Wednesday, 9 November 2016

Institutional Rot

If we think of Brexit and Trump as of an ilk, then a notable characteristic of this "illiberal tide" is that it has succeeded first in states with the longest established liberal political systems. Despite facing greater economic pain and social disruption in the wake of 2008, countries with relatively recent experience of Fascism and conservative authoritarianism, such as Spain and Greece, have not succumbed. The parties of the liberal centre have often been rejected, and even obliterated in some cases, but the far-right has not come close to power, and doesn't look likely to (e.g. Golden Dawn polls around 9%). Where it might is in next year's French Presidential election. However, while Marine Le Pen may do better than her father did in 2002, the most likely outcome remains defeat to a centre-right candidate with a vote of around 30%. This is a worrying increase on the elder Le Pen's 18%, but it doesn't herald the end of the Fifth Republic. What Brexit and Trump point to is the failure of the political centre, not the resurgence of the anti-democratic right.

While progressive reform over the years has done much to alter the dispensations of 1689 and 1789, the UK and the USA both retain institutional features that embody a bourgeois democracy suspicious of universal suffrage (e.g. the US Electoral College), sympathetic to personality-driven factionalism, and dedicated above all to the preservation of property rights. Whether you consider it be-suited Fascism, know-nothing populism or ethno-nationalist authoritarianism, the current rightist insurgency is clearly directed at a liberal establishment. In most cases it is adopting a constitutional form, which is typical of populism, so the "threat to democracy" remains mostly hyperbole, and in many cases it is advancing classical (if not neo) liberal policies. Even parties like the Front National that consider democracy irrelevant to the "nation's will" know that challenging the liberal establishment is best done by claiming to be defending the constitution and secular rights, notably from "reactionary" Islam, not by advocating their overthrow.

The ascent to power of Fascism in Italy, Germany and Spain in the first half of the 20th century depended on three things: the dissatisfaction of conservatives with the extension of democracy (and the boost this gave to socialism); a general bourgeois fear of Bolshevism (which led to centrist toleration of the "state of exception"); and the liberal encouragement of ethno-nationalism at Versailles and after. You might be able to find faint echoes of each in contemporary politics, if you listen hard enough, though it's often liberals who are most dissatisfied with democratic practice while the great terror for centrists appears to be the mild social democracy advocated by Jeremy Corbyn and Bernie Sanders. Ethno-nationalism is alive and kicking globally, but the fractious borders of the former Yugoslavia remain an exception in Europe, while the US is still a society divided by racial claims to property rather than ethnic claims to territory. What is consistent between the two eras is the fragility of liberal institutions: then because of their relative youth in Continental Europe; now because of their senility in the Anglosphere.

On election eve, The Economist caught the scent of this: "It can seem overwrought to warn about the risk of fascism in the context of proud old democracies like America and Britain. And in truth, neither is about to see brownshirts in the streets or the complete domination of government and society by autocrats. At the same time, it is important to understand that liberal society is not immutable. There is not much holding it up apart from the institutions we build, which themselves rest on a fine balance of costs and benefits. Mess around with those costs and benefits enough, and the thing can come crashing down." Though the piece was straplined "Democracy in danger" and opened with the observation that "Liberal democracies, while not exactly on the brink of a descent into fascism, are facing a period of crisis", the key point is that the hegemony of liberal norms depends upon the effectiveness of liberal institutions, and they have been in decay in the US and UK since the late 1970s.

Many people are confused by the distinction between liberal (meaning classical liberal) and neoliberal, assuming the latter is just the former in skinny jeans. While the theory remains fundamentally consistent, particularly in its privileging of private interest, there is a significant difference in practice, namely that the neoliberal extension of the market from commerce to all spheres of society has eroded both the normative authority of liberal institutions and their practical effectiveness. The institutions that developed in the 17th and 18th centuries were focused on protecting landed and bourgeois interests against autocracy, hence the division of powers, the constraints on prerogative and the focus on property rights. Those that developed over the course of the 19th century were more geared to managing contending interests thrown up by the industrial revolution and the growth of nationalism - i.e. the "social question" and issues of ethnic identity.

