Globalists: Neoliberals in search of terrestrial empire

The recently published “Globalists:The End of Empire and the Birth of Neoliberalism” by Quinn Slobodian charts the history of neoliberalism from its rather humble origins (in terms of intellectual importance, not in terms of income level of its main participants) in Vienna and Geneva to its ascent to a very important if not dominant position in economics, both in theory and economic policy. It is a very well researched book that, I believe, brings even to those who know the essentials of the Mont Pèlerin society, ordoliberalism and Hayekiana lots of new factual information and fresh insights into opinions and, at times, unusual political positions or unexpected bed-fellows of various neoliberal luminaries.

The title puts the emphasis on the global nature of neoliberal thinking. Having, after the end of the Great War, reconciled themselves to the political impossibility of a single worldwide empire that would ensure freedom of commerce, and free movements of labor and capital (a thing which Pax Britannica in the last decades of the 19^th century provided), neoliberals’ ideal world consisted of a “double government”. On the surface, national borders would remain and, with them, all the national symbolism: flags, coats of arms, national language, newspapers etc.; but at a deeper level, there would be no national sovereignty in economic policy-making at all. The world would remain “flat” for the movement of capital, labor, goods and services. Capital especially will have a privileged position: it will be protected against nationalization and abuse by international rules, enjoying to a large degree extraterritoriality as it did in the colonized or semi-colonized countries in Asia in the latter part of the 19^th century.

It its scope and generality neoliberal vision is breathtaking.  But it ran into many problems, particularly after World War II when African and Asian nations became independent, numerically dominant in the United Nations, and keen to extend their newly-won political sovereignty into the economic arena. The clash between the neoliberal ideals and the dominant development paradigms that influenced not only the “new” nations but, through Keynesianism, also the United States, was inevitable. This clash led many neoliberals, especially so Wilhelm Röpke who plays a very important role in the book, but also (to a lesser extent) Mises, Hayek and Friedman to support racist regimes, apartheid, military coups, and to openly stand against one-person one-vote democracy whenever “inferior” classes or races threatened to use it to come to power.

Slobodian shows how, ironically, an ideology that was, in the beginning, general and very abstract (treating in principle every individual the same) and whose many key proponents opposed Nazism and fled  Germany, came, in the 1960s and 1970s, to an almost explicit reactionary, and at times even racist, position. Thus, the support for Pinochet in 1973 was not an oddity, but represented a consistent choice, driven by neoliberals’ increasing rejection of democracy and quasi-religious emphasis on free markets.

The book truly comes to life from Chapter 3 onwards, that is, from the end of the Second World War. In these parts it is a real page-turner. It tackles there the early post-War period and decolonization, the split of the neoliberal camp regarding the desirability of the European Economic Community, neoliberals’ rearguard action against the New International Economic Order and the Group of 77.

The first part (Chapters 1 and 2) deals with the beginning of the movement until the outbreak of the Second World War. I found that part weaker because it concentrates exclusively on neoliberals without situating them in a broader intellectual context. We learn enormous amount about the early evolution of neoliberalism, including most interestingly its close political and financial connection, principally through Mises, to national (and later International) Chambers of Commerce as well as about its short flirtation with economic statistics and empiricism. But we do not see neoliberals’ relationship with other strands of thought: classical Marshallian economics, Keynesians, Marxists, Fascists. We never get the proper measure of neoliberals’ importance nor of their intellectual interaction with the rest of the world.

