By Lars Cornelissen, who holds a PhD in the Humanities and works as a researcher and editor for the Independent Social Research Foundation. Originally published at openDemocracy
The ongoing and increasingly intense conservative backlash currently taking place across Europe is often understood as a populist reaction to neoliberal policy. The neoliberal assault on the welfare state, as for instance Chantal Mouffe has argued, has eroded post-war social security even as it destroyed people’s faith in electoral politics. Coupled with a sharp increase in inequality and rapid globalisation, the technocratic nature of neoliberal government has angered electorates across the continent. Wanting to “take back control” of their political life, these electorates have turned away from traditional centrist parties and have thrown their lot in with populist parties on the fringes of the political spectrum. Although, as Mouffe is at pains to point out, this creates a space for both left-wing and right-wing populisms, today it seems that especially its inward-looking, nationalistic variants are experiencing electoral success.
To be sure, this diagnosis is by and large correct. Decades of neoliberal hegemony have certainly served to impoverish the cultural life of many European nations. Meanwhile, neoliberal policies of privatisation and deregulation, followed after the 2008 crisis by a decade of blithe austerity measures, have gutted most of the institutions that previously carried the promise of equity and security—even if that promise was always already a false one. The rise in jingoistic nationalism is, in this sense, without doubt a consequence of the neoliberal era.
It would be incorrect to assume, however, that these nationalisms are somehow juxtaposed to or fundamentally different from neoliberalism. It would be wrong, that is, to see the rise of the so-called “new right” as a sign of neoliberalism’s demise or to see the 2008 financial crisis as marking its death rattle. Neoliberalism did not merely provide the occasion for the rise of nationalist sentiment; rather, the latter also grew out of the former. Differently put, neoliberal doctrine already carried the seeds of the kind of conservativism that is currently running rampant in Europe.
The Neoliberal Network
A good place to start is the network of neoliberal think tanks and research institutes that has served as the frontline of the neoliberal project since the 1950s. Indeed, as numerous research studies by historians and sociologists have shown, although neoliberalism first emerged as an intellectual movement spearheaded by such figures as Ludwig von Mises, Friedrich Hayek, Walter Eucken, and Milton Friedman, crucial to the movement’s success was its effort to disseminate its ideology strategically. Thus, after an initial phase in which these men prepared the philosophical grounds for the neoliberal agenda, they set out to spread their ideas, forming a Transatlantic web of intellectuals and researchers with the express objective of steadily influencing public opinion in general and policy-makers in particular.
Among the most prominent think tanks to be erected in this way are the Institute of Economic Affairs, founded by Anthony Fisher in 1955 on Hayek’s explicit advice, the Cato Institute, founded in 1974, and the Adam Smith Institute, founded in 1977. They are merely the most visible core of a vast network of similar organisations, however. Whether named after neoliberalism’s pioneering theorists (a small selection: the Hayek Institut; the Hayek Gesellschaft; the Ludwig von Mises Institute; the Walter Eucken Institut; the Becker Friedman Institute) or given more esoteric monikers (such as the Heritage Foundation or the Atlas Economic Research Foundation), many right-wing think tanks are of neoliberal descent. Those whose founding predates the birth of neoliberalism, such as the Hoover Institution and the American Enterprise Institute, were quickly absorbed into the neoliberal project. Together these think tanks form a sprawling network of ideological entrepreneurs driven, as Anthony Fisher is reported to have said, by the desire to “litter the world with free-market think tanks.”
As the primary channels through which neoliberal ideas flow to the wider public, these institutions make for a crucial weather vane for shifts unfolding within the neoliberal mindset. Any attempt to make sense of neoliberalism’s many twists and turns must therefore pay attention to trends in their ideological direction and outputs. And this is where neoliberalism’s recent hard turn towards conservative nationalism becomes apparent.
Neoliberal Conservatism
Neoliberalism has always had a strong conservative streak: Hayek himself was inspired by Edmund Burke at least as much as by Adam Smith, and such towering figures of German neoliberalism as Wilhem Röpke and Alexander Rüstow were deeply conservative thinkers. Conversely, Hayek in particular has exerted a considerable influence on the most recent generation of conservative philosophers, with men like Roger Scruton, Paul Cliteur, Francis Fukuyama, and Niall Ferguson routinely drawing upon his ideas about the market, law, and societal order in support of their own conservatism. (The latter, as it happens, received the Hayek Lifetime Achievement Award in 2012.)
