G'day all,
The history of the war on social democracy , as per the latest LMD.
<http://MondeDiplo.com/2002/01/11alternative>
United States neo-liberalism seems to have
triumphed: the US now dominates military and
diplomatic affairs; Europe is on its way to
being a mere free-trade zone. In December the US
House of Representatives (narrowly) granted
President George Bush increased powers to negotiate
trade agreements ("fast track") — the same
powers it had denied President Clinton in 1997. And
the anti-globalisation movement is on the
defensive, just as neo-liberals were 30 years ago.
After financial crises in Russia, Southeast
Asia and Latin America in 1998, a rightwing pundit
gloomily said: "Global capitalism, whose
triumph once seemed inevitable, is now in full retreat,
perhaps for many years". Business Week
asked: "Is the American model of free-market
capitalism, the de facto ideology of the
post-cold war period, in retreat? Countries are opting out of
a free-market system everyone took for
granted" (1). Japan's finance minister described himself as
"an outdated Keynesian" (2).
Capitalism's decline proved illusory:
events, and commerce, resumed their course. Yet the
prevailing economic system, based on
beliefs that validated public policy, had once been
overthrown. This was neither a fluke, nor
the predictable result of social or historical shifts. Rick
Perlstein's new book on Barry Goldwater,
the 1964 Republican presidential candidate, reminds us
of the power of politics; it recalls an era
when the "losers" unexpectedly rewrote the history books
thanks to their ability to mobilise,
popularise ideas and found movements. They went on to win the
bigger war (3).
Contrary to the beliefs of most pollsters
and journalists, charting the best course of action does not
automatically mean accepting current trends
and the prevailing spirit of the times, or acquiescing to
the media. At times political activists try
to modify trends before reversing them. This calls for
patience and tenacity, and may involve
battling advocates of fashionable ideas. Ideological labour,
political will and activism may create
demand for new political agendas.
In 1964 Goldwater, with the support of only
38% of the US electorate, lost to Lyndon Johnson.
Commentators were quick to write Goldwater
off and proclaim the triumph of the Democrats'
centrist, Keynesian ideology. Radical
conservatism was finished. Goldwater's famous call to arms
— "Extremism in the defence of liberty is
no vice. Moderation in the pursuit of justice is no virtue"
— offered voters a counter-revolutionary
message grounded in social divisiveness. The
Republicans supposedly learned their lesson
in defeat. The 1964 elections were won in the
centre-ground: radicalism was too
frightening, progress was assured and the New Deal appeared
invincible. Ideologies were converging,
technology was paramount and thinking was monolithic:
there was no alternative (4).
In 1958 the Republican president, Dwight
Eisenhower, had acknowledged that "the gradually
expanding federal government" was "the
price of rapidly expanding national growth". In 1960 the
Democratic party declared that the "final
eradication" of poverty was "in reach". Johnson devoted
himself to this task, secure in the
knowledge that "we can do it all. We have the wherewithal" (5).
Once in Washington, he launched his "war on
poverty" by increased taxation and a vastly
expanded civil service. Although his war on
poverty did achieve some of its social objectives (6),
in political terms it was the Keynesians'
swansong. In Goldwater's words, it was "a war on your
pocketbooks".
No longer monolithic
The political ground was already starting
to shift. The New Deal's durability was not guaranteed
and business interests were plotting their
revenge. The Democratic coalition was imploding on two
fronts: low-income Southern whites
abandoned the party because of its support for black civil
rights while the radical left challenged
Johnson on the draft and the Vietnam war. Thinking was no
longer monolithic, and "extremism" was
changing allegiances.
Ronald Reagan notably switched his
political allegiance. By 1964 he had become a Republican and
campaigned on Goldwater's behalf (7).
Goldwater had called for "a choice, not an echo" and in
this he was successful. Since the
Republican party had not held the White House since 1933,
Eisenhower had urged it, in the early
1950s, to retake the presidency by coopting Democratic
issues and policies. Four decades later,
Bill Clinton won credit for a similar strategic move. But
this time the move was to the right: the
Democrats embraced Republican issues and policies just as
the Republican party had taken on a radical
neo-liberal tone. In 1993 Edwin Feulner, president of
the Heritage Foundation, a rightwing US
thinktank with links to many officials now serving in the
Bush administration said: "When we started
out [in 1973], Heritage was routinely referred to as an
ultra-right, far right or extreme right
organisation. Today our ideas are considered mainstream" (8).
It would be naïve to attribute this shift
exclusively to the ideological efforts of the thinktanks, the
power of international economic
institutions or the writings of intellectuals and journalists whose
concept of modernity required them to cosy
up to employers. . The US right even quoted the
Italian communist Antonio Gramsci, who
argued that "cultural hegemony must be conquered". But
it achieved its goals only when the
interplay of social and political forces had shifted in its favour.
The issue of "minority rights" helped wreck
the Democratic coalition. Voters overlooked the policy
benefits they got from the welfare state,
and remembered only the tax increases that such
programmes required. Some sectors of the
electorate viewed taxes and inflation as the unacceptable
price of policies that no longer benefited
them. In 1964 Goldwater proved that invoking race and
"values" could swing the electorate to the
right as voters were restless with income-redistribution
policies, which they saw as governmental
coercion favouring "minorities" and the poor. Reagan
knew exactly what he was doing when he
argued that the food stamp programme (along with its
presumably African-American beneficiaries)
"let some fellow ahead of you buy T-bone steak
[while] you were standing in a check-out
line with your package of hamburger".
