In the 1980s, Margaret Thatcher introduced us to TINA – her refrain being that “there is no alternative” (to the liberalisation of national and global markets).
Social democratic parties bought into that argument and have shown no inclination to rethink policies since the global crisis began almost a decade ago. Jeremy Corbyn’s Labour party, I grant you, is one exception – but has attracted vitriolic attack on the basis that there can be no going back to the world of the 1960s and 1970s.
The argument generally consists of the following elements -
- The state can’t get out of the immense debt which it has taken on by rescuing the banks
- Although the operations of privatisated industries are subject to increasing attack, the idea of reprivatisation is rarely presented in social democratic programmes
- The ideology of greed has become so legitimised, lives so atomised and the commodification trend so strong that notions of collective and cooperative effort seem more and more unrealistic
- We can’t stop automation
- Only eccentrics question the worship of growth
Much wailing and gnashing of teeth in the social democratic camp has so far produced little to convince - let alone inspire - people that a feasible programme exists which could attract electoral support. This short 2015 Compass article and book Rebuilding social democracy – core principles of the centre left ed Keven Hickson (2016) give a fair sense of both the mood and policy drift…….
Of course, convincing programmes need to be based on a sound story…..about what exactly has been going on in the post-war period? It’s clearly not enough simply to blame neo-liberalism,,,,,
This week I watched one of the best narratives I have so far come across - Global Trumpism – presented by Mark Blyth, author of Austerity – history of a dangerous idea which I wrote about earlier in the year.
Blyth’s style of historical ideas, colloquial language and slides is a gripping one which puts other economists into the shade….
His starting point is the growth of populism throughout Europe and now the States and the question whether (as I tended to suggest in one blogpost on Brexit) it is a reaction to immigration trends and fears – or has a more basic economic explanation…. He shows how the location of Brexit and Trump supporters correlates with the devastation caused by globalisation and recent Chinese imports; job insecurity et al - but then uses the largely unknown figure of Michael Kalecki to show how the post-war Keynesian consensus unravelled in the 1970s
Kalecki had warned as far back as 1943 of a central flaw in the Keynes’ model – which duly presented itself in the 1970s with the arrival of serious inflation which was dealt with by first monetarist and then neo-liberal policies. The post-war regime slowly gave way to one of secular disinflation; capital assertiveness; global markets; strong central banks; and weak trade unions and parliament
As befits a political economist, Blyth wants to know about losers and winners – none of this cosy nonsense about equilibrium….and uses Branko Milanovic’s slide of global trends in income distribution showing the shape of an elephant to back up his argument about global trumpism….
He returns, finally, to his initial point in exploring the various economic options we seem to have –
- The sort of spending on infrastructure which Trump’s campaign envisaged? (probable but not with anticipated results)
- the return of “good jobs”? (unlikely)
- getting corporations and the rich to pay more tax (“fat chance”!)
- “technological disruption” (the digital disruption has already happened)