Crank economics 2.0

The ‘economic nationalism’ offered by right-wing populists sounds as though it is a break with the dominant, neoliberal economic model (the “crank economy”), argues Maurice Macartney, but on closer inspection, it is simply another version, this time within more easily controlled borders.

#CrankEconomy – how the mechanism works!

It has been a bad few weeks for right-wing populists (pauses for cheering to subside).

Bouffant hairdo notwithstanding, Geert Wilders failed to become the Dutch Donald Trump, and the original US version failed to ‘repeal and replace’ President Obama’s Affordable Care Act. Of course, we should be careful not to read too much into these events. We have yet to see how many French voters will support Marine Le Pen’s National Front, for instance. Moreover, Mr Trump may have failed to take health care off millions of working class Americans, but he may yet achieve other aims such as doling out yet more tax cuts to an already hyper-rich elite.

Nevertheless, Mr Trump’s failure leaves him looking less of a ‘closer’, more a loser. And if his astonishing claim that “nobody knew healthcare could be this complicated” (it’s the ‘nobody’ that gets me – wasn’t he paying attention this last seven years?) is anything to go by, he may have just started to realise he is out of his depth.  If those who voted for him begin to realise that too, the mid-term elections of 2018 are going to be very interesting.

Closer to home, we are also witnessing the continuing collapse of UKIP, with their sole MP, Douglas Carswell, jumping ship to become an Independent. Ironically enough.

So are we at a turning point? Has the surge of right wing populism reached its high tide mark? Time will tell – but progressive politicians and campaigners cannot afford to sit back and relax. It cannot be denied that Trump, Wilders, Le Pen, Farage and the rest have tapped into a broad seam of discontent, the strength and breadth of which took most of us on the left or even on the centre right by surprise. Even if Trump (let’s use him as metonym) begins to lose momentum at this stage we cannot simply go back to business as usual, for at least two key reasons, one more immediate, the other more fundamental.

One immediate reason for Trump’s success was his open appeal to a xenophobia of varying degrees of intensity. The openness of this appeal shocked liberals and leftists, and the centre right, most of whom felt that such a man could never, surely, make it all the way to the White House. But it is precisely that unthinkability that gives us a clue to the power of Trump’s appeal, and gives us forewarning about the way to overcome it.

In an excellent discussion of identity politics in the New Humanist, Lola Okolosie and Vron Ware remind us that in the late 1970s, when Rock Against Racism got going, it helped make racism ‘uncool’. The effect, as Ware says, was a “powerful relegation of racist views to the edge of what was acceptable, without being moralistic”. No one, until recently, she significantly continues, wanted to be seen as racist. Okolosie draws the conclusion: someone like Nigel Farage allows people who formerly held back because they did not want to be seen to be racist to come out, as it were. Mr Farage’s supporters felt they suddenly had authorisation to “speak their truth”. The parallels with Mr Trump’s energetic rallies are clear.

The lessons for the left, though, perhaps need a bit more thought. To be clear, Rock Against Racism, and all the other anti-racist efforts, were great and necessary interventions. But not wanting to be seen to be racist is not the same thing as not wanting to be racist. If we are to address the cause of the current upsurge in overt xenophobia, simply shouting and shutting down the xenophobes (being ‘moralistic’) will not do the trick. Rather, we need to defuse the xenophobia itself. That will take a long, detailed effort that cannot bypass honest conversation. Amongst ourselves, and with others.

You cannot solve the problem of xenophobia, after all, by repeating its core gesture – ‘othering’ a whole group of people and labelling them ‘enemies’ (or in this case ‘racists’).  Not without talking to them first, at any rate. Xenophobia comes in a spectrum, with everything from those expressing confused discomfort at one end to out and out white supremacists at the other. Collapsing that spectrum down, so that ‘they’ appear to be ‘all the same’ is not how to deal with this. But because many, including some on the left, are so quick to collapse the spectrum rather than engage in a conversation about the meaning of the confused discomfort (think Gordon Brown meets Gillian Duffy), the underlying issues have remained unaddressed, sometimes for decades.

And it is the underlying issues that we need to be clear about if we are to get at the root causes of our current problems. Indeed, Gordon Brown couldn’t address those with Mrs Duffy because it would have meant facing up to the systematic flaws in the policies he had been pursuing since 1997. Policies governed by the logic of crank economics.

