Neoliberal Democracy and the Futility of Elections

What I want to explore today is a concept that might explain voter apathy, the rise of the “values voters”, as well as the ongoing “culture war” nonsense.

The core idea is that under Neoliberalism, the market is protected from democracy. This theme was explored in this podcast with Mark Blyth and Jonathan Hopkin that I listened to a few months ago.

Rhodes Center Podcast: Populism, or ‘Anti-System Politics’? (Watson Institute)

Hopkin’s idea is that the rise of what he calls “anti-system politics” comes from the fact that the economic sphere is consigning more and more people to poverty and precariousness, yet politicians do nothing about it. This goes on for election cycle after election cycle. People vote one party into power, then another, and yet nothing ever changes! Why is that? Hopkin says it is because all ruling centrist parties across the wealthy democracies have effectively signed onto the same basic economic philosophy:

[11:00] Jonathan Hopkin: “The story isn’t just an economic one; it’s also about how democratic institutions have failed to deal with the economic problem. And a big part of that story is why competitive elections have not been enough to give people channels to address their grievances and elect people who will do something to help them.”

“A big part of the story there is that if all the political parties are signed up to a particular way of doing things—lets just for shorthand call it neoliberal economics—then voters can vote, but it won’t make any difference. There might be marginal differences—some of them quite important—between political parties, but the underlying system of management of the economy is not going to change if all the parties are signed up to the same model. And that same model has been entrenched across all of the Western democracies.”

“I’m not trying to suggest there’s no difference between the way capitalism works in the United States and the way it works in Sweden. And I’m not trying to suggest that there’s no difference between Tony Blair and David Cameron, to take the British example. But it is true that all of these countries and all of these politicians have been signed up to this kind of pro-market way of thinking about the economy…

Both political parties have signed onto a neoliberal consensus regarding the economy that says politicians must never “interfere” in the workings of the Market. In essence, Neoliberalism is a back-to-the-future retread of Classical English Liberalism, or laissez-faire, which was the prevailing economic philosophy up until the Gilded Age. Today, dozens of well-funded think tanks once again defend and promote this philosophy and deny any alternatives. The economics profession is basically united behind promoting neoliberalism as the only valid form of economic organization.

I think this is the reason why so few people actually turn out to vote in the United States. When did voting ever change anything? Paychecks keep getting smaller, benefits keep getting more stingy, and things like housing and education keep getting more expensive, regardless of who is in power. It’s simply what the Market decrees, and politicians of any party are powerless to stop it.

At this point, they introduce a very important term: neoliberal democracy.

[24:12] Mark Blyth: “…You have a term of art: neoliberal democracy. What do you mean by that?”

Jonathan Hopkin: “Just to confess, it isn’t my term–Colin Leys dreamt up that concept. It’s the idea that in a neoliberal system, if you take the view that that markets not only are the best way of organizing the economy, but they need to be protected from political interference, because the Public Choice School always argues that democracy is a big threat to the market system because voters will vote for nice things rather than just deserts…”

MB: “What they should get…”

JH: “…What they should get, yeah. And so neoliberal democracy is really a system in which the market is protected from democracy. It means a democratic system which can’t actually enact any change. Some of the things you were talking about earlier like central bank independence is a great example of neoliberal democracy. Supranational rules set by non-majoritarian institutions. ‘Non-majoritarian’ is a political science term to mean ‘not elected’ and ‘not accountable’ institutions. So, like the European Court of Justice when it comes to things like product market rules and labor market rules, or the ECB (European Central Bank) or the Fed (Federal Reserve) or the Bank of England when it comes to monetary policy.”

“So, in essence, it’s democracy without democracy. Its the trappings of democracy without any possibility of a popular majority really bringing about a change to the market system.”

Neoliberal democracy is a system where the market is protected from democracy.  And that’s why people don’t bother voting—because it doesn’t really change anything. This is by design!

So my contention is that, because we can’t really change anything in the economic sphere with our vote—even though the economic sphere has the biggest influence over our lives by far—all we are left to fight over is meaningless “culture war” issues: transgender bathrooms, abortion, guns, gay marriage, drug use, racist jokes, cancel culture, and other such idiotic bullshit. Our leaders are okay with us fighting over this stuff, because it doesn’t affect their wealth or their bottom line. They can go on strip mining society to increase their wealth with impunity. They can move capital around the world and hire and fire people just as easily.

Meanwhile, the people being crushed by this system are kept constantly at each others’ throats over religion, race, sex, and so on. They are unable to unite to provide any kind of concerted opposition. Is the oldest play in the book: divide and conquer.

