As more people in the public squares openly question the globalised, neo-liberal political economy we have inhabited for 30 years, it’s a good time to ask what we in Australia can learn from the head-whirling changes that have struck the western democracies of the US and the UK.
What went wrong there for the status quo and the ‘of course’ economic narratives of recent decades?
At state and federal levels, Australia is not immune to the ideas and pressures that have beset the US and the UK. Far from it. We’ve been experiencing years of privatisation and public asset stripping and attacks on the public interest sector.
Since April 2018, the banking royal commission has shone a light on one corner of our version of Wall Street. It’s not a pretty picture of greed and corruption and mismanagement. Meanwhile, the same old politicians promise another free trade agreement with the same old winners and losers.
For human population growth and international trade, the natural environment is again under sustained attack. The past year has offered depressing stories about the mismanagement of the Murray Darling Basin; native forest logging, and removal of other vegetation ecosystems that support the beleaguered koala; migratory birds and a host of remaining native species. Our guardianship of the Great Barrier Reef is framed by political and economic denial of real causes and consequences.
The post-war working and middle class is beset by industrial closures, efficiency drives and ‘creative destruction’ with new technology. The 1980s compact between employers and workers is under daily political threat as unaffordable. The list of warning signs for ‘business as usual’ goes on.
District Bulletin editor Maria Taylor sifted the tea leaves soon after Trump became President of the United States. Here’s an abridged version of what she found then (quoting deeper analysts than us). The hope is that it helps us understand today.
“I’M REALLY UPSET” wrote an NRMA employee in a change.org petition. “We’ve just found out that they may sack a lot of staff by January and send our Aussie jobs offshore. How could they do this to their workers, and treat Australians like this? They made tens of millions in profit last year – but to make a little more they’re going to hurt Australians who’ve built this company.”
This social media plea that garnered almost 10,000 signatures in protest by late November 2016, was reportedly part of a move by IAG Insurance to outsource and automate some unspecified services in the interest of greater ‘efficiency’. It highlights why the middle and working class is hurting and many are angry – not only in the US but right here in Australia and in our region too.
During the same week came news that Essential Energy has been given the green light by NSW government authorities to lay-off another 600 workers (having already trimmed the work force in March) and ‘outsource’ more tasks. All this directly affects jobs and the economy of our region, as well as possibly the safety and amenity of the wider community. The attrition in regional jobs has been happening for some time and promises to go on.
“Otto, a Bay area startup that had been acquired by Uber, wants to automate trucking – and recently wrapped up a 120-mile driverless delivery of 50,000 cans of beer…” reported Om Malik in The New Yorker. “From a technology standpoint it was a jawdropping achievement, accompanied by predictions of improved highway safety.
“ From the point of view of a truck driver with a mortgage and a kid in college, it was a devastating ‘oh shit’ moment.
That one technical breakthrough puts nearly two million long-haul trucking jobs at risk,” he reported. ( > Silicon Valley has an empathy vacuum, 28 Nov 2016 )
If trucking went (still a decent-paying job for non-college graduates), so would a whole ecology of support services from truckstops to motels and retailers.
The ‘of course’ talk about efficiency and innovation and never mind the human consequences has characterised western economic thinking since at least the early 1990s (and the digital revolution), capturing middle-of-the-road politicians from Bill Clinton to Obama in the US to New Labor politicians in Britain.
Here in Australia, the present supposedly middle-of-the-road Prime Minister continues the same rhetoric about what will save the country along with proposals for corporate tax cuts justified by trickle-down economics. Never mind that it has not proven to work anywhere else. Someone famously called this approach “voodoo economics”.
Thanks to innovation and efficiency the white collar jobs outlook for many young people is discouraging. Professional training in law or journalism, resource management, science or engineering hardly guarantee a job these days as they once did. Meanwhile HEC fees pile up. (Here’s an idea though: human service jobs, teaching, nursing or social work look more promising with an ageing population and high immigration.)
Couldn’t image it
Living in Australia and dependent on mainstream global news reports, many of us could not imagine that Donald Trump would become the 45th President of the United States. Of course Hillary will win, we assured ourselves as the polls tightened. How could it possibly be otherwise?
There was little reporting of the economic underbelly of this surreal presidential race that in the end landed Trump as a “human Molotov cocktail” against the political system, as documentary maker Michael Moore memorably put it. There was equally little reporting on what made Clinton such a singularly unsuitable Democratic candidate for the times and for the style of her opponent, Trump.
