Varieties of Nostalgia

It sounds like Branko Milanovic, former lead economist at the World Bank, didn't have time to proof-read when he wrote the following, but you can just about get his point: "In a very symmetrical way, the arrival of Utopia to power that began in glacial Petrograd in November 1917 ended with the death of its last actual, physical, proponent, in a far-away Caribbean nation, in November 2016". This was part of a confused blog post that recycled various tired tropes (communism as millenarian religion, capitalism as the end of history) in an attempt to finally dismiss the old spectre on the occasion of Fidel Castro's death. Not only did the piece do violence to history as well as language, but it lapsed into the surreally comic: "Communism could not innovate in practically anything that required for success acquiescence of consumers.  It thus provided tanks but no ball-point pens, spacecraft but no toilet paper". It was fortunate that the defeat of the Wehrmacht depended more on T-34s than bog rolls, but I'm still baffled as to how they got fountain pens to work in space.

What struck me about this was the nostalgia for a time of certainty, when communist manufacture meant Soviet tractors rather than Chinese smartphones and the denial of private property went hand-in-hand with the denial of human rights. Long before 1989, most historians recognised that the actually existing varieties of communism were essentially political projects to build nation states in which Marxism was largely instrumental or contingent, hence Deng Xiaoping's eager conversion to "getting rich" and the reappearance of ethnic tensions in Yugoslavia. Cuba was another example of this. Castro started out as a radical nationalist in the American tradition of Bolivar, San Martin and Marti, who adopted communist rhetoric for convenience and remained wedded to permanent revolution (to the benefit of liberation movements in Africa) because that was what he was good at. The crippling of the Cuban economy owed much to the US embargo and the hostility of other Central and South American states, but it also owed something to the institutionalisation of a guerrilla campaign: strong on coercion, health and education; weak on production, innovation and plurality.

Milanovic is the author not only of the well-known "elephant chart", which puts the stagnation of developed nation median wages in the context of the advance of the Chinese "middle class" and the global one percent, he is also the author of this year's Global Inequality: A New Approach for the Age of Globalisation (whose chief arguments are summarised here), which has been hailed as a subtle riposte to Thomas Piketty's Capital. Milanovic has suggested that fluctuations in national inequality are periodic, with succeeding waves of growth and decline set within the wider context of a global convergence. In this reading, far from being a historical exception caused by two world wars and the post-1945 reconstruction, les trente glorieuses was just one iteration of a decline in inequality and we can expect a similar turn in the future rather than the inexorably increasing inequality theorised by Piketty. However, these cycles ("Kuznets waves") are driven not just by benign secular forces but also by malign ones that build during the upswing of inequality, such as the increased bellicosity and financial crises of unequal societies (one irony is that his explanation for WW1 - growing inequality led to the export of capital, which led to empire and then war - is pure Lenin).

In other words, we may be facing more trouble in the years ahead, of which the xenophobic nationalism of Brexit and the plutocratic populism of Trump are harbingers, before things take a turn for the better. Milanovic does suggest a number of benign forces and developments that could reduce national inequality without too much pain, such as the positive impact of ageing on wages, but most of his policy prescriptions are well within the bounds of neoliberal orthodoxy, such as capital pre-distribution (e.g. employee share-ownership) and higher inheritance tax rather than increased income tax. He is pessimistic about social democracy (i.e. welfare states) because of the mobility of capital and skilled labour, and thinks that economic migration (which he sees as globally beneficial) can be reconciled with nativist concerns by recognising that citizenship is a rent (your wealth and opportunity largely reflects where you were born, not your personal talent), so differential citizenship (i.e. a premium) could make natives more accepting of immigrants. This could range from having to show your passport at a hospital to a citizens' basic income.

I'm not going to dwell on the problems in Milanovic's diagnosis, or the wishful-thinking in his prescriptions, so much as the "eve of war" vibe that has been knocking around since 2008 and has, I think I can say without fear of contradiction, gone up a notch or two this year. Another example of this was provided last week by George Monbiot, channelling Cassandra in The Guardian: "Eventually the anger that cannot be assuaged through policy will be turned outwards, towards other nations. Faced with a choice between hard truths and easy lies, politicians and their supporters in the media will discover that foreign aggression is among the few options for political survival. I now believe that we will see war between the major powers within my lifetime. Which ones it will involve, and on what apparent cause, remains far from clear. But something that once seemed remote now looks probable". At least he didn't say the lights are going out all over Europe. This gloomy prognosis revives the old idea that nationalism necessarily leads to war, because it fails to resolve domestic social and economic conflicts while providing an organising principle to externalise tensions.

The idea that nations export their inner turmoil originates in the French Revolutionary Wars. Prior to 1792, and with the notable exception of the off-stage American Revolution, European conflict was largely a series of "cabinet wars", relatively small-scale conflicts engineered by absolute monarchies for marginal gains, which in turn represented an advance on the bloody sectarian conflicts of the 16th and 17th centuries. In other words, wars that originate in the passions of the people tend towards cruelty and excess, unlike the wars of calculation made by elites. The problem with this theory is that while national fragmentation often leads to wars of liberation and unification, increased national homogeneity doesn't. This is why Nazi Germany was more aggressive beyond its borders than Fascist Italy or Francoist Spain. While it is conceivable that Russia might seek to "protect" its fellow Russians in the Baltic states, as it did in Crimea, the likelihood of it risking war with NATO (and the mass-expropriation of oligarchic assets abroad) is slight. Likewise, climate change may well trigger conflict, but this is most likely to happen in developing countries, not among what Monbiot refers to quaintly as "the major powers".

This apocalyptic vision has roots closer to home in the automation of jobs: "At lower risk is work that requires negotiation, persuasion, originality and creativity. The management and business jobs that demand these skills are comparatively safe from automation; so are those of lawyers, teachers, researchers, doctors, journalists, actors and artists. The jobs that demand the highest educational attainment are the least susceptible to computerisation". What the tales of Macedonian youth creating fake news for pennies points to is the increased commoditisation of news (we've always had fakes). Much of it is already produced by software and "free" opinion is ubiquitous, which makes the inclusion of journalists in the list of "safe" professions look like nostalgia. The fear of the liberal press that it may be talking to itself reflects a suspicion that "originality and creativity" are over-rated. While Monbiot has a distinctive voice, it would take little to write a program that could randomly generate think-pieces by Polly Toynbee or Julia Hartley-Brewer. Indeed, Monbiot's often comical battiness is all that stands between him and redundancy. Perhaps Branko Milanovic is aiming for the same effect.