However, what originally remained an intellectual attraction between neoliberals and conservatives has in recent decades morphed into something more closely resembling a synthesis. As neoliberal hegemony reached its climax in the 1990s, its intellectual custodians began focusing their attention on what they purported to be the failures of multiculturalism. Decrying ‘cultural relativism,’ neoliberal think tanks began publishing pamphlets that sang the praises of western culture, which their writers regarded as inherently superior to its non-liberal (read: non-western) counterparts. They proceeded to assert the need to protect national identity from its dilution by immigration and to advocate patriotism and nationalism as a means of consolidating such identity.
It is, then, wrong to assume that neoliberal parties or intellectuals embraced nationalism only after the so-called “new right” was in its ascendency, as a means to win back voters or to assuage a supposedly vitriolic and jingoistic electorate. In truth, many of neoliberalism’s ideologues had swerved firmly towards conservative nationalism well before right-wing populism became a serious political contender. In doing so, they anticipated many of the latter’s principal ideological markers, including its conspiratorial conception of “cultural Marxism” and its fondness for Oswald Spengler.
In short, neoliberals had no small part in setting the stage for the recent eruption of regressive nationalism. By peddling ethnocentric, nationalistic, and xenophobic ideas they helped shift public opinion to the conservative right, rendering it ever more salonfähig. A good example of this process may be found in Dutch politics, where Islamophobia entered mainstream discourse largely due to the efforts of Frits Bolkestein, then the country’s leading neoliberal politician and author. Anticipating the Islamophobia of Pim Fortuyn and later Geert Wilders by about a decade, he claimed as early as 1991 that Islam is objectively speaking inferior to western culture. In so doing, he shifted the country’s national debate and gave xenophobia a gloss of legitimacy, setting the stage for his country’s sharp conservative turn in the new millennium.
A Neoliberal Brexit
Neoliberalism’s influence on the rise of conservatism is not exhausted by its ideological appeal, however. Think tanks are, after all, meant to direct policy, not just to elaborate an ideological doctrine. By way of example, let us consider Brexit. Indeed, the neoliberals’ impact on the “new right” is nowhere clearer than in the British hard right’s attempt to enforce a no-deal Brexit.
To begin, it’s worth noting that the Conservative Party’s most prominent cadre of Brexit-backing nationalists counts many explicit devotees of Hayek amongst its numbers, including Roger Scruton, Boris Johnson, Priti Patel, and Sajid Javid (who called Hayek a “legend” in a 2014 tweet). Jacob Rees-Mogg’s late father William was similarly an outspoken Hayekian, calling himself “an Austrian economist more than anything else” in a 2010 interview and adding for good measure that he “knew Friedrich von Hayek and liked him very much.”
But neoliberalism’s impact on Tory hard Brexiteers goes much further. Here again, the neoliberal network of think tanks takes centre stage. As research done by openDemocracy UK has demonstrated, the Conservative Party’s nationalist wing maintains very intimate ties with the Institute of Economic Affairs, which has lobbied extensively to broaden the appeal of a hard or even no-deal Brexit. Thus it maintains very close ties with the European Research Group (ERG), a group that represents the Party’s most extreme Eurosceptics, and has had the ear of Boris Johnson, Michael Gove, David Davis, and Jacob Rees-Mogg.
The IEA is but one of many neoliberal think tanks that are today advocating a hard Brexit. The same is true for, amongst other, the Adam Smith Institute, the Hayek Institut, the Austrian Economics Center, the Mises Institute, the Hoover Institute, the Cato Institute, and the Heritage Foundation. Whilst it’s not true that all of those who work for such institutes are Brexiteers—indeed, the Adam Smith Institute is very open about its internal dispute over Brexit—it certainly is the case that neoliberalism’s ideological vanguard is contributing significantly to the justification and rationalisation of a no-deal scenario.
