Tag Archives: capitalism

Alternatives to Neoliberalism

The Financial Crisis of 07/08, followed by the ensuing ‘Great Recession’, has hugely undermined faith in Neoliberalism. As Colin Crouch argued in his 2011 book “The Strange Non-Death of Neo-liberalism”, it seems that in many ways neoliberalism is actually stronger than before the crisis. Indeed, the main groups attracting protest votes are very much neoliberal, and heavily influenced by the neoconservative (the two ideologies often go hand in hand) scepticism about the stability of multi-cultural and multi-religious societies. Yet 2011 was also “the year of the protestor” thanks in large part to people’s frustration with its dominance. Moreover, if you listen to the left then No Alternative to Neoliberalismneoliberalism might be in for a fall. Even mainstream (left wing) opposition groups (e.g. Labour in the UK and Die Linke in Germany) now voice their opposition.

But what are the alternatives? After all, when the UK Labour Party was in power between 1997-2010 it governed from within the neoliberal consensus, and its elite became more as opposed to less convinced in the truth behind that consensus as time went on.

To answer this question first let us define neoliberalism. Essentially, it is a political and economic ideology very close in thought to classical liberalism. Andrew Heywood’s “Key Concepts in Politics” defines it as an ideology of the “new right”. It uses models based on the rationality of markets and individuals, places faith in the capitalist economic structure, and espouses a limited role for the state given the capitalist market’s natural tendencies towards long term growth, and the balance of supply and demand. In terms of policy it emerges as a preference for privatisation, de-regulation, low taxes, and anti-welfarism (e.g. austerity cuts to public spending and benefits).

The espoused alternatives are commonly thought to be some sort of mix or variety of Mercantilism (whereby the state makes all economic decisions) and/or Socialism (whereby control is collectively managed without regard to socio-economic differences). However applications of these alternatives don’t take the big picture into account. And in this sense it is right that they are heavily critiqued. Neo-liberalism is the antithesis of the collectivisation and nationalisation seen in the USSR, and perhaps also an echo of the corporatist third way first employed in fascist Italy. To oppose it by lurching back towards the USSR’s tactics is ultimate folly, since the same reasons why we rejected that path in the first place still stand today.

Instead of choosing between letting the state dominate the economy, and letting private capital holding elites dominate the economy; we should be looking for a third choice – and a novel one! There are plenty of new ideas out there without us constantly looking back to the twentieth century. Moreover, it’s no wonder neo-liberals have found it simple to convince people of the economic strengths of their model. Capital holding elites, and especially since the so-called “managerial revolution” and the rising strength of managers and corporations, give high priority to increasing the amount of capital. Indeed the dominant model of corporate governance around the world is that which has one prime goal: maximising shareholder value. States don’t seek the same thing, and so it’s no wonder why people have become convinced that neoliberalism is a necessary evil to keep our economies strong. But answers are out there. The German model of Corporate Governance for example, also empowers the workers, and gives them say over corporate governance. So should we all seek to copy Germany? No.

Solutions must always be adopted, and tailored, relative to local demand. But the German model of corporate governance does carry the seeds of an interesting idea. It recognises that there are other stakeholders besides state and economic elites, and it also recognises that empowering other stakeholders can potentially regulate the excessive short-termism and risk-taking that especially ambitious managers, are often willing to take.

capitalism-is-not-democracySo what would the optimal solution be for Europe? Simple. The neoliberal consensus, which has been growing since the time of Reagan and Thatcher, has reversed our prior agreement that capitalism must conform to democracy as opposed to it being the other way around. To reassert democratic control, we must seek to empower all stakeholders in the economic system (e.g. consumers, suppliers, employees, shareholders, neighbours, and the broader public). Rather than socialism or capitalism, this would be an economic democracy; a model and an ideology that has thus far been unrealised in practice, and should reflect the new counter-argument to the modern neo-liberal consensus.

Why is Democratic Participation in Decline?

People are in widespread disagreement about the extent, or pace of change, of democratic participation today. But consensus in the West agrees that voter turnout has fallen steeply, and participation in all things other than single issues has fallen alongside it.

Voter Turnout

The chart to the left is from “The Decline of Party Identifications”, in Russell J. Dalton and Martin P. Wattenberg (eds.), Parties without Partisans: Political Change in Advanced Industrial Democracies (Oxford: Oxford University Press, 2000), p 73.