The success of Anglophone democracy in the 20th century owed something to luck, but it also owed something to the greater capability of its first-wave political institutions, first displayed by their resilience in the face of nationalism and then by their greater adaptability in the face of demands for universal suffrage and social reform over the course of the 19th century. Evolution, rather than the periodic revolution to be seen in Continental Europe, seemed to be more effective, but this gave rise to a smug superiority that in turn produced fussy constitutionalism, the preservation of antique forms and a self-satisfied civil service. This initial foundation was buttressed by the growth of civil society institutions, such as trade unions and local government, the adoption of claims to institutional roles by private enterprises like newspapers (the "fourth estate"), and the subsequent expansion of the welfare state. In the UK, for example, the BBC and NHS took on quasi-state roles in respect of normative values: truth, equality, solidarity etc. The problem arose when neoliberalism insisted that these auxiliary institutions, like the state itself, should respect only one value: the wisdom of the market.

As the varied institutions of civil society were gradually eviscerated or colonised by the market after 1980, more and more social demands were consequently directed towards the political institutions of the state. This was problematic both because of the neoliberal state's retreat from hitherto key areas of public life, such as responsibility for full employment and market regulation, and because the remaining antique forms were increasingly incapable of satisfying those demands. The regular call for public inquiries in the UK nowadays, which are by definition exceptions to the institutional norm (and are often decried by centrists for that reason), reflects the failure of the liberal state to efficiently respond to popular concern, much as the original concession of the EU referendum did. Every time a liberal commentator insists that only the House of Lords is defending our liberties against an aggressive government (and in the face of an incompetent opposition), you are witnessing an implicit admission that the institutions of liberal democracy are in crisis. Of course, liberals would prefer (as ever) to blame "mismanaged" democracy itself, or even cut to the chase and blame the mob.

Adam Gopnik, writing in The New Yorker, provides a good example of this transatlantic tendency when trying (ahead of yesterday's vote) to understand what motivates Trump's supporters and what liberals can do about it: "His followers are not, shall we say, there to root on their favored libertarian in his pursuit of free-market solutions to vexing social problems; they are there to scream insults and cry havoc on their (mostly imaginary) enemies" (given that Trump has got out the usual Republican vote, another way of reading this is that GOP supporters were never that bothered by free-market solutions). This leads Gopnik to liberal pessimism: "The more tragic truth is that the Trumpian view of the world is the default view of mankind. Bigotry, fanaticism, xenophobia are the norms of human life—the question is not what causes them but what uncauses them, what happens in the rare extended moments that allow them to be put aside, when secular values of toleration and pluralism replace them". The answer, of course, is that toleration and pluralism must be practised at an institutional level to become normative in society.

It would be easy to point at the multiple failings of the media in this regard, from the lies and vitriol of British tabloids and US cable TV, to the stupidity of the BBC's "balance" and the liberal media's indulgence of outrage (they need the clicks too), but the media has been partisan, bigoted and condescending since the advent of mass literacy. The real institutional rot has occurred elsewhere: in the performative cruelty of the "reformed" welfare state; the destruction of organised labour and the atomisation of the gig economy; and the denigration of any social solidarities outside the shared experience of a cultural commodity, like the Great British Bake-Off or the latest Netflix must-watch. Brexit was sold in terms of sovereignty and "taking back control", but the immediate result is that the UK's impending departure from the EU has placed intolerable stresses on the already rickety institutions of the liberal state. These have become attenuated not because of a lack of match-practice since 1972, but because the embrace of the EU allowed us to preserve antique forms long past their 1960s sell-by date.

So what can we forsee for the USA? Donald Trump's "movement" remains organisationally weak and ideologically inchoate. In the manner of many of his previous business ventures, the "brand" will be quickly absorbed by the Republican Party. Though he ended up running against the GOP establishment as much as the Democrats, Trump's lack of any emotional party affiliation means that he will pragmatically accept their support rather than seek to build a new organisation, though he'll no doubt indulge far-right fan-fic as well. The eclipse of the Bush dynasty, and Trump's likely appointment of people like Stephen Bannon of Breitbart fame, will see an ethical realignment all down the line. There will be a willingness, as in the UK, to interpret the "will of the people" in the harshest terms. Trumpism will simply be right-wing Republicanism largely unconstrained by the institutions of the Republic. Very soon, Trump will be the establishment, even if he continues to claim otherwise. Psychologically, he wants the luxury of being the ultimate outsider-insider.