All of these threads seem to converge in the figure of Steve Baker. Serving as Under-Secretary of State for Exiting the European Union from June 2017 until he resigned a year later over his disagreement with the government’s stance on Brexit, Baker was one of his party’s leading Eurosceptical voices well before that. In 2015, he co-founded the Conservatives for Britain campaign, which was instrumental in lobbying for a referendum on Britain’s membership of the EU. What’s more, he served as Chairman of the ERG between 2016 and 2018 and as Deputy Chairman since then. Baker is also a prominent figure in the world of neoliberal think tanks, having co-founded The Cobden Centre (TCC) in 2010 and served as its director until 2017. A self-declared Austrian-inspired think tank, TCC is co-directed by hard Brexiteer Daniel Hannan, routinely posts defences of a hard Brexit, hosts material by hard-line Brexiteers such as Nigel Farage, Douglas Carswell, Michael Tomlinson, and Baker himself, and has close links to a glut of other neoliberal, pro-Brexit think tanks.
There is ample evidence that what is often seen as the “new right” is in fact not all that different from its predecessor. Several decades of neoliberal hegemony have not just triggered a backlash by the conservative right. Rather, the conservative right is a mutation of neoliberalism, one of its many outgrowths. The left is ill served by the continued assumption that it’s fighting a new enemy, for clearly neoliberalism is still very much with us.
Good article, so many connections I didn’t know about, thanks!
The article inspired me to check on Canada’s long list of think tanks. I guess even our former prime minister Harper is a founding member of a neo-liberal think tank. Right now our federal Conservative Party seems to be continuing in Harper’s footsteps but Alberta’s premier is the one creating policy that will affect conservatives.
Many thanks, Yves.
With regard to Brexit, I would just add that neo con think tanks, e.g. the Henry Jackson Society, also joined their more economics focussed brethren. Brexit is a means of weakening the EU to the benefit of the anglosphere, albeit a US led community with the UK playing Greece to the US’s Rome. They are less prominent, or shouty, but I think that is by design. The likes of Richard Dearlove, Charles Guthrie and John Scarlett know how to play this game and are happy to let the loud mouths, especially the colonials like Kate Andrews, Divya Chakraborty and Chloe “low tax” Westley, or “low fact” to some, front up on air.
Steve Baker is a former Royal Air Force officer and MP for the neighbouring constituency. He straddles both camps.
There are differences, often tensions, between the Austrians, neo cons and the likes of the North family. Pete(r J) North’s latest blog addresses that.
Indeed all confessed VOX (populist rigth, Spain) voters I know were faithful Popular Party (conservative) voters. Anecdotic but in line with this article.
The ‘New Right’ are the storm troopers of the neoliberal ‘New World Order’, conjured deliberately, and painstakingly into existence as a bulwark against the rising tide of legitimate populist revolt against the strangle hold of neoliberal rule.
This is exactly what Jay Gould meant* when he said he could hire half the working class to murder the other half.
It’s disturbing to note how obviously Trump is stirring the embers of reactionary sentiment that are never far from the surface of our national lack-of-character.
*It matters not if Jay Gould actually uttered these words, they describe the foundation of right-wing power in America.
Where is this “rising tide” you refer to? In the US our supposed revolutionaries are firmly within the Democratic party which is neoliberal to the core. While the above article may be correct that the nationalist new right represents fake populism in the manner of Wall Street loving Trump, there’s not a lot of evidence of an anti-capitalist revolt on the left either (Elizabeth Warren: I am a capitalist). The article linked the other day on inverted totalitarianism hit the nail squarely. Whether left or right “There Is No Alternative” holds sway until the house of cards finally collapses. In the meantime our current elites will go to any extreme to keep that from happening.
The discomfort of those at the bottom results eventually in anger, and that anger looks for an outlet.
Rather than take the chance that those angry folks might seek, and eventually find solace in solidarity with left-oriented populism a la Bernie Sanders flavor of socialism, TPTB nurture a perennial alternative, the empty, but effective promise to make things ‘right’ by force of will, and of course, violence if necessary.
If the “rising tide” of relatively informed and activist candidates did not exist, and were not influencing the electorate, there would be fear on the part of TPTB, and so no reason to encourage the “New Right”.
I might add, that IMHO, you are swimming in that “rising tide” by your participation here at NC.
