The logic of the crank

Maurice Macartney sets out his take on the logic driving much of the politics we are seeing unfold today.

Can there be anyone left who would argue there was little to choose between a Clinton and a Trump presidency? That Mr Trump campaigned to the right but will govern to the centre?

Leaving aside his declaration of ‘absolute’ belief in the efficacy of torture, the loosening of environmental standards, the restarted construction of controversial oil pipelines, the dismantling of Obamacare the signalling of an intention to overturn Roe v. Wade, that wall, and a score of other matters, Mr Trump’s sacking of the acting attorney general for opposing his travel ban  surely removes all doubt.

This presidency, I think we can conclude, represents a disastrous lurch far to the right, and away from democracy. The sheer speed is worrying: it’s as if he is trying to ram things through faster than democratic processes can scrutinise, let alone put up any opposition to them.

Mr Trump is one of a range of right-to-far-right populists in the ascendancy. Aside from our own Nigel Farage in the UK, in Europe there a number of right-populists within varying distances of making electoral gains. If we’re lucky – if we work hard – the US example will make Europe step back from the brink.

But how did we get to the brink in the first place? Doubtless there are complexities, and any simple explanation opens itself to the charge of oversimplification. To do the thing justice we would have to dig way back into the history of globalisation, armed trade, slavery, conquest and so on (something I hope to do through our Connections and Combinations series).

Nevertheless, I’m going to set out, as succinctly as possible, what I take to be the basic logic driving much of the politics of the last few decades, the consequences of which we are witnessing today.

Wish me luck.

The logic

The current wave of right-wing populism is not just about economics in the era of globalisation, but it can’t be understood outside that context. It arose, at least in part, as a reaction to the still-unfolding consequences of the Reagan-Thatcher ‘free-market’ revolution, which promoted what we could call ‘crank economics’.

This model sets out the imperative of turning an economic crank, as it were, that boosts profits by cutting costs.  Or rather, by displacing the costs: it cranks profits and rewards up to the wealthy while pushing the cuts and the costs down onto those with the least wealth and power, or out in the form of what economists call ‘negative externalities’ – that is, forms of pollution, literally and metaphorically. Here’s the logic of the crank, a step at a time:

1. Reduce the power of the workforce – make it harder to join unions, and harder for them to take action; fragment or ‘fissure’ the workplace;

2. Empower managers to maximise profits for owners by;

3. Driving down the costs of wages, the cost of maintaining decent terms and conditions for your staff, of materials and goods.

And over the last few decades proponents of the crank have worked out you can turn it faster by:

4. Opening up to the global market, thus buying in cheaper goods, materials and labour.

Do this and you can have a bigger cut of the profits to share between the owners and the managers who have run the operation successfully. Yes, it should be acknowledged that this was a success in important respects.

For one thing, GDP grows. Some do very well (managers and owners here at home), some reap the benefits of access to northern markets (Developing Country business classes), some do moderately well (some Developing Country workers) or lose out altogether (some in the traditional northern Working Classes, other Developing Country workers). At this stage the results are complex, so it is relatively easy to persuade enough people that, sure, some lose out, but on the whole it works out for the best. On aggregate.

This is where the political argument gets interesting.

The politics

For Europe and the US, the key political issue is the shift from being production based economies to consumption based economies. Lots of producers (people who built things in factories) lose their jobs. Financiers (people who oil the crank) get rich. Politicians turn their attention away from the former and towards the latter, because that’s where the power now accumulates.

The Tories did this overtly. They were the party of the market (that is, the crank version of the market).

New Labour were concerned to win new support by adopting crank economics, but they tried at least to soften the blow on enough of their supporters to win elections. They were the party of the market plus mitigations. The crank plus welfare.

Roughly the same story unfolded in the US with Reaganite Republicans and Clinton Democrats.

The problem for New Labour and the (neo-liberal) Democratic Party is that crank economics ensures the inequality keeps growing. So there comes a point where, try as you might, you just can’t keep enough of your old supporters on board – they’ve lost too much, relative to the newly empowered; they have been side-lined too long.

And no amount of ‘welfare’ helps, because all it does is emphasise the ‘dependency’ of those who once took pride in their work. Everybody comes to resent each other.

If I’m wealthy I start to resent having to give ‘my’ money to someone who doesn’t even work for a living. If I’m on benefits, I start to resent those who have grown rich on a system that won’t even give me a job or an affordable house. I start to resent having no choice but to sit idle, dependent on the ‘generosity’ of the wealthy financiers who shut my factory – and who now, resenting my worklessness, call for cuts to my benefits.

