Trumped up and buried under the ashes of neoliberalism

Introduction

At the time of preparing this talk, January 2017, Donald Trump had just been elected the 45th president of the United States of America.    This talk is not really about the United States under the tutelage of the newly elected American President Donald Trump.  Rather this talk is more about how we arrived here: about the legacy of neoliberal policies that forged the trump card for the explosion of right wing populist movements and their victories across the advanced capitalist zone including in the United States.  As the vivid title of this talk makes clear, I am not arguing that we have moved to a post neoliberal order as of yet–although there are signs we may be in a bad transition out of the neoliberal epoch.  Alternatively, I will argue that we are living with the consequences of neoliberal institutions and policies: suffocating under the ashes of neoliberalism with Donald trump as the brightest burning coal at the top of the ash heap.

As most people know, to play the “trump card” in any game—political, economic or otherwise—confers a decisive advantage to the person who plays it given the right circumstances and timing.  The idiomatic expression “trumped up” refers to situation that has been manufactured to produce one set of outcomes while falsely claiming to produce another.  A trumped up criminal case is promulgated on phony evidence where the wrongly accused faces a criminal sanction while the broader public is misled to believe justice is being done.  There is close analogue here to the phrase gaslighting.  Much of neoliberalism, indeed an important explanation for its ideological spread was the initial promise of employment and renewed economic growth, i.e., what we might call the remedy to economic shame[i].  There is a sense in which neoliberalism is and was a scam and a manipulation of public morale: the difference today is most, including significant sections of the ruling classes admit this. They simply do not care because its all just a contemporary communications game.

If you are on the left it is easy, in this context, to simply be against Donald Trump and the sundry list of right wing populist movements and leaders. Who reading this post is for racism, sexism, xenophobia and soft and hard bigotries of all stripes?

Rather the problem for the putative left, particularly but not solely, its formal parliamentary forms; the Democratic Party in the United States, the New Labour Party in Britain and Australia, the Socialist party in France, the New Democratic Party in Canada, and the Sozialdemokratische Partei in Germany, for example, is to come to terms with what is now 40 years of their own internal drift to the right and their own hand in building the very neoliberal institutions which  created the conditions in which right wing populism and inequality flourish and left wing politics languishes.[ii]

In the above regard, it is my suspicion that it will be much harder for the institutionalized left to come to grips with the folly of neoliberalism than the right.  This is particularly so in the upper echelons of the progressive social structure (intellectuals, academics, politicians and the quasi woke citizenry).

Here is why.  For the right, neoliberalism was an internally motivated project, which sought to roll back, dismantle, and or fundamentally restructure the post World War II social order.   Neoliberalism was never about jobs, productivity, or economic growth for conservative elites: it was about a redistribution of power upwards.  In this regard, the adoption of neoliberalism did not require a conversion of ideological convictions as it did for the left. It was broad and important segments of the left which made the conversion:  It is the Clinton democrats, Tony Blair’s ‘new labour’, Gerhard Schröder’s ‘third’ way, and the legions of intellectuals and academics which made their own accommodations, and indeed in many cases who crafted neoliberal innovations that will have to do the hard work of soul searching, shame letting, and back tracking.

I am not very sanguine about the prospects of the aforementioned coming to pass for three reasons.  For one thing, most left accommodations to neoliberalism were made within the reality of a very constrained political economy characterized by high unemployment,fears of high inflation, and low economic growth and a concomitant ideological restructuring to the right.  For example, Tony Blair inherited Margaret Thatcher’s new United Kingdom, and Bill Clinton inherited Ronald Reagan’s “New Day in America.”  It would be impish to maintain that these were not real reconfigurations to the possibilities facing policy makers—left or right.

The second reason I am not optimistic about the chances of a volte-face on the part of the neoliberal left is quite simply that we are now almost two generations into the neoliberal epoch and easily one generation into its hegemony.  Educational attainment, political identities and careers have been formed and built within a neoliberal cognitive and material framework.  None of which is particularly easy (and in some cases possible) to walk away from.

Third, the left remains fractured between insiders and outsiders.  Because the political insiders on the left will not admit to the paucity of neoliberalism and the role they played in constructing the neoliberal order, the most vigorous and energized elements of the left remain largely outside formal political institutions and the broader public policy processes.  Indeed many insiders on the political left are still gaslighting the outsiders.  And if they are not merely sociopaths, its fairly hard for serial abusers to admit they have a problem…lotta shame needs to be overcome.