This is unfortunate because the period was remarkably intellectually fertile and contentious. Neoliberals, though, at that time, represented a tiny, and rather uninfluential, faction—even in their own Vienna “headquarters” where social-democrats, communists and fascists all commanded much greater support. It is thus rather unfortunate that Mises’ debate with Oskar Lange and Abba Lerner about the (im)possibility of economic calculation in a socialist economy does not get even a mention. And yet it was not only an important event in the history of neoliberalism (and indirectly, socialism), but presaged many of neoliberals’ later positions, including Hayek’s seminal work on the nature of economic information. (On that last point, Slobodian leaves the reader in a bit of a quandary as to who was the real innovator there. Walter Lippman’s book An Inquiry into the Principles of the Good Society published in 1937, from which Slobodian quotes several passages, seems to contain key insights—dispersal of economic knowledge, state with a very narrow but powerful role focused on the rule of law—that Hayek formulated in the later years. It would have been nice to have learned a bit more about intellectual precedence on this and several other matters.)

Another part where the book does not, I think, duly account for the interaction (cross-fertilization) between neoliberals and others ideologies is in the discussion of neoliberals’ model of federalism.  As mentioned, it consisted of a “double government” or differently put, “imperium”, that dealt with political, cultural and symbolic matters and was fully autonomous, and “dominium” which was internationally-controlled and dealt with economics. But the idea of a political federation that allows full cultural autonomy is something that goes back to Austro-Marxists who, prior to the First World War, grappled with precisely the same problem but looked at it from a different angle: how to organize a social-democratic federation in a multiethnic state (like the Habsburg Empire).  Both Austro-Marxists and neoliberals came to advocate an essentially identical federal design compatible with cultural and religious freedoms-but, of  course, they diverged on the “dominium” part. For Austro-Marxists it included a strong state involvement in the economy, and for neoliberals none at all—except for the rule of law. It would have been useful to find out more about the mutual influences of the two groups, as well as about the role of others like Schumpeter who straddled the space between neoliberals and Marxists.

The quality of writing is uneven. There are parts of the book that are engagingly written, and cover historical developments very closely. But there are also parts, especially in Chapter 7 which provides a “lengthy exegesis” (to quote Slobodian himself) of Hayek’s writings which are repetitive, boring, and at times even odd. These parts resemble a doctoral dissertation where an eager students shows to have mastered hundreds of quotes from the authors he reviews (probably more than they themselves could remember) but which have very little do to with the subject at hand. One would have liked to learn more about Hayek’s influence in the Thatcher revolution (that goes unmentioned) than on Hayek’s ruminations on epistemology, law, psychology, cybernetics, system theory, brain neurology and the like, complete with his many Greek neologisms and innumerable metaphors (is the human society more like a flock of geese, or like a school of fish, or like “iron fillings magnetized by a magnet under the sheet of paper on which we have poured them”).  

This is an excellent book but if it were shorter, more focused and at times less concerned about providing all the rights citations, it would have gained, in my opinion, in readability and probably in influence.

What is to be done? Fifteen authors in search of a solution.

In a slender volume edited by Heinrich Geisenberger “The Great Regression”, fifteen, among  the most important left-wing social thinkers of today, ask the  following question:  what is the future of social-democracy now when global neoliberalism is crumbling and the forces of nationalism and xenophobia are on the rise? I would not be letting you in on a big secret, nor do I think I would undermine the book’s appeal, if I say that they do not have an answer; neither individually, not collectively. The reason is simple: the answer, as of now, is elusive, and it might even seem that it does not exist.

The contributors to this very good volume which, as I said, gives an excellent insight into the intellectual thinking of the left are (in alphabetic order): Arjun  Appadurai, Zygmunt Bauman, Donatella della Porta, Nancy  Fraser, Eva Illouz, Ivan Krastev, Bruno Latour, Paul Mason, Pankaj Mishra, Robert Misik, Oliver Nachtwey, César Rendueles, Wolfgang Streeck, David Van Reybrouck and Slavoj Žižek.

Not all contributions are, in  my opinion, equally interesting, I find Zygmunt Bauman’s writing, as always, very convoluted and difficult to read. Ivan Krastev seems like an odd man out among this group of writers: he disagrees with Trump and Brexit but from what seem fully certifiable neoliberal positions.

