Politics got weird because neoliberalism failed to deliver

Ian Welsh says that the USSR collapsed because its promises -- "a cornucopia and a withering away of the state" -- conspicuously failed to materialize; now, neoliberalism's promises ("If the rich have more money, they will create more jobs; Lower taxes will lead to more prosperity; Increases in housing and stock market prices will increase prosperity for everyone; Trade deals and globalization will make everyone better off") are likewise being shown to be lies, and so we're in crisis.

Welsh argues persuasively that this accounts for a host of weirdnesses, like the "fake news" epidemic ("the press lied to them repeatedly, it is the original fake news") or economists' predictions about Brexit ("why should they, most economists missed the housing bubble").

In a way, this is the rupture that Thomas Piketty predicted: as capital accumulates into fewer and fewer hands, the rich will have an increasingly outsized in setting policy, and will not allow any policies that undermine their further capital accumulation -- hence climate denial, mass surveillance, privatization of public goods from education to health care, violent suppression of oppositions and protest movements. This leads to increasingly worse outcomes for everyone who isn't in the elite (socialized losses, privatized gains) and political instability, which eventually becomes more expensive to put down than it would be to remediate through fairer policies. Though, of course, cheap, high-tech mass surveillance moves the "economically rational" point for redistribution over suppression, by making suppression a lot cheaper.

As Graeber pointed out in The Utopia of Rules, the west used to point to the USSR's failings by talking about the long lines, the endless paperwork, and the depressing sameness of everything. In today's world of privatized health-care, "accountability" movements in education, migration crackdowns, monopoly telecoms, and winner-take-all franchise capitalism, the west has become the land of long lines, form-filling, phone support queues, and malls that all sell the same things.

Welsh's list of neoliberalism's failed promises is an important and compact reminder of what's going on right now, one that we should have ready to cite in discussions of whether capitalism is sustainable.

The world order we live in was born in 1979 or 1980, with Thatcher and Reagan. It made a few core promises:

1. If the rich have more money, they will create more jobs;

2. Lower taxes will lead to more prosperity;

3. Increases in housing and stock market prices will increase prosperity for everyone;

4. Trade deals and globalization will make everyone better off.

These core promises all turned out to be lies. It’s that simple. For most of the population, the last 40-odd years were either an experience of stagnation, or an experience of decline.

[Ian Welsh]

(via Naked Capitalism)

Notable Replies

  1. It really is that simple. And what's been so hard for so many to see is that "the left" as they know it has really become just another part of the right.

  2. Arguably, it is the politics of the 50s and 60s that were weird, at least in the sense of being different than the usual. There was a general recognition at that time BY THE ELITES THEMSELVES that too great a concentration of wealth and power leads to populist unrest and thence to the sorts of unstable populist revolt that plunged Europe into chaos and war. There was a recognition that we are all in the same boat, and we need to keep it afloat and off of the rocks, even if that means sharing some of your bread with the oarsmen.

    But of course, as time passed and memories of the great depression and the war that it engendered faded, the elites forgot this lesson. So we started to see a greater emphasis by the wealthy on lowering taxes and weakening the safety net. Add to that the return of a rebuilt Europe and Japan to the world economy and we have seen the long slow relative decline of the middle class in the US.

    What we have now are two political parties which differ mostly on social issues and not in their allegiance to money and those that have it. The difference in economic planning between the two is relatively small, unlike the 50s when the main difference between the parties was on economics, and both parties were a combination of those with liberal and conservative social values. The fact that both parties have at least acquiesced to the ever greater concentration of wealth led to revolts by economic populist voters in BOTH parties. Neither party has really done much to help the economy as it is felt by the majority of Americans.

  3. Oh, not this again. Puh-leaze.

  4. And what did they spend it on? You may disagree with what they used it for, in your country (I have no idea) they may have used it less wisely than you like. But some if it (quite a lot in most cases) was spent on
    - education
    - law and order
    - infrastructure (of all kinds)
    - healthcare (in some possibly more 'civilised' countries [accepts some people will decide that is bait])
    - welfare safety nets (yes, I know you said welfare, but see the other things in this list?)
    - defence (and in some cases war)
    - health and safety, environment, trading standards, consumer protection, etc
    - and so on

    My point is, they didn't just piss it all down the drain or burn it, OR SPEND IT ALL ON WELFARE. They may have pissed some of it away and we all disagree as to which part. State pensions are not like private pension funds, in the UK at least, they have always been part of the welfare state (funded from current tax revenue) with a degree of discretion as to the level of benefit, as is the case for all benefits. And my (UK) payslip does not purport that any tax deducted is hypothecated for old age support. So if your point is "actually it's all the fault of governments" well, obviously. But not for the reason you seem to believe. So, as GilbertWham said: Puh-leaze!

  5. Neoliberalism hasn't failed; it was hugely successful at achieving what it was built for.

    The destruction of working class gains and massive transfer of wealth to the top wasn't a bug, it was a feature. Looting the peasantry for the benefit of the aristocracy was the whole point.

    The trickle-down bullshit was just marketing spin to keep the rubes distracted while the bosses raided the treasury.

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