Neo-populism is so hot right now
2024 is increasingly looking like a 1979/1980-style turning point where the dominant ideology is abruptly junked. With difficult-to-predict consequences
Image courtesy of DALL-E
We must redouble our organising efforts now we have an environment that is more favourable than we have had for decades.
Sally McManus, ACTU Secretary, 5/6/24
In continental Europe, anti-immigration, anti-Muslim parties are progressing at a rapid rate. At the time of writing, Nigel Farage has re-emerged to lead the Reform Party on a platform of reducing net immigration to zero and was immediately physically attacked. Why is this happening? Throughout the last decade, the legacy media answer has been the same: we don’t know and we don’t care.
Konstantin Kisin, 5/6/24
Conservative economic thinkers have now had at least eight years to construct an intellectual and policy framework around Trump’s instinctive economic populist message. What they have come up with is a set of worker-first, anti-corporate elite policy proposals, which are increasingly popular within the party, and in Trump’s economic circles. They contend that the Reaganite low-tax, low-regulation, free market ideology has not worked out very well for American workers, but it has worked out enormously well for corporate elites.
Eamon Javers, 21/5/24
For these voters, the “system” has failed, so we need Trump. But what is the system? Basically all the universalistic promises of liberal democracy, be they the notions of the rule of law, formal political equality, or market exchange. To Trump those ideas are bullshit, the nice sounding lies of the big shots. In all of those frameworks, individuals are supposed to encounter other individuals as free and equal citizens endowed with the same inalienable rights. A harmonious society supposedly develops from the interplay of their diverse interests. But what if it doesn’t?... To many, life feels more like a continuous struggle for survival rather than a social contract providing for reciprocal rights and obligations.
John Ganz, 5/6/24
Regardless of who wins the upcoming US presidential election, it appears neoliberalism is on its deathbed in the US. Given all Anglosphere politics is downstream of American politics, I’m assuming that means neoliberalism will soon also expire in Australia, Canada, New Zealand and the UK.
It's always discombobulating for people to accept that the old order has passed away. I imagine many East Germans watching the wall come tumbling down in late 1989 expected it would soon be patched back up by the authorities and regular programming would resume. They were mistaken. As, I suspect, are those sniffy legacy media types who believe the restive masses will soon return to their (free-market-worshipping, migration-loving, wealth-creator-venerating) senses.
But don’t take it from me that neoliberalism is so five minutes ago. Check out what Democrat and Republican thought leaders have been proposing.
Leftist neopopulism
I argued last week it was a New York Times article by David Leonhardt that started the chattering classes chattering about neo-populism.
This isn’t entirely correct – Leonhardt (and others) were reporting on and responding to a speech given by Jake Sullivan, Biden’s National Security Advisor. Below, I’ll relay Sullivan’s frankest admissions and the resulting ‘populist’ policy prescriptions before touching on some similar admissions and proposals from the Trumpist Right.
Here goes…
Sullivan: America’s industrial base [has] been hollowed out. The vision of public investment that had energised the American project in the postwar years — and indeed for much of our history — had faded. It had given way to a set of ideas that championed tax cutting and deregulation, privatisation over public action, and trade liberalisation as an end in itself… in the name of oversimplified market efficiency, entire supply chains of strategic goods — along with the industries and jobs that made them — moved overseas. And the postulate that deep trade liberalisation would help America export goods, not jobs and capacity, was a promise made but not kept.
Me: I suspect the West’s corporate behemoths were only ever truly concerned with doing an end run around unions, environmental activists and, ultimately, the nation state. (Or at least the taxation departments of nation states.) But if they did ever honestly believe gifting vast amounts of capital, (largely unreciprocated) market access, expertise and IP to the Chinese would turn out to be a win-win proposition, they’ve been proven grievously mistaken.
Sullivan: Another embedded assumption was that the type of growth did not matter. All growth was good growth. So, various reforms combined and came together to privilege some sectors of the economy, like finance, while other essential sectors, like semiconductors and infrastructure, atrophied. Our industrial capacity — which is crucial to any country’s ability to continue to innovate — took a real hit.
Me: I still find this statistic near impossible to believe, especially with some sort of conflict over Taiwan now seemingly inevitable, but the one-time arsenal of democracy currently has less than 0.5% of the shipbuilding capacity of China.
Sullivan: Much of the international economic policy of the last few decades had relied upon the premise that economic integration would make nations more responsible and open, and that the global order would be more peaceful and cooperative — that bringing countries into the rules-based order would incentivise them to adhere to its rules. It didn’t turn out that way… The People’s Republic of China continued to subsidise at a massive scale both traditional industrial sectors, like steel, as well as key industries of the future, like clean energy, digital infrastructure, and advanced biotechnologies. America didn’t just lose manufacturing — we eroded our competitiveness in critical technologies that would define the future.
Me: Yep – the citizens of Australia, Japan, the Philippines, South Korea and Vietnam better hope the Americans can rebuild their manufacturing sector post haste. (It might be an idea to sign up for Duolingo Mandarin lessons, just to be on the safe side.)
Sullivan: That is the core of our economic approach. To build. To build capacity, to build resilience, to build inclusiveness, at home and with partners abroad… And the inclusiveness to ensure a strong, vibrant American middle class and greater opportunity for working people around the world. All of that is part of what we have called a foreign policy for the middle class.
Me: This mindset, especially the part about structuring policy to foster “a strong vibrant American middle class”, was nearly universal among politicians and voters on both the mainstream Right and Left from circa 1945-1975. While Anglosphere voters’ commitment to egalitarianism appears to have weakened from around the late 1970s, they never became as economically liberal, or as comfortable with glaring wealth disparities, as their elected representatives.
