Humans are Incredibly Adaptive, and when we’re Faced with Crises, as we are Environmental and Inequality there can be Various Responses. (2-2)
Q: What can be done? If you wanted to come up or start with a policy agenda to address some of these issues, what would you do?
A: The one thing we want to do is not do that. Here’s why.
In a sense, what we’ve run across the world during the globalisation era is a kind of meritocracy. A meritocracy is people like you and people like me, and people who are slightly different from us but nonetheless went to the same universities and studied the same courses. We get to run everything and we become the technocratic class. The technocratic class really has nothing to do with the rest of society. We send our kids to the same schools. We read the same newspapers. We have the same social habits. We’re a kind of transnational class. I was part of this. I saw it emerging.
Now, you’ve got everybody else who lives a very different life, where wages aren’t rising. The real-term costs are going up. The politicians are telling them ‘There’s no inflation’ but it seems that the cost of everything nonetheless is going up for them in real terms. And there’s a disconnect between the two.
Now, go back to the story about globalisation and how it emerged. The first thing neoliberalism did, in a sense, was to globalise labour markets and thereby render labour’s ability to command its share of national income obsolete. Then you have that product-market effect, and it [eats through product] markets. In a sense what happened was all of the little cartel structures, corporatism in Germany—let’s think product-market coalitions, all that sort of stuff, that kept the national economy insulated, all the little rules about who could buy your stocks on the stock market etc—all of that was stripped away.
Once all that was stripped away and everything really did go global, then you’ve got a question as to what happens to the political-party structures. Because what made all those little labour-market cartels and cushy arrangements possible, what made all those product markets safe for domestic companies and all the rest of it, were the political classes that mediated that post-war compromise—that were based everywhere on either a two-party system, Labour and Conservative, or a majoritarian coalition system of the type that you have in Germany.
Now you’ve destroyed the labour-market cartels. You’ve destroyed the product-market cartels. You’ve globalised everything. What’s the point of the existing parties? They don’t really have one. They were there to stabilise structures that no longer exist. Which is why they’re strangely clueless about what’s going on.
So the thing we don’t want to do is to say: ‘Well, let’s hand it over to the technocrats. Let’s get some policies. We will have some policies.’ This was the 2016 [US] election. Senator Clinton had hundreds of policies. They were all ranked. You could see the R[andomised C[ontrol] T[rials] that they were scored against to prove that they worked. And we could just add them together and that was a platform. Except it’s not—because what people are crying out for is a vision, a reason to believe in something.
What they actually want is someone to explain to them why, if global warming is so important, they have to pay through their wallets, through a diesel tax, when people that own yachts seem to get off scot-free. What they need is somebody to explain to them why it is that inequality has got so out of whack and our politics is run by the very people who are sitting at the top of the pile pulling the strings of the politicians. They’re not stupid. We think they’re reading ‘fake news’. They’re not. They’re just looking for an alternative account, because they don’t believe a word that comes out of our mouths anymore.
So until we actually get over the fact that the post-war party system is dead—[that] populism is the new normal—and we somehow reconfigure political action to basically create new parties and new structures or renovate old parties, and move forward with a much more progressive agenda … Then we can talk about policies. Just simply going ‘What are we going to do in terms of policies?’—we tried that in 2016. It was a disaster.
Q: And the institutional structures of existing parties are not really accommodating. How would you reform parties? What would they need to do? Mainstream conservative, mainstream social-democratic parties are under pressure everywhere. What would you recommend they should do?
A: Well, the first thing that they should do, to quote—I think it was Planck, the physicist, that said this—‘Society evolves one funeral at a time.’ Let them die. I think you’ve got to start from scratch. When I had to give a speech at the SPD [Stiftung] in 2016 I said: ‘You are two electoral cycles from extinction.’ And I think I was exactly right. You might get three. But they’re dead. So there’s no point in trying to renovate something that’s dead.
