All entries for Monday 06 June 2011

June 06, 2011

Neoliberalism is dead, long live neoliberalism…

And now Portugal. In all EU countries most affected by the economic crisis that was caused by the market, elections have been won, paradoxically, by free-market conservatives: first in Latvia, then in UK, Hungary, Ireland and Portugal. Spain will surely follow within a year, judging from the PP victory in the recent local elections. By contrast, the Left has lost – with the partial exception of Ireland.Mirador

Despite the apparent absurdity, there is a logic behind. The crisis, much more than undermining neoliberal logic (see also Colin Crouch’s recent The Strange Non-Death of Neo-Liberalism, Polity 2011), has destroyed the ‘Third Way’ argument (do you remember? only 4 years ago Giddens was defending it in Over to You, Mr Brown). After all, the most keen supporters of market reforms in the last twenty years have been centre-left, not centre-right parties. The Right was supporting the market because it was in the long term efficient, not because it was just; and at times it also compensated with identity politics, e.g. nationalism, xenophobia, or moral conservatism. By contrast, ‘Third Way’ social-democrats have supported the market twice: because it was efficient (ideological defeat) and because it was fair, in terms of opportunity. After the crisis, the Right can still say that we consume more than 10 or 20 years ago, and that crisis is just a temporary downside of capitalism. The spending cuts are not hurting their voters, who already, as savers, benefited from the state rescue of the banks. It is this Centre-Left’s argument that has gone to the dogs: redistribution before and after the crisis has been enormously regressive, and the crisis has shown that there is nothing fair in the markets: those earning millions managing banks or companies do not deserve it on merit – they are by and large total w***ers. Their remuneration is the opposite of motivational: it insults the values of reason and work, which should be the values of any Left.

It remains to be explained why more radical Left also loses – most visibly in Portugal. The easy explanation is that it is not that their argument is weak – rather, that they have no argument. It is also very fragmented among countries, and a progressive answer probably requires co-ordination: each country left alone is placed in apparent ‘There Is No Alternative’ positions. An orderly restructuring of debt, by shifting the losses to creditors and those who have rather than on those who have not, could be politically attractive (after all it has worked so many times in Asia and Latin America, while the current tough measures in the EU have just no chance). But nobody proposes it.

Let’s at least enjoy the relief that Latin America is much cleverer than Europe. It’s now Peru to have chosen progressive politics over a return of criminal conservative ones – I share the joy of so many Peruvian immigrants here in Madrid, and of the Andean people I spent some time with in 2006.


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