Moreover, it is by now blatantly apparent in American politics that the political process is over-determined by campaign and party financing—with the democrats still requiring that some professional politicians and administrators be the front for the donors and with Trump era republicans increasingly disposing of the political ‘middle men’ (sic) and opting instead to just put the donors in power. That is, within American politics it is increasingly the case that the Democrats and Republican parties do not merely represent different fractions within the haute bourgeoisie–they are the haute bourgeoisie.  There is, therefore, a toxic stasis on the European and North American left facing a dynamic, well funded, and popularly organized right.

Afterword to the introduction

It has been almost a year since I gave this talk and there is reason today to feel a bit more sanguine than one may have felt in the morning after Trump was inaugurated.   The British labour party had a major coup d’état with the victory of Corbyn. Equally positive has been the increasing traction of non normie style democrats.  Moreover, and I think more importantly, there are some positive signs that that the non parliamentary left is finally working through some of its major dysfunctions of which I will just touch on two below.

First, there are strong signs that the non parliamentary left intelligentsia is moving beyond the internecine, unproductive and self defeating debates of the naughties and teenies.  I think Trump’s election was a brutal wake-up call signalling that the prosaic and bitter debates of grad school educated lefties had become a waste of real resources.  Do not get me wrong, I think those debates had to be had, but they went beyond their best before date and ossified  into petty silos.  It was as if by sitting in grad school seminars and by standing giving grad lectures we were going to change something all on our own, as if the logical consistency of our interior ontological righteousness could alone change the world:  to be sure a much more meaningful exercise than Dynamic Stochastic General Equilibrium models, but often not much (there is a future post in this analogue, someone remind me of it).

Second, while we were busy, people like Jane McAlevey and countless others were actually being a part of helping communities organize.  Her title gets right at the problem, there are no shortcuts to the real work of organizing: there is no one big existential idea, no coupling of mobilizing and online communication hubs (often falsely called communities) for living in, and being a part of, organizing ourselves in the broader (as in not self selected) communities we live in.  Life has an unavoidable spatial context and real social complexity.  Organizing involves dealing with both.  I think the non parliamentary left is finally getting this.

[i]   See Arlie Russel Hochschild, “Strangers in their Own Land: Anger and Mourning on the American Right”, (2016), The new press.
[ii]  It remains to be seen if Jeremy Corbyn marks a shift in English politics.

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NDP has nothing to fear from an election: let us go to the polls

Unlike the other two major federal parties the NDP (and Greens for that matter) have nothing to fear from an election. Indeed if the NDP understood that building its party was the key to future electoral gains it would welcome more frequent elections. Why? Because elections force parties to identify, organize, and mobilize their core constituencies; elections force MPs onto the streets in their ridings; and it forces them to solicit and involve local citizens in the political process. Elections are about making the political process active rather than a passive spectator sport.

What I am suggesting is that the NDP needs to view elections as a long term mobilizing strategy that is part of a larger strategy of transforming democracy into a much more participatory process. The long, slow transformation of the NDP from a mass party into a highly centralized cadre party has proven to be a dead end. If the NDP were to view elections as nothing more than an intensification of an ongoing party building strategy it would go a long way to curbing the tendency to be narrowly focussed on short term considerations such as opinion polls and political opportunism. Indeed a focus on short term considerations leads to an incoherent whole which is likely shot through with hypocrisy which undermines the longer term goals of expanding party membership, increasing party identification and loyalty and articulating a coherent alternative vision on behalf of the electorate.

Flaherty`s Flatulence is no Laffering Matter: The Revenge of Zombie Gas Coming to an Election Near You

I am not going to spend much time dissecting the claims made by the Finance Minister in the block quote below. Indeed over at the PEF both Erin Weir and Andrew Jackson have pointed out the myriad of ways in which the Finance minister is simply dissembling on the issue. At the heart of the matter is not an economic “law” but rather a cocktail party joke once told by a republican operative and an economist to the Ford administration.

Two things clench the deal for me. Even if we believe abstractly that there is a Laffer curve no one has shown that we are in fact on the right hand side of the dissecting line vertically running through the centre of the curve. Second as Andrew and Erin have pointed-out the Department of Finance itself does not believe it either as all their estimates say exactly the opposite: decreased corporate income taxes will lead to decreased *not* increased corporate income tax revenue. So whatever appeal the Laffer curve has to economists owing to their counter-intuitive Straussian like need to be separated from the uninitiated masses, the rather conservative chaps in the Department of Finance are not buying it. Not that that is the ultimate test of veracity, it is just that if a Conservative Finance minister can’t get one of the most conservative ministries to stump for him or his beloved curve it would seem to indicate the we are indeed dealing with a Zombie idea born out of Voodoo economics aka the supply-side school.

“There’s a false assumption there which is really dumb – that is, by reducing business taxes , we reduce business tax revenue to the Government of Canada. That’s simplistic and, in fact is wrong. If we look at the tax revenues of the Government of Canada – corporate income tax revenues – they have gone up during the time that we have been reducing the tax burden.”