What you can do is you can do what Corbyn did, although he’s not doing much with it, which is to take the dead husk of the Labour Party, in a kind of free-leveraged buy-out—take it over, build a whole new membership and then run it from the inside out. Until you assemble [in Germany] some kind of red-red-green coalition, you’re not going to stand in the way of the nationalists [in Alternative für Deutschland].
Q: What do you think will happen once populists are in government? Look at Italy right now. ?.
A: Yes. This is the really interesting one. When the Italian thing came up I said: ‘Look, here’s your real problem. It’s not this government. It’s what happens when this government fails.’ Because at the end of the day what populism has going for it is the notion of sovereignty.
Chris Bickerton, a political scientist at Cambridge, had a really nice observation about this. There’s a book he did a few years ago called [European Integration: From Nation-States to Member States]. Sovereign states have their own printing press. They can devalue. They can default. They can do all these things. Once you join the euro you can’t. It’s off the table. Essentially, you enjoy the backing of the ECB, who will back your sovereign debt and thereby backstop your credit markets, so long as you play by the rules. Hence the importance of rules in the system.
But those rules really don’t work for large, consumption-based economies like France or in particular Italy. They work for the ones that can globalise their supply chains through eastern Europe, and then sell their stuff to the rest of the world and suck in demand from abroad. That’s Germany, the eastern Europeans and some of the north. So you have a real north-south split on this.
Q: The populists come to power in Italy. They may even come to power in France. They’re going to find out unless they leave the euro there’s not much they can do. But if they leave the euro they will destroy probably somewhere in the region of 40 per cent of national savings while trying. That’s not a good option. So you’ve now got people in charge who said: ‘Screw them all. We will change everything.’ And they’re not going to change anything. What does that do to democracy and people’s faith in democracy?
A: The constraints are in many cases not just confined to the national circumstances. Even though the initial expression might lead to a populist government of sorts, without actually triggering a cataclysmic event they won’t be able to do very much about these issues.
Right. What happens is in electoral cycle one, since the crisis, whoever was incumbent gets thrown out and whoever was the establishment opposition got in. In electoral cycle two the establishment opposition, who is now the government, is voted out. Half the time the old establishment incumbents in 2008 got back in but then had to share power with populists. Or populists themselves massively increased their vote share, typically eating away at [the] centre-left. Run the next electoral cycle. You will have more populism. More collapse of the centre-left going on, because it won’t be able to reconfigure itself in any important way.
More of these people will get into power and they will fail. And I really worry about that, because when they fail we could say: ‘Well, good, because they’re all idiots and they’ve got stupid policies.’ Yes, but what does that do to the public’s faith in democracy? Because they’re basically saying: ‘You can vote for the radical alternatives and you still don’t get to change anything.’
Q: So you’ve given up hope that there is some way to reform, not just party structures—party structure is just a function—I mean reform the political economy, which is basically the constraint on many of these issues?
A: I think that it can be done if there’s activism to try and do it—if basically remnants of the progressive forces actually realise that unless they hang together they will definitely hang apart. And we’re really at that moment. Germany is the classic example for this again. If you had done red-red-green six or seven years ago we could have been in a completely different space now, but it wasn’t done. If you can reconfigure that now you can offer an effective opposition to AfD, but if you can’t then you won’t, because the SPD is dead. And that’s a choice that’s facing lots of countries.
This is not a counsel of despair. I have zero faith in the incumbents. They’ve had 10 years to fix it. They resuscitated the system with a massive liquidity injection. Didn’t change anything. And it turns out the world has changed and those structures don’t fit anymore.
Humans are incredibly adaptive, and when we’re faced with crises, as we are—environmental and inequality—there can be various responses. Just now what we see is the exclusionary nationalist response but that doesn’t have to be the only one. We are totally masters of our destiny here. My point is this: if you’re waiting for a bunch of superannuated, septuagenarian social democrats to save your arse start looking elsewhere.
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