Even Professor Mark Franklin, who tends to be sceptical about the significance of this set of data, nonetheless calculates a decline in turnout of 5.4% over 23 democracies. For more information see p163 of ‘The dynamics of electoral participation’, in LeDuc, Lawrence, Niemi, Richard G., Norris, Pippa, eds., Comparing Democracies 2: New Challenges in the Study of Elections and Voting (Thousand Oaks ; London : Sage, 2002).

In other words consensus shows a steadily declining rate of engagement with the formal, country wide votes for parties, Members of Parliament and Presidents. And of course this strikes many people as odd. How can we be less engaged when we’re more educated than ever before, and have technological know-how to allow voting over the internet or via satellite?

Below, I discuss a few different reasons (in no order), grouped for your ease into those causes associated with the voter and society, the political establishment, and the political and economic system at large.

Causes Associated with the Voter and Society

Lack of Knowledge

This one is usually dismissed without thought. People are more educated than ever before. They have more access to the news, as well as social, political and economic information, than ever before. And yet, people also have more access to other information too. And, they’re expected to be more productive than ever before. So although in the past it might have been difficult to get information, it’s possible that we are simply so bombarded with information today that we cannot act on it all, and consequently don’t believe we have enough information or knowledge to vote.

Contentment

You’ve all heard the quote “they’ve never had it so good”. But more than a simple elitist perception, the idea that people don’t vote because they’d be happy either way does have some grounding in literature. After the end of the Cold War Fukuyama wrote in ‘The End of History’ that we have found our perfect system of governance. And speaking economically, we have obtained a degree of productivity in many countries that, if we weren’t worried by comparisons with other countries, would enable us to cover our basic needs for survival many times over, and also allow us to spend a majority of our time at leisure. Therefore some argue that people don’t vote because they’d be content with any result. Given that this leisure filled world isn’t a reality however, and it’s human nature to always want more, this argument stands on very shaky ground.

Civic Culture

Arguments harkening back to a lost golden age are usually very weak. But there has nevertheless been a shift in values since the 60s and 70s when this decline in political engagement started. Community cohesion and unity is lower in almost all countries throughout the west. The strength of ‘individualism’ has grown. People can’t remember the struggles that women and working class men had to go through to get the vote. Membership of religious organisations and trade unions have declined. And discussing a vote today is more likely to see you labelled a geek than it is win you respect for completion of your civic duties.

Pragmatism

Aristotle taught that the true nature of a thing was in its potential; both the potential to change, and the potential to become something else. Given the Aristotelian philosophical dominance over western civilisation in a great deal of the centuries since, it is no wonder that the idea of democracy gained ground. Yet ironically, the first signs of democracy coincided with the period when Aristotelian ideas were being repudiated, and the foundations of modern day pragmatism were being laid e.g. Machiavelli.

Historically, and currently too, we tend to focus more on people than decisions. And this isn’t entirely a bad thing. People and relationships are always at least 50% of any job. But nonetheless, one of my first pieces of advice to the Democratic Reform Party after taking my position as an advisor to them early this year was to focus on the decision making process. In other words I said that we should think first (I stress first, as it is not always prudent to think this way) in an Aristotelian manner, about the potential for change as opposed to thinking in a pragmatic manner about the end results. But this isn’t as radical as it sounds. The UK has held two referenda on the decision making process over a very short period of time recently – on the electoral system first, and then secondly on Scottish independence. However AV in particular failed to engage. And where Scottish independence engaged it didn’t do so on rational grounds about which outcome would be best for decision making, but rather on the nationalist argument, and on fears related to the economic outcome.

In other words, is one reason why we see less engagement today that people care less about the process, and more about the end results?

Post-Modernism

The advance of post-modernism has been cited by some as a cause, such as for example Ronald Inglehart. Inglehart went so far as to correlate the degree of focus on survival or well-being as a function of GNP per capita. Historical focuses on survival as a political matter makes things like the health service key matters of importance to the voter. Yet when wealth reaches a certain level people can become much more de-constructive about all the multitudes of political issues which affect not only short term survival such as health-care, but also long term well-being (and survival) e.g. the environment and working time directives.

