[Marxism] In ‘Brexit’ and Trump, a Populist Farewell to Laissez-Faire Capitalism
markalause at gmail.com
Wed Jun 29 13:03:48 MDT 2016
Anyone else sick of the way these idiots use "populist"?
On Wed, Jun 29, 2016 at 1:19 PM, Louis Proyect via Marxism <
marxism at lists.csbs.utah.edu> wrote:
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> NY Times, June 29 2016
> In ‘Brexit’ and Trump, a Populist Farewell to Laissez-Faire Capitalism
> by Eduardo Porter
> Prime Minister Margaret Thatcher and President Ronald Reagan in 1984.
> Their belief in unfettered markets, which guided policy for a generation,
> is under fire. Credit Agence France-Presse — Getty Images
> Donald J. Trump and Boris Johnson: Is this how the era ushered in by
> Ronald Reagan and Margaret Thatcher finally ends?
> It once looked as though the financial crisis of 2008 might even bring
> about the end of laissez-faire economics. “The idea of an all-powerful
> market which is always right is finished,” declared Nicolas Sarkozy, then
> the president of France. And Peer Steinbrück, Germany’s finance minister at
> the time, predicted that “the U.S. will lose its status as the superpower
> of the world financial system.”
> Even Alan Greenspan, the former Fed chairman, once known as the “maestro”
> of capitalism, declared himself “in a state of shocked disbelief” at the
> collapse wrought by the unfettered markets he had championed throughout his
> life. “I’ve found a flaw,” he said. “I’ve been very distressed by that
> But I suspect few would have guessed that the economic order built on
> Reagan’s and Thatcher’s common faith in unfettered global markets (and
> largely accepted by their more liberal successors Bill Clinton and Tony
> Blair) would be brought down by right-wing populists riding the anger of a
> working class that has been cast aside in the globalized economy that the
> two leaders trumpeted 40 years ago.
> Britons’ vote last week to exit the European Union was not simply about
> their idiosyncratic distaste for all things European — an aversion shared
> by Thatcher, who saw Brussels as the kind of meddlesome big government she
> loathed. Brussels was merely a stand-in for something deeper: the very
> globalization that Thatcher as Britain’s prime minister so enthusiastically
> The so-called Brexit vote was driven by an inchoate sense among older
> white workers with modest education that they have been passed over,
> condemned by forces beyond their control to an uncertain job for little pay
> in a world where their livelihoods are challenged not just by cheap Asian
> workers halfway around the world, but closer to home by waves of immigrants
> of different faiths and skin tones.
> It is the same frustration that has buoyed proto-fascist political parties
> across Europe. It is the same anger fueling the candidacy of Mr. Trump in
> the United States.
> Across Europe — in struggling Spain and affluent Sweden, even in Europe’s
> champion competitor, Germany — more citizens would like to see powers
> returned from Brussels to their national governments than would like to see
> more powers go the other way, according to a poll conducted last spring by
> the Pew Research Center.
> Older people throughout the European Union express nearly as much
> dissatisfaction as those in Britain’s aging industrial heartland who defied
> the will of the young and voted to leave by a wide margin. Even at the very
> center of the European project, only 31 percent of the French 50 years old
> and up have a favorable view of the European Union.
> Their frustration is turning traditional ideological labels on their
> heads. Mr. Trump, a bombastic businessman who’s never held office, and Mr.
> Johnson, the former journalist turned mayor of London, might not put it
> this way, since they continue to cling to a conservative mantle. But they
> are riding a revolt of the working class against a 40-year-long project of
> the political right and its corporate backers that has dominated policy
> making in the English-speaking world for a generation.
> As the conservative magazine National Review gleefully noted, the big
> “Leave” victories came “deep in the Labour heartland.”
> So where does capitalism go now? What can replace a consensus built by a
> charismatic American president and a bull-in-a-china-shop British prime
> minister in favor of small governments and unrestrained markets around the
> The British political scientist Andrew Gamble at the University of
> Cambridge has argued that Western capitalism has experienced two
> transformational crises since the end of the 19th century. The first,
> brought about by the Depression of the 1930s, ended an era in which
> governments bowed to the gospel of the gold standard and were expected to
> butt out of the battles between labor and capital, letting markets function
> on their own, whatever the consequences.
> In his 2010 book, “Capitalism 4.0,” the London-based economic commentator
> Anatole Kaletsky refers to a document in the archive of the British
> Treasury that shows the reaction of the permanent secretary to a proposal
> by the great economist John Maynard Keynes to use government spending to
> spur Britain’s economy. It has three words: “Extravagance, Inflation,
> Mr. Keynes’s views ultimately prevailed, though, providing the basis for a
> new post-World War II orthodoxy favoring active government intervention in
> the economy and a robust welfare state. But that era ended when
> skyrocketing oil prices and economic mismanagement in the 1970s brought
> about a combination of inflation and unemployment that fatally undermined
> people’s trust in the state.
> Even the former president of France François Mitterrand — a Socialist who
> nationalized the banking system, increased government employment and raised
> public-sector pay after being elected in 1981 — was forced into a U-turn.
> In 1983, he froze the budget and brought about “la rigueur”: the austerity.
> The Keynesian era ended when Thatcher and Reagan rode onto the scene with
> a version of capitalism based on tax cuts, privatization and deregulation
> that helped revive their engines of growth but led the workers of the world
> to the deeply frustrating, increasingly unequal economy of today.
> There are potentially constructive approaches to set the world economy on
> a more promising path. For starters, what about taking advantage of
> rock-bottom interest rates to tap the world’s excess funds to build and
> repair a fraying public infrastructure? That would employ legions of
> blue-collar workers and help increase economic growth, which has been only
> inching ahead across much of the industrialized world.
> After the Brexit vote, Lawrence Summers, former Treasury secretary under
> President Clinton and one of President Obama’s top economic advisers at the
> nadir of the Great Recession, laid out an argument for what he called
> “responsible nationalism,” which focused squarely on the interests of
> domestic workers.
> Instead of negotiating more agreements to ease business across borders,
> governments would focus on deals to improve labor and environmental
> standards internationally. They might cut deals to prevent cross-border tax
> There is, however, little evidence that the world’s leaders will go down
> that path. Despite the case for economic stimulus, austerity still rules
> across much of the West. In Europe, most governments have imposed stringent
> budget cuts — ensuring that all but the strongest economies would stall. In
> the United States, political polarization has brought fiscal policy —
> spending and taxes — to a standstill.
> The cost of inaction could be enormous. Mr. Johnson’s campaign to reject
> British membership of the European Union is already producing political and
> economic shock waves around the world. Mr. Trump — whose solutions include
> punishing China with high tariffs and building a wall with Mexico — is
> trying to ride workers’ angst into the most powerful job in the world.
> There are less catastrophic ways to put an end to an era.
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