The neoliberal order begins to crack

Issue: 154

Alex Callinicos

Amid the host of uncertainties in which global capitalism is now caught, some things are clear. The first is the sheer arrogance of power displayed by the Western ruling classes. One feature of the neoliberal era has been the refusal to admit the legitimacy of relatively small policy differences or conflicts of interest even among ruling classes themselves. Deviants are either hammered into line—the fate of Greece under its ill-fated Syriza government—or ostracised, like Vladimir Putin’s Russia.

The Russian example is of wider significance. Putin has been asserting Russian power in two regions where Moscow has a long-standing interest, Ukraine and Syria, and where the United States either doesn’t (Ukraine) or has (till recently) been playing a relatively cautious game (Syria). The idea that the resulting clashes represent the opening phases of a new “Cold War” is ridiculous, because of both the radically different global configuration of power from that of the post-war era and the huge gap that now exists between US and Russian economic and military capabilities.1

The inflation of the Russian threat in media and policy discussion is an indication of the unwillingness of the Euro-Atlantic imperialist order to tolerate even relatively marginal disruptions of its plans. So the indignation among pillars of this order both sides of the pond at the Russian connections of Donald Trump and his advisers is quite sincere—though, of course, the idea that Hillary Clinton’s defeat was the work of the heirs of the KGB also offers her and the Democratic Party establishment a splendid alibi for their failure.

Washington against globalisation?

Second, like it or not, their order is cracking all the same. Trying to explain away Trump’s victory as a result of Russian intrigue allows what Tariq Ali has called the “extreme centre” to argue that all is well with neoliberal capitalism—or at least it would be if it weren’t for the vulgar orange usurper in the White House.2 This is mere self-deception, as Megan Trudell shows in her article elsewhere in this issue. What is happening is that Western ruling classes are now beginning to suffer political payback for 40 years of neoliberalism and nearly ten years of economic crisis. It’s unfortunate that the biggest beneficiary so far is a right wing bigot and adventurer. However, this shouldn’t be dismissed as an unfortunate accident, but should be understood rather as a symptom of how accident-prone the system is becoming.3

European elites have breathed a sigh of relief at the failure of Geert Wilders’s Islamophobic PVV to make a breakthrough in the Dutch elections in mid-March, in the hope it showed the “populist tide” can be stemmed. But whatever happens in the French presidential elections in late April/early May or the German federal elections in September, Trump’s advent is a profoundly ­destabilising event. Perry Anderson disdainfully sums up the new administration thus:

Once installed as President, with no prior ties to the Republican party or political experience of any sort, Trump was virtually bound to put together a government at variance with most of what he said on the campaign trail, drawing on bankers and businessmen, generals and a couple of politicos of right-wing stamp, to produce a cabinet out of George Grosz.4

Despite the vagaries of government by tweet, this is a little too dismissive. It’s true that Trump has stuffed his cabinet with generals and business people—despite running against Wall Street he’s been especially kind to former Goldman Sachs bankers. One can, however, identify two ingredients in the new administration’s ideological mix—Reaganism and the racist and populist right. Reaganism in this context means deregulation, tax cuts and higher military spending. All this plays well with sections of the Republican Party and with the financial markets—it’s the prospect that Trump will give business a bonanza that has sent shares soaring to record levels.

The racist and populist right is another proposition.5 Its most important representative in the White House is Stephen Bannon, ex-chair of the alt-right website Breitbart News and now Trump’s chief strategist. Bannon’s political power was underlined when he was appointed a member of the key Principals Committee of the National Security Council, while both the chairman of the joint chiefs of staff and the director of national intelligence were not. Bannon is widely credited (if that’s the right way of putting it) with the cannonade of executive orders after the inauguration on 20 January, most notably the entry ban on citizens of seven Muslim-majority countries.