When you are powerless to change the economic conditions you live under, “values” are the only thing left to vote on. Thus you get the rise of so-called “values voters.”

Seen in this way, wokeness is yet another weapon of Neoliberalism. It’s deployed by the media and corporations as the essence of what it means to be on the “Left” in America, and it’s certain to alienate the working classes and keep them in a perennial state of agitation against the “politically correct” liberals in the boardroom who allegedly despise them. Yet, of course, both blue collar and white collar workers have been proletarianized. But by keeping them from developing class consciousness you stop any effective resistance from forming, because that requires things like solidarity and collective action. Wokeness, deployed by these “Kayfabe-Left” institutions like Hollywood and the corporate media, keeps that from happening.

I heard a quote from Andrew Yang recently that made the same point:

“Right now, if you say to someone…you’re with this person in Ohio and you’re like, ‘Hey get out and vote!’ They look at you, and they’re like, ‘this does not fucking matter to me at all.’ Like, my vote does not matter. And they have in many cases decades of experience telling them just that. And then there are people who will never come near it because they are completely in despair, or they’re completely disconnected from civic society. And that to me is not extraordinary anymore.”

And its not even irrational. That’s the toughest part, Anand. You cant be like, ‘Hey if you just get off your ass and vote everything will be okay.’ Not really. You know, they could come and vote and their person just gets co-opted, or that person is just one vote in a chorus. The power dynamics are so broken. And then selling to them [that] ‘this vote’s going to do it for you. If you can just get that person into city council or school board or…'”

“You know that’s not true. You know that these systems, when they get there, even if they’re good they’re going to get their hands cuffed, and they’re going to be beholden to some assholes, and they’ll be outvoted by the crazy cohort on the city council, or a school board, or the state legislature, or the U.S. Congress, or whatever it happens to be…”

Andrew Yang tries to convince Anand Giridharadas that we need UBI (Yang Speaks)

The voters that Yang talked to during his presidential campaign told him, in essence, My vote does not fucking matter. They know this is true, because the market is insulated from democracy. And Yang can’t really dispute this. From the standpoint of the voters, its totally rational not to vote. After all, they’ve reliably gone out and voted year after year after year. If they’re old enough, they’ve lived through the switch from Democratic control to Republican control back to Democratic control, back to Republican control, and what’s changed for them, really? Nothing! As Joe Biden assured wealthy donors: Nothing will fundamentally change.

This gives us a framework for understanding why that is: neoliberal democracy, which is, in essence, democracy without democracy. They then talk about the anti-system politics of Trumpism in the U.S.:

[26:32] JH: “…I think one of the real misunderstanding of Trump, especially over here, is that underneath the chaotic rhetoric there is quite a clear political line there, which is that its anti-globalization. It’s pro-market, but its markets embedded in a particular view of society, right? So there’s a social order that he wants to protect. It might be a racialized social order; its not an egalitarian social order. But it is a social order in which the market should not be allowed to wipe out the livelihoods of particular groups which have been hard done by, and which Trump would like to protect. Obviously there are other types of groups he doesn’t care for. But it is a vision of society in which the state should have the capacity to shape the market to achieve political and social ends.”

MB: “And that’s very un-neoliberal, and that’s basically in a sense, to bring us back around, why this is an anti-system moment. One of the things you note in your book…is that when you look at the party platforms and speeches and pronouncements and actual polices of all these different anti-system parties, none of them fall into the neoliberal box. It doesn’t matter if they’re Left or Right, they’re all much more pro-state, is that right?”

JH: “Yeah, that’s right. So, I took this data from what’s called the Comparative Manifestos Project. It’s a way of trying to score the positions of political parties in elections all across Western democracies ever since the War. So it’s a huge data set.”

“And what you can get from that is there have been clear shifts in the kind of positions parties take. You can also observe in this data that Social Democratic or Center-Left parties have increasingly abandoned economic interventionism over the post war period. It started to come back a bit in the last decade or so, but they’ve kind of given up on the idea that government can try and shape the market in that that which you were just describing Trump aspiring to do.”

“So you can see in this data that the anti-system parties whether they’re on the Right: Trumpism, Le Pen; or whether they’re on the Left: Sanders, Corbyn, Podemos in Spain, and so on—they’re very different on what we call the socio-cultural dimension of policy: things to do with racial equality, gay rights and so on, but they are very similar actually in economic policy. They’re all arguing for a return to the state; for a return to government having a role in shaping the economy.”

