Trump and neoliberalism

Submitted by Matthew on 1 March, 2017 - 11:50 Author: Martin Thomas

“Neoliberalism as a set of principles rules undivided across the globe: the most successful ideology in world history”, declared the left-wing historian Perry Anderson in 2000.

With Trump, we see both a strand of neoliberalism, pushed on a scale which threatens to break up neoliberalism “from the inside”, but in a reactionary way; and a strand of real revolt against neoliberalism, expressed again in a reactionary way.

Large sections of the neoliberal bourgeoisie are genuinely alarmed by Trump. Yet we have already seen many orthodox neoliberals adapt to Trump’s power. Theresa May is only one example. The neoliberal bourgeoisie will not safeguard the moderate extensions of women’s and LGBT equality, the modest opening of opportunities to ethnic minorities, the relative freedom of movement for some across some borders, the mild cosmopolitanism, on which they pride themselves. Having already let so many civil rights be swallowed by the “war on terror” and the drive for “labour flexibility”, they will be no bulwark for the rest.

They will try to restrain Trump’s moves to disrupt world markets, but they cannot be relied on even for that. Trump can and may make things worse. The only answer is a mobilisation of the labour movement and the left for a democratic and socialist alternative both to neoliberalism and to Trump’s “economic nationalism”. Markets Neoliberalism has been the reshaping of every country’s policy so as best to attune it to world markets and make it an attractive site for footloose global capital. It includes marketising, privatising, and outsourcing. It does not mean a minimal “night-watchman” state, like classic capitalist liberalism. It is heavy on regulation, but of its own sort. Margaret Thatcher, pioneering neoliberalism in the late 1970s and early 1980s, talked of sweeping away regulatory bodies (“quangos”).

In fact, as historians write: “The mid-1980s [brought] rapid growth in quangos, though many [were] disguised”. Globally, neoliberalism has been the heyday of regulatory institutions. The World Trade Organisation, the IMF, the European Union, the G8, the Bank for International Settlements, have keystoned “globalisation”.

The great triumph for the leading capitalist powers in the 1990s was not just that Stalinism collapsed in the USSR and Eastern Europe, but that those territories were drawn smoothly into an expansion of the web of institutions and regulations established by the West over previous decades. Markets do not make themselves. They have to be organised. To global capital, individual governments do not offer local “Wild Wests”. They offer organised and regulated infrastructures of energy supply, transport, education, public services, financial regulation, and regimentation of labour.

Trump pushes, in extreme form, one strand in neoliberalism: market rivalry as the model for human affairs. He champions bullying and blustering in politics because he has found it has worked in business, giving him sharp elbows to thrust in others’ faces as he has negotiated a series of misconceived adventures, business defaults and failures, shady alliances, and legal censures and still come out making profits. He claims that this “art of the deal”, turbo-charged by extravagant threats and stagey provocations to throw rivals off balance, can also produce “better deals” in public policy. But international institutions, and individual states’ networks of regulation, must by their nature be more stable, more settled long-term compromises, than the welter of deals, consortia, joint ventures, and contracts through which businesses operate.

Trump’s approach, if he persists with it, will blow up neoliberalism “from the inside”. It will disrupt the frameworks on which market competition depends, and push the world backwards into an era of trade wars (and more shooting wars). Neoliberalism has been resilient. Out of the discrediting and disruptive crash of 2008, for example, it emerged more aggressive, not less so. Partly it has been resilient because for each country’s government, neoliberalism is not just an ideology, but in large part a matter of accommodating to world-market norms and priorities defined outside its control. The government knows that exclusion from or marginalisation in the world markets would crash its capitalist economy, so it adapts.

Trump could have emerged as he did only in the USA, because since 1945, or even since 1919, the USA has been simultaneously the chief architect of international capitalist institutions and regulations, and the big capitalist power most likely to stretch or flout the international regulations.

The USA is more dependent on trade now than it used to be. Exports are now 13.5% of its GDP. But that compares with 28% for the UK, or 46% for Germany. The USA is alone in the world with Burma and Liberia in not using the metric system. The size and wealth of its financial sector and its consumer markets guarantees it will attract global capitalist investment even when it flouts world-market norms. As an expert writes: “The United States has not historically worried much about how to make itself an attractive location for investment geared towards exports”.

Trump can build on a tradition of American exceptionalism. Push that beyond limits, though, and he can plunge the world back into something like the 1930s. He is already producing snowball effects.

If Marine Le Pen wins the French presidential election in May 2017 — unlikely at present, but then Trump’s victory looked unlikely in early 2016 — a substantial social regression, and restoration of barriers to trade and the movement of people, will follow in Europe. Partly, also, Trump bases himself on people who rebel against neoliberalism, but in a reactionary way, and on advisers who spell out reactionary alternatives.

On 23 February, Trump’s Chief Strategist, Stephen Bannon, spoke to a Conservative Political Action Conference. He said: “The centre core of what we believe [is] that we’re a nation with an economy. Not an economy just in some global marketplace with open borders, but we are a nation with a culture and a reason for being.” Explaining Trump’s bluster against the media (he has excluded many reporters from White House briefings), Bannon said: “They’re corporatist, globalist media who are adamantly opposed to an economic nationalist agenda like Donald Trump has”. He also promised: “deconstruction of the administrative state... The way the progressive left runs, is if they can’t get it passed, they’re just going to put in some sort of regulation in an agency”.

Thatcher and others talked about scrapping regulations, and in fact brought in more regulations (of a different sort and purpose). Bannon, however, is a genuine anti-neoliberal. He wants a Wild West, and one in which he has a bigger gun than anyone else. The anti-neoliberal thread in Trump’s politics builds on a strand with a long history in conservatism, and, sadly, some recent history in parts of the left too: “identity politics”. Against neoliberalism’s worship of world market rules, they offer “America First”.

Workers will still be exploited, abused, made insecure, but they can think their “American” identity is being upheld against the soulless world markets. Anti-neoliberalism, and sometimes even anti-capitalism, can be reactionary as well as progressive. Here it is reactionary. To rally workers, under cover of suspicion of world markets, to hostility to “un-American” migrants, or workers in other countries, is a divisive snare which will end up biting even the most “American” of workers: their strikes, their rights, their legal protections, will all be called “un-American”. Trump’s hostility to world market rules is not support for workers establishing protections.

His first (failed) nominee for Labor Secretary, Andrew Puzder, was a rapacious fast-food billionaire who sometimes sounds off against “big corporate interests” and “globalist companies”, but also opposes unions, minimum-wage rises, and regulations mandating overtime pay and sick leave.

Neither Trump, nor neoliberalism, but labour-movement mobilisation for democracy, workers’ rights, open borders, internationalism, and socialism!