In a remarkable speech given in the Vatican of all places in 2014, Bannon announced that “the underlying spiritual and moral foundations of Christianity” are being eroded by “two strands” of capitalism—Chinese- and Russian-style “state-sponsored capitalism” and “libertarian capitalism”, which, as Marx argued, “really looks to make people commodities, and to objectify people, and to use them almost” as well as by secularism at exactly the time when “we’re now…at the beginning stages of a global war against Islamic fascism”.6

Bannon strongly identifies with the European racist and populist right. His Vatican speech contains a number of approving references to UKIP. But his politics more closely resembles that of Marine Le Pen of the French Front National—Islamophobia plus anti-globalisation “patriotism”. In a rare public appearance since Trump’s inauguration, Bannon listed “economic nationalism” as one of the “three verticals” of administration policy and denounced “corporatist, globalist media that are adamantly opposed…to an economic nationalist agenda like Donald Trump has”.7 And it’s clear that Trump is with him on this. Speaking in Florida in February, the new president declared:

People want to take back control of their countries, and they want to take back control of their lives and the lives of their family. (Applause.) The nation-state remains the best model for human happiness, and the American nation remains the greatest symbol of liberty, of freedom, and justice on the face of God’s Earth. (Applause.)… Erasing national borders does not make people safer or more prosperous—it undermines democracy and trades away prosperity. We’re giving it away. The so-called global elite have done very well for themselves, but have left working families with shrinking wages… Eighteen years ago, many of you in this room made more money working one job than you’re making right now working two and three jobs. (Applause.)

Instead of peace, we’ve seen wars that never end and conflicts that never seem to go away. We don’t fight to win. We fight politically correct wars. We don’t win anymore. We don’t win at trade. We don’t win in any capacity. We don’t win anymore. We’re going to start winning again, believe me. (Applause.)8

The historians Charlie Laderman and Brendan Simms warn:

We should not assume this is just rhetoric. First, because… Trump has been saying all this, or much of it, for more than 30 years in his writings and interviews. He is no mere opportunist. Secondly, because Trump emerges from the confluence of two long-dormant but now resurgent American political traditions: the blunt early 19th century appeal of Andrew Jackson to the “common man” and the protectionist isolationism which produced the Smoot-Hawley tariffs and Charles Lindbergh in the 1930s…by contrast with every single Democratic and Republican president since the Second World War, including George W Bush, Trump rejects the international liberal order.

At the heart of Trump’s revolt against that order, undoubtedly, is economics. Reviving the American economy is essential to making America great again. Central to that project is a revision of the terms of trade. Trump is convinced that the US is getting a raw deal, not just from its enemies, but also—and most importantly—from its friends.9

Now this is a really big deal, since that international liberal order has been constructed and maintained by the United States since the 1940s in order to serve the interests of American capitalism.10 But, as Laderman and Simms show, Trump has been consistently arguing since the 1980s that this order works against the US national interest, in particular advantaging allies such as Japan, Germany and Saudi Arabia to benefit unfairly from American markets and military muscle. And one wing of his administration is targeting the multilateral trade system. Thus Bannon describes Trump’s rapid withdrawal from the Trans Pacific Partnership (TPP), a trade deal with 11 other Asia-Pacific states, as:

one of the most pivotal moments in modern American history… That got us out of a…trade deal and let our sovereignty come back to ourselves, the people, the mainstream media don’t get this, but we’re already working in consultation with the Hill [ie Congress]. People are starting to think through a whole raft of amazing and innovative, bilateral relationships—bilateral trading relationships with people that will reposition America in the world as…a fair trading nation and start to bring jobs. High value added, manufacturing jobs, back to the United States of America.11

In his rancorous “America First” inaugural address, Trump promised: “Protection will lead to great prosperity and strength”.12 US treasury secretary Steven Mnuchin accordingly blocked the G20 finance ministers meeting in Baden-Baden in mid-March from pledging to “resist all forms of protectionism”.13 This is like the Pope questioning the Virgin Birth. The shift brings the US potentially into conflict with the two manufacturing and exporting giants—not just China, which Trump regularly attacked during the campaign, but also Germany, whose current account surplus (8.5 percent of national income in 2015) is currently the biggest in the world.