His domestic priorities will most likely turn out to be tax-cuts and removing restraints on business, rather than building walls or quitting the WTO, even if he uses executive orders to make early eye-catching gestures and turns up in Nogales with a trowel. Digital economy companies like Apple and Amazon, who were solidly behind Clinton, will probably cut a deal on tax (they'll pay a bit more) in return for greater help for the security services (i.e. more surveillance). Obamacare may be formally repealed, but it will live on in diminished form: half a step forward, a quarter step back (Barack Obama will become the new Jimmy Carter). More illegal immigrants will be deported and Muslims will face higher hurdles to get in, but the bigger "homeland security" issue will be the steadily worsening relations between the police and working-class black Americans. The vote will be taken as a sign on both sides of the divide that black lives really don't matter that much.

Abroad, Trump will cleave to the usual positions, simply because US foreign policy rarely moves outside narrow bounds regardless of who is in the White House. With a compliant Congress and the prospect of a more right-wing Supreme Court, he will not need look to foreign affairs to compensate for gridlock at home. If his previous comments on Europe mean anything, it is that foreign policy isn't an area of real interest to him, not that the US is going to abandon NATO. After the liberal interventionism of the 90s and the neocon adventurism of the 00s, the pendulum had already swung back towards instrumental realism, which in practice means geostrategic caution and a disinterest in human rights. Extra money will flow to the military, but Trump's comments to date suggest he is more interested in spectacle and rhetoric - from drones to nuclear missiles - than boots on the ground.

What will ultimately distinguish Trump's tenure is institutional rot. The credibility of the Supreme Court has been dribbling away for years and this is likely to accelerate with further conservative appointments. The end of Congressional gridlock, combined with the opportunities for directing military and other infrastructural spending, will lead to a great flowering of pork-barrel politics and corruption. Trump's inability to control his own appetites or temper will lead to an excessive use of executive orders and the brokering of favours for buddies. The Federal Reserve will be bullied into line. The calibre of the civil service will plummet. I'd put the chance of him surviving four years at 50% (jail being a bigger risk than a bullet), and the chance of a second term at zero. Meanwhile, liberals, who today are already trying to love-bomb Trump into respectability, will bleat "I told you so, the man is deplorable", completely missing the point that they made him possible by rejecting pluralism and social conscience for the divisiveness and winner-takes-all mentality of the market.

In the UK, which suddenly looks almost comically parochial in comparison, there appears little likelihood the institutional rot will be reversed. Theresa May's commitment to an activist government, and the insistence on the social responsibility of business, will mean nothing without the rebuilding of the institutional infrastructure degraded since Margaret Thatcher bustled into Number 10. This is not only too big a task (Brexit provides the excuse to avoid a lot of hard choices), but it's one that might open up the pandora's box of constitutional reform, which would threaten too many vested interests. It will be far easier to focus the Home Office and Justice Secretary on keeping the tabloids sweet, which means beasting the poor and repelling immigrants, while Crown prerogative is exploited at every opportunity. The one hopeful sign in the UK is that some in the Commons looks like they're up for a fight with the executive. The worry is that the politico-media caste that has overseen Parliament's recent decay, from the evasions of Iraq to the cowardice of welfare reform, remain very much in situ and more concerned with social media proprieties and factional plotting.


  1. "I'd put the chance of him surviving four years at 50% (jail being a bigger risk than a bullet), and the chance of a second term at zero."

    I think the second term issue is important. If he wants it, and the signs are that he will, given that he already seems to regard himself as a pseudo-Emperor, then I think that will affect how he approaches the presidency.

    Given that his economic programme is unlikely to benefit the poorer section of his support, to appease them would require that he make more than just a gesture towards their more racist and reactionary concerns. Thus some minorities (or minorities of minorities) are going to suffer seriously from his presidency.

    Alternatively, he could try and maintain his 'outsider' status by deliberately picking a fight with Congress and create position as a national figure acting over the sectional interests of politics. To do this, however, would require a massive volte-face on many of his previous statements and orientations, particularly as the Republican political establishment seems to object to his style and the manner of his rise rather than any of his stated policies.

    I suspect you're right that he has no chance of being elected for a second term, but it might be his efforts to try and achieve this that really lead to his ultimate downfall.

  2. "the chance of a second term at zero."

    So pretty much the same probability of him getting a first term.

