(Getting to) The Politics of the Future

By Kindred Winecoff

A couple of quick additions to my previous post on Thatcher and punk rock. First is perhaps the greatest stunt a punk band ever pulled (in a quite strong field): convincing at least some folks in the upper reaches of the US and UK intelligence services that a Soviet plot was underway (ht Adam). An enjoyable read despite Buzzfeed’s Buzzfeediness.

More substantive is Jonny Thakkar’s recent long article on Thatcherism: where it came from, what it meant, and whether it was essentially inevitable. I’ve been a big fan of Thakkar ever since I discovered The Point a few years back, and strongly recommend searching its archive. Lots of good stuff in there. This article, I think, conveys a lot of the intention behind my meager post (and much more too). Take this as a morsel:

[O]ne of the greatest mysteries of the last three decades has been why leftist parties, so quick to criticize neoliberal policies in opposition, have consistently pursued them once in power. Since 1979, when Thatcher was first elected, almost all Western governments, left and right, have, to greater or lesser degrees, privatized public services and utilities while lowering taxes on corporate and individual incomes; inequality has risen inexorably; and the common perception is that citizens have become more consumerist and individualistic. In coming to terms with the failure of their elected representatives to arrest these trends, leftists have tended to cry corruption or cowardice; but the phenomena in question are too universal to be explained by personal vice alone. Either politics in general is just a cynical masquerade conducted by the rich and for the rich—a tempting explanation, to be sure—or there is something about the contemporary situation that makes it virtually impossible to resist neoliberalism. There must be various factors at work, but one of them is surely the absence of a compelling counter-ideal to neoliberalism in recent leftist thought. In the last three decades intellectuals and activists have mostly directed their attention towards foreign policy, climate change or identity politics rather than economic questions; when they have engaged directly with neoliberalism, it has typically been to offer what should technically be called conservative complaints, seeking to slow or reverse change rather than to suggest any new direction or ideal.

It is this sentiment, or something like it, that I was trying to get across. Mark Blyth stresses similar points at various times in his uneven, but well worth reading, Austerity. I’d put more emphasis on material conditions and less on a lack of counter-ideals, and I don’t think all of politics is rent-capture, but basically I think this a question that demands an answer. And I haven’t heard a good one.

Like it or not, neoliberalism is the closest thing we’ve gotten to a real global revolution with real global labor and capital integration. The best anti-neoliberalism counterfactual isn’t very appealing. And the effects should have been predictable: the wealthy in the global North have benefited (in many cases) as have the poor in the global South (in at least some cases). The middle class hasn’t disappeared… it’s grown enormously. It’s just that the new entrants aren’t from the U.S. or U.K., so for many of us it looks like stagnation. If you doubt my portrayal of the empirics, go check out Branko Milanovic’s extensive research on these questions.

Constructing a meaningful left politics out of this is very difficult. It must either eschew internationalism or eschew nationalist egalitarianism in the short run, and the short run might not be all that short. Neither is easy to do, for philosophical and practical reasons. The left can work for a more redistributionary tax code, but as Thomas Piketty — remember that name… you’ll see it a lot over the next 6 months — tells us in his landmark analyses into national inequality, that is a mere palliative; not a cure. More radical solutions, such as nationalizing finance, are non-starters politically and probably are not even desirable on the merits. (Do you really want financial power and state power to be even closer together?) The same is true of traditional right politics, which has been even more thoroughly discredited.

I have not yet decided what I believe to be the appropriate path forward. Thakkar recommends Platonic socialism — and bizarrely claims that simply not working somehow reduces inequality — but I can’t see it as a positive political program even if I accepted all of its premises, which I most certainly do not. I do know that I am grateful for durable political institutions undergirded by fairly strong norms of liberty, equality, and fraternity in whatever order they may appear. I know that “muddling through” is an underrated political strategy. And I know that even if neoliberalism was inevitable or even desirable c. 1980 does not make it so now. The religious battle over Reagan and Thatcher — angels or demons? — serves no positive function any longer. If your politics reduces to “banks are bad” or “government is bad” or “country X is bad” then you’re at least a generation out of date in your political thinking.

The task at hand is to construct social, political, and economic realities that extend the quite-meaningful gains we’ve made since industrial revolution, to do so with our eye on time horizons that extend further than the present day. We cannot pretend that gains we’ve made are not real; they are. We likewise cannot accept that we could not or should not do better.

What’s the Neoliberalism Counterfactual?

By Kindred Winecoff

Since 2008 there’s been a lot of discussion of the status of neoliberalism, one of those amorphous terms that means everything and nothing depending on context but generally is short-hand for “market-oriented reforms”. It is generally agreed that neoliberalism is a predominately Anglo-American philosophy, was exemplified by Reagan and Thatcher before being incorporated by Third Way liberals like Blair and Clinton, and has been forcibly exported around the globe through the use of US-UK financial power and its control of international institutions like the IMF. From there the narrative differs. Neoliberals like to point out that the past 30 years have been the best in human history by probably any reasonable metric: success for neoliberalism! Anti-neoliberals like to remind us that income inequality has gone up in many places, environmental degradation has been a byproduct of capitalist production, and the system has produced numerous crises: neoliberalism is gonna kill us all!

