Trump, Neoliberalism and the humiliating demise of the Radical Left
I have been reading this short Foreign Affairs article: “Trump and American Political Decay”. Excuse me while I quote an extensive portion of it below, because it reflects the standard boilerplate currently being repeated to American voters:
“Donald Trump’s impressive victory over Hillary Clinton on November 8 demonstrates that American democracy is still working in one important sense. Trump brilliantly succeeded in mobilizing a neglected and underrepresented slice of the electorate, the white working class, and pushed its agenda to the top of the country’s priorities.
He will now have to deliver, though, and this is where the problem lies. He has identified two very real problems in American politics: increasing inequality, which has hit the old working class very hard, and the capture of the political system by well-organized interest groups. Unfortunately, he does not have a plan to solve either problem.
Inequality is driven first and foremost by advances in technology and second by globalization that has exposed U.S. workers to competition from hundreds of millions of people in other countries. Trump has made extravagant promises that he will bring jobs back to the United States in sectors such as manufacturing and coal simply by renegotiating existing trade deals, such as NAFTA, or relaxing environmental rules. He does not seem to recognize that the U.S. manufacturing sector has in fact expanded since the 2008 recession, even as manufacturing employment has decreased. The problem is that the new on-shored work is being performed in highly automated factories. Meanwhile, coal is being squeezed out not so much by outgoing President Barack Obama’s environmental policies as by the natural gas revolution brought about by fracking.
What policies could the Trump administration implement to reverse these trends? Is he going to regulate the adoption of new technologies by corporate America? Is he going to try to ban U.S. multinationals from investing in plants overseas, when much of these multinationals’ revenue comes from foreign markets? The only real policy instrument he will have at his disposal is punitive tariffs, which are likely to set off a trade war and cost jobs in the export sector for companies such as Apple, Boeing, and GE.”
I wonder how many people are buying this silly argument by Fukuyama?
First, is Fukuyama seriously expecting us to swallow his argument that, “Trump brilliantly succeeded in mobilizing a neglected and underrepresented slice of the electorate, the white working class, and pushed its agenda to the top of the country’s priorities.” What about non-white and immigrant workers? Were they “over-represented” on the country’s list of priorities, somewhere just below Boeing, Goldman Sachs and Lockheed-Martin?
Second, leaving Fukuyama’s bizarre and outlandishly racist argument to one side, on what facts does he base his equally bizarre argument that Trump’s policy options are limited?
The unique position of the United States in the world market
In the first place, even within the sophomoric limits of purely bourgeois economic theory the United States is uniquely positioned to use the exact same Keynesian policy tools as it has previously. Unlike the EU or the countries of Asia, Africa and Latin America, the US controls the most important policy lever in the world market, the dollar. This means, the US retains all the policy tools outlined by Keynes in his “General Theory”, not just in relation to the US economy but the world economy.
To put this simply: Brazil or France cannot simply run trade and budget deficits indefinitely, but the United States can; as it has proven for the last 40 years, during which it has run an unbroken string of trade and budget deficits without once ever facing a problem financing those deficits. Just the opposite, in times of great stress, like the 2008 financial crisis, global capital pours into the US treasury at low or even negative interest rates. Quantitative easing itself is only possible because excess capital in the world market compete to loan Washington money even at near zero percent interest rates.
Apparently, Fukuyama no more knows about the limits of US economic policy than he knew about the limits of history.
So far as Washington is concerned, in terms of US economic policy, the division of the world market into separate national capitals is a mere formality; the dollar is the world reserve currency and the inner sphere of circulation (Marx) of the dollar is coterminous with the world market as a whole and is not simply confined to the territory of the United States; which is to say, US economic policy manages the world economy in much the same way national governments used to manage their own individual economies.
Why would Fukuyama be making this dumb argument when everyone, and certainly Washington policy makers, knows it can run trade and budget deficits indefinitely. No one at the policy making level of US government thinks the US can “run out of money”; no one in their right mind thinks US policy options are limited.