    1. Ha ha. Mine is a rhetorical "zero", not a mathematical estimate. There is no knowing what weird shit will happen over the next 4 years, but I suspect the inherent contradictions of a Trump presidency will make a second term highly unlikely, regardless of his ability to stand.

  3. Considering the recent backward steps that the BBC has taken, the recent Reith lectures by Kwame Anthony Appiah are quite timely, as one of his main theses is that aspects of civilisation that we ascribe as "Western" are not so unless we actually embody them. So it is our institutions that must reflect our civilisation or lack of it. At a time when our institutions are indeed falling apart. In that context Angela Merkel's response to Trump's election was far more appropriate - ironic considering WW2 and all that.

    1. Germany has the advantage that its institutions are relatively recent, and were partly designed by British and American liberals who had the opportunity to embed features that they'd never been able to implement in their own countries. In other words, Germany was a used as a guinea pig for the design of an ideal liberal state.

      Insofar as it is capable of offering a better model (many liberals have already anointed Merkel as the new "leader of the free world"), it does so as a sort of nostalgic mid-2th century "backup". The danger is that the market principles embedded in the German model (i.e. Ordoliberalism) are not thereby critiqued.

    2. Yes, part of the success of the German 'Grundgesetz' was that it effectively started from 'stunde null'- a clean slate. The old aristocratic and military elites that had retarded democratic institutions throughout the country's history were wiped out or marginalised along with the reactionary petty bourgeoisie that had spawned the Nazis.

      As such, occupied (and to an extent it still is) West Germany was a country where the bourgeois provided a much firmer socio-economic base for liberal institutions than almost anywhere else in the world. For liberals this is fine- for the moment. But you're right in suggesting that the 'Ordoliberal' ideological justification for German institutions has to criticised from the left, for the sake of the European Union as much as Germany.

  4. How much of this analysis can be dovetailed to the polanyian double movement notion. Anne Petifor is already claiming that we are seeing at root is a defensive gesture. If these votes don't somehow result in the creation or renewal of our social institutions then what can?

    1. At a coarse level, we are clearly seeing a double movement. For example, Trump's promise to repeal NAFTA and "bring the jobs back" is a promise to defend society against the free market. But there are two major differences between the dynamic seen in the 19th century and today.

      First, much of the destruction wreaked by the market then was exported to the colonies. In other words, empire provided a means of compensating industrial workers at the expense of others. Second, welfare could be reconciled with the market because unemployment was periodic, hence we institutionalised market mechanisms such as insurance, saving and borrowing in the welfare state.

      Today, we are seeing a historic (and largely peaceful) rebalancing of wealth between nations. What this produces in the West is growing internal inequality. You can think of globalisation as an informal empire that continues to benefit the rich, but which no longer compensates the rest.

      The root driver of contemporary structural unemployment and stagnant wages is technology, not "job-stealing". In other words, globalisation should be thought of as primarily a financial dynamic - capital flows - not as the displacement of labour. Reversing globalisation will not bring the jobs back.

      What this suggests is that the liberal state will struggle to defend society against the market until it accepts two principles. First, that intra-national wealth inequality must be reduced and that this can only be done through international cooperation over capital flows (essentially Piketty's point). Second, that the link between welfare and work must be broken for good.

    2. Thank you for reply, I fear you are right about the significance different context of previous double movements, but picking up on your last remark, are you hinting at a new distributional logic, maybe the job Guarentee, and if so how can we get there politically from here? Also would that not be the ultimate institutional consequence of what would still be a double movement, because if the jobs are not coming back then there's no way to get a tight enough labour market to reverse income inequality, then something like the job Guarentee / workfare is all we have left. And if you were to agree any of that, how can it be reconciled with open borders? We can't even prevent the Europeans effectively defecting by refusing to relflate the periphery, what chance to we have at a wider level?
      Sorry to sound pessimistic

    3. I'm thinking of a basic income, not a job guarantee. The BI has the twin advantage (if generous enough) of allowing workers to reject low-paid jobs and necessitates higher taxes on the rich, so reducing inequality.

      Open borders are not an issue because the BI would be dependent on citizenship, so it could cut migration in the short-term if marginal wages are reduced (e.g. a £7 minimum wage becomes a CBI of £6 + a min wage of £1), and in the long-term as CBIs are introduced globally, so reducing pressure for economic migration at the lower end of the income scale.