Sullivan: Even as the term “industrial policy” went out of fashion, in some form it remained quietly at work for America—from DARPA and the Internet to NASA and commercial satellites.
Me: One day, I hope to have a beetroot-faced, business-paper columnist explain to me how a bunch of lazy, overpaid, work-to-rule, featherbedded public servants pissed the American taxpayers’ money up against the wall by inventing drones, GPS, the personal computer and the Internet.
As an aside, Scott Galloway can be most amusing about the self-pleasuring delusions of Seasteader tech bros whose unimaginably vast fortunes would never materialised without taxpayer-funded research.
Sullivan: We know the problems we need to solve today: Creating diversified and resilient supply chains. Mobilising public and private investment for a just clean energy transition and sustainable economic growth. Creating good jobs along the way, family-supporting jobs… Stopping a race-to-the-bottom in corporate taxation. Enhancing protections for labor and the environment. Tackling corruption. That is a different set of fundamental priorities than simply bringing down tariffs.
Me: While those on the Right might quibble with one or two of those goals, it’s hard to see a Republican politician running in 2024 arguing against, for example, the need to create many more “family-supporting jobs”.
Which brings us to developments on the other side of the aisle.
Rightist neopopulism
High-profile Republicans such as JD Vance, Marco Rubio, Josh Hawley, Tom Cotton and, of course, Donald Trump have been promoting what is now known as neo-populism for years.
Perhaps the most interesting thing about Rightist neo-populism is how similar it is to Leftist neo-populism. Like their Democrat counterparts, a growing number of Republicans (both politicians and voters) are keen to reverse the trend of recent decades and redistribute some wealth and power from the wealthy and powerful to the beleaguered middle and working classes.
Drawing on the work of conservative intellectuals, such as Sohrab Ahmari and Oren Cass, the afore-quoted Javers argues Rightist neo-populists support the following policies:
· Impose a 10% global tariff on all imports.
· Block American firms from investing in China.
· Block Chinese firms from access to U.S. capital markets.
· Impose harsh penalties for employees who fail to comply with immigration laws.
· Eliminate H-2A and H-2B programs for seasonal and agricultural workers.
· Award H1-B visas to the highest-paying employers.
· Create a $100 billion National Development Bank for critical infrastructure.
· Repeal the National Environmental Policy Act of 1970.
· Reform corporate bankruptcy to mandate six months severance for all employees and one year’s tax liability for local communities.
· Require private firms hired by public pension funds to publish annual performance data.
· Impose a financial transaction tax of 10 basis points on secondary market sales of stocks, bonds and derivatives.
· Ban stock buybacks and eliminate tax deductibility of interest.
There’s only one or two items on that list that the Left wouldn’t get behind in a New York minute.
Interestingly, there’s even some revisionism going on about exactly how neoliberal the neoliberal saints were. For instance, conservative commentator and Substacker Fred Bauer has pointed out Ronald Reagan didn’t facilitate the relocation of his nation’s industrial base to Eastern Europe during the first Cold War just so his business donors could reduce their labour costs.
How neo-populism will impact upcoming elections
Unprecedentedly high levels of migration lie at the root of much of the ‘populist’ turmoil now roiling the Anglosphere. In many ways, this is the ‘remote working’ of political issues in that the workers (who have the numbers) have interests at odds with those of the bosses (who, until recently, had an iron grip on the levers of power).
The UK election
Despite the widespread fury over both legal and illegal immigration, I suspect the British public is now so demoralised that it believes that only Nigel Farage and his Reform Party genuinely want to reduce numbers.
That’s little consolation because it’s hard for new parties to prosper in first-past-the-post systems. Farage may just win the seat he’s contesting, but I don’t imagine any other Reform candidates will. The Tories may veer Faragist if they suffer a heavy defeat. But even if that happens, it seems unlikely a Blairite centrist like Starmer will depart much from the high-migration status quo of the last three decades after moving into Number 10.
The US election
Trump will win the upcoming presidential race chiefly because American voters consider him a more sincere neo-populist than Scranton Joe. That’s not fair – Trump never built the wall but certainly didn’t neglect to push through a donor-class-delighting tax cut – but politics is about perceptions. In contrast to Trump, Biden hasn’t done much to differentiate and distance himself from his direct neoliberal predecessors – Obama, Clinton and arguably even Carter. And the Democrats’ decision to immediately re-open the southern border to all comers will surely come to rank with running Hillary Clinton for president in the annals of electoral self-harm.
The Australian election
The ALP has never had much luck. I suspect its next misfortune will be going into minority government. With the Greens, who are nowadays fiscally neo-populist while remaining socially hyper-liberal (i.e. the party is simultaneously committed to strict rent controls, a generous welfare state and open borders).
I’m classifying the upcoming federal election’s outcome as bad luck because Albo was a passionate economic neo-populist for much of his political journey. Now, at precisely the wrong time, he appears to have completed his transformation into a professional politician terrified of anything other than the most gradual and unobjectionable change.
Bill Shorten lost the unlosable 2019 election by overestimating the electorate’s appetite for serious reform to address serious issues such as housing. Ironically, I suspect Albo will partly or entirely lose the next election due to underestimating the electorate’s appetite for serious change to address serious issues such as housing (and therefore migration).
To channel John Howard, the times would now seem to suit Whitlamesque reformers promising to drain the swamp. Albo’s currently governing like a don’t-scare-the-horses gradualist while his wily “populist” opponent is showing no such ideological restraint.