And, mind you, this is not the fringe thinking of the modern money school, MMT only describes what Washington is already doing. Washington already knows that, within certain definite limits, it faces no real fiscal or trade constraint. So what is up here? Why does Fukuyama insist Trump’s options on the problem of inequality are limited to obsolete policies like trade tariffs? Moreover, why does every suggestion Fukuyama offers as a credible response to the crisis — regulating the adoption of technology; capital controls; and punitive tariffs — in some way limit the productive forces.
I think Fukuyama offers these ‘solutions’ precisely because all three can be criticized for throttling the development of the productive forces and restricting capitalist growth. This means Fukuyama can then make this bizarre argument that all efforts to address inequality and address the needs of the working class must lead to society becoming poorer.
The feigned impotence of US economic policy
Washington always try to frame the options in such a way that any attempt to address a problem becomes itself problematic: “We can’t fix inequality because every tool we have at our disposal to fix it only makes society poorer.”
But notice something: In 2008, when the banks were failing, Washington suddenly “discovered” it could create trillions of dollars to bail them out. Bernanke sat down with 60 Minutes and explained how easy it was to create as much currency as it took to save the financial system.
Yes, there were a few cranks who predicted this would lead to hyperinflation and the end of civilization; but no one in Washington paid those (mostly) Austrian School simpletons any mind. The banks, i.e., the financial arm of US military and economic might, were collapsing and only Washington could prevent it. Fukuyama, who today tells us Trump has limited policy options, never opened his goddamned mouth to tell Bernanke his options were limited.
Both Bernanke and the newly elected Obama pulled out the MMT playbook and created currency on a terminal until their fingers got tired. Meanwhile, interest rates fell to near zero, frightened capitalists stood in line to loan Washington money. In fact, despite all the predictions of certain simpleton economists, not only did hyperinflation not erupt, deflation hit one after another country.
The collapse of working class living standards
Meanwhile the crisis began to take on its present form as rising costs of deficit spending ended up in the pockets of the financiers. To contain hyperinflation, the newly created currency had to be sterilized by borrowing it back from the capitalists. Thus finance capital was bailed out twice, first directly, by buying up worthless financial assets, and again with a steady stream of interest payments on U.S. treasuries.
At the same time, the working class, on whose behalf this amazing scam was justified, took the full impact of the crisis in their faces. The sections of the working class that were most sensitive to this catastrophe were the better off ‘white’ workers. This may seem like a strange argument, but it is true precisely because the condition of ‘black’ workers had already declined horrifically prior to the crisis: 27.4 percent of all African Americans workers, and 45.8% of of their children under the age of 6, already live in poverty; 43% of incarcerated Americans are black; and one of every three black American males born today can expect to go to prison in his lifetime.
There simply is no blood left to squeeze from that stone. Instead the crisis began to forcibly depress the economic position of those better off proletarians who had thus far escaped its worst effects.
At the same time, the 2008 election had just seen the victory of the nation’s first black president, with whom black workers strongly identified and for whom they gave their enthusiastic political support. While, through the same prism of race relations, ‘white’ workers, who have since the days of slavery blamed their black counterparts for much of their economic plight, (as both blame the immigrant worker), expressed their hostility to what was happening in decidedly racist terms.
Thus we come to the standard boilerplate explanation for the Trump victory, featuring the usual suspects, as defined by the Democrat Party and its radical Left appendages:
- White people
- White racism
- White privilege
- White workers
We are supposed to accept this argument as if none of these categories — white people, white racism, white privilege and white workers — existed before Nov 8, 2016; as if Trump discovered this hidden vein of political discontent on his own.
The Democrats were not blindsided by this election
The thing is the Party of Slavery and Segregation saw this disaster coming, but they decided they would rather risk a Trump presidency than tolerate a $15 an hour minimum wage, single payer and free education — i.e., the platform of Clinton’s opponent, Bernie Sanders. They could have adopted Sanders’ platform and added him to the ticket, but they badly wanted to crush the pretensions of the radical Left once and for all — the unexpected election, last year, of SYRIZA in Greece no doubt played a role in this decision.
