The time of monsters

Political polarisation + economic turbulence = a new era

Photo by Colin Lloyd on Unsplash

For roughly half a century, our political economy has been based on the governing concept of neoliberalism – the idea that capital, goods and people should be able to cross borders in search of the most productive and profitable returns… The sense that the global economy has become too unmoored from national interests has helped fuel the political populism, nationalism and even fascism… The neoliberal philosophy is tapped out not only in the United States but also abroad – witness the backlash in Britain to Prime Minister Liz Truss’s ill-fated experimentation with trickle-down tax cuts… philosophies that have outlived their usefulness give way to new ones. Seismic shifts in the socioeconomic agenda are rare and transformative. We are going through such a shift now.
Rana Foroohar

Both Labor and the Coalition have pursued what is generally called a neoliberal economic agenda, forcing the country to be more open to world markets and citizens to be more reliant on their own resources. This new order – instigated by the Hawke-Keating Government in 1983 and bedded down by the Howard Government between 1996 and 2007 – has undermined traditional social formations… as the working class became the ABN [i.e. self-employed] class, Labor lost its base. As Labor lost its base, the Liberal-National parties lost their raison d’être, which was to oppose the interests of that old working class… The ‘teals’ – the community independents – are the political godchildren of all these changes, impossible to countenance without the transformation neoliberalism wrought in Australian society, and they exhibit a mosaic of views – social and economic – that you would expect to see in a movement seeking to tame the social disruption that neoliberalism wrought.
Tim Dunlop 

The old world is dying, and the new world struggles to be born: now is the time of monsters.
Antonio Gramsci

Just as Liz Truss’s Thatcher tribute band tour was grinding to its ignominious end, podcaster, blogger, author and George Mason University economics professor Tyler Cowen published an attention-grabbing thinkpiece entitled ‘Classical liberalism vs The New Right’. If that kind of thing is your bag, you can find the entire article here. But the aspect of it I found most interesting was Cowen’s observation that nobody – Rightists, Centrists, Libertarians, Leftists – trusts or respects elites.

According to Cowen, the New Right (he’s referring to the new New Right, not the old New Right that arose in the 1970s in reaction to the New Left) wants to watch the world burn, ideally while strangling the last gender-transition-leave-championing CEO with the entrails of the last free-trade-agreement-signing politician.

Like New Rightists – and just about every other political grouping imaginable – classical liberals also now find the incumbent elites contemptible and fear that they are no longer particularly competent. However, they take a small-c conservative, ‘Eh, what are ya goin’ do?’ approach to their continued existence. As Cowen puts it:

In the classical liberal view, elites usually fall short of what we would like. They end up captured by some mix of special interest groups and poorly informed voters… That said, classical liberals do not consider the elites to be totally hopeless. After all, someone has to steer the ship and to this day we do indeed have a ship to steer.

I’m not sure voters are as poorly informed as Cowen and his cognitive elite peers assume, or that they had much success bending elites to their will between 1979 – 2015, but let’s leave that to one side.

Cowen goes on to contrast classical liberals’ resigned fatalism with the New Right’s growing rage:

The New Right thinkers are far more sceptical of elites. They are more likely to see elites as evil and pernicious, and sometimes they (implicitly) see these evil elites as competent enough to actually wreck society…

Once you start seeing elites as so bad and also as collusive, many other changes in your views might follow… Free trade becomes seen as a line peddled by the elite, and that is an elite unconcerned with the social and national security costs of a deindustrialised America. Globalisation more generally becomes a failed project of the previous elite…

The last twenty years have seen 9/11, a failed Iraq War, a major financial crisis and recession, and a major pandemic, mishandled in some critical regards. It doesn’t seem that wrong to become additionally sceptical about American elites, and the New Right wields these points effectively.

Cowen mentions the Woke Left only in passing. But he could easily have cut and pasted the above passages and switched a handful of bogeymen terms around to describe contemporary progressives. After all, the Left was anti-globalist long before it became cool on the Right. Despite its triumphant long march through the institutions and seizure of the citadels of cultural power, the Left is also inclined to see (homophobic, transphobic, Islamophobic, racist, misogynist etc) elites as evil and pernicious.

I’m pretty sure this amount of hating on elites wasn’t the norm from circa 1939-2006. Granted, things got hairy in the late 1960 and early 1970s, but back then the Right was desperately trying to maintain the status quo and demanding authority figures be treated with due respect. Now almost everybody is itching to guillotine the king and his courtiers.

