Thursday, 6 August 2020

Does the Left know how to fix Capitalism?

Nothing Too Drastic: Few would dispute that the Left, today, are few in number. Is their failure to make the public aware of and act upon the manifest failures of the present system attributable to their lack of active energy and intelligence? Or, is it simply because the Left’s ideas have become, almost entirely, those of the historically compromised middle-class?

IT IS PERFECTLY NATURAL, when people see a system failing, that they should want to fix it. By the late-1970s and early-1980s it was pretty clear to everyone that the post-war economic miracle had stalled, and that all the usual remedies had been tried and had failed. Voters were in the market for something new, something that hadn’t been tried. They were hungry for an alternative.

 Young New Zealanders who have grown up in the neoliberal era of low inflation, small and weak private sector unions, and low-to-stagnant income growth will find it difficult to imagine an annual inflation rate of 14 percent with wage rises to match. Economic policies have hardly changed in 35 years, so the idea of prime ministers and finance ministers flailing about in search of a solution to rampant price and wage inflation will strike those who have never experienced the collapse of a long-standing policy consensus as bizarre.

 What would also strike them as unusual is just how energetically New Zealand society examined and debated the alternatives put forward to replace the failing post-war consensus. Even though today’s 20-somethings have lived through the global financial crisis – an event which tested neoliberal ideas and practices to destruction – there has been nothing like the lengthy period of public discussion and disputation that preceded the dramatic reforms of the Fourth Labour Government.

 That there was so much public discussion: so many features in the newspapers, lengthy magazine articles and prime-time documentaries (the most famous being Milton Freidman’s staunchly monetarist “Free to Choose” series) is indisputably because the most vociferous arguments in favour of change were coming from the Right.

 Keynesian economic orthodoxy, which had largely dictated the policies of Western states since 1945, represented capitalism’s grudging compromise with the social-democratic aspirations of the men and women who had lived through the years of depression and war. Ordinary people were demanding a better life, and western politicians, all too aware that if they refused to meet their citizens’ demands the Soviets would be quick to tell them why, thought it best to give the voters what they wanted. The problem, especially for the capitalists of the English-speaking world, was that the post-war compromise had worked too well.

 With the power of the trade unions growing, and the rate of profit falling, capitalism was in trouble. Worse still, a “revolution of rising expectations”, beginning in the 1950s and 60s, had, by the 1970s, led to previously marginalised and/or suppressed groups – blacks, women, gays and lesbians – demanding their own fair share of space on the social, economic and political stage. Left to itself, conservative intellectuals argued, social-democracy was generating demands that capitalism could only meet by consenting to its own dissolution. The time had come to fight back.

 And what a fightback it was. Crucial to the success of the Capitalist counter-revolution was the middle-class fear of being forced to surrender its economic and social privileges to groups long-considered inferior – most especially the working-class and people of colour. Trade union militancy and black assertiveness, the most radical manifestations of social-democracy’s culture of enablement and emancipation, were to become the unacknowledged drivers of middle-class support for the capitalist fightback. The price: a promise of full social, economic and political equality for middle-class women, regardless of race or sexuality; did not seem particularly high. After all, it had worked before.

 Were there left-wing alternatives to the Keynesian post-war settlement? Of course there were! Did they enjoy the same encouragement and support as the alternatives put forward by conservative intellectuals and right-wing think tanks? Of course not! The “More Market” side of the debate patted the capitalist cat just the way it liked – from its head to its tail. Those foolhardy enough to try stroking it in the opposite direction ended up getting very badly scratched.

 In the ten years that have elapsed since the global financial crisis, much has been written about the deficiencies and failures of neoliberalism. Alternative economic ideas have been advanced by thinkers and politicians from all around the world. Unfortunately, the critics of neoliberalism have achieved nothing like the cut-through achieved by the critics of Keynesianism in the 70s and 80s. The careful creation of an intellectual climate for change; the constant publication of detailed proposals for reform; the extraordinary preparation and seeding of the political ground that prefaced the policy revolutions unleashed by Margaret Thatcher, Ronald Reagan and Roger Douglas; none of these have been replicated by the Left.

 Hardly surprising when one considers the extreme disparity in resources between the individuals and groups advocating neoliberalism, and those promoting more equitable alternatives. Having billionaires as backers really does help!

 Even with the powerful incentive of the Covid-19 Pandemic, the development of a convincing alternative to the status-quo remains pitifully (and, given the rapid advance of climate change, dangerously) slow.