It would not surprise the reader that the names that are often mentioned in the volume are Polanyi and Gramsci, with Erich Fromm with his “Escape from Freedom” coming back from a long oblivion. Be ready to see Fromm quoted more and more.

I would like to highlight three contributions that seem most interesting to me. Nancy Fraser has written an excellent and bold essay on the ideological background to Trump’s victory. She sees the main competitors to be “progressive neoliberals” and “reactionary populists”. Progressive neoliberals are the creation of Clinton’s “New Democrats” and his innumerable triangulations that eventually brought together “progressives” who cared about identity,  gender and racial equality, and sexual rights together with the most hard-nosed Wall Street types. This was, at the origin, an unlikely coalition: LBGTQ activists together with Goldman Sachs. But it worked.  The “progressives” enjoyed their newly-found influence. They got Goldman to pay lip service to equal rights, promote a few persons of “color” to top positions, and even realize the advantage, for its bottom-line, of being more open to diverse talent.* Goldman Sachs made the money. This is what in the 1990s and early 2000s went under the slogan of “socially liberal and fiscally conservative”.

Who played the serpent to  this “progressive neoliberal” paradise? Those left out of  economic success, that is, losers of globalization, and those unable or unwilling to accept the new screeds of “progressivism”. The alliance of progressives and financial-sector neoliberals created, almost by definitions, its counterpart among those who were maladjusted: either economically or socially, So long as “the maladjusted” accounted for 20% or so of the electorate  and made lots of noise with little political success (“The Tea Party”), they could be ignored by the winning coalition. It is one of the ironies of life that “the maladjusted” found in Donald Trump somebody who was able to express, and use that resentment.

But, as Nancy Fraser shows, this alignment of forces totally ignored the left. The left was co-opted by the Clintonite and Obama’s grand coalition of sexual liberators and money bagmen, and whenever it threatened to get out of that coalition it was faced with the specter of terrible things to come. It became a hostage of progressive neoliberals. This completely neutered the left. It could not get out of Clintonite coalition without bringing racists and xenophobes to power, and it could not nudge the Clinton-Obama coalition left.

In this excellent analysis Fraser openly puts the responsibility for Trump’s rise on the ”unholy alliance of ‘emancipation’ with ‘financialization’”. What to do next?: “To reach out to the mass of Trump voters who are neither racists nor committed ‘right-wingers’ but the casualties of a ‘rigged system’” (p.48).

Wolfgang Streeck analysis for Europe is very similar to Fraser’s for the United States. The costs of “la pensée unique” adopted by social-democrats  across the continent are being paid now through the absence of a credible social-democratic alternative that could attract the votes of “malcontents” and consequently check the  rise of the right. In the opinion of “the progressive neoliberal” alliance, Streeck writes, “the fact that the Great Unwashed, who for so long had helped promote the progress of capitalism passing their time with the Facebook pages of Kim Kardashian…had now returned to the voting booth, appears to be a sign of an ominous regression” (p. 161).

Streeck is very critical of the use of the term of “populist”.  He sees it, rightly in my opinion, as a useful shorthand to reject “en bloc” everybody who is against TINA (“There Is No Alternative”).  The term of “populist” is useful to the “progressive-neoliberal alliance” because it makes no distinction between the left and the right, and because  both Trump and Sanders can be dismissed as populists who are providing “simple answers to a complex reality”.  Everything but TINA is simple and wrong because that immeasurably complex reality is understood only by neoliberals.  “’Populism’ is diagnosed in normal internationalist usage as a cognitive problem” (p. 163). In other words, questioning TINA is seen by the elites as a symptom of some deep cognitive issue. Not surprisingly , there are calls to ditch the universal franchise and replace it by “gnosocracy”: vote given only to those who can show to be sufficiently smart. (Streeck quotes such instances).

Solution: None at the moment. We are in the Gramscian interregnum  when "familiar chains of cause and effect are no longer in force and unexpected, dangerous and grotesquely abnormal events may occur at any moment” (p. 166).