“And in some ways, they’re actually really rather similar. If you look at the British example, Jeremy Corbyn was fairly unenthusiastic about the European Union, partly because the European Union has strict competition laws that mean that governments can’t bail out failing companies, and they can’t have an industrial policy. Well, here we have a new government in Boris Johnson who, before the pandemic, had all kinds of plans for industrial policy in Britain to try and revive the post-industrial north.”

“So there’s actually a strong connection. These parties are way apart on other things, but when it comes to the economy they definitely have a view that the government should get involved. So it’s not neoliberal democracy. It’s actually a form of democracy. It’s a form of government which allows people to take back control, to use the Brexit phrase, of the market economy.”

This next portion ties into exactly what I talked about in the previous post:

MB: “So why do you think it is that most other scholars playing in this area really haven’t made that connection? Really, nobody else points this out. Why are you the only person that’s noticed this?”

JH: “…I think the problem is we both inhabit a world which is geared to not understanding this, right? We are in prestigious academic institutions which have benefited from globalization, which have benefited from some aspects of neoliberalism even though many people in our universities would like neoliberalism to be mitigated…”

MB: “Oh yeah. Many six figure salaries have been made writing about how bad neoliberalism is…”

JH: “Exactly. And I think that this prejudices us a little from seeing how this may look at the sharp end.”

“There was a great example of this. Andy Haldane, who’s not an academic—he’s a Bank of England technocrat; a very honest analyst of what’s happening in Britain—was talking about how a few years back he went up to Sheffield in the north—a very, very depressed region–to talk about the economy. He’d been looking at some data beforehand that his assistants in the Bank of England had been pouring over, and he was thinking, ‘Well, things don’t look too bad, you know, the economy’s recovering and things are looking in the right direction.’ And he got to Sheffield and he suddenly realized that everything was terrible, [and] that people were desperate. And I think in universities, we suffer a bit from some of this, that we don’t get out there enough to see what things are like at the sharp end.”

This is exactly what I said last time: the technocrats look at statistics which tell them that everything is fine. What they do not do is actually go out and visit communities devastated by globalization. Andrew Yang, quoted above, did so, and came to a very different conclusion. But notice that Yang is not an economist. Also note that his remedy—a Universal Basic Income—would be deemed quite impossible by neoliberal economists. How would we pay for it?

They conclude by looking at what the future holds for anti-system politics:

[39:20] JH: “…I think where things will really become clear is when it becomes less of a public health problem and more of an economic problem, which might happen pretty soon. At the moment we’ve got both. But the full implications of this economic shutdown are going to be clearer and clearer as the year goes on. And you can expect [?] to become more and more unpopular.”

“So where we have mainstream parties in government, you would expect that it would give [?] to the anti-system parties. But the really interesting thing is to see where anti-system parties are in there already, and are coping not terribly well with this crisis, what is the effect? Do people revert to the establishment? Or do they go for a different type of anti-system [?]?”

My guess is if you revert to the establishment, you’re going to very quickly be disappointed. So if the outcome in the U.S. is Biden wins the election, I think anybody who’s contemplating voting for Sanders, and a lot of people who supported Trump and lost are going to be really furious very quickly.”

“There’s no sense in which we’re going to return to neoliberal democracy as a satisfactory way of managing the economy, not until we get growth back. And there are all kinds of reasons for thinking that growth is never going to come back to some extent, that that is going to do the job.”

So we need to fundamentally change the way the economy works, and my position—and I’m sure you would agree with this as well—is that in one way or another, that’s going to involve government taking much more responsibility for the way the economy works and getting much more involved in distributing investment and opportunity, and giving people security. There’s no way you can do that in the old neoliberal system. So things are going to have to change, and the question is who’s going to be able to deliver that.”

MB: “…Well that all depends on the quality of your government. If you have a state that you actually trust and seems to know what they’re doing—for example, the Danes—then you’re perfectly willing to hand over fifty percent of your income and let them provide public goods. If you’re the United States or the United Kingdom, there’s pretty good reasons for not believing that these people know what the hell they’re doing, and you don’t want to hand them that chunk of change. That perhaps goes some way to explaining the political polarization that’s out here.”

JH: “Yeah, that true, but its also true that there’s no way around this that doesn’t involve the government becoming the buyer and seller and lender and seller of last resort, right? A huge chunk disappeared from the economy, and you don’t get that back by just the government sitting back and doing some fix like negative interest rates or something, and saying, ‘Let the market sort it out.’ That’s not going to be enough. So it’s going to involve the government getting involved whether or not we really think they’re up to it.”

MB: “But what if they get involved with another healthy bout of austerity…?”