Perhaps what the minister is saying is that in an economic upswing that even though the percentage of corporate income taxes as a percent of GDP will decline they will nonetheless get absolutely bigger even if their relative share is diminishing. I can imagine this happening. But so what? The real issue here is who is going to pay for the deficit. If corporate tax rates do not provide the same relative share of total income tax revenue as a percent of GDP then that shortfall will have to be made-up somewhere else. What Flaherty is really saying is that either public austerity or further increases in individual taxes either through sales or income taxes are in the cards.

Now no conservative government is going to run an election on the promise of tax increases so it is going to have to be the former. So the real stench hanging in the air from Flaherty’s emission of Zombie gas is the question as to which services are going to be cut? I do not expect the conservatives, given Flaherty’s dissembling, are going to be honest with the electorate. Rather it is going to be a cake and eat it too election campaign–more of the hear no evil; see no evil; do lots of evil–we have seen so much of in Canadian politics.

But hey it is a democracy and if the electorate wants to fall for all this hand-waving who am I to criticise?

Reform of the Century? US Health Care

To my mind the most interesting aspect of the health care debate south of the border is just how far off the actual legislation was from the rhetorical flourishes and hubris.

Paul Krugman thinks the fact that Markets Yawned is evidence of just how crazy those to the right of him are. What he misses of course is that the Yawn betrays just how little was really accomplished. Between the hyperbolic claims of Stalinistic socialism and the hubris of “Reform of the Century” what the actual legislation would seemingly indicate is just how impossible it is to get good coherent legislation drafted in the US. The markets yawned because they seem pretty convinced it is more or less business as usual in US health care.

The over the top rhetoric may produce good sound bites for the coming elections but they really do serve to mask the degree to which the US political system is almost completely captured by big, especially myopic and above all rich private interests. That all the political actors want to engage in theatrical spectacle is more than a little telling.

Where are the provinces?

What I cannot figure out is why the provinces have not been more vocal on expanding both eligibility and the duration of benefits for EI given the EI program is a federal program and welfare is provincial. From a provincial point of view the more restrictive the EI program the greater the provincial welfare bills.  So why are the provinces not calling on the Feds to at least temporarily expand the program in  a meaningful way?  I doubt the provinces are worried about moral hazard.  So what has been going on?

The conservatives and democracy: Part I election financing

Warning this one is long but I think a worthwhile read.

In Maclean’s, Andrew Coyne took the position that the Conservative plan to slash the 1.95 per vote election subsidy parties receive was a good idea but that it did not go far enough.  Indeed that is the title of his op-ed: “Too far? Sorry, the Tories did not go far enough.”  Inter alia he seems unhappy with all the electoral subsidies but he really wants the per vote-subsidy axed. As we shall see, this is quite curious given what he says he wants to achieve: a more stable competitive political system.

There are two ways to go here.  One is to argue that Coyne is a timid man and is not following the courage of his convictions all the way.  Coyne generally holds that the government is unnecessary save for the areas of the enforcement of contracts, the security of citizens, and the territorial integrity of the state.

The first of which he probably interprets fairly broadly so that things like intellectual property rights got inside the bailiwick of the state; the second he would probably interpret very narrowly so that things like insecurity of poverty did not get inside the bailiwick of the state; and the third would have to be interpreted in such a way that the military was used purely in a violence making capacity.  In sum, we can call this the Libertarian-Lockian view of the State (LLS).

Of course were Coyne to follow the courage of his convictions he would have had to make an argument about his substantive normative view of the state and from that derive his position on the role of elections in liberal democratic systems and how they should be funded. Further he would have had to argue for his minimalist view of the state and minimalist view of when public subsidies are called for in a consistent manner: No public subsidies for any democratic institution, including the electoral system, that does not directly relate to the legitimate functions of the LLS .

The other way to go is to help Mr. Coyne make a coherent argument.  Let us assume that Coyne holds to a profound (that is maybe he actually read and evaluated Locke) view of the LLS.  Locke argued (albeit on a restricted to male property owners’ basis) that citizens formed the state to take care of their collective needs (the three functions of the LLS outlined above) and that they did so in a manner in which the legislative had to be accountable to citizens.  Locke went so far as to argue that citizens would be justified in armed revolt if the legislative strayed too far from its mandate.

