For all its surprises, 2016 will go down as the year that finally marked the death knell of neoliberalism. It had seemed to survive the financial collapse of 2008; indeed, the main responses to this collapse, most especially in Europe, served to strengthen market players and further weaken both states and civil society. But it cannot survive the political shocks of 2016.
This is for two principal reasons, one bottom up and the other top down. From the base of society has come a ‘revolt of the dispossessed’ that found expression in the Brexit vote in June and in Trump’s election in November, and that has emboldened right-wing forces in Europe and beyond as we enter 2017. This, at long last, is forcing the issues of obscene levels of inequality, of the social sectors bypassed by neoliberal globalisation, and of the ‘iron cage’ of an inhuman technical rationality on to the political agenda.
The second reason that this marks the beginning of the end of neoliberalism is that right-wing elite forces have recast themselves as the champions of the dispossessed, willing to offer simple slogans as responses to the anxieties and fears of those being left behind. In Brexit UK, in Trump’s US and maybe in the Netherlands and in France in coming months, the attempts to be seen to be making decisive reforms that change the social situation of marginalised sectors will further strain the consensus that has underpinned neoliberalism.
The primacy of open markets, of economic efficiency over social equity, of the subservience of social and environmental policy to corporate interests now runs into a counter-force demanding limits, protection, support for livelihoods, secure identity. Even the current dominant responses being offered which focus on limiting immigration or curbing some trading freedoms (such as Trump’s pledge to stop the offshoring of jobs) mark a retreat from the neoliberal project that has been the dominant political economy project since the 1980s.
Of course, the irony is that it is corporate elites that are literally seeking to cash in on the discontent of growing social sectors. In doing so, they are playing with fire as they strengthen the emergence of political forces that are willing to use state power in unpredictable ways, and that do not share the liberal economic consensus which neoliberalism required to flourish. And, as is all too obvious as we enter 2017, the response of the centrist politics that has underpinned this consensus is to seek to emulate the appeal of the right.
Trump’s incoming administration is a fitting end to decades of corporate politics, as political leaders ceded power to global market forces, restructuring the state so that it served corporate interests rather than the interests of citizens, especially the most vulnerable. This shift in political power is well expressed in the move from the welfare state that had grown up in the post-war world to the competition state as favoured by neoliberalism. Many US voters seem to have decided that, in this situation, why not just hand over the state to corporate leaders. So we have a new Trumpian view of government as corporate ‘deal making’ over any concept of the public realm.
The dominance of far-right responses to the revolt of the dispossessed serves to occlude the fact that there have also been left-wing responses, from Syriza in Greece and Podemos in Spain, to Corbyn in the UK and Sanders in the US. These offer more substantial responses to growing inequality and social marginalisation, responses that centre on strengthening state power and forging a new social contract with civil society.
Yet, it must be admitted that a coherent left-wing alternative has so far failed to be able to compete with the post-truth slogans of the far right. This remains a huge challenge, forcing the left back to basics as social democracy collapses and loses its traditional support bases in country after country. This process, happening over decades, requires a much more radical response in the forging of a new and distinctive social project, not least to respond to the challenges of climate change.
The collapse of neoliberalism should also embolden the left, freeing it from the constraints of deferring to market interests. For example, the new conjuncture now requires a forceful political response to the growth of inequality, adopting such robust policies as a return to genuinely progressive taxation, as the re-invention of a strong welfare state, as mandatory pay limits reducing the obscene gap between the highest and the lowest paid, and as supporting strong countervailing forces to the power of capital. All of these are outlined in Professor Anthony B. Atkinson’s latest book on inequality; with the demise of neoliberalism they should be seriously and forcefully promoted by a rejuvenated left, and implemented in full once they win political power.
As we enter 2017, the world is being shaken up. We clearly are moving beyond the centrist consensus that helped create the successful social market capitalism of the 1950s to the late 1970s, and then underpinned the emergence of a hyper-financialised neoliberal capitalism. Our future is far less clear than for many decades, and the urgent challenges of climate change are fast moving us into completely uncharted territory. All we can say for sure is that radical change is in store; its content and direction has to be fought for. A forceful progressive response and mobilisation is more needed than ever.