Have formerly aspirational voters tired of casino capitalism?

For the past four decades, he who dared (successfully) won. Are the more risk-averse about to get a bigger slice of the pie?

Photo by Jonathan Petersson on Unsplash

Socialism never took root in America because the poor see themselves not as an exploited proletariat but as temporarily embarrassed millionaires.
John Steinbeck (attributed)

The time has come for a new economic policy. It targets unemployment, inflation, and international speculation.
Richard Nixon, 1971

The point is, ladies and gentlemen, that greed, for lack of a better word, is good. Greed is right. Greed works. Greed clarifies, cuts through and captures the essence of the evolutionary spirit. Greed, in all of its forms — greed for life, for money, for love, knowledge — has marked the upward surge of mankind. And greed, you mark my words, will not only save Teldar Paper, but that other malfunctioning corporation called the USA.
Oliver Stone and Stanley Weiser, via Gordon Gekko (1987)

I think price controls are a stupid idea. Ditto for all but the most circumscribed price-gouging laws. A stronger case can be made for rent controls, but only if you’re not concerned about discouraging new housing development.

Being old enough to dimly remember the pre-neoliberal epoch, I’m entirely aware that both tariffs and industry policy are wide open for abuse by both Labour and Capital. (That noted, I do believe they have a place, especially when dealing with a rising and aggressive mercantilist power.)

But what you or I think about market-distorting economic policies is neither here nor there, dear reader. The evidence suggests that – albeit after having had a flutter themselves – Anglosphere voters have tired of casino capitalism and are now demanding their elected representatives start smashing up the roulette wheels.

The Anglosphere’s big gamble
Younger readers, who’ve known nothing but neoliberalism all their lives, probably can’t comprehend just how omnipresent Big Government used to be, not least in the United States.

Let me provide an illustrative example.

In the early 1970s, the US was already starting to experience an issue that would soon thereafter come to bedevil many other nations – stagflation (i.e. high unemployment and high inflation). In response, a fervently anti-Communist Republican president introduced a New Economic Policy in mid-1971.

Yes, it was really called the New Economic Policy (NEP) despite or because of the Soviet associations.

What people remember about Nixon’s NEP is that it took the US dollar off the gold standard. What has been lost to the mists of time is that it also introduced a 90-day freeze on wages, prices and rents and imposed a temporary 10 per cent ‘surcharge’ on imports. At a time when taxes were much higher, the NEP also lowered tax rates to spur economic activity. Given Nixon won one of the largest landslide victories in US political history in 1972, it seems American voters didn’t take issue with his heavy-handed central planning.

But a very different Republican president would be elected after Nixon. He was also big on tax cuts but not so keen on the international-speculation-constraining guardrails that created widespread prosperity and upward mobility from 1945-1980.

A beguiling vision    
While Nixon’s old-school policies seemed to work for a while, the US didn’t banish stagflation for long. By the late 1970s, many powerful institutions (and voters) throughout the Anglosphere had concluded, not unreasonably, that Keynesian policies weren’t delivering the goods.

“A bloated bureaucracy and irresponsible union leaders are the source of all your problems,” argued the neoliberals. “Let the wealth-and-job creators do their thing unmolested and you’ll unleash a boat-lifting rising tide. Sure, those at the top might pull ahead initially. But all that wealth will inevitably flow down to those of a humbler station.”

Four decades on, there’s a broad consensus that things haven’t quite worked out that way.

Many of the more prescient plutocrats, especially the American ones, are now calling on their peers to either accept a much heavier tax burden and/or give away their fortunes.

As an aside, whenever I fear I’m careening too deeply into apocalypticism, I reassure myself that we must all be living in Bizzaro World if even the wealthy are now demanding that their wealth be redistributed.

There are no heroes in this story
Few of us depart the neoliberal era with clean hands. Corporate, political, media and academic elites certainly talked up neoliberalism. But plenty of Anglosphere voters were content to keep voting for parties advocating neoliberal policies for decades.

It seems that it wasn’t until the Global Financial Crisis that a critical mass of voters started questioning whether greed was, in fact, good. And whether unshackled corporations and unconstrained plutocrats were entirely sincere about delivering them the wealth, status and fulfilment they had long promised.   

This brings me to a book by

Nate Silver

and an article by

Oren Cass

. 

Silver sees  
If you don’t already know who Silver is, you will be November 5. To summarise, he’s a talented statistician/data analyst who shot to fame by predicting the outcome of the 2008 election with unsettling accuracy.

I’m yet to read Silver’s new book, On the Edge: The Art of Risking Everything. However, it reportedly argues that the world can be divided into a small minority of increasingly rich and influential individuals who are comfortable with high-risk, high-reward scenarios and a large majority of individuals who prefer stability.   

Silver describes the daredevils as being part of ‘The River’. Financiers, start-up founders, venture capitalists and Bitcoin boosters are all River folk. In contrast, academics, public servants, journalists and median voters typically reside in the more circumspect ‘Village’.

Silver’s core argument is that the risk-takers have become much more powerful – culturally, financially and politically – in recent decades. As a result, citizens of the Anglosphere, regardless of their risk tolerance, now live in winner-take-most societies.  