Post-Modern Values   Political Engagement

Although it might not sound very post-modern to be simply talking about wealth, Inglehart also linked the subjectivism of post-modernism to the individualism encouraged by modern-day consumer capitalism.

An increasingly post-modern society is one that is increasingly suspicious of reason, and particularly ideological reasoning behind actions. Even if politicians speak the truth; how can they possibly speak the “whole truth” without re-living their entire experience word for word? It might not be intentional even. We tend to believe that people stand to be elected for good reasons. And yet there is an entirely different culture in the halls of power. And what people hear in those halls will unwittingly affect what they say, and do not say, when speaking to the electorate. In other words post-modernism could be seen to breed individualism and distrust in the political and civic institutions in which people need to have some element of trust if they are to vote.

Decline of Class Tensions

It’s very hard to get someone passionately for something unless part of that passion stems from a stance against something else. Many parties are created on class lines, especially in the two party system, where the left party represents the working class people and the right party represents the middle and upper class people. But Professor Franklin (ibid) sees a decline in class tensions, of labour vs. capital interests, and thus of the debate on the welfare state. As a consequence voters may be less passionate about what debates take place.

Diversification in Identification

Linked to the possible decline of class tensions is the growing complexity of personal identity. Think about the stereotypical 1950s housewife. She worked hard at home, took the children to school, went to church, and engaged in local civic activities when possible. Between this local affiliation and her family’s socio-economic status i.e. class, it’s quite simple to see why this stereotypical person would very rarely have been a swing voter. She identified with few things, which were easy to embody within one party. But what about the stereotypical housewife of 2014? When I googled it it came up with the tv show ‘Desperate Housewives’. But a few hits down and I came up with a gem.

“Being a housewife or stay at home mom puts you in one of the most controversial professions today. Society’s views of us fluctuate so wildly it’s impossible to keep up. On one hand we are valuable members of society who are strengthening family ties. On the other we are old fashioned and outdated, possibly lazy, responsible for thwarting the efforts of women who work outside the home and insulting the memory of those who worked so hard to obtain equal rights for women.” (http://apriljharris.com/2013/08/are-you-a-professional-housewife/)

As this quote shows, far from living in a stereotyped world of their own making, even society at large struggles to pin a single identity on housewives or househusbands today. Those who live up to some sort of stereotype themselves are simply bringing back antiquated views from the 50s.

People today are more educated, and more sceptical, than ever before. But this doesn’t mean less identities. It means more. Just think about online identities. There have been several high profile acts of online bullying in recent years, by people who don’t display any bullying tendencies in ‘normal’ life, because they create new identities for themselves online. And as people look less at the class affiliations, and start thinking about policies more and more, they come to realise that they don’t agree with any party entirely. That was actually my first shock in politics. I went to volunteer with the Lib Dems when I was 17, and I said that I was still undecided about whether to help or not because I didn’t agree with everything the Lib Dems propose. I expected the answer “well what don’t you agree with? We’ll discuss it.” But instead, I got “neither do I”. Parties have always been coalitions of different politicians. But they would like to present a single, collective identity that their voters, as one collective body, can identify with. Unfortunately, that becomes more difficult every year.

For me this growing complexity in identity is one of the most convincing arguments. Although participation with generalist parties has declined, participation with specialist political organisations, lobbies, and movements has massively increased. Think about Occupy and the protests against the Iraq War in 2003. And think about all the small, single issue political parties which have increasing support.

Causes Associated with the Political Establishment

A Plague on All Your Houses

The anti-establishment feelings are present almost everywhere, especially in the wake of the Great Recession. This explanation sees all political parties grouped under one heading as a scapegoat. But more than this, despite the fact that involvement in non-party affiliated political action has actually increased; when asked, people report less interest in politics almost everywhere. Trust in politicians has declined to staggering levels.

Failure to Adapt

Societies have undergone enormous changes in the past few decades. Yet political parties look quite comparable to those which existed in the 60s and 70s. In the words of P.Norris:

“In conditions of greater security, Inglehart theorizes, public concern about the material issues of unemployment, health care and housing no longer takes priority. Instead, in post-industrial societies, the public has given increasingly higher priority to quality-of-life issues, individual autonomy and self-expression.” (Pippa Norris, Electoral Engineering: Voting Rules and Political Behavior (Cambridge: Cambridge University Press, 2004), p 19.)