To sum up that logic, for thirty odd years the dominant political parties told us that the market knows best, that if we try to ‘interfere’ with the workings of the market, no matter how painful they may sometimes be, we will do more harm than good. We will kill the goose that lays the golden eggs.  Millionaire Conservatives and Republicans told us that we had to keep turning the crank, keeping costs (such as wages) down and rewarding the ‘wealth creators’ or they wouldn’t be able to ‘create jobs for us’. Self-proclaimed ‘centrists’, like millionaire Tony Blair, and the Clintons, told us that we had to keep turning the crank, keeping costs down and rewarding the ‘wealth creators’ or we wouldn’t have money to put into public services or social security.

Enough people bought into this logic for it to shape the outcome of successive elections from the late 1970s until the crank broke in 2008. Oh, sure, conservative governments were elected after that – decades of momentum don’t come to a halt overnight – but try as they might to get the crank turning again, some of the workings had become disconnected. The machinery was out of whack. But why?

Predictably, some politicians and newspapers opened, in Tanya Jones’s wonderful phrase, a can of worms and pulled out a big red herring. They pointed at the broken workings and sold the idea that it was foreigners what done it. Bureaucrats in Brussels, Eastern Europeans taking ‘our’ jobs and houses.

Wrong. But repeat that story often enough (daily, as in Daily Mail) and it starts to sound, to some, like common sense. For those at the receiving end of the downward forces, symptoms of the crank economy come to appear as causes in themselves­. People without much money competing for precarious jobs on low wages, competing for barely affordable housing, or for the last remaining places in an overcrowded school find it easier to spot an outsider coming in for a share of these resources than to notice the real problem: the massive, and systematically increasing share of our collective resources being cranked to a tiny group at the top, precisely by putting downward pressure on a whole broad range of people at the bottom.

We need to get the message out: yes, you have been given a raw deal, but it’s not because of outsiders. It is because of the policies pursued for decades by the political parties currently claiming they have ‘taken back control’ for you.

Their goal is not to ‘repeal and replace’ the crank – quite the opposite. Look at the details of the ‘replacement’ Mr Trump had in mind for Obamacare. Here’s a graph, showing the scale of the cuts in coverage for the least well off, and the associated huge tax breaks for the very wealthiest.

And here is a graph showing the forecast effects of Mr Trump’s and Mr Ryan’s tax plans.

Bit of a pattern emerging, no?

Incidentally, clearly Ryan’s is more painful for average Americans than Trump’s, but let’s not be hoodwinked into thinking the latter is anything but a high-geared, well-greased machine cranking wealth to the top. Indeed a really cynical part of me thinks the whole function of the Ryan plan (according to which 99.6 per cent of the tax relief over the next decade would go to the top 1 per cent) is to make Trump’s (with ‘only’ 50.8 per cent going to the top) look generous. Lest you are tempted by that bait, remember this: those in the poorest fifth will ‘save’ $100 under Ryan and $120 under Trump (though of course they will bear the brunt of public service cuts). Those in the top 0.1 per cent (including, for instance, the Trump family) will receive $1.4m under Ryan and fully $1.5m under Trump. Let’s see that on a chart:

Struggling to see the two columns on the left? Then let’s convert the figures into something more visible. If each dollar is 1 millimetre, the columns representing the poorest fifth come in at just over 10 centimetres, or around four inches. About the height of a coffee cup. The columns representing the tax relief for the top 0.1 per cent reach 1.4 and 1.5 Kilometres respectively. There is currently no building on earth tall enough to unfurl a full-scale copy of our chart from.

Take back control for whom? For ordinary citizens? For democracy? No: the right-wing populists want to take back control the better to keep turning the crank. Better still, if they can get you to put your shoulder to the crank by telling you how awful these foreign regulations are (it’s all ’ straight bananas’ and ‘health and safety gone mad’) they will do so, and get you singing the national anthem while they’re at it.

Mrs Thatcher used to say ‘there is no alternative’ to the rule of the market – the crank economy. Right-wing populism appeared, at first glance, to offer just such an alternative, in the form of so called ‘economic nationalism’. But judging by Mr Trump’s emphasis on cutting social security and doling out tax breaks to the rich, this is no real alternative at all, more an attempt to confine the crank within more easily controlled borders.

So what is the alternative? Global economic democracy.

But to discuss that, we’ll have to wait for another post.

Maurice Macartney

28 March 2017


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