Guess I’m old enough to remember an actual popular tide. But as we found the tide comes in and then it goes out. IMO in order to have another New Deal we are probably going to need another Great Depression. The internet including this website have become a great resource for learning what is going on. But if the plutocrats begin to bothered by it they will institute censorship (it’s already happening). What they really fear is losing their money and therefore their power. Another economic crisis might do the job.
The next New Deal or big infrastructure type programs (ala interstate highway system) are going to be about developing infrasctucture that bots and robots can use.
I’m sure manufacturing will be brought back for the making of the Mark 13 robot.
Unless progressives educate the public that neoliberalism is NOT the gold-standard for responsible government, the Conservatives and Wall Street will continue to set Western domestic policies for years to come.
The counter-intuitive lack of support for progressivist candidates whose policies are likely to be helpful to the middle classes may well be due to the fact that voters conflate neoliberal ideology with how government finance works – “tax & spend” vs “tax-cuts and don’t-spend” – popularized by leaders like Reagan and Clinton (red & blue) as well as Thatcher and others, and often echoed by parents who think government finance is like their household finance, and thus, neoliberal capitalism is the only way responsible government works.
Whenever one attributes anything to Trump, I believe it is important to imagine him not as the mastermind, but as the catalyst. There are countless pent up forces that are using him as the figurehead or scapegoat around which a torrent of change coming which was previously held back. I feel that the damage done by his presidency was coming anyway, with him now as Court Jester leading the parade. He is the perfect hybrid of Big Brother and Emmanuel Goldstein.
Nonsense.
Neoliberalism is anti-national and anti-conservative.
Epistemology of Neoliberalism – from Phillip Mirowski video – Hell is Truth Seen Too Late.
https://www.youtube.com/watch?v=QBB4POvcH18&t=653s
1. People are sloppy undependable cognitive agents.
2. Not to worry – “The Market” is the greatest information processor in human history.
3. The problem is to get people to accept and subjugate themselves to the Market. This is called “Freedom”.
4. The politics of 1-3 can get a little tricky. Best not be too literal about it.
Liberty and liberal are both words that are fraught with contradiction and confusion. Whose Liberty? Liberal for whom? That never gets parsed out because in the parsing both words lose their meaning. They are just bricks and bats and hand grenades. Hayek reads like a thoughtful, reasonable person. But what he believes to be effective economics always fails. We are all current witnesses. Austrians are conservative in defense of their liberty. They seek liberal policies and governments so they can have more individual economic freedom. And free trade. Socialism sees it differently; socialists are, by contrast, conservative. They believe in conserving social justice. Now we have a first hand understanding of the failures of neoliberalism. People at the local level, and the rural, want to be included in the liberal prosperity so they vote for more economic freedom (leave the EU); the elite and the rich want something entirely different; they want an even less restricted government so they can sail off and be neocolonialists. So just like the confusion over the word “liberal” nobody asks, Brexit for whom? It makes me weary.
I too am confounded. We’re a long way from The Great Chain of Being.
I’d say the neolibs are more afraid of sanders than they are of trump, so conservative (why can’t those better republicans be like us) and also that they understand labor arbitrage requires borders and so are pro national.
No, labor arbitrage involves playing off workers in/from one geographic region of the earth from workers in/from another to lower corporate labor costs; therefore, it necessarily involves eliminating or at least weakening borders in order to effect ‘free’ trade and lax immigration policy.
This is such an obvious point that you have to wonder why ‘experts’ such as Cornelissen don’t get it. Do they really, honestly believe that neo-liberalism promotes anything other than ‘free’ trade, open borders and foreign intervention (for ‘human rights,’ of course)? Now, do politicians fronting for the neo-libs sometimes appear to criticize these things? Well sure, if that’s what it takes to win an election. But watch what they do once they’re safely ensconced in office!
Does anyone here remember Merkel back in 2010 telling her electorate that “multiculturalism has failed”? So what did she do about it? Tighten the asylum laws? Push to restrict immigration? Hardly! Only a few years after making that statement, she proceeded to flood the country with ‘refugees’!
And do you remember the last time the US had an official amnesty for illegal aliens? I do. It was back in 1987 and it was shepherded into law by that bleeding-heart lefty Ronald Reagan! (Incidentally, the real lefties back then, such as Houston Congresswoman Barbara Jordan, actually opposed Reagan’s amnesty because–get this!–they claimed that too much immigration lowers wages for native-born workers. Who ever heard of such arrant crack-pottery!)
