Donald Trump. Gage Skidmore/Flickr. Some rights reserved.Global neoliberalism is in turmoil. Proven policies have lost traction; established political systems haemorrhage legitimacy, and the ideology that once embodied the common sense of the age has degenerated into a farrago of clichés. Even the steadiest political hands have lost their grip on the levers of power, which, themselves, lack effectiveness. The certainties that used to hold neoliberalism together are melting into the air.
Is this an existential predicament or merely a passing disorientation? Surely, a decade-long economic crisis, the continuing decline of growth rates worldwide, and the rise of Donald Trump, Nigel Farage, Marine Le Pen, Viktor Orbán, Recep Tayyip Erdoğan, Michel Temer, Abdel Fattah al-Sisi and the Thai NCPO could be merely the global political economy equivalent of senior moments; however, such alarming repetition would warrant a medical check-up. In what follows, I argue that the economic turmoil in global neoliberalism is now morphing into a political crisis that could engulf the entire system of accumulation: the beast is infirm, and it might become fatal.
A dysfunctional economic system
Neoliberalism has created unprecedentedly favourable conditions for capital accumulation worldwide. They include the west’s victory in the Cold War and the reconstruction of US imperialism, the collapse of nationalist movements and governments in the global south, the decline in the power of trade unions, peasant movements, left parties and social movements, the liberalisation of trade, finance and capital movements and the provision of unparalleled support to accumulation by competing states, the rollback of taxes on the rich and cutbacks on transfers and welfare provision, and the ideological hegemony of a bogus but vociferous ‘free market’ capitalism. At the same time, the availability of new technologies has supported productivity growth and driven the restructuring of accumulation, alongside significant increases in the global labour force, not least with the integration of China and the former Soviet Bloc into global capitalism. They have fostered a steep concentration of power, income and wealth: neoliberalism has created new patterns of inequality and uneven and combined development, in which unparalleled prosperity for certain groups (often identified as financial or other elites or oligarchs, the top 1%, or the top 0.01%) coexist with severe poverty and new patterns of exclusion.
Instead of thriving on the basis of these conditions, accumulation in the core countries has been hampered by falling rates of investment and GDP growth, mounting instability and finance-driven crises, culminating in the deepest and longest economic calamity since the Great Depression. Recoveries have also become increasingly sluggish. The current crisis has already lasted nearly a decade, and it shows no sign of resolution. Its causes remain unaddressed, and the policies deployed to contain the cataclysm have created further imbalances. In the meantime, global warming presses on, unchecked. Even the best-paid apologists of capitalism now accept that the world economy has been engulfed by a Great Stagnation with no end in sight.
These adverse outcomes directly follow from the economic contradictions of neoliberalism. The ‘reforms’ have dismantled pre-existing systems of provision, hampered the co-ordination of economic activity, created socially undesirable wage and employment patterns, precluded the use of industrial policies to achieve socially determined priorities, made the balance of payments dependent on erratic flows of capital, and allowed the financial institutions to shift resources from production into speculation almost at will, often under the guise of ‘shareholder value’. Unsurprisingly, accumulation under neoliberalism tends to take the form of bubbles which inevitably collapse with destructive implications, requiring expensive state-sponsored bailouts.
A jammed political system
The political project of neoliberalism includes an atrophied form of democracy designed to shield economic reproduction from political ‘interference’, and where popular participation is limited to choosing between shades of neoliberalism in a tightly regulated political market policed by a vitriolic right-wing media. Meanwhile, the substantive choices about social provision, the structure of employment and the distribution of income are made elsewhere.
Neoliberalism has eroded social and economic structures in most countries; it has also imposed an almost impermeable membrane between political power and the economic domain. This has drastically reduced the capacity of peoples and institutions to resist and even to conceptualise alternatives. Under neoliberalism, ‘there is no alternative’ tends to become a self-fulfilling reality, even when neoliberalism is patently destructive, floundering, or failing.