The crank turns, the rewards go up, the pressures press down, and everybody gets that little bit angrier.  So where does populism come in?

Well, into that anger steps a self-appointed champion who says ‘you are right to be angry’ (here’s where he or she wins over the first tranche. What a great relief, what a sense of release, to be told at long last that you are right to be angry).

Then he or she says: ‘You are right to be angry with the political elite because they have failed in their duty to protect you…’ (and here’s where they win their next tranche): ‘…from foreigners’.

It’s actually a double whammy: the right-populist gets to point the anger of ‘the people’ (we’ll come to this in a second) at both the home grown elite and the external enemy, the foreigner, whether those faceless bureaucrats in Brussels, those foreign immigrants coming to take ‘our’ jobs and houses, or Mexicans and Muslims in the US case. But while tapping into xenophobia and ethnocentric anger may feel satisfying for some, it doesn’t hit the mark.  ‘Foreigners’ may form an easily visible target, but it’s the wrong one.

Remember step four of the logic set out above. Once the crank gets going, it becomes profitable for a small, rich portion of the population to off-shore and outsource and tax dodge their way to still greater wealth. The crank operates beyond borders – indeed the crank uses borders for leverage, playing one nation-state off against another to gain tax and trading advantages. We won’t solve that by going down the route of ethno-nationalism.

Proponents of crank economics, though, like right-populists, make something of a speciality of misdirection. Remember the crash of 2007-8? How did that unfold? Some of the above-mentioned small, rich subset of the population engaged in reckless speculation and made a killing selling debt to those who could not afford it, but who couldn’t afford not to get into debt, if they wanted to keep a roof over their heads.

When it all inevitably went wrong, when the financiers crashed the economy, the government bailed them out (because they couldn’t afford not to), and proceeded to roll out austerity for the citizens with the least power to resist it. The argument for prioritising deficit reduction is: ‘we’ve got to turn the crank faster’.

Despite the claim in the UK that we were all in it together, we plainly weren’t: the least well off ended up shouldering a disproportionate share of the burden, and the wealthy soon got back to getting richer. Those in the middle began to resent those on either side – the elite above and the ‘spongers’ below.

Many also began to resent another target: foreigners.

Yet surely the government’s job, in a democracy, is to give we the people what we want? So what’s the problem? Well, everything depends on how you think of ‘we the people’, how you populate that ‘we’.

Populists think – or pretend to – that there is a (singular) people, with all the purity and single-mindedness of a monolith. The populist speaks in the name of ‘the people’. Or rather, some of the people as though they were all of the people. The part stands for the whole: some of the people come to be represented as the real people. Disagreement with what ‘the people’ want, therefore, comes to be seen not as part of a democratic conversation, but as an attack on ‘the people’.

Populists appeal to what Paul Taggart calls the ‘heartland’. If you don’t support what the people of this self-defined, but nebulous heartland want, you must, by definition, be an ‘enemy of the people’. Hence the prevalence of talk of ‘betrayal’ and ‘treason’, such that when Mr Trump fired acting US attorney general Sally Yates the White House statement – the White House statementaccused her of having ‘betrayed’ the department.

It’s worth noting that this accusation of betrayal is directed at a legal figure – just as in the jibe against the UK’s Supreme Court judges (‘enemies of the people’) when they upheld the right of Parliament to have a say in the Brexit negotiations.

Democracy is about the rule of law, settled by agreement among a polity of equals – all of whom have equal say in shaping the law, and none of whom has power over the law.

Populist demagogues, on the other hand, prefer the law of the ruler to the rule of law.

But if populism believes in one monolithic people (ein Volk), and prefers one strong leader (you can fill in this bit), democracy, in contrast, is about learning to live with our differences, nonviolently. It is inherently, essentially pluralist. It is about all of the people, for all their differences, having equal standing, before the democratically achieved law, as citizens. It isn’t something we have already, like some sort of democratic Utopia, but something we (you and I) are either moving towards or away from.

And it’s not just about the importance of standing up for the rights of others, in terms of ethnicity, gender equality and so on, though this cannot be overstated.  It is also that democracy provides a better answer to our politico-economic problems than populism. Because the problem is not just about money or jobs: it is about the distribution of power.

Crank economics, remember, begins by shifting the relative balance of power in favour of business owners and the managers who serve their interests. It isn’t just money that is cranked to the top: it is also power. Which means that a politics based on crank economics is a politics that, as more power is accumulated by the wealthy over time, tends gradually to move away from democracy.

The only answer to which is more democracy.

What would that look like? That’s for another post.


Maurice Macartney

1 February 2017