It takes an incredible degree of bravery to shift so radically in focus, especially when most of those people who communicate with their representatives are those who believe that the right things are being discussed, and think that they can shape the outcome in some way. How is one to know when those who hold the new, post-modern values are in the majority? When you’re talking about something so deep, polls really don’t cut it.

What results from the knowledge of such changes is often more in the way of rhetoric than action. For example UK Prime Minister David Cameron often talks (or at least talked at the beginning of his term) about social wellbeing, and yet his actions, and even his rhetoric when he is seriously proposing something, is all geared towards improving economic productivity. This isn’t an uncommon thing to happen however. Societies and polities are often slow to adapt to one another, and rhetoric without action helps change the values of others around them, and thus facilitate a slow and steady shift over a generation or two.

Causes Associated with the Dominant Political and Economic System

Market Conformist Democracy and not Democracy Conformist Markets

Is it any wonder why the only countries which seem partly able to duck these international trends are those countries least associated with neo-liberalism e.g. Denmark, Sweden and Iceland? In 2011 Professor Colin Crouch wrote ‘The Strange Non-Death of Neo-Liberalism’, in which he argued that although the recession proved several staggering deficiencies in the logic of Neo-Liberalism, mainstream parties fear to reject it.

Tony Blair famously said that winning in politics was about capturing the centre ground. And the next time his party was out of government it was replaced by one in which both the Chancellor and Prime Minister adhered to Blair’s teaching with a vehemence akin to religion. In fact both supposedly kept a copy of Blair’s autobiography on their bed-stands for months. But was Blair really finding a universal truth of politics, un-realised for thousands of years? Or was he accepting the neo-liberal dominance of politics in the world today?

The words “market conformist democracy” were spoken by German Chancellor Angela Merkel, and commented upon in Professor Wolfgang Merkel’s 2014 article on the contradictions of capitalism and democracy. He said he believed that Merkel must have made a mistake to say that democracy should conform to the markets, and not the other way around – a kind of Freudian slip from someone who accepts the neo-liberal consensus. But then Professor Merkel also went on to argue that this consensus, which emerged around the 60s and 70s, especially with Thatcher and Reagan, has broken the delicate balance between capitalism and democracy, which do after all have opposing goals. Perhaps we’re seeing less engagement because democracy is so far in decline that capitalism has effectively defeated it. Perhaps all we have left is the Schumpeterian democracy i.e. nothing more than a legitimation of government through a choice of leaders once every few years.

Lack of Choice

A truly values led-democracy, based not on a belief that democratic decisions are effective, but rather a belief in the people, would not be a permanent democracy. Rather, there would be an entrenched part of the constitution, which would say that every generation there would be a referendum on which type of government should be employed e.g. Oligarchy, Theocracy, Elected Dictatorship, Geniocracy, etc. This is actually a system I would very much like to see researched, and maybe even employed (depending on the electoral system used to decide the winner, and the safeguards designed to ensure that the generational referenda were always maintained). But it would be misleading to say that the form of government is the only area of agreement within the main parties of government today. There is also widespread agreement on neo-liberal tools, capitalism, the use of oligarchic components in representative democracy, and most tellingly, even on the way that decisions are formulated. For example in the UK, although Members of Parliament technically have the power to propose new laws, almost all proposals come from those few people in Cabinet who have practically no time to think upon, or research new ideas. The only party which proposed alternatives to such a system of decision making is the Democratic Reform Party.

So is this the reason? Are mainstream parties converging in ideology? There is evidence from the Comparative Manifestos Project (http://www.wzb.eu/en/research/dynamics-of-political-systems/democracy-and-democratization/projects/the-manifesto-project) that this isn’t the case, and choice is still as present as ever.

Globalisation

Why vote for those who have almost no power over the things that you really want to change?

Despite the fact that globalisation is responsible for increasing powers as well as reducing them, the view that politicians no longer have any real power is very popular. And it’s not just about international political and economic bodies like the EU, international free trade associations, the UN, the WTO, the WB and the IMF. It’s also about the growing strength of multi-national corporations, and even rich individuals. France is a perfect example. When President Hollande tried to buck the trend and increase tax on the rich, he was seriously hurt by a number of high profile people leaving the country. The power of these economic figure-heads can be seen in the media too. It would be reasonable to think that media intending to maximise sales would attack the actions of these rich emigrants fleeing the country to avoid taxes that the people gave their government a mandate to impose. And yet the attacks hit Hollande even worse, for this educated economist was labelled as someone with absolutely no idea about the real world of economics.