Winner-take-most societies are great; if you’re a winner. But if the winners take most, there’s not a lot left for the non-winners. Nowadays, even if you “get an education” and land what would once have been considered a solidly middle-class job, you’ll still probably struggle to afford the traditional trappings of a bourgeois lifestyle. And if you don’t go to university, you’ll probably end up working a modestly remunerated service-sector job and face a lifetime of financial stress.

Once again, I fear younger readers will assume ‘twas ever thus.

But it wasn’t that long ago that people could attain a ‘relaxed and comfortable’ lifestyle, including home ownership, without finishing high school, let alone enrolling in university. 

During the post-war Keynesian era, there were still rich and poor people, but most voters fell between those extremes.

Over the last four decades, the middle has been hollowed out. Voters now seem to want to fatten up that shrinking midsection and create a world that’s less tilted in favour of 99th-percentile, cognitively elite types, and kinder to the humdrum everyman.

Is everything we’ve been told about the Yanks wrong?
If there’s one thing everybody knows about Americans, it’s that they are delusionally optimistic go-getters who are eternally confident they will win so much that they’ll get tired of winning. Accordingly, they’ve always been constitutionally averse to social democracy because they can’t imagine a situation where they’ll ever require a safety net.   

But it seems that’s not true. Or at least nowhere near as veracious as most non-Americans – and many Americans – believe.

It wasn’t true from 1932-1980, as illustrated above. It may or may not have been true from circa 1980-2007. But, as Oren Cass explains, it’s certainly not true now:    

One of the most consistent and counterintuitive findings in American Compass’s public opinion surveys, which we find in other survey data as well… is that the politically prevalent understanding of the American Dream as a chance to “get ahead” or “make it to the top” is not widely shared by the American people. To be sure, no one objects to the idea that America should be a place where anyone, wherever he starts, can achieve great things. But the obsession in our political rhetoric with “opportunity” is misplaced.

Much more important than “opportunity” and “mobility” is “stability” and “security.” I first became aware of this contrast with a fascinating question asked by Pew Research: Which of the following is more important to you: “Financial stability” or “Moving up the income ladder”?

Americans chose “financial stability” by 12 to 1, in one of the most lopsided results you’ll ever see in public polling…

In one of our focus groups, with working class Americans, we asked people to envision their ideal economy. What would it look like? Nearly every person responded with some form of “stability”; as one person put it, “a decent job that you're putting in 40 hours for and be able to not worry about making ends meet, or even affording a place to live.”

It seems that when gun-totin’, ’baccy chewin’, ‘Murica-lovin’, Far Right/racist/fascist Trump voters are invited to picture utopia, they call to mind a society like… *checks notes*… Sweden.

Gimme shelter
As some of my fellow Substackers – see Matt Yglesias and Noah Smith – have been arguing of late, ‘neoliberalism’ has been overused to the point where it’s come to mean anything the Left doesn’t like.

There are several ways of defining neoliberalism. I think of it as a combination of economic hyperliberalism (this used to keep the Right happy) and social hyperliberalism (this continues to keep the Left happy). It’s as if a settlement was reached in the early 1980s that handed control of the economy to the Right and oversight of social policy to the Left. (Not coincidentally, the median Anglosphere voter is well to the cultural right and economic left of their elected representatives, and other members of the professional-managerial class.) 

But here’s another way of thinking about neoliberalism. It’s the transfer of risk from the state and businesses (big and small) to ordinary citizens. That’s an arrangement that’s worked out spectacularly well for globe-spanning corporations, plutocrats and politicians eager to shirk accountability. (“It sucks your job got offshored, I feel your pain. But, hey, whaddya expect me to do about globalisation? Maybe you should learn to code.”)

More on this next week, but I suspect the professional-managerial class (PMC) is about to get a bitter taste of its own medicine as AI, probably in concert with other emerging technologies, abruptly vaporises scads of prestigious white-collar jobs.

Given that, I’d argue the parties/politicians that are winning now, and which will win even more bigly in future, are those committed to de-risking people’s lives. (That is, people who either haven’t been winning for a long time or who have recently sighted a life-deranging tsunami of technological disruption rapidly advancing toward their profession.) 

The gathering storm
If you want to get an idea of just how disruptive Gen AI already is, consider the following.

I just asked ChatGPT to turn this article “into a 20-scene script”, then cut and pasted that script into Pictory, which creates “highly engaging videos in minutes using the power of AI”.

In less than five minutes, with a few taps on a keyboard, I generated this:

Granted, it might be a stretch to call this video content “highly engaging”, even if it conveys reasonably effectively the article’s main points. But if you spend a few minutes familiarising yourself with Pictory’s simple and intuitive interface, you can play around with the visuals, background soundtrack, narration, text, etc.

If you do that, you can create slightly better video content, such as this:

In short, you can learn to be a ‘good-enough’ videographer/video editor in half a day. Within a few days, I imagine you could start churning out professional-grade content. 

Take a moment to think about the position Pictory puts videographers and video editors in. Now take a moment to think about what happens when your own ‘laptop class’ skill set also gets Pictoryified.

Don’t believe that could ever possibly happen to you? You might be right. But as someone who used to be a print journalist, I’d warn against insouciance.