But it is not just the Democrats refusal to adopt Sander program that is so shocking; in the middle of this election cycle, two things happened that clearly indicated the capitalist class was completely unwilling to relent on its unceasing class war on the proletariat: First, despite Trump’s vociferous criticism of NAFTA and TPP, Ford blew everyone’s hair back by suddenly announced it would be moving part of its automobile production off-shore. Second, healthcare providers drove the stake through the heart of the failing Obamacare program as providers announced they would abandon participation and premiums skyrocketed.
These were shocking announcements to come in the middle of an election where trade and healthcare played such an incendiary role. It was as if the bourgeoisie was preemptively telegraphing it had no intention to compromise on these issues with the proletariat to ease the crisis. Both announcements, of course, played right into the themes of the Trump campaign along with a third issue: rampant corruption in Washington, epitomized by the Clinton cartel, and the bizarre behavior of the Department of Justice and the FBI.
The Democrats were revealed to be unwilling to address rising inequality, the burden of rising healthcare costs and blatant corruption.
The radical Left is dead
Second, the radical Left proved to be entirely marginal to the discussion, having neither the program nor the organization to fight back. Instead, the radical Left played its assigned role by focusing on Trump instead of Clinton — even when they ran independently of the Democrats.
It may be too early to say this, but it appears the radical Left’s moment has passed. What began in Greece with SYRIZA has died in the US. The radical Left now joins a long line of working class failures going back to the split in the First International.
And there is little to no possibility the radical Left can recover at this late stage in the crisis. In a break with the past iterations of the workers movement, the radical Left has never believed it needed independent organization or program to effect its political aims. Unlike the Second and Third International, the radical Left was satisfied to exert pressure within the existing bourgeois parties of Europe and America. Even when it did organize itself independently, as in the case of SYRIZA or the American Green Party, it still believed it could realize its program through the existing state.
A large part of this failure results from the fact that radicals, like the previous iterations of socialism, normalize wage slavery. In this attitude, the radical Left only expresses politically the material conditions of the working class who are dependent on sale of their labor power. Communism, however, is a radical break with the material conditions of the working class, with the sale of labor power generally. The starting point of the radical Left — and this includes every proletarian movement since the Great Depression, including the Civil Rights movement — is, therefore, exactly opposite both the historical mission of the proletariat and the historical trajectory of the capitalist mode of production.
The radical Left thus faced the contradiction that in their determination to represent the working class politically, they renounces its historical mission. To represent the working class as mere seller of labor power, radicals engender the very forces the sale of labor power creates. The more radical politics aims to facilitate the sale of labor power, the more the sale of labor power renders radical politics superfluous.
The withering away of the state
If this is not bad enough, the historical mission of the working class also and independently is the historical trajectory of capital itself. Thus to represent the political interests of the working class, the radical Left found itself hurtling toward a direct confrontation with history.
Marx famously predicted eventually the state would wither away, but many take this prediction to apply only to the lower stage of communism; it does not. The state disappears no matter this occurs under the rule of the proletariat or the bourgeoisie. The distinction to be made here, if one is necessary conceptually, is that the rule of the proletariat presents no obstacle to this abolition.
Even under the fascist dictatorship of the bourgeoisie the trajectory of the state is necessarily toward its abolition. However, in this latter situation, the abolition of the state is necessarily fraught with conflicts in which the struggle between classes necessarily turns the abolition of the state into an interlocking and cascading series of increasingly severe periodic political-economic crises. The state is still abolished, but this abolition occurs through increasingly catastrophic political failures. The destructiveness of this uncontrolled collapse, in terms of human lives and the productive forces, is indicated by its global character.
Neoliberalism is not a policy, it is the irreversible crisis of the existing bourgeois state, the fascist state, the dictatorship of capital.