The isolation between a disabled politics and a dysfunctional economy derives, in part, from the material structures of neoliberalism. For example, the transnational integration of production and finance creates the need for international policy harmony through negotiation, regulation, conditionalities and competition between countries. Inevitably, they reduce the scope for national diversity and erode the established modalities of social reproduction. At a further remove, neoliberalism embeds the logic of finance into the country’s institutional fabric, as it imposes specific modalities of discipline on key social agents, with the workers at the forefront, but also upon capital, the state and finance itself. These are accompanied by a growing intolerance to all forms of dissent, from collective action to individual privacy. Finally, neoliberal democracy tends to splinter the political sphere between a myriad of competing parties, movements and NGOs with intransigently narrow horizons and lacking the vision, means and ambition to transform society. Their conflicting agendas ensure a permanent political paralysis that can be handled only by painful negotiations that, ultimately, secure the hegemony of conservative interests. Neoliberal democracy has spawned political deadlock, the disintegration of established forms of representation, and a generalised sense of alienation.
Many neoliberal democracies are now engulfed in turmoil. In the Eurozone periphery, elected governments were replaced by so-called non-party technocrats ordered to implement, with greater energy, perverse strategies to address the economic crisis (Greece, Italy). Later, elected administrations advocating unconventional strategies were crushed (Greece). A dour conformity reigns among near-stagnant economies. Then the crisis of neoliberal politics reached the global periphery. There, authoritarian governments have been installed by different means, including more or less honest elections (Argentina, Hungary, India, Poland), judicial-parliamentary coups (Brazil, Honduras, Paraguay), the abuse of constitutional prerogatives (Turkey), and military coups (Egypt, Thailand).
The malaise eventually reached the ‘core’ countries. A hard-right Trump administration was elected in the USA despite the ‘superior experience’ of Wall Street vassal Hillary Clinton. Japan drifts almost relentlessly towards ultra-nationalism; Brexit won the popular vote in the UK, despite ample disagreement about what the vote was for. In France, Marine Le Pen flutters above the Élysée while a harsh national security state trumps Liberté (Égalité lies in the dustbin, while Fraternité drowned long ago). Nativist populism thrives in Austria, Switzerland and Scandinavia and, in the eastern periphery of the EU, tinpot far-right politicians lead rudderless societies against enemies weaker than themselves: waves of dark-skinned refugees fleeing worse realities further south.
The lumpenisation of neoliberal politics and the rise of nationalist authoritarianism
The rise of nationalist authoritarianism is not a transient wobble on the march of neoliberal democracy towards the ‘end of history’. Quite the contrary: it is the incubus springing from the lumpenisation of neoliberal economies and societies through several rounds of restructuring under the guise of ‘adjustment’, inflation control and the pursuit of ‘competitiveness’, culminating in the ‘new normal’ of long-term economic stagnation punctuated by crises. In doing this, neoliberal restructuring has also begotten the lumpenisation of politics.
As neoliberalism hollowed out economies it also eroded the social structures in most countries, with labour at the centre, creating a large and heterogeneous array of ‘losers’. The condition of labour has deteriorated for the informal workers, the traditional middle classes, and almost everyone else. Millions of skilled jobs have disappeared, and entire professions have either vanished or were exported to cheaper shores. Employment opportunities in the public sector shrunk, job stability retreated, and pay and conditions worsened everywhere. Hundreds of millions of people worldwide have been deskilled and, effectively, drowned into what Karl Marx described as the lumpenproletariat and the reserve army of labour. The ‘losers’ include informal workers with no realistic prospect of stable employment, underemployed skilled workers, employees fearing the disappearance of their jobs, indebted small business owners, bankrupt small farmers, endangered middle managers, threatened small business owners, anxious civil servants, panicky pensioners, and the remnants of erstwhile privileged social strata bewailing their mounting debts and inability to bequeath better circumstances to their offspring.
These ‘losers’ lack a common culture or a sense of collectivity drawing upon shared material circumstances; they also distrust political systems that seem to bypass them. Heterogeneous, divided and disorganised, they are unable to resist the continuing rollout of ‘reforms’. Worse: just as the lumpenproletariat is highly vulnerable to political capture by the élite, the losers in lumpenised neoliberal societies are prone to capture by the political right.