One hint: it didn’t require Russian interference, a stilted campaigning style or much prompting by Trump – who delighted in tweeting daily reminders of Hillary’s alleged lies. “Yuge Liar!” The track record of her husband’s two terms as president sufficed for those with a memory. The record was one of campaign promises to help middle and working class people that were cynically traded by a Clinton government that came to be called Republican ‘lite’.
Bill Clinton deliberately blew off the labor movement and black leaders who had helped elect him. He told workers whose industries were disappearing overseas (aided by his support for the North American Free Trade agreement) that what they needed was to get re-educated. A worker’s lot was an individual not a collective struggle (so 1930s!) as if everyone could be redeployed as a barista or a computer jock in the 1990s.
He championed legislation greatly expanding the so-called war on drugs (ie war on users) that has disproportionally targeted poor people and young black men. The world’s biggest incarceration system mushroomed on his watch. He kicked parts of the social safety net to shreds and kow-towed to Wall Street and its economic priorities. This was the new Democratic Party, emulated by New Labor in Britain.
According to author and historian Thomas Frank, Hillary Clinton was an active proponent of the political strategy that made enemies of former allies and voters – to show voters how independent and non-partisan the politician was.
Frank and others point to all this as the main reason Hillary Clinton lost in the heartland states. A map shows the striking result that only both coasts, where the professional, technocratic and financial services demographic dominated, voted in majority for Clinton.
Under these revised centrist parties it was still possible to be progressive in cultural and identify politics – feminism, gay rights, multi-cultural tolerance etc, as well as welfare and medical reform like Obamacare – while neglecting basic economic democracy.
That remained the direction of the Democrats in the Obama years to the great disappointment of many. It was another reason for the coolness towards more of the same under Hillary Clinton. (A matter of some confusion to many of us who could not understand what people had against Clinton, other than misogyny.)
The fire is coming
Frank writes about speaking at a firefighters convention “blue-collar workers who have watched with increasing alarm what has been happening to folks like them for the past few decades … watched as the people formerly known as the heart and soul of this country had their lives taken apart bone by bone.” While they are among some of the last unionised workers, “they can see the inferno coming”.
A firefighter explained it this way:
“ people have run out of ways to adjust and still have a more or less middle class standard of living.
First they went for dual incomes. Then they ran up debt on the credit card. Most recently they have pulled equity out of their homes. All this has not been enough as wages continue to sink.
“If we want to understand what’s wrong with liberalism [in the American sense of the word] what keeps this movement from doing something about inequality or about our reversion to a 19th century social pattern, this is where we’re going to have to look: at the assumptions and collective interests of professionals, the Democratic Party’s favourite constituency.”
You’ll find a complete report in Frank’s entertaining and thought-provoking 2016 book Listen Liberal, a thoroughgoing polemic about the elite thinking “you get what you deserve, and what you deserve is defined by how you did in school”, in what was once the party of the working people – who survived with new social programs during and after the Great Depression. (Shorter than the book, this article by Frank explains where ‘Liberals’ have gone in recent times.)
Based on track record and disillusionment, has such distrust of the major political parties set in here? Considering the last federal election the answer has to be yes. Four One Nation senators did not just drop from the heavens.
What many see happening in western countries is a revolt of millions globally whose lives have been ‘stomped on’, as journalist Glenn Greenwald puts it, during 30 years of globalisation and rule by ‘the markets’.
Criticism of job loss from the left as well as right
US Senator Bernie Sanders, (who gave Hillary Clinton surprising competition in the US primaries calling himself a socialist, well social democrat) summed up his own appeal as a critic of the mainstream parties and why Trump won. He said:
“ I think a number of people who voted for Obama once, or twice, voted for Trump.
“There are a whole lot of people who are really hurting. They’re working two or three jobs; they’re worried about their kids; they can’t afford to send them to childcare or college; and Trump comes along and says “I’m a champion of the working class”, promising jobs.
He describes the new populist appeal as the fallout of 30 years of neo-liberal economic policies bowing to ‘the market’ and privatisation of public assets and jobs, together with globalisation of capital and labour on behalf of multi-national corporations and a professional class that have done very nicely. That’s the new normal that public discussion in the mainstream media (singing from the same song sheet as ruling politicians) tells us is normal.
From that perspective, it is normal to assume that it has been a disaster that the TPP (Transpacific Trade Partnership) is being disrupted by Trump. But is it? Many think that these global trade agreements threaten not only some domestic jobs but the ability to safeguard the environment, public health, animal welfare and local autonomy.
Again the American experience shows the way: the NAFTA free trade agreement with Mexico and Canada, sold as a boon for workers under Clinton, has with hindsight been disastrous on both the US and Mexican side of the border for traditional jobs – in US factories and on Mexican small holdings.
Why is the new normal failing?