The top-down neoliberal ‘consensus’
I’ve got a pet theory that many of the world’s problems arise from the Right achieving almost total victory in the economic debate and the Left achieving almost total victory in the culture war. The Cathedral never ceases in its work of talking up the upsides of the Right and Left’s respective victories. But that doesn’t change the fact (a) there have been massive downsides to the right-wing economic policies and left-wing social policies enacted in recent decades and (b) Anglosphere voters never embraced economic and social liberalism to the extent their elected representatives did.  

Much to the Right’s frustration, many voters support soaking the rich, preventing multinationals from gaming the taxation system, generous government spending on health, education and retirees, protecting domestic manufacturers and farmers, and shifting the balance of power back to Labour from Capital. Much to the Left’s horror, many voters are repelled by mass migration, drag queen story hour, pricey environmental policies of dubious efficacy, late-term abortion, soft-on-crime politicians and woke scolds.

This is why right-of-centre politicians ready to move a little to the left on economics and (more rarely) left-of-centre politicians willing to move a little to the right on culture attract so much support. It’s also why many of the newer political parties in Europe are a seemingly contradictory mélange of Leftist economic policies and Rightist social ones.  

The estimable Ed West has a characteristically droll essay about this that details how right-wing his Labour-voting friends are and how left-wing his fellow Conservatives are. West observes:          

 The median voter is a sentimental authoritarian, culturally but not socially conservative, hardline on immigration but viewing racism as the preserve of wrong‘uns, egalitarian and resentful, hostile to change, and extremely sentimental about animals. The British public, both of Left and Right, have never really got over the Second World War and the Blitz spirit, when Britain became the most successful authoritarian socialist state in history. They want war communism, not freedom… The difference between social and economic liberalism is not how unpopular they are with the people, or how much they are imposed by an ideological minority; it’s how much support they get from elites. If Truss’s plans for a neo-Thatcherite revolution had the backing of academia, showbusiness, journalism and the wider intelligentsia, it wouldn’t matter what ‘the public’ thought. It would happen.

The populist revolt
Long-serving Australian treasurer Peter Costello used to drily observe that people never marched in the streets to demand neoliberal economic reforms. The same point could be made about many of the social reforms of the last few decades. Both economic and social liberalism were imposed from above.

I imagine non-elite types wouldn’t have minded if untrammelled economic and social liberalism had turned out well. Admittedly, neoliberalism has turned out fantastically well for those in the top quintile of the income distribution. A case could also be made that the pros have outweighed the cons for those in the second quintile of the income distribution. But, not without reason, those in the bottom three quintiles of the income distribution believe, at best, they are treading water and, at worst, they are drowning.

Occupy Wall Street, the Tea Party, the gilet jaunes, Brexit, Trump, AOC, Bernie Sanders, BLM, Marine Le Pen and Meloni didn’t drop out of a clear blue sky. The bottom 3-4 quintiles have been growing increasingly angry since the Masters of the Universe crashed the global economy, then demanded to be bailed out by taxpayers who were losing their homes and jobs. They are no longer inclined respectfully accept the pronouncements of elites that have repeatedly proven themselves inept, oblivious and venal.

The New World Order
I’m running out of time and space, so let me end by briefly sketching out a vision of what a post-neoliberal world might look like:

*Less cross-border movement of capital, goods and people. There’s growing agreement that the world is deglobalising and ‘Chimerica’ is decoupling. This isn’t quite the same thing as saying free trade is on its deathbed. In all likelihood, the world will divide into two blocs, one headed up by America and one headed up by China. There will be as much or possibly even more cross-border trade in capital, goods and maybe even people within these blocs but much less cross-bloc trade.

*A pivot to dirigisme – For the last four decades, those in the Anglosphere have been told the path to efficiency, prosperity and happiness lies in shrinking the state (“starving the beast”, to use the lingo of economic liberals), letting the free-market rip and elevating ‘wealth creators’ to the status of culture heroes.

Interestingly, this was never an approach taken by nations venerated by economic and social liberals, such as Singapore and Sweden. It’s most definitely not the approach China, the great economic success story of the last 50 years, embraced. After being treated like a red-headed stepchild for as long as anyone can remember in the US and UK – and, to only a slightly lesser extent, Australia, Canada and New Zealand – the state is likely to mount an impressive comeback.

*More societal and geopolitical conflict. There’s a reason that Gramsci described the transition period from one era to another as a time of monsters. Those who’ve long benefitted from the status quo aren’t going to go gently into the good night. And those who believe the world isn’t changing quickly enough will become increasingly radical as their demands for rapid and far-reaching change are inevitably frustrated. That’s a recipe for societal conflict.

With China and America’s economies decoupling, leaders in both nations will now be under even more intense domestic political pressure to get tough with the rival hegemon. That’s a recipe for geopolitical conflict.

Buckle up, people; it’s going to be a bumpy ride for the next few years.