What is discussed much less frequently is what the alternative to neoliberalism was, and is. In fact, the TINA principle has frequently been invoked: There Is No Alternative. Collectivism was tried and found wanting. Keynesian managementalism was tried in Bretton Woods and collapsed. What else is there? We’ve reached the end of history. The liberal market plus democratic welfare state nexus seemed like the only game in town.

As Noah Smith points out in Foreign Affairs, there has always been an alternative: Japan.

Faced with economic stagnation in the late 1970s and early 1980s, most of the world’s rich countries made a fateful choice. They lowered taxes; slashed government regulation in labor, financial, and other markets; opened their economies to global trade and finance; and privatized government functions. …

Buoyed by the last spurt of its postwar catchup growth, Japan managed to sail through the 1980s without having to face hard choices about the structure of its economy. As a result, its labor markets are still tightly regulated, with stringent protections for full-time employees, including strict regulations on firing employees. Its corporate taxes remain high, and many of its domestic markets are still shielded from imports behind a tall thicket of non-tariff trade barriers. Its financial system remains centered on large government-backed banks instead of on capital markets, and hostile takeovers are still prevented by the courts. There are no Gordon Gekkos in Japan.

As Smith recounts that hasn’t worked out all that well either:

Many features of the Japanese economy that are commonly attributed to culture are, in fact, the result of Japan trying to run a modern economy without neoliberal reform: powerful but inefficient corporations, little job mobility, low unemployment, a relatively equal income distribution, and a job market that is heavily rigged against women. Taiwan, which is probably the closest country to Japan in cultural terms, has much higher inequality, greater labor mobility, more gender equality, and a higher per capita GDP than Japan. Taiwan, of course, is a low-tax, low-regulation country that is heavily exposed to trade with China.

Smith goes on to describe the structural reform efforts that are currently underway in Japan, which are broadly neoliberal. The question is: why now? If entrenched interests blocked reforms for the past few decades how are they being overcome?

The first answer is poor performance. Japan’s “Lost Decade” — the amount of time that Japan’s economy has not grown — is about to turn twenty. Of course that simply leads to another question… why, after so long, is the poor economic performance intolerable now. I know little enough about Japanese politics that I am nervous about extending an explanation, but two primary factors stand out to me.

The first is the rise of China. While this has been happening for awhile, it was only recently that China surpassed Japan as the world’s second-largest economy. Japan’s turn to neoliberalism under the leadership of Shinzo Abe contains a sharp nationalist edge. Japan’s contemplation of the Trans-Pacific Partnership signals a desire for closer ties to the U.S. (even if it disadvantages some domestic interest groups). Abe’s push to revise the Japanese constitution in order to build up its military — which has been prohibited since 1945 — is perhaps the biggest signal that Japan is increasingly wary of China.

The second is the subprime crisis. The effects were not as pronounced in Japan as in Europe, but they were still significant. One of the major results was political: the Liberal Democratic Party lost the 2009 election, the first time in Japan’s postwar democratic history that the LDP had been defeated. They regained power in 2012 on a platform of nationalism and significant reform. Those reforms were neoliberal, of course: TINA.

The point of this discussion is not to debate the finer points of Japan’s monetary or regulatory policies, but to ask anti-neoliberals to consider what else should have been done in the early-1980s, or 1990s, or now. Neoliberalism was a response to stagnation in the late-1970s and 1980s. It is a response to stagnation in Japan today. Countries that did not enact neoliberal reforms, or enacted them haltingly, continued to stagnate. Given that, suggestions that our current situation is all the fault of Reagan and Thatcher seems to be overly-simplistic (and are probably simply wrong). Suggestions that we can fix all of our problems through tighter regulation and limitations on trade, immigration, and financial movements appear to be contradicted by Japan’s experience. Structural problems, like rising income inequality, would appear to be the result of structural developments in the world economy rather than idiosyncratic policies.

The Politics of No Future

By Kindred Winecoff

When Fred Armisen paid a sort of tribute to Margaret Thatcher this Spring most took it as straight satire. Perhaps it was. But there is an argument to be made that part of punk rock’s driving force was rooted in the same dissatisfaction with postwar political economies that led to the Reagan-Thatcher neoliberal moment. The 1970s were thus a decade of economic as well as cultural transition, and as the decade wound down things were not going well. England was on an IMF bailout program and suffered from a Winter of Discontent. As part of this, trash collectors went on strike, so London was literally covered in garbage. It must have made a sort of sense to wear garbage bags as clothing in response.