 Ninety years ago, the father of public relations, and author of the ground-breaking book “Propaganda”, Edward Bernays, wrote:

 “Only through the active energy of the intelligent few can the public at large become aware of and act upon new ideas.”

 Few would dispute that the Left, today, are few in number. Is their failure to make the public aware of and act upon the manifest failures of the present system attributable to their lack of active energy and intelligence? Or, is it simply because the Left’s ideas have become, almost entirely, those of the historically compromised middle-class?

This essay was originally posted on The Daily Blog of Thursday, 6 August 2020


  1. It's all about controlling the narrative as you know. When this breaks down, the repression is ruthless. Look what happened to Occupy, Corbyn and Sanders. Look here in NZ at how ruthless the put downs of Capital gains and wealth taxes are. Even the merest mention of the idea, let alone a full debate, and the volleys come thick and fast from the myriad state friendly media journos, all keen to defend those fearful wealthy potential victims.

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  3. The Left was intellectually exhausted you say. But how much intellectuality was there in NZs Left? Wasn't it more just repetition of something out of a book - almost rote learning. Listening to an ex-miner from Kaiangata who spouted out all his beliefs like a fountain that couldn't be turned off, I don't thing there was too much thinking and analysing and practical strategies in it.

    That's why we didn't have a Mondragon co-operative like they had in Spain. We had individuals who tried here, like Danilo Dolci did in Italy but not a lot of entrepreneurs discussing new ways. It was just carry forward the class struggle to 'the man', get as much out of the blood-sucking employers as possible - 19th century stuff. The Tolpuddle Martyrs got home from Australia by 1840, and when we signed the Treaty of Waitangi, there needed to be more than just a reverse of power and privilege.

    Labour couldn't do anything with the unions with their regular routines of wage negotiation. Start with double you want and then negotiate down. That led to huge inflation in the end. So Treasury said why not bring them face to face with the reality, let them decide individually what they want in the wide market, want it, decide to have it and give them work so that they can get it. They will enjoy going their own way, rather than an authoritarian union telling them what they should have, and when. That's how I envisage the thinking of that time.

  4. It all is not that complex at all
    The Socialist Left was was defeated in democratic countries already 130 years ago when it split into revolutionary Marxism, and Social Democratic welfare promotion.
    Keynesian credit creation helped it to survive post WW1 economic difficulties - and would be still good to-day, if adequate debt repaying savings rates had been maintained - or are introduced now.

    Inevitably, Social Democratic welfare began to stall when increasing reliance on welfare made its sustainability increasingly difficult without borrowing to meet the increasing commitments.

    The innovative future is in the direction of individual participation in capitalism by all, as the next step, after having achieved universal literacy, i.e. a basic education - by all.

    This proposition should be examined and compared with other propositions, all of which have been pretty hazy and unclear so far.


  5. The problem has all the hallmarks of a "Gordian knot". We need an Alexander who can simply draw his sword and slice through it, figuratively speaking.

  6. I'm going to use a quote from this article and one from your previous to try and address your question of why the Left has not profited from the GFC in its fight against neo-liberalism.

    From the previous article:
    Labour, like National, is defined almost entirely by what it is not. The moment either party abandons this essentially negative function – as Labour did between 1972 and 1975, and National did between 1990 and 1993 – they are instantly perceived as threats.

    I see the argument but note that you've left Labour 1984-1990 out of the picture, when they did not just abandon their negative posture against National's "ideas" (they had no specific ones) but fully embraced their supposed "Right-wing" economic approach and pushed it beyond anything National could have dared to hope for. Sure, they eventually fell apart in 1990 but they did win a solid re-election in 1987, unlike your two examples, and even then it was more a matter of a government that was punished for the usual crime of tearing itself apart.

    Perhaps "negative" is the wrong word. I think "constrain" is better; that the two parties are there to apply the brakes to each other, and they get punished when they decide to push hard for what they truly want - at which point they actually get punished by the voters, who apparently like constraint. But even then Labour '84-'90 is an anomaly in pushing hard for what National wanted? Perhaps it was the novel shock of such that enabled them to avoid being a one-term government?

    But that brings me back to this article and quote:

    ...all the usual remedies had been tried and had failed. Voters were in the market for something new, something that hadn’t been tried. They were hungry for an alternative.

    I think you found the key point right at the start of your article with this, and all the rest of it - like backed by billionaires (you are aware that "Free To Choose" was put together by PBS, right?) and so forth - is less relevant to the success of implementing the ideas.