Trump is just a messenger for the failures of too much of current major party politics in western democracies wedded to market economics. Top of the list is failure to counteract the gathering inequality and economic pain of the working and middle class. Add to that failure to publicly acknowledge the obvious pressures on jobs etc of human population increases and people movements. And failure to get it right on counteracting climate change that may yet be the biggest economic wrecker of all.
These failures then manifest in people scapegoating minorities and ‘outsiders’ for their problems and in electing demagogues who promise some quick fixes.
India: poster child for what happens with ‘trickle down’ economics and populist politics
Pankaj Mishra in a New York Times opinion piece in November 2016, took a blow torch to modern Indian politics on related themes.
“Something is rotten in the state of democracy,” he wrote. “The stink first became unmistakable in India in May 2014, when Narendra Modi – a member of an alt-right Hindu organisation inspired by fascists and Nazis – was elected prime minister. Like Donald Trump, Mr Modi rose to power demonizing ethnic-religious minorities; immigrants and the establishment medi; and boasting about the size of a body part.
“Mr Modi’s ascent, like that of many demagogues today, was preordained by the garish dreams of power, wealth and glory that colonized many minds in the age of globalisation. In India, one of the poorest countries in the world, “the tutelage of a distant and self-satisfied elite” – to borrow from Ross Douthat, describing America – spawned a much more extravagant sense of entitlement. [But] “the India that embraced deregulation and privatisation was a “roaring capitalist success story,” according to a 2006 cover of Foreign Affairs magazine.
The narrative went something like this: Now that the government was getting out of the way of buoyant entrepreneurs, a rising tide was lifting the boats of all Indians aspiring to the richness of the world. Suave technocrats, economists and publicists (mostly US-trained) endlessly regurgitated free-market nostrums (imported from America).
“The fervent rhetoric about private wealth-creation and its trickle-down benefits openly mocked, and eventually stigmatized, India’s founding ideals of egalitarian and collective welfare. It is this extraordinary historical reversal, and its slick agents, that must be investigated in order to understand the incendiary appeal of demagoguery in our time.
Back in the USA, the neo-liberal project did not falter in Barack Obama’s time. American philosopher at Harvard University and civil rights activist Cornel West writes that the hope and change agent that Obama appeared (easily winning many of the working and middle-class white votes who then turned to Trump) never delivered and instead carried on a neo-liberal economic agenda led by Wall Street ‘criminals’ augmented by a hawkish foreign policy of drone bombing, and domestic disdain for civil rights. What happened to him?
What all this adds up to is that in the US as in the UK (and to a less extreme extent Australia) the ‘liberals’ in American parlance (or the ruling non-Tory parties) shifted from defending the working classes to seeing as their constituency a technocratic and professional class that reaped the rewards of globalisation and free market economics.
That Bill Shorten has been called the most worker-friendly and progressive Labor leader at least since Bob Hawke’s Labor/boss Accord, tells you something. Keating and those who followed him led in the other direction and only recently admitted that the neo-liberal project may have run its course.
I remember in the US in the late 1980s, the union-busting and wage-squeezing that was going on under Ronald Reagan and wondered where that might end up. Well here we are.
Leveraged to the hilt
Australian European economist Yanis Varoufakis explained the debt and deficit visited upon ordinary citizens that is quite recognisable here.
“Before 2008, workers in the US, in Britain and in the periphery of Europe were placated with the promise of ‘capital gains’ and easy credit. Their houses, they were told, could only increase in value, replacing wage income growth. In the meantime their consumerism could be funded through second mortgages, credit cards and the rest.
“The price was their consent to the gradual retreat of democratic process and its replacement by a ‘technocracy’ intent on serving faithfully, and without compunction, the interests of the one percent. Now, eight years after 2008, these people are angry and are getting even.
“Trump’s triumph completes the mortal wounding this era had suffered in 2008. But the new era that Trump’s presidency is inaugurating, foreshadowed by Brexit, is not at all new.
“It is, indeed, a post-modern variant of the 1930s, complete with deflation, xenophobia, and divide-and-rule politics. Trump’s victory is not isolated. It will no doubt reinforce the toxic politics unleashed by Brexit, the undisguised bigotry of Nicolas Sarkozy and Marine Le Pen in France, the rise of the Alternative für Deutschland, the illiberal democracies emerging in Eastern Europe, Golden Dawn in Greece.”
A review of US campaign and role of the media
American independent journalist, Pulitzer Prize-winning Glen Greenwald, known also for his part in publishing the Edward Snowden government spying revelations, was another observer who thought Bernie Sanders would have had a better chance against Trump. He also warned that American politicians ignored the lessons of Brexit. His comments below come from interviews with democracynow.org and from articles published in The Intercept where he is a founding editor.