In New York (which had gone bankrupt in 1975) crime was near its peak, entire neighborhoods — and practically a whole borough — had burned to the ground, and the subway looked like something out of, well, the bleak movies a coked-up Martin Scorcese was making at the time. The Keynesian consensus had not anticipated stagflation; the postwar compromise between capital and labor had calcified.

The politics of the ’77 punk movement is assumed to be of the left. This is questionable. In the 1980s the punk and hardcore communities were solidly leftist in their opposition to the Moral Majority and other neoconservative forces, but most of the 1970s groups had no politics, or their politics was obscure. In New York, punk was an extension of the avante-garde art and fashion communities, and London (at first) simply mimicked New York. The first signs of politics were anarchist when not nihilist. ’60s collectivism was as worthy of mockery as ’50s individualism. The mantra of “God Save the Queen” is not republican but simple defeatism: “no future”. This was the Blank Generation. They had no ties to the labor movement. They issued nothing like a Port Huron statement.

The Clash summed up the situation in “Career Opportunities”: there were none worth taking. The British economy was being crucified by entrenched corporations, corrupted trade organizations, and a hapless Labour Party. “Career Opportunities” was written in 1977, two years before Thatcher came to power but describing a social condition without which she never could have gained authority. The Clash saw one way out: a “White Riot” to match the civil unrest exemplified by black activists. (The Sex Pistols may have wanted anarchy in the UK, but the Clash proposed a mechanism. To the extent that punk had clear politics it was anti-racist. To the extent it had potential as a movement it was anti-statist.)

Some kind of structural transformation was needed, and had begun earlier in the decade with the final abandonment of the Bretton Woods system of pegged exchange rates. The entire edifice of postwar capitalism was evolving, and the frictions were clear. Even on the left there was some suspicion, as Christopher Hitchens put it, that on some matters Thatcher might just have had a point. When the face of American labor is Jimmy Hoffa there is not much hope in that direction.

Johnny Ramone was famously conservative, and even claimed that punk itself was fundamentally conservative. This is wrong. To the extent that punk politics have ever been articulated they are oppositionist[1]. In the late-1970s oppositionism meant pushing back against the stagnant institutions and slogans of postwar social democracy. These were controlled, at the time, by the parties of labor. From that fixed point only two roads extended: anti-democratic communism or neoliberalism, and by then even the communists were beginning to liberalize. Few punks were Thatcherites, but Thatcher was the only one who would provide the sort of destruction — the massive societal reorganization — that they were asking for.

That is, punk as a cultural force and neoliberalism as a political force are fixed in history. They were responses to the times, and each articulated a key insight: the contradictions of democratic Keynesianism had come to a breaking point. That punk emerged in the several years before Reagan and Thatcher came to power is not an historical accident; it was a warning. That neither punk nor neoliberalism exist as identifiable movements — rather than nods to fashion — in the U.S. and U.K. today demonstrates their contingency[2].

The fact that punk rapidly developed both left and right political factions — little-s soviets and Nazi punks, to give two examples — that were well beyond one standard deviation from the mean in response to Reagan and Thatcher is indicative of this. Some first-wave punk was assimilated into neoliberal political economies — we usually call it “new wave” for no clear reason — while others remained deeply oppositionist. During the 1980s the latter group included much of the emergent hardcore, the working class (often-nationalist) oi segment, and the avant-literate (Dead Kennedys, Minutemen); the former was on MTV.

Punk remains oppositionist but the political ideologies have shifted. Labor parties are the conservatives once again. Once again, the revolutionaries are on the right. The contradictions of the previous economic development model — the Reagan-Thatcher model — were made quite clear, but our political economy has so far not adapted. The rudderless nature of Occupy is illustrative of this, as is the return of vague Utopianism. As is the simple fact that in the U.S. and U.K. there is no cultural force equivalent to first-wave punk.

This could be temporary, but there are signs that it may not be. Mature political economies have gotten quite good at muddling through their contradictions; we’re six years on from the start of the crisis and we’re still muddling. Political demands are of the form “fix it!” rather than “destroy it!” Marginal tweaks appear more likely than systemic overhauls: revolution is incomprehensible, and anarchism is similarly unattractive. It’s not very fashionable but that’s the correct conclusion. The world is much better in 2013 than it was in 1977: we don’t have to wear garbage bags as clothes. And we have no need for another Thatcher.

[/1]Conservatism has periodically taken this “stand[ing] athwart history, yelling ‘Stop!'” mask, but Corey Robin’s definition of conservatism as fundamentally counterrevolutionary is, I think, a much more useful characterization of the core impulse than oppositionism.

[/2]”Neoliberalism” is a descriptor that lost its usefulness in the U.S. and U.K. well before Third Way liberalism adopted the Reagan-Thatcher platform more-or-less entirely. Any contemporary use in reference to Anglo-American political economy is usually an attempt at bullying.