    My memory is that the Left of 1984, specifically including large-brained mammals like Ken Douglas, simply had nothing new to offer as a solution. More government intervention? Higher levels of government ownership of the commanding heights of the economy? More rules and regulations? Higher taxes?

    The Left was intellectually exhausted because all it's ideas short of full-blown communism had been tried and seen to fail. All it could do was point at Muldoon and say he was a lousy manager of Lablur institutions, but at that point nobody could honestly say that the previous Labour government (72-75) had been any better. Many said they'd been worse.

    So the Neoliberals did win by default, but it was the default of Left-wing failure with no new ideas pushing along their desired path and what people could see happening with their own eyes to what the institutions the Left had built. There should have been a more robust challenge from the Left, but all they could offer was more of the status quo and when that's seen to be failing it doesn't amount to much of an argument.

    The real killer is that while you could argue - and you and many other Lefties certainly do argue - that the exhaustion of the status quo now lies with the NeoLiberal world, the fact is that the Left still suffer from the same emptiness that they did in the 1980's. Despite Pikketty and Modern Monetary theory, and countless Lefties talking about "new" solutions, they're not really new at all in the sense that the First Labour Government's ideas were new.

    No, these ones are just going back in time to the glory days of 1945-1970. In that sense they are truly reactionary.

  7. Nancy Fraser's critique of what she terms Progressive neo-liberalism cuts to the quick of the issue here. Identity has supplanted class; the personal is more political than the collective, at most we have communities not a society. To have an alternative to capitalism requires the type of structural change that disturbs the status quo; to sign up for that you need to have a concept of society that includes both reciprocity and a willingness to limit oneself for the greater good. To have that you require narratives that frame your interactions and perceptions of others as more than commodity-value based, or that seeks you and your group to have more freedom within the status quo.

    The second thing is that you mention the public debate and argument of ideas that many of us can still remember. Today however, there is no public debate of such ideas, what we have is a siloed debate. The mainstream media is dead for an increasing number of people under 40. The fragmentation of debate onto social media is, in the end, the great success of capitalism: the new distraction opiate of the masses and the runaway success of digital capitalism. Even if there is some debate there is no notion of a collective debate. What you tend to get are calls to the collective action of marches and protests but this is allowed because it lets the stream out of the pot and never changes the underlying structural issues.

    The third issue is that we have suffered a decline in a willingness to think seriously and to read seriously. Instead, we have embraced capitalist populism of both the left and the right: where what we feel is more important than what we think and where what we say is more important than what we do.

    So we find ourselves in a situation where the question is : what slight variant of capitalism do you want... or rather, do you FEEL suits you the best? That is, on the right which variant makes you feel safer, richer and & more secure, on the left which makes you feel more safer, more secure & virtuous...

  8. Off course not, maybe when cancer is found a vaccine cure.

  9. “Only through the active energy of the intelligent few can the public at large become aware of and act upon new ideas.”

    Or "all movements need their intellectuals". One thing I think is that many associate NZ with it's main ethnic group. If you were to replace us all with Chinese they would run it as well or better (the same with Samoa). The neoliberal logic (whereby society is decided by market forces) is that that is o.k, but unless you are a high status European you would be a second class citizen. As someone put it to me "oh, well I don't care I'll be dead then" whereas another said "I do. It's my country". Meanwhile the academics and journalists tweet about whiteness

    Pol Sci Professor Canterbury
    Thought about dominant casual whiteness of Christchurch today in two places (just two you say?) Merivale Supermarket: ‘where’s the packets/seasoning for curries gone?’ I ask ‘Oh in the international section now’ (so what’s the *main* supermarket now selling? Chops, peas & salt?)
    Ballantyne’s (yes I know) windows: all the mannequins are porcelain white, bright white and bald. In contrary to the street filled with colour, hijab & hats. I thought it was just me, but the sports/surf shop next door has put up exact same mannequins, except they are all black.

    Advises Mental Heath Foundation and Aged Concern

    "But [Christchurch] too often feels very white"

  10. "Identity has supplanted class;"
    Of course it has. Class does not protect people from racism, women from sexism, or gay people from discrimination. It will only disappear if the political and social experiences of identity groups become the same as majority groups. Until you can guarantee that, you are stuck with it.

  11. Tom Hunter. The reason for going back to the social and economic policies of the first Labour Government, is because unlike Neo-liberalism, and rule by the rich, they worked.