As with Brexit, said Greenwald …
“ supporters of Trump were continually maligned by the dominant media narrative (validly or otherwise) as primitive, stupid, racist, xenophobic, and irrational.
“In each case, journalists who spend all day chatting with one another on Twitter and congregating in exclusive social circles in national capitals – constantly re-affirming their own wisdom in an endless feedback loop – were certain of victory [for the Democrats].
“Senator (Bernie) Sanders [who was largely ignored by the US media] is actually quite remarkable, because he isn’t coming out and saying everybody who voted for Donald Trump is a racist troglodyte. He’s not saying that everyone who voted for Donald Trump is a misogynist who hates women and cast their vote for that reason.
“He’s saying that there are a huge number of people who voted for Donald Trump, and not for Hillary Clinton, who have very valid grievances. And those grievances are grounded in a system of policies that both political parties have played an equal role in creating. Look at what he (Bernie Sanders) is describing: jobs going overseas, industries being destroyed, Wall Street being protected.
“You can go back into the ‘80s, into the era of Reagan and trickle-down economics and the destruction of unions, to find the genesis of it. And then you look into the ’90s, with NAFTA and free trade mania and the liberation of Wall Street from all kinds of constraints, and into the 2000s.
“In the post-2008 economic crisis the Obama administration prosecuted not a single Wall Street executive responsible for that crisis, while continuing to build the world’s largest penal state; largely for poor people, people with no power. And it’s this inequality, this oppression of huge numbers of people in the name of globalism and free trade, that Bernie Sanders is describing as why Trump won.
“ Hillary Clinton, probably above every other politician who could have run, is the symbol of safeguarding that system, of believing in it, of advocating for it and, most of all, of benefiting from it greatly.
“And so, you sent a Democratic nominee into the general election, in this climate, who could not have been more ill-suited to voice the kind of systemic critique that Donald Trump, being the con artist that he is, was able to voice and that Senator Sanders has spent his entire career trying to advocate for. And I think you see the contrast really well in terms of how Senator Sanders would have run against Trump … versus how most Democrats are reacting to this Trump victory.
Democracy Now! interviewer: “And then you have the media part of this – right? – where you have the unending Trump TV, not the new Trump TV, but all the networks’ Trump TV, when it came to Donald Trump. They showed more footage of his empty podium, waiting for him to speak, than they ever played of the words of Bernie Sanders.
“That famous night, March 15th – every single victor and loser that night, from Rubio to Kasich to Clinton to Cruz to Trump, all their speeches were played – except for Bernie Sanders, who was speaking to thousands and thousands and thousands of people that night in Arizona. This is just emblematic of the rest of the coverage. They never played a word that he said that night.”
Glenn Greenwald: “Lets begin with the fact that Donald Trump’s public persona prior to this election was consecrated and constructed by one of the most powerful media organisations in the world, if not the most powerful media organisation in the world, which is NBC News, which for many, many years paraded Donald Trump in the format of a reality TV program, watched by tens of millions of Americans, that portrayed him as the embodiment of the entrepreneurial spirit.
“ He marched into boardrooms, in charge, and unflinchingly fired people who weren’t working up to standard performance. He built new businesses.
“He was the embodiment of everything that Americans are taught to revere. And this is the person who, for decades, has been a racist; a demagogue; a con artist, and yet NBC turned him into this swaggering hero at great profit to itself.
“And so, already, he was a by-product of media worship. And then, once the campaign began, the media, as you said, nonstop fed on Donald Trump, to the exclusion, certainly, first and foremost, of Bernie Sanders, but even to the other candidates, who got far less TV time than Trump did, because he was a ratings gold mine.”
Greenwald notes however that once Trump was the Republican nominee the media’s belated wake up call to his shortcomings worked in his favour too, claiming that the media was being ‘unfair’ to him as people knew the media to be.
Editorial media judgement about who is important: communication is key
Greenwald continued: “[In] all of their editorial judgments about who is worth hearing from and who isn’t worth hearing from are all kinds of ideological and partisan biases.
“So the idea that Donald Trump, the billionaire, celebrity, TV star, should constantly be heard from, whereas Bernie Sanders, the old Jewish socialist from Vermont, who nobody took seriously, doesn’t need to be heard from, with all of his boring speeches about college debt and healthcare and the like, in that choice is a very strong and pedantic ideological choice that the American media embraced and played a huge role in enabling Trump to march to the primary.”
Another observation about the crucial role of communication and media narratives in modern democracies comes from public intellectual and long-time critic of US policy Noam Chomsky.