Under neoliberalism, left parties, trade unions and mass organisations have imploded because of social and economic change as well as repression. The entire political spectrum has shifted to the right, and the blockage of collective forms of dissent has fed political apathy, anomie, and the sense that politicians are there only for the taking. The ‘losers’ tend to perceive the evacuation of democracy through the lens of corruption and capture, in contrast to the sepia-tinted ‘good old days’ of economic certainty and (limited) privileges, including jobs for life, law and order, monochrome neighbours and obedient wives.
They tend to see today’s political systems as serving primarily the rich (bankers, tax dodgers, self-perpetuating political élites, foreign tycoons), so-called ‘privileged minorities’ (constructed to mean women, selected ethnic or national groups, or supposed sexual ‘deviants’), and alien hordes. Annoyingly, all of them seem to draw state support, while the morally upright ‘losers’ find it impossible to make ends meet. Perhaps even worse than these economic hardships is the erosion of their proud, even if not elevated, social standing: it is difficult to understand what has hit them, and why.
These woes lead lumpenised groups of ‘losers’ to project their hopes and fears onto a universalist (classless) ethics and reactionary political programmes drawing upon ‘common sense’. These tend to be framed through the language of rights, respect, taking back control, and the preservation of ancient privileges, and fronted by ‘strong’ leaders who can ‘get things done’. These choices reflect the desperate search for a way to short-circuit a logjammed political system and secure gains to those who have grown tired of losing out, and lack a sense of security grounded on income, assets, merit, citizenship, or anything else. Those agendas also express their revulsion at slick politicians delivering, time and again, convoluted excuses for inaction while the living conditions of the majority continue to deteriorate. The implosion of post-war social democracy can be directly related to these neoliberal pressures.
Mainstream conservative parties have shown greater resilience, both because of their closer identification with neoliberal ideology and policy practice, and because the right is used to deploying misleading or unrealistic programmes and nationalist slogans. They are well positioned to offer disgruntled voters a random menu of desirables, regardless of contradiction even with neoliberalism itself. Those programmes tend to be naïve, exclusionary, divisive, xenophobic, racist and morally conservative. Yet, even those parties have been triangulating towards an increasingly strident nationalism. Down their necks breathes a new generation of proto- and neo-fascist movements parading even more aggressive slogans. The far right has a proven ability to mobilise on the basis of national, physical, religious or gender identity, and it thrives best in conditions of anomie: current conditions favour its continuing prosperity.
The limits of nationalist authoritarianism
Nationalist authoritarianism has emerged in response to the economic contradictions of neoliberalism, the sclerosis of the political institutions regulating its metabolism and the corrosion of its ideological foundations. It is, however, limited, because the aggregation of individual demands does not support transformative programmes grounded upon material reality, which are necessary to address the structural problems of accumulation and social reproduction under late neoliberalism and the ecological crisis. Even though authoritarian neoliberal leaders are unlikely to deliver their key promises, this does not prevent them from trying, or from achieving selected goals irrespective of cost or consequence. The (unavoidable) failures of nationalist authoritarianism can lead social dissatisfaction under late neoliberalism to remain unfocused, feeding unpredictable explosions followed by rapid evaporation. These cycles of revolt will be destabilising for the economic reproduction of neoliberalism and for constitutional politics. These grievances also tend to remain unresolved, fuelling further waves of instability.
These alarming political developments have not evolved to shield neoliberalism against the insurgency of an organised left demanding political and economic democracy. Quite the contrary: nationalist authoritarianism is the expression of the impotent fury of a disorganised array of losers under neoliberalism, in conditions of social disorganisation, global crisis, and accelerated economic restructuring. Their focus on attacking the weak – immigrants, refugees, the ‘undeserving poor’, the unjustifiably ‘privileged’ by state action and judicial activism – feeds retrograde political programmes and poses the urgent need for sustainable and democratic left-wing alternatives.
The economic and political platforms against neoliberalism, and the aspiration for democracy, can be integrated through the demand for distributive and democratic economic policies. These demands are, simultaneously, fundamental conditions for a substantive democracy, and incompatible with nationalist authoritarianism. They also reflect the notion that the most promising lever for challenging neoliberalism is political, both because neoliberalism’s key vulnerabilities are in the political domain, and because politicised mass movements are essential for progressive social and economic change. There is a race between the restoration of social and political collectivity and barbarism. The winner will take it all.
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