Interesting perspective this about neoliberalism and the new right drawing from the same ideological source. I would also add that Ukraine is a cautionary tale to all would-be right wing “leaders” that you can whip citizens into a frenzy (with help from Victoria Nuland, John McCain and a not insignificant coup warchest of $5bn) and ride the stirred up resentment of the establishment to the presidency but unless you deliver real, socially beneficial changes the next election you’ll have your as# handed to you by a comedian, just ask Poroshenko.
Outside of the US where right wing politicians like Trump can take the credit for levers like easy credit bidding up asset prices and the gig economy putting lipstick on the unemployment pig to keep the deception going (the deception being that stock markets are at all time highs, employment numbers are up etc even as wealth and income inequality are at robber baron levels), right wing populism is hardly a viable political strategy. Once all the immigrants have been demonized and chased out and people notice that their lives are still stuck in an economic rut, the right wingers run out of targets to aim their vitriol at, their rhetoric falls flat and public trust in their divisive tactics erodes.
…and all the while life remains austere for all but 10%.
He gets several things confused, apparently as a result of an attempt to argue that immigration, multiculturalism and so forth are unproblematic, and only “islamophobes” would suggest otherwise. It’s very much a view from inside the Panglossian bubble. There are at least three strands here.
Celebrations of western culture in comparison with Islam (a minority position but one which is still found) go back a long time, mainly on the Right Christian heritage, democracy etc) but also to some extent on the Left, where some writers fear that secularism and class-based politics are themselves in danger.
Opposition to explicitly multicultural policies by government (not the same as living in a society with different cultures) is largely a reaction to policies promoted by governments of the ostensible Left, although supported for entirely cynical reasons by neoliberals as a way of fragmenting resistance. This opposition comes from all parts of the political system.
Opposition to neoliberal policies, most obviously the encouragement of immigration by unskilled workers from poor countries, is based primarily on the lived experience of the poor and disadvantaged who are the main victims of immigration. (A non-negligible element of the opposition comes from past immigrants who have settled and made lives for themselves.)
There’s a very elitist argument here that people are incapable of understanding their actual situations and require some right-wing pundit to explain things to them.
Also the article elides the fact that neoliberalism has within its DNA a subspecies of Fabian Socialism that seems to assuage what little conciousness market fundamentalists have about rolling back a century of bitterly won advances by the working classes (of all erthnicities & gender identies, fixations and usages) within the insustrialized regions by diluting them with waves of foreign people made desperate by contrived colonial wars and climate disasters.
Does anyone believe that an Indonesian Muslim background person in Netherlands who’s made a good living suddenly wants her children to have to compete with waves of Africans for starter jobs?
Also- we’ve just come off of 30 plus years of identitarian pride for all non-white people. Which is just garbage that’s come out of english departments in the elite universities. White people have been told for about a decade now by everyone in academia and entertainment that they’re all racist trash who need to intermarry with darker people as quickly as possible to expiate the sins of north american chattel slavery and ..muh holocaust. Somehow all the depradations, human sacrifices, genocides and repressions of and by about every group throughout all time are just ‘whatabouttism’ now. When you start scapegoating any group they will get their back up eventually. There’s nothing conservative about it. But Disaster Capitalists are more than happy to insert themselves into the scene, supporting such causes the same way they supported #MeToo or #BlackLivesMatter when it was a convenience. Never let a good disaster go to waste, right?
Yes, and nary a mention of long-standing socialist (oft referred to in the U.K. as Bennite in “honour” of the school of thought popularised by Tony Benn, but he merely expressed much older international labour movement (note the small “l” there not a big “L”) notion of global worker solidarity) opposition to the EU.
You can say many things about socialism, Bennism and their kissing cousin Communism. But “neoliberal” or “neoliberal antecedences” isn’t one of them.
A nice try at constricting — and thereby, one has to assume, attempting to constrain and frame — Brexit as being only a right wing or conservative reactionary ideal and thereby inherently neoliberal. But that might, only might, have worked a few years ago. Too much water has passed under the bridge and too much ideological complexity has emerged around it now for that to wash.