Political analyst Benjamin Barber recalls
Clinton's remarks in January 1995, two months after the
Democratic party was routed in the 1994
Congressional elections: "We lost our base in the South:
our boys voted for Gingrich [then the
Republican leader of the house]. I know these boys. I grew
up with them. They feel that our reforms
always come at their expense. Every progressive advance
our country has made since the Civil War
has been on their backs. They're the ones asked to pay
the price of progress. Now we are the party
of progress, but until we find a way to include these
boys in our programmes, until we stop
making them pay the whole price of liberty for others, we
are never going to unite our party, never
really going to have change that sticks" (9).
Racial tensions had battered class
solidarity during the rightwing shift of the late 1970s, while
unemployment, economic uncertainty and
competition had made some working-class voters less
willing to foot any bill, even though this
was the "price of progress" for groups more
disadvantaged than themselves.
Neo-liberalism's social failures facilitated its electoral and political
success, with unbridled capitalism causing
reactionary populism. Both leftwing and rightwing
governments adopted policies favouring the
rich. Then, with the help of media controlled by
wealthy interests, they increased
working-class anger at the economic situation until it turned into
panic about identity and to calls for "law
and order" (10).
Milton Friedman ended his 1976 Nobel Prize
lecture with the observation: "The drastic change that
has occurred in economic theory has not
been the result of ideological warfare. It has responded
almost entirely to the force of events;
brute experience proved far more potent than the strongest of
political or ideological preferences" (11).
This is too modest. Without the painstaking work of
"extremists" such as Goldwater and the
thinktanks run by Friedman and Friedrich von Hayek, no
one could have predicted that the
stagflation of the 1970s would be interpreted as it was. Moments
of crisis challenge the status quo.
Thinking the unthinkable
Conservative groups such as the Heritage
Foundation, the Cato Institute, and the Société du Mont
Pèlerin (founded by Hayek) dared to think
the unthinkable. In the end, the party in power would
be irrelevant if political parties were
forced to fashion business-friendly policies; the competitors
could meet head on as long as they all
played by the same rules. On the right, in 1960, the
Keynesians included the British
Conservatives, the US Republicans and the French Gaullists. On
the left, in 2000, the neo-liberals include
Tony Blair's New Labour, the US Democratic party and
most French Socialists.
Hayek, who had been preparing his grand
alternative to socialism since 1947, announced his
intentions: "Our effort differs from any
political task in that it must be a long-run effort, concerned
not so much with what would be immediately
practicable, but with beliefs which must regain
ascendance" (12). This amounts to saying
that the neo-liberal cause would not be compromised to
seduce the mainstream or win in the
short-term. For those who advocated a revolutionary break
with the past, the point was not to cajole
the political centre, along with elected officials and media,
as they go with the flow; the neo-liberal
goal was to reverse the whole trend. As market Leninists,
the "conservatives" believed in the role of
the avant-garde. They were not interested in cabinet
positions. They wanted power.
With each day our world edges closer to the
dreams of Goldwater, Reagan, Thatcher, Hayek and
Friedman. Such figures had weapons that
opponents of neo-liberal globalisation could never hope
to muster; business interests are not about
to finance the research activities of those who seek to
overthrow them. The press, now safely in
the hands of the multinationals, will do everything it can
to discredit anti-establishment protesters.
But the protestors do have one advantage: they know that
viewing the world solely in terms of
commerce is folly. For the foolish ideas of the dominant class
to be replaced by the voice of reason — and
the interests of most people on earth — it may take the
same determination and patience shown by
the free marketeers when they first dared to think the
unthinkable.
(1) Robert Samuelson, Newsweek, 14
September 1998; Business Week, 14 September 1998.
(2) International Herald Tribune, 9
September 1998.
(3) Rick Perlstein, Before the Storm: Barry
Goldwater and the Unmaking of the American Consensus, Hill and Wang, New
York, 2001.
(4) Several years later the phrase "There
is no alternative" was frequently used by Margaret Thatcher on behalf of
a dominant ideology which had, in the meantime, become even more
right-wing than that of Barry Goldwater.
Thatcher's sentence soon became known by its acronym, TINA.
(5) See Rick Perlstein, op cit, pp 13, 327
and 304.
(6) The number of Americans living below
the poverty level dropped from 22% in 1959 to 11% in 1979. The Johnson
administration's programmes were of notable benefit to US senior
citizens.
(7) In 1960 Ronald Reagan, as a "Democrat
for Nixon", supported the Republican candidate over John Kennedy.
(8) On the role of think tanks in the Bush
administration, see Robin Toner, "Conservatives Savor Their Role as
Insiders in the White House", New York Times, 19 March 2001.
(9) Benjamin Barber, The Truth of Power:
Intellectual Affairs in the Clinton White House, Norton, New York, 2001,
p 97.
(10) See Thomas and Mary Edsall, Chain
Reaction: The Impact of Race, Rights and Taxes on American Politics,
Norton, New York, 1991.
(11) See Richard Cockett in Thinking the
Unthinkable: Think Tanks and the Economic Counter-Revolution 1931-1983,
Fontana Press, London, 1995, p 198. See also Keith Dixon, Les
évangelistes du marché, Raisons d'agir, Paris, 1998.
(12) Richard Cockett, op cit, p 104.
Translated by Luke Sandford