      The growing liberal media fascination with basic income schemes indicates a recognition that workfare and job guarantees are inadequate. The political struggle will be over generosity, collateral damage (the right like BI as a means of abolishing the welfare state), and uprating (i.e. making sure fruits of growth are spread evenly across all of society).

    4. "indicates a recognition that workfare and job guarantees are inadequate."

      How come?

      People demand that everybody else make the same choice as their own. Or at least that seems to be what happens at our current level of development within our cultural norms. Don’t forget that we already have resentment from the private sector for the so-called ‘feather bed’ jobs in the public sector.

      Similarly where people are ‘on the dole’ or on hand outs you get intense resentment within those societies from those who feel they have to go out to work – and perhaps don’t want to.

      The main argument is that ‘natural forces’ have failed to provide a system with sufficient income and therefore it is extremely unlikely that ‘natural forces’ would provide a system with a particular standard of living either. It has to be directed in some way.

      So I would see it as having to start at the more directed end of the Job Guarantee – because the current cohort has been trained in the ‘job = income = resources’ mindset. You would then have to change the education system so that it stopped training people to be cogs in a machine.

      Then perhaps over a generation or so you could move to a more spontaneous society – once we have citizens where the creativity hasn’t been crushed out of them by the structure of schooling.

      "cut migration in the short-term if marginal wages are reduced"

      Hmm. I don't like this. IMHO if we invite people into the country they should be treated the same as anyone else. I can see how it could be sold though.

      Have any BI advocates thought about 'funding' a BI from restricting bank lending? -

    5. The job guarantee and workfare both assume that unemployment is episodic. In other words, they aim to return to (and expect) a state of full employment.

      The JG must offer wages marginally below the minimum in order to incentivise workers to move back into the private sector when demand for labour picks up (i.e. JG jobs are "non-feather-bedded" public sector roles). Similarly, workfare assumes that retraining or skills maintenance will raise the value of labour making it easier to reintegrate workers in the market when demands picks up.

      The growing interest in a basic income is driven by the fear that we are facing structural, persistent unemployment due to the results of globalisation and technological change - i.e. there will never be enough jobs to satisfy demand and this in turn will depress wages, obliging the state to subsidise pay (e.g. tax credits) and depressing productivity growth. I explain more here:

      Re the relationship of basic income to migration, I am not suggesting that cutting immigration is a good thing, merely observing that it is a likely consequence because of the link to citizenship and the impact on minimum wage rates.

    6. "Open borders are not an issue because the BI would be dependent on citizenship, so it could cut migration in the short-term if marginal wages are reduced (e.g. a £7 minimum wage becomes a CBI of £6 + a min wage of £1)"

      BTW it seems open borders are *required* for BI then, you need a bunch of 2nd class citizens to do the work. That is quite socially corrosive. Why wouldn't they resent and 'smash the system'?

    7. If the work needs doing, and the non-citizen rate is too low, then employers must either increase wages (which would attract domestic labour) or invest in more automation. A BI does not require either open or closed borders - it affects the dynamic of supply and demand rather than constraining movement.

  5. THE SAS ARE A BUNCH OF MURDERING BASTARDS11 November 2016 at 14:44

    There is a staggering amount of bullshit around the victory of Trump, it is the end of the world, the political centre is dead (if only!), capitalism is facing as existential crisis (if only), the bourgeois are in turmoil (do me a favour).

    What I do think is that this should be viewed more in terms of a crisis of globalisation and part of the inevitable problems as a result of a 'leveling' and reconfiguration between the advanced and developing world as globalisation intensifies.

    The thing is globalisation cannot ultimately be stopped under a capitalist system, so either the world ends through a nuclear war (ok maybe end of the world wasn't total bullshit!) or the advanced world comes to terms with this reality and globalisation gathers pace once more. But Trump is simply a by-product of this process, here today and gone tomorrow.

    Meanwhile Britain court China while trying to catch the eye of the US. A delicate balancing act! Like having 2 lovers! No she means nothing to me darling!! Then why did you buy her that ring. It is you I love!!

    I have plugged in the figures and computer says capitalism has another 176 years before everything starts to disintegrate. Computer doesn't think socialism is the likely end game. All you see is a blank screen!