@David – yes! Resistance to excessive immigration is non-ideological but based on very human tribalism. Too many strangers in a society results in a loss of fellow-feeling and more division. This is, IMHO, the root of much of the rot in Western societies – the destruction of trust, aided and abetted by a ruling class that uses deception habitually to manage the masses and divide them from themselves. Can’t let the cattle figure out how we’re exploiting them!
If one views the indigenous workforce of a nation as a loosely constructed “labor union”, one only has to look at the disdain that labor unions have for strike breaking “scabs” to see why there is resistance to excessive immigration.
At the top of the workforce pyramid, the well-paid upper crust views their costs for domestic help and workplace staffing dropping with increased immigration..
I suspect left leaning US politicians do not allow that many voting, low wage, workers (aka HRC deplorables) view themselves competing with immigrants for jobs, with some numerical justification, as immigrants and their US born children constitute about 28% of US population.
https://www.migrationpolicy.org/article/frequently-requested-statistics-immigrants-and-immigration-united-states
“Immigrants and their U.S.-born children now number approximately 89.4 million people, or 28 percent of the overall U.S. population, according to the 2018 Current Population Survey (CPS). Pew Research Center projects that the immigrant-origin share will rise to about 36 percent by 2065.”
Trump has tapped into this, but is doing it in a Potemkin village style, as I tell people that Trump likes low wage workers for his properties and construction projects. His border wall is designed for show, not effectiveness, otherwise he would enforce employer sanctions against employing non US citizens.
“otherwise he would enforce employer sanctions against employing non US citizens”
If we ever see that seriously being done then we can probably safely assume that real change will be happening.
Neo-liberalism seems to me to have as a logical consequence the fostering of a Covenant-Lite approach to culture as well as markets.
The markets show that some of those Covenant-Lite Collateralized Loan Obligations are blowing up now, distressingly reminiscent of the CDOs that wrought havoc on the world financial markets last decade during the Crash.
Culture gets its turn, as it always does, this time through an anything-goes approach without any moral or ethical underpinnings, of whatever nature. It should be no surprise to anyone that there are bad actors to manipulate situations, institutions and people.
See also Wolf Richter on the matter.
Glad to see my nemesis being exposed for what he truly is! :)
I think this is neglecting an important strand…..Neoliberalism obviously contains within itself the resistance of the Hoi Polloi…even Hayek and Mises were aware of this as far back as the 40’s.
People would chafe at the all against all hyperindividualist yer-on-yer-own orthodoxy and seek ways to challenge the Neoliberal Order.
The Right Wing Version of such Populist insurgency is simply one that the Neoliberal Thought Collective can more easily swallow and use towards it’s own ends.
Unlike the Sanders/Veroufkas(sp-2). Melanchon(sp-2) Actual Left version of Populism, which is the antithesis of Neoliberalism.
Look to the history of things like the CIA, and the Elite neofeudalist worldview it has worked for from it’s very beginnings….anything that smells of the Left must be rooted out and crushed, lest it present an alternative…while Right Wing Authoritarians are supported as “Freedom Fighters” and “Liberationists”….just ignore all the corpses(or blame them on the Powerless Left)
Neoliberalism is merely the latest(and slipperiest!) version of a Capitalist World Order that itself is merely the latest iteration of the Ancient Regime.
The Elite, as a class, have been trying to undo the Enlightenment(often by coopting many of it’s features) since time immemorial.
The Populist Right is a useful(if dangerous) tool in furtherance of that end, while Lefty Populism is anathema, that would undo the very foundations of their preferred Order.
I don’t get it. The Brexiteers would be hard-core NeoLiberal’s, sure – but the EU is hard-to-lite NeoLiberal itself, so what is the goal that they are trying to achieve, with Brexit?
The EU is useful for guarding against the return of progressive left governments, which would utilize strong fiscal spending and even monetary power to provide that (ala MMT) – even in the UK with the sterling, due to EU fiscal rules – so what is the advantage gained, by opening up the risk of economically strong left-leaning governments, like that?
