynesianism of the post-war period, but to break the pendulum; to refuse the underlying system upon which politics has operated on; to challenge the instability, the ennui, the permanent conflict between owner and worker that defines all capitalist systems, whether the market is free or constrained. In other words, this crisis point offers the chance to establish a qualitatively different kind of society; the chance of socialism.
Our job, then, is to reach out from within this crisis; to reflect, analyse, imagine and organise – all in pursuit of a future that is not inevitable, not predetermined, but entirely dependent on the strength of our will to manifest it.