“ Even the simplest, the most obvious, the most crucial facts are invisible if they do not accord with the needs of power”
… citing also George Orwell who described how unpopular ideas can be suppressed without the use of force simply by a cultural consensus of the elites that some things are not talked about. (From Power and Terror Conflict, Hegemony and the Rule of Force, Pluto Press 2011.)
Let’s look at fake news
Evgeny Morozov an insightful critic of the narrative that Silicon Valley “will solve everything and make our lives wonderful”, brings the western media story up to the present with a piece on how digital ‘fake’ news is being blamed for establishment politician losses and the media’s failure to understand those losses.
Hillary Clinton and Russian hacking via Wikileaks continues as a prime example. He writes: “Democracy is drowning in fake news. This is the latest reassuring conclusion drawn by those on the losing side of 2016, from Brexit to the US elections to the Italian referendum.
“ Apparently, all these earnest, honest and unfashionably rational grownups are losing elections because of a dangerous epidemic of fake news, internet memes and funny YouTube videos.
“For this crowd, the problem is not that the Titanic of Democratic Capitalism is sailing in dangerous waters; its potential sinking can never be discussed in polite society anyway. Rather, it’s that there are far too many false reports about giant icebergs on the horizon.”
Fake news and silo-ised audiences are challenges for journalists, but Morozov argues so far all the focus on fake news and taming Facebook has served as new distractions from the economic underpinnings of present-day voter dissatisfaction.
Summing up the economic drivers of voter upset
Here’s Greenwald again, a journalist who doesn’t flinch from some colourful language and big conclusions: “The indisputable fact is that prevailing institutions of authority in the West, for decades, have relentlessly and with complete indifference stomped on the economic welfare and social security of hundreds of millions of people.
“While elite circles gorged themselves on globalism, free trade, Wall Street casino gambling, and endless wars (wars that enriched the perpetrators and sent the poorest and most marginalized to bear all their burdens), they completely ignored the victims of their gluttony, except when those victims piped up a bit too much – when they caused a ruckus – and were then scornfully condemned as troglodytes who were the deserved losers in the glorious, global game of meritocracy.
“ That message was heard loud and clear…
“After the Brexit vote, I wrote an article comprehensively detailing these dynamics, which I won’t repeat here but hope those interested will read. The title conveys the crux: “Brexit Is Only the Latest Proof of the Insularity and Failure of Western Establishment Institutions.” That analysis was inspired by a short, incredibly insightful, and now more relevant than ever post-Brexit Facebook note by the Los Angeles Times’ Vincent Bevins, who wrote that ‘both Brexit and Trumpism are the very, very wrong answers to legitimate questions that urban elites have refused to ask for 30 years.’ ”
Bevins wrote: “Since the 1980s the elites in rich countries have overplayed their hand, taking all the gains for themselves and just covering their ears when anyone else talks, and now they are watching in horror as voters revolt.”
The warning is still up
Greenwald notes: “For many years, the US – like the UK and other Western nations – has embarked on a course that virtually guaranteed a collapse of elite authority and an internal implosion. From the invasion of Iraq to the 2008 Financial Crisis to the all-consuming framework of prisons and endless wars, societal benefits have been directed almost exclusively to the very elite institutions most responsible for failure at the expense of everyone else.
“It was only a matter of time before instability, backlash, and disruption resulted. Both Brexit and Trump unmistakably signal its arrival.
“A lot of people who voted for Brexit, a lot of people who voted for Trump understand exactly all the arguments that were made about why each of them is potentially destructive and so dangerous, and they did it, not despite that, but because of that.
“They want to punish and ultimately destroy the institutions who no longer have any credibility with them and who they believe are responsible for the suffering and the lack of security that they experience in their lives without anyone really caring about it at all.
“And until we start to address that and until institutions, elite institutions, take responsibility for it, those things are going to continue to fester and grow, and it very well may be the case that Trump and Brexit are just the beginning of this very alarming cycle, rather than the peak of it.”
Judging by many of the talking head discussions of the past year, it seems the lessons are faint for many, and the danger therefore remains.
David Remnick, editor of The New Yorker, a publication I normally like, wrote a piece in November 2016 that summarises a popular mainstream liberal media analysis. This prefers a theory of right-wing conspiracy (Russians, Wikileaks, shady cyber operatives for hire) taking down a competent Democratic female candidate rather than drilling down into the political economy that Greenwald, Frank and others have analysed. It’s called An American Tragedy.
Everyone can agree on that title at least. ♦
IMAGE: Esso maintenance workers say they will protest at the gates of the Longford plant [in Victoria] for “as long as it takes”.
ABC Gippsland / Nicole Asher