Are they just trying to dash the UK against the rocks, and pilfer the wreckage? To break up the UK, so that each individual region (United Ireland, Scotland, England+Wales) is weaker than the previous whole – and thus more pliable to corporate/globalist influence, due to being individually weaker and with probably less powerful governments? (and are they banking on the broken-up regions of the UK, rejoining the EU and being forced to ditch the sterling?)
There are a lot of fairly uncertain outcomes of it all – in all of the short/medium/long runs. This article doesn’t make sense, as it doesn’t describe what the goals are meant to be – or whether it’s aimless?
Raising more questions than it answers is still useful and all – but that’s a pretty big gap.
Correct
Interesting read.
IMHO the so called “populism” is a transient stage, prior to the people’s revolution yet to come. We don’t need to think too hard to appreciate that history provides lessons the monied class ignored at their peril. In the past, entrenched inequality was established by force and maintained by the creation of family elites or “royals”. This time around it’s subjugation of the masses aided by the use of digital technology enforced by purchased political actors and associated non elected bureaucratic elites created by the monied class, causing inequality not seen for around 100 years.
In the past we had a succession of depressions, mingled with world wars which culminated from global skirmishes around shaky empires that collapsed when the ordinary people decided they gained nothing by supporting these structures. The new deal and a reformed Europe established some order for 50 years, but it has been picked apart since the 70’s by old and new money demanding a greater share of nations’ outputs. So essentially we are back to 1880 and already the global depression is looming as it did around that time to signal the new beginning. Out of that depression(s) and associated destabilisation, all it will take is for one nation (China, US, Russia, Iran, India, Pakistan, Israel) to take a nuclear action and the whole pack of cards of the financialised economy will collapse. Roosevelt must be turning in his grave!
Let’s look at the truth table (from Thomas Frank).
Economically Right Socially Conservative
Right 1 1
Liberal 1 0
Lower Classes 0 1
Politics had evolved naturally into a two party system where liberals were forced to be more economically left wing and then they could enact socially liberal policies.
Neoliberals thought they would try and achieve the impossible with right wing economics and socially liberal policies.
The Right have seized the opportunity neoliberals have presented to them.
US professionals used to be solidly Republican due to their more right wing economics.
US professionals are now mainly Democrats as they have moved further to the right on economics and as long as it doesn’t affect their affluent lifestyles US professionals like socially liberal policies.
The Democrats right wing economics and socially liberal policies have pushed the lower classes towards the Republicans.
The truth table hasn’t come out very well as all the white space has been stripped out.
Two headings.
Economically Right
Socially Conservative
1 – true
0 – false
In the lower classes, neoliberalism created a competition for scarce resources, e.g. housing, jobs, benefits, etc …..
The liberal Left’s support of mass immigration can only make these problems worse and this is what the Right have capitalised on.
The Left have abandoned economics and have no real economic alternatives.
Anything harking back to the way things were in the Keynesian era are dismissed as old ideas that have already failed.
Neoliberalism is based on 1920s neoclassical economics that are even older ideas that failed so long ago people don’t remember that these are just rehashed very old ideas.
Things are panning out as expected.
We stepped onto an old path that still leads to the same place.
1920s/2000s – neoclassical economics, high inequality, high banker pay, low regulation, low taxes for the wealthy, robber barons (CEOs), reckless bankers, globalisation phase
1929/2008 – Wall Street crash
1930s/2010s – Global recession, currency wars, trade wars, rising nationalism and extremism
1940s – World war.
The final destination is becoming only too apparent as nation turns on nation and political extremism flourishes.
Today’s debt fuelled, rentier capitalism doesn’t have a long term future.
The UK:
https://cdn.opendemocracy.net/neweconomics/wp-content/uploads/sites/5/2017/04/Screen-Shot-2017-04-21-at-13.53.09.png
A three stage plan for the Left to come up with a much better economics.
Step 1 – Find out what capitalism really is.
Did you know capitalism works best with low housing costs and a low cost of living?
It’s obvious really.
Employees get their money from wages and the employers pay high housing costs through wages, reducing profit and driving off-shoring.
This is how Asia did so well at the expense of the West during globalisation. You just can’t pay those wages in the West, workers can’t afford to live. Multi-national corporations could make higher profits in Asia due to the low cost of living that they had to cover in wages.
Apple are off-shoring more stuff as we speak, you just can’t make a decent profit in the US. The cost of living is too damn high.