Lack of Time

One result of increased education may be that people begin to understand how complicated many legislative decisions actually are. When you have a full time job, a commute and a family to look after, it’s a struggle to have a hobby or to ever see your friends. Where does the time for civic duties come from? Some companies talk about letting people have time off to fulfil said duties. But such talk is almost always nonsense. Bosses frown if you ask. The work culture usually sees it as bunking off. And what happens to your work when you go away? Likely, you have to do overtime later.

In times gone by there was great speculation that increased productivity would leave us able to work less, and enjoy more leisure. But sadly, the truth is entirely the opposite, and France is just one example of a country which may soon be forced to increase the number of hours worked.

Irrationality of Representative Democracy

Individual voting is often explained by reference to the rational choice equation. Yet the problem with this is that this equation suggests voting is usually irrational. And so it may be. When you reach a size of several million one vote is a drop in the ocean. It’s like your chances of winning the Euromillions, but without the potential for winning anything personally, and with the possibility of taking a lot more of your time to know who’s who and what they stand for. In other words voting is a collective activity for the collective benefit. Individuals, as part of that collective, will benefit from the electoral outcome whether or not they vote.

So why, under this explanation, would people ever have voted? This could be explained with reference to novelty of universal suffrage, which initially caused excitement during the period 1893 to today, when universal suffrage has still yet to spread to places like the Vatican City, Brunei, Saudi Arabia and the UAE. Indeed Switzerland only granted universal suffrage in the cantonal elections in 1990. The UK only lowered the voting age to 18 in 1969. And issues such as when migrants should be able to vote or stand for election, and whether children should be able to vote, are still widely discussed. So in terms of the evolution of our political systems universal suffrage is a blip on the radar. Will we stop voting when we get bored?

Conclusion

So why is democratic participation in decline? The answer clearly depends from country to country, region to region, interest group to interest group, and issue to issue. But keep in mind that this is a simple blog post, not a well researched piece. I’m well aware that I missed other causes I didn’t have time to delve into. And with such a multitude of reasons the most obvious conclusion is that pieces written by authors blaming one or two factors are either attempts to mislead the reader, or attempts to mislead themselves.

Nonetheless, what do you think are the big causes? Why do you think democratic participation is in decline?

Are we truly free?

Capitalism is often espoused as an economic system that liberated people from Serfdom. Linear models of history tend to place it after Feudalism as the most free of social models. Fukuyama even went so far as to say it marked the end of history.

And yet when we compare 2011 with 1848, which looks more revolutionary? Neither resulted in the overthrowing of existing theories. Both spread ideas far and wide. And 2011 was a lot bigger! So if we assume that 2011 and Occupy was largely about Capitalism then it seems that many are far from happy with the amount of freedom that they have.

Your immediate thought may be that people are unhappy because of the Great Recession. At this moment there are more 16-25 year olds in the world who aren’t in education or work than there are citizens of the United States. These people clearly have reason to think that the system let them down. But what about those protestors with a job? What about those who wanted to protest but feared that they could be fired for doing so, or that they were working so much that they didn’t have time to protest? Movements as big as Occupy don’t result solely from recessions, no matter how big they are.

This now brings me to my main point. I saw a Dilbert cartoon some months ago, and it stuck in my head. Dilbert kept looking at various animals kept in captivity, each time deriding them for their stupidity in allowing themselves to be virtually enslaved. And then in the last strip he went to sit in an office booth and tapped away on a keyboard; a slave, or so we are to think, of a faceless corporation.

Capitalism says that it permits labour freedom of movement, so they can work where they want. But critics say that Feudalism at least protected one from being fired and/or unemployed. And of course you are only free to choose where you have a choice. Where’s your freedom to quit if you know that there aren’t any other jobs out there? After all how many people have you met who work in their dream career? How many people have you met who work for who they want to work for? In a Capitalist system you generally need capital in order to be your own boss.

So what is it that we have right now? Freedom of labour movement? Freedom to choose which company you enslave yourself to? Or worse still rigid slavery to an entire system that we cannot escape, and serves only the 1%? Are you truly free? Or will our grandchildren look back on these times with pity?