Could Progressives Have Done More to Prevent Nasty Populism?

The rise of populism has caused both left and right to indict centrist’s seeming embrace of “neo-liberalism”, to further their own agendas, or to forensically assign blame for the current blight of Trump, Brexit, Five Star, Gilets Jaunes, Orban, etc. While neo-liberalism has always been multi-dimensionally-flawed I believe these indictments of Centrists are mostly unfair, and fall prey to the cardinal sin of revisionsm by ignoring the context of centrists’ appeasement with neo-liberalism across most western democracies.

Neo-liberalism means many different things to different people. While it’s history is long, it’s come to mean “laissez-faire” government, coupled with monetarist, supply-side orientation, restraint of social policies, and generally free trade in goods and cross-border movement of capital. It rose with popular support from the embers of 70s inflation, bloated states, and Volcker’s massacre, championed first by Thatcher and then by Reagan in a re-play of Weimar disorientation and Brunning’s smackdown. It has accompanied four decades of economic growth, laid the foundations for globalization, trade liberalisation and, subsequently, prepared the world for re-entry of China, Eastern-Europe, and India. It’s helped draw billions of people out of most extreme poverty, while also fostering rising inequality in industrialized nations (especially US/UK), industrial concentration, industrial hollowing, corporate rent-seeking, and with these, market-failures across many sectors.

Economic growth and transformation in the 1980s led to general popular acceptance in the public psyche on grounds of economic efficiency and positive externalities. Some see this resulting from policy success, and while some is, I view it through an “Iceland analogy” where (like Iceland’s meltdown) the Volcker induced pain was so deep and thorough, that when authorities removed their foot from the economy’s head, and loosened fiscal policy, there was only one direction for things to go – both for the economy and the national zeitgeist.

Neo-liberalism is, was, and always will be, far from perfect. Humans have spent the better part of our modern history tinkering with “what works” and what doesn’t in social and business organization, and the limitations of policy and structure. In the process, we’ve discovered what are likely the effective (pragmatic) boundaries of taxation, regulation, fiscal, and monetary policies, as well as nuances of democracy, and human rights. As a result, we know that: Government is not universally bad, inept or inefficient (but certainly has the capacity to be); both fiscal and monetary policy have roles to play and differ according to circumstance and regime; we ignore the social impacts of economic policy and income/wealth distribution at our peril (ask Nicholas II!); trade is good, and unfettered globalization can hollow-out industries; immigration has strong economic benefits but also has social consequences; that mobile capital is pre-disposed to rent-seek and arbitrage both regulation and tax; and that markets often fail – whether from privatised monopolies, natural monopolies, or collusive oligopoly. But don’t always use this knowledge, and since it’s emergence in 1981, forces who gain parochially from “purer” policy (be it tax, regulation, environment) have organized to prevent The State from using and applying this hard-won knowledge.

Clinton and New Labour, and then Obama thereafter, are accused mostly by the more ambitious left - both academics and politicians – of embracing neo-liberalism and thereby neglecting the social consequences thereby creating the present populist backlash. I’ve also heard it from think-tankers, writers/journalists and academics blithely blaming the failure of centrists. And I have a problem with this. Not a problem with the fact that neo-liberalism has contributed to the populist backlash (I agree to some extent), but rather that Centrists should shoulder the blame for this.

Both history and policy analysis are contextual and incremental. In all but the most extraordinary times, we are bounded by prevailing sentiments. Progressives, Democrats, Liberals, Social Democrats have been in ideological opposition to the prevailing societal narrative since Reagan/Thatcher’s success and popular pursuit of neo-liberal agenda(s). Legislative majorities and electoral considerations in this environment further constrain policy options. Consider Walter Mondale in 1984, which was a defining electoral moment. Mondale, a Minesota Democrat, a sensible pragmatic progressive suggested: “We might have to raise taxes”, in a debate, and was requited with one of the most resounding defeats in electoral history. Ditto for Dukakis in 1988 whose opponent GHW Bush’s catchphrase “Read my lips – No new taxes” produced an equally decisive result. Would a more radical left have fared better? Hardly. Would a harder left manifesto by Kinnock have led to a labour victory with similar constraints? No.

By 1992, in the US, Clinton and the progressives understood the impediments. Ditto Labour/Blair in ‘97. Claim more of the center, assuage fears on the economy. One can wish all one wants for a pure and fanciful but unpopular manifesto, but in the end nothing gets done if you don’t have power. And even if legislatively, it proves difficult, you will have prevented the worst-case erosion from more conservative agendas. Now that you had power – albeit with slim and fickle popular vote majorities, what could you do. As said, you could prevent further erosion, tinker on the edges of social policy, but giving is easy – taking away is hard. Ambitious social agendas require spending, and the lessons from Mondale remain. And legislative majorities short-lived and easily obliterated by an economic mis-step, and constatntly shifting and challenged at State levels. Their best hope was go with flow, expand the economy and opportunity. Their achievement was continuing to foster growth, pursuing sounder social and environmental policies, and being less mean-spirited than the conservatives. Is that something to be proud of? Were they unwitting stooges of global capital, manipulated by industrialists to shaft The People? Not in the main. Both Clinton & Obama arrived with ambitious plans to tackle healthcare and failed. The failure resulted from broken democratic process, cynical lobbying and media distortion, and corrupt subterfuge across party lines, but not an embracement of neo-liberalism by the center. This is indicative of being in power, but remaining in opposition to the prevailing (probably contentious and often wrong) economic narrative. But one thing is certain: social policies, and economic policies with the most negative negative externalities upon The People, were less bad, and illiberal social agendas delayed or stymied during progressive rule.

That alone made would have made co-opting neo-liberalism worth it.

It’s useful to denigrate one’s predecessors in order to set oneself apart and cut a new path. But this carries dangers as zealots are everywhere (on both sides). Impugn the historical reality of pragmatic centrism, and one may open the path to von Hindenberg-National Socialist coalitions in response. By all means, I believe journalists, activists, academics, think-tankers and politicians, should make the case for reducing inequality, increasing opportunites, crackdowns on crony-capitalism and corporate rent-seeking, better education, transport, housing, regional policies for changing economic geographies, and more humane immigration policies. But do not destroy the efforts of pragmatists who’ve throttled the corrosive effects of ideologically-driven neo-liberalism. There is too much at stake.