One of the things that competitive elections accomplish in contemporary liberal democratic theory is that they do away with the need for armed revolt.  Competitive elections are viewed very much as a public good insofar as they guard against the certain loss of liberty and life (security) that would inevitably arise if armed revolt was the central mechanism by which the government of the day was held accountable (think Iraq if you doubt this).  Unlike armed revolts, competitive elections more or less assure that the majority opinion of Election Day wins out.  Armed revolts, however, may or may not be successful. Given the incredible violence making capacity of the modern state armed revolts are more likely than not to fail.  Thus, not only are competitive elections a public good (like the Lockian armed revolt) they are more efficient than the mechanism of armed revolt: some would even say a more civilised way of proceeding.

Let me assume Coyne is aware of this,  and that he actually believes in the competitive electoral process as a public good on this basis.  Indeed, he would probably argue that he wants to really embrace it—although that is not at all clear from his column.  Strangely there he suggests that the end to publicly funded campaign financing would create greater stability apparently by crushing the Bloc and strengthening the liberals.  This is a non-sequitor; any populist forces unleashed by parties forced to rely singularly on individual donations would compel the BLOC as much as the LP to strengthen their donor base.  And the case can be made that in either case it need not push in a more moderate direction.  Any party with a hard-core group of supporters is better to target that hard-core for stable funding and tinker on the margin to increase nominal donations from more moderate segments of the electorate.  This is the Conservative formula par excellence.  Were the Bloc and the Liberal parties successfully able to ape the conservative model it is hard to see how this would lead to more stability either in terms of majority governments or a diminished nationalist sentiment and vote in Québec.

As an aside, Anglos always think that nationalism is a transient phenomenon in Québec: It is not.  It is in fact one of the most stable national institutions in Canadian history that goes back to before there was a Canada.  Making the conjecture that tinkering with campaign financing will solve this “Anglo-burden” is wishful thinking.

Back to the issue of competitive elections.  Let me assume that Coyne’s conjecture that abolishing public financing of elections would have his desired effect: a strengthened LP and a diminished BLOC.  Coyne has curious notion of competition.  How does decreasing the efficacy of one party and the strengthening of another promote competition?

Economists generally hold to a quantity theory of competition: the more the better.  Oligopolistic forms of competition are not generally held up to be the preferred form. Further, although most liberal economists are ambivalent about what to do about oligopolistic market structure few would encourage their development.  But notice that Coyne’s positive assessment of an oligopolistic political market structure—because it lends to increased stability—could equally be applied to an oligopolistic market structure and from there it is surely not far to get to central planning.

Usually economists attack central planning on the basis that whatever might be said for its efficacy on paper (indeed the calculation debate was won by the socialists) it really is not efficient because it is too cumbersome, too slow to react to new demands, and too easily overwhelmed by disparate demands and in public choice theory too easily captured by narrow sectional interests.  These same arguments are then brought to bear on the state.  In fact some version of it was originally brought to bear on the absolutist state and then brought bear on the economy and then refined and brought back to bear on the state.

The authoritarian liberal impulse has always been to demand less democracy not more; to prize stability over democratic responsiveness; to prize efficiency in decision making over deliberation and consensus.   Of course authoritarian impulses in liberal democratic thought always sit uneasily beside their libertarian instincts.  Coyne is a good example of this tortured existence.

Let me come directly to the obvious problem with Coyne’s war.  In his op-ed he does, however briefly, acknowledge that the per-vote subsidy– and one could argue all the other electoral subsidies–were brought in as part of broader election campaign funding reform.  What he does not mention is the arguments behind campaign financing reform.  The idea was to make parties less reliant on big donations from well funded big interest groups like corporations and apparently unions.  The idea was to make the financing of parties conform more to their capacity to get broader public support to fund their election campaigns.

But is this not what Coyne argued for?  In fact the direct per vote subsidy is the most effective subsidy mechanism of all those mechanisms he outlined in his op-ed.  The tax credit, for example, disproportionately gives more money to bigger donors allowing parties to focus on narrow sections of the well healed population for funding:  counter to Coyne’s stated goal of forcing parties to broaden their support.  Similarly, the direct subsidy to campaign offices is accessible to any party that meets a minimum threshold of voter support.  With the consequence being that any single issue party with a minimum appeal to the electorate will get campaign subsidies disproportional to their popular support.

In fact, the per-vote subsidy is the only mechanism which encourages parties to broaden their support because it is the only subsidy which has a one-to-one correspondence between voter support and electoral financing for political parties.  It also has the perverse effect of rewarding large stable parties and limiting new entrants.  But given Coyne’s fascination with stability and oligopolistic political competition this would actually be another argument in favour of the per vote subsidy. One man’s vice is another man’s virtue.

Indeed, it would appear that to be consistent Coyne should be calling for the abolition of all electoral subsidies except the per-vote subsidy.  And to be consistent he should also be calling for a cap of 100$ per individual donor with no tax credit.  That is, of course, if Coyne’s agenda is  really to strengthen the hand of the individual voter vis-à-vis political parties.