Paul Mason (whose excellent “Postcapitalism” I have reviewed here)  has  penned a beautiful  essay that draws on his, and his father’s, personal experiences. It is a story of the English working class, bound together in its contempt for the rich, swindlers and government, open to foreigners like themselves, and with strong social ties. All of that was, according to Mason, destroyed by Thatcherism. Companies went bust, coal mines were closed, work for which these people were prepared became hard to find, jobs got off-shored, social solidarity frayed, and atomization set in. Some left these now desolate places looking for better alternatives in the cities, others espoused the new dogma of financialization and easy money. Local rugby clubs folded. Instead of a rich social fabric, there was now a desert.

The description is strong and poignant. Mason wants things to go back to the way they were in the 1960s and 1970s. He is frank in stating that the left must undo globalization, bring back the jobs, forget about developing countries, and get rid of  East European immigrants. The latter come for a special critique, unlike the earlier African and Sub-Continental  immigrants because, through no fault of theirs, they came to the UK when the country was transiting from manufacturing to service economy: they thus could not be included into an essentially working-class ethos described by Mason because that world had by then ceased to exist. But Mason does not like them because he sees them also as being  too pliant to the demands of globalized capitalism and too acceptant of neoliberal dogmas. Forget about the blond Polish baristas, give us back a strong, beer-swelling Kenyan worker!

But what kind of leftism, one could ask, is that, so indistinguishable from Marine Le Pen’s Front National?

The question left to the reader at the end of the book is, should the social-democratic left maintain its internationalism, in which case it would have to go back to Wall Street elites and ditch national policies of redistribution, or should it focus on domestic malcontents in which case it would move towards policies of national socialism? Or will be able to find a narrow path, between the two, that would combine internationalism with domestic redistribution?

  

* Fraser (p. 41) speak contemptuously of “corporate feminism focused on ‘leaning in’ and ‘cracking the glass ceiling’”.

“The most important relationship”: Kissinger on China…and America

Henry Kissinger’s “On China” (Penguin Books, 2012) is a magisterial book. Although it deals almost entirely with China, it contains many valuable lessons for foreign policy in general, and US foreign policy in particular. I will come back to that in a moment.

The book is divided in three parts.  In the first, Kissinger provides a bird’s-eye of China’s history with the emphasis on the “century of humiliations”, a period of China’s impotence towards the West, Japan and Russia which still strongly colors Chinese attitude toward foreign powers today. In the second part, Kissinger describes the Sino-American rapprochement in which he has, famously, played such a big role. Not only is the discussion of the diplomatic minuet into which the United States and China engaged before the first serious contacts were established riveting, so are transcripts of the conversations with Mao and Zhou Enlai, and Kissinger’s assessment of the two. The third part deals with Dengist and post-Dengist China when Kissinger played the role of a senior statesman and trusted intermediary between the two governments but no longer participated in  active policy formulation. It is there that Kissinger tries to distill the lessons for the conduct of US policy toward China, and where he provides a hopeful, but ultimately very somber, and at times even dark, assessment of the likely path the relations might take.

The book is self-limited in three ways. First, it is self-limited in Kissinger’s obvious reluctance to explicitly criticize US government policy toward China. The first slightly negative mention of US policy appears only on page 131, in regard to Eisenhower. Even when the assessment is strongly negative (as in the cases of Reagan’s and Clinton’s administrations) it is couched in a very nuanced, diplomatic language; it is stated with an almost Chinese indirectness and some veiled sarcasm.

The book is self-limited also in the detail with which Kissinger’s active role is discussed. The reader has the impression that Kissinger could have easily written hundreds of pages on his meetings with Mao and Zhou (as, other than on his memory, he can also rely on voluminous documents and transcripts of the conversations) but chose to be very concise.