Conclusion: Polanyi was right: Really, all this confirms what Karl Polanyi wrote over fifty years ago. Polanyi argued that an attempt to create a “pure” market society separate from politics would lead to “the destruction of society.” People would not tolerate being subjected to the whims of the market—of watching their livelihoods be destroyed, of watching their businesses go under, of watching people be priced out of their homes, and so on. They would demand redress from their politicians.

The politicians during the first wave of globalization believed that markets were “self-regulating” and therefore should be kept free from “interference.” To that end, they attempted to shield the Market from any kind of attempt on the part of the populace to subject anarchic markets to democratic oversight for the good of the populace as a whole. Now we see neoliberalism doing the exact same thing as its Classical Liberal predecessor: protecting markets from democracy.

The chaos supposedly self-regulating markets caused ultimately led to the Great Depression and the subsequent rise of fascism in Europe and the New Deal in the United States. The common denominator of these movements was to subordinate the Market to the needs of society. In the U.S., the happened democratically. In Europe, this was implemented by fascist regimes that suspended democracy and introduced an us-versus-them dynamic to retain power. As Hopkin noted above, this desire to subjugate economic forces to democratic control can be done by regimes of very different socio-cultural values, from those which preach harmony and inclusiveness, to those who preach racial hated and competition. The form it takes depends on the society. While neoliberalism is regarded as “centrism” today, the populist, or anti-system alternative represents a type of governance that transcends traditional Left-versus-Right. That’s why you get these silly debates over whether the Nazis were “left wing” or “right-wing”. The desire to transcended the Market for the good of society does not map so easily onto the uni-dimensional political axis of today.

In the end, big business will always try and promote an authoritarian/fascist option to prevent a genuine leftist movement from coalescing that would curtail their power. This failed in the United States the last time, but it appears to be succeeding this time around in the United States as well as in many other countries. The wealthy have much more power and more effective means of propaganda at their disposal than they did back then. Neoliberalism, sadly, appears poised to die the same way it’s utopian philosophical twin did several generations ago: through economic collapse and a global conflagration where millions upon millions will perish.

…The passing of the market economy can become the beginning of an unprecedented freedom. Juridical and actual freedom can be made wider and more general than ever before; regulation and control can achieve freedom not only for the few, but for all. Freedom not as an appurtenance of privilege, tainted at the source, but as a prescriptive right extending far beyond the narrow confines of the political sphere into the intimate organization of society itself. Thus will old freedoms and civic rights be added to the fund of new freedom generated by the leisure and security that industrial society offers to all. Such a society can afford to be both just and free.

Yet we find the path blocked by a moral obstacle. Planning and control are being attacked as a denial of freedom. Free enterprise and private ownership are declared to be the essential of freedom. No society built on other foundations is said to deserve to be called free. The freedom that regulation creates is denounced as unfreedom; the justice, liberty and welfare it offers are decried as a camouflage of slavery….

Freedom’s utter frustration in fascism is, indeed, the inevitable result of the liberal philosophy, which claims that power and compulsion are evil, that freedom demands their absence from a human community. No such thing is possible; in a complex society this becomes apparent. This leaves no alternative but either to remain faithful to an illusory idea of freedom and deny the reality of society, or to accept that reality and reject the idea of freedom. The first is the liberal’s conclusion; the latter is the fascist’s. No other seems possible.

The Great Transformation, pp. 256-257

 

4 thoughts on “Neoliberal Democracy and the Futility of Elections

  1. Is there anything that gives you hope? The mass, sustained protest movement? The pandemic-driven drive for public health care? Anything?

    I share a lot of your pessimism. I’m actually leaving the US, something set in motion for work a while back but taking on a new sense of urgency right now. The country is falling apart.

    But I also remember my Camus: Sisyphus taking satisfaction from rolling that rock up the hill every day, and my Nietzsche, with his sense of joy of the eternal reoccurrence of the same. There is no moral arc of history. There will *always* be more Donald Trumps, more sociopathic would-be exploiters, waiting in the wings. The job is never done. It can be disheartening but also exhilarating, knowing that there are always more fights to be fought.

    1. Take me with you! You must have some connections if you can go anywhere with an American passport right now.

      All societies go though a life cycle: birth growth, decay. We just happen to be in a decay phase. There’s no rule that times always have to be good.

      I heard a good analogy a long time ago from Buddhism. A fruit has to rot and decay for the seeds within it to spring forth and produce something new. That seems hopeful to me.

  2. So the ‘anti-system’ parties support a return to the State. These are strange times indeed we live in.

    Makes perfect sense though 🙂

    1. Be careful. There’s nothing to “return” to, because the state never went away. They just support a different role for it vis-a-vis the economy than the neoliberal status quo.

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