When did it all go wrong?
At the end of the 19th century.
We thought small state, unregulated capitalism was something that it wasn’t as our ideas came from neoclassical economics, which has little connection with classical economics.
Ricardo knew, yes that Ricardo.
“The interest of the landlords is always opposed to the interest of every other class in the community” Ricardo 1815 / Classical Economist
What does our man on free trade mean?
Disposable income = wages – (taxes + the cost of living)
Employees get their money from wages and the employer pays through wages.
Employees get less disposable income after the landlords rent has gone.
Employers have to cover the landlord’s rents in wages reducing profit.
Ricardo is just talking about housing costs, employees all rented in those days.
Employers and employees both win with low housing costs and a low cost of living.
Step 2 – Find out how the monetary system works and where the money supply comes from.
Step 3 – Find out what real wealth creation is.
We want the economy to grow.
We want GDP to grow
No one thought about what it was or what it measures.
GDP tells us what real wealth creation is.
(When you’ve done step 2, you find money comes out of nothing and is just numbers typed in at a keyboard; that is not where the real wealth lies. Money has no intrinsic value; its value comes from what it can buy.)
What was Keynes really doing?
Creating a low cost, internationally competitive economy.
Keynes’s ideas were a solution to the problems of the Great Depression, but we forgot why he did, what he did.
They tried running an economy on debt in the 1920s (look familiar?)
The 1920s roared with debt based consumption and speculation until it all tipped over into the debt deflation of the Great Depression. No one realised the problems that were building up in the economy as they used an economics that doesn’t look at private debt, neoclassical economics.
Keynes looked at the problems of the debt based economy and came up with redistribution through taxation to keep the system running in a sustainable way and he dealt with the inherent inequality capitalism produced.
The cost of living = housing costs + healthcare costs + student loan costs + food + other costs of living
Disposable income = wages – (taxes + the cost of living)
High taxation funded a low cost economy with subsidised housing, healthcare, education and other services to give more disposable income on lower wages.
Keynesian ideas went wrong in the 1970s and everyone had forgotten the problems of neoclassical economics that he originally solved.
Quinn slobodian has writing about this as well – https://preview.publicseminar.org/2018/02/neoliberalisms-populist-bastards/
No one can cut to the meat of an issue the way that Michael Hudson can.
Banks hate deficit spending because then they can’t make money by extending loans. They WANT this to be a credit-dependent nation.
Here are the real two parties:
Those who want the private banking industry to run government finance and those who do not.
Who will plan economies: Financial managers, or democratic governments?
Bonnie Faulkner: If there were pressures to create a New International Economic Order in the 1970s, what was this new order looking to achieve?
Michael Hudson: Other countries wanted to do for their economies what the United States has long done for its own economy: to use their governments’ deficit spending to build up their infrastructure, raise living standards, create housing and promote progressive taxation that would prevent a rentier class, a landlord and financial class from taking over economic management.
In the financial field, they wanted governments to create their own money, to promote their own development, just like the United States does. The role of neoliberalism was the opposite: it was to promote the financial and real estate sector and monopolies to take economic management away from government.
So the real question from the 1980s on was about who would be the basic planning center of society. Would it be the financial sector – the banks and bondholders, whose interest is really the One Percent that own most of the banks’ bonds and stocks?
Or, is it going to be governments trying to subsidize the economy to help the 99 Percent grow and prosper? That was the social democratic view opposed by Thatcherism and Reaganism.
*******
Former NY Times journalist Chris Hedges has described what is going on here and, as you probably have already guessed, it has nothing to do with beating Trump:
“Politicians like the Clintons, Obama, Biden, Pelosi and Schumer are creations of Wall Street. That is why they are so virulent about pushing back against the Sanders wing of the Democratic Party. Without Wall Street money, they would not hold political power.
The Democratic Party doesn’t actually function as a political party. It’s about perpetual mass mobilization and a hyperventilating public relations arm, all paid for by corporate donors.
The base of the party has no real say in the leadership or the policies of the party, as Bernie Sanders and his followers found out. They are props in the sterile political theater.
These party elites, consumed by greed, myopia and a deep cynicism, have a death grip on the political process. They’re not going to let it go, even if it all implodes.”