Finally, the book is self-limited in that it deals with China only. Other “players” like Vietnam, Cambodia, the Soviet Union, India etc. are mentioned only when related to China. Europe, interestingly, since it had no political role in the China rapprochement, is entirely absent.

The book is suffused with admiration for the Chinese way of conducting diplomacy and one has at times the impression that Kissinger might have preferred to be a Chinese rather than American negotiator. As he wites, the West might have at times exaggerated the sophistication and depth of Chinese interlocutors—so he is aware of that possibility but it hardly affects the content of the book. Not surprisingly Zhou Enlai takes the pride of place:

In some 60 yeas of public life I have encountered no more compelling figure than Zhou Enlai…Mao’s passion strove to overwhelm the opposition. Zhou’s intellect would seek to persuade or outmaneuver it. Mao was sardonic, Zhou penetrating. (p. 241).

The picture of Mao who “would deal with his interlocutors from Olympian heights as if they were graduate students undergoing an examination into the adequacy of their philosophical insights" (p. 448) is less clear, despite many direct quotes from the conversations. Although Kissinger never says so, Mao at times even comes across not as a God who has descended from up above to spend some time with humans, but perhaps suffering from an inferiority complex as when he tries to display his broad-mindedness by ridiculing his own revolutionary slogans. I do not think that a serious politician should do that—unless he wants to kowtow to his interlocutor.

Deng was, of course, very different from both Mao and Zhou. His “acerbic, no nonsense style”, his “disdain for the philosophical in favor of the eminently practical” (p. 324) sets him apart. He busied himself by looking at how many meals should train conductors take, not with more lofty matters. He ruled entirely behind the scenes: “Deng held no major office; he refused all honorific titles; he almost never appeared on television, and practised politics almost entirely behind the scenes. He ruled not as an emperor but as a principal mandarin” (p. 334). And in a interesting detail, Kissinger mentions that the last foreign visitor whom Deng has met was Brent Scowcroft in 1989 (after Tiananmen). Deng spent the last several years of his life (he died in 1997) living as a recluse—an image of Deng that those who have seen him on TV screens bouncing with energy even in the his 70s have a hard time to conjure. After his death, Deng was cremated and his ashes disperses into the sea—in strong contrast to Mao.

The last several chapters covering the period of crisis in Sino-American relations after the Tiananmen massacre deal with US policy towards China, but more generally toward non-democratic regimes. Kissinger is politely but no less firmly critical of American establishment’s view that peaceful relationships are possible only with democratic governments:  

Americans were insisting that democratic institutions were required to guarantee a compatibility of national interests. That proposition—verging on an article of faith for many American analysts—would be difficult to demonstrate from historical experience. When World War I started, most governments in Europe (including Britain, France, and Germany) were governed by essentially democratic institutions. Nevertheless, [the War]… was enthusiastically approved by all elected parliaments (pp. 425-6).

Moreover, "If adopting  American principles of governance is made the central condition for progress in all other areas of the relationship, the deadlock is inevitable” (p. 452).

American Messianism of universal values which in practical language means that all countries have to adopt the American way and to be included in an international system headed by the United States, comes for criticism repeatedly. China, “a country that for most of its modern period—which in China starts two thousand years ago—regarded itself as the pinnacle of civilization, and that for nearly two centuries has regarded its uniquely moral world leadership position to have been usurped by the rapaciousness of Western and Japanese colonial powers” (p. 511) is unlikely to ever accept such a secondary role in the international hierarchy.

In the practically last page of the book Kissinger cautions American policy-makers that “Americans need not agree with the Chinese analysis to understand that lecturing a country with a history of millennia about its need to ‘grow up’ can be needlessly grating” (p. 546). With Trump administration consciously eschewing the Messianism of universal values in favor of a more realistic (but wrongly executed) policy of national interest, Kissinger’s admonitions have less of a relevance than usual. But, as is likely, the US returns, after next election or the one after, to its traditional Messianism such notes of caution may be more apposite.