Thus Peter Navarro, head of Trump’s new National Trade Council, when interviewed by the Financial Times about the prospects for the other big regional trade deal, the Transatlantic Trade and Investment Partnership (TTIP) between the US and the European Union, attacked Germany, “which continues to exploit other countries in the EU as well as the US with an ‘implicit Deutsche Mark’ that is grossly undervalued. The German structural imbalance in trade with the rest of the EU and the US underscores the economic heterogeneity [diversity] within the EU—ergo, this is a multilateral deal in bilateral dress”. The FT report of the interview continues:

Mr Navarro said one of the administration’s trade priorities was unwinding and repatriating the international supply chains on which many US multinational companies rely, taking aim at one of the pillars of the modern global economy. “It does the American economy no long-term good to only keep the big box factories where we are now assembling ‘American’ products that are composed primarily of foreign components,” he said. “We need to manufacture those components in a robust domestic supply chain that will spur job and wage growth”.14

Again this is a very big deal. According to the UN Conference on Trade and Development (UNCTAD), about 80 percent of global trade (in terms of gross exports) is linked to the international production networks of transnational corporations (TNCs), either as intra-firm trade, through non-equity modes of international production (NEMS), which include, among others, contract manufacturing, licensing and franchising), or through arm’s-length transactions involving at least one TNC.15 Global supply chains really are “one of the pillars of the modern global economy”. US corporations have developed production networks that spill over the border into Mexico (another Trump target) and across the Pacific to China. The reorganisation of German capitalism in the 2000s involved not just wage-repression, but the geographical spread of production facilities to benefit from the pools of cheap but skilled labour in Central and Eastern Europe. And British-based TNCs rely on supply chains crossing the Channel.

One device for repatriating supply chains being mooted by the Trump administration and Republicans in Congress is the introduction of a tax on imports from which US exporters would be exempted. The European Commission has responded to these discussions by threatening to sue the US at the World Trade Organisation if a border tax is introduced. The German economy minister Brigitte Zypries has backed the threat up, declaring: “I am placing my trust in the courts,” a remark that sums up the legalistic mentality of the German political elite.16 If the US lost such a case, it could suffer $385 billion a year trade retaliation.17 Even by the admittedly low standards of political intelligence displayed by the EU, this is a stupid idea. No US president, not even one as loyal to liberal internationalism as Barack Obama, could tolerate such a blow. Brussels’ and Berlin’s victory would be pyrrhic, in all likelihood provoking US withdrawal from the WTO and thereby the definitive collapse of the multilateral trading order.

The border tax threatens to bring the US into conflict not just with the EU but with China. But, while the Europeans remain geopolitically subordinated to Washington (and indeed are terrified that Trump might act on his—largely accurate—denunciations of NATO as a means by which continental Europe free rides on US military power), China is the only credible challenger to US hegemony. Rex Tillerson, the former ExxonMobil CEO who is Trump’s secretary of state, used his Senate confirmation hearing in January to attack Beijing’s policy of extending and fortifying disputed islands in the South China Sea: “We’re going to have to send China a clear signal that, first, the island-building stops and, second, your access to those islands also is not going to be allowed”.18

Maybe the political ingénue Tillerson misspoke: trying to deny China access to the islands could well mean war between the two biggest economies in the world. Beijing has been playing it cool but tough—avoiding the petulance displayed by European politicians, and courting the Trump family business by, for example, suddenly approving its longstanding applications for Chinese trademarks, but forcing Trump to back down on his pre-inauguration threat to dump the “One China” policy and continuing to fortify the islands. The TPP was designed by Obama to isolate and contain China economically, and so its denunciation by Trump was described as “a wonderful gift” by a Chinese general. Beijing is presenting itself as the new champion of globalisation and offering Asia-Pacific states its own Regional Comprehensive Economic Partnership as an alternative trade deal.19 According to the Financial Times:

if Mr Trump does start a trade war with Beijing, Chinese officials argue that they are well positioned to respond. Mr Zhu [Min, ex-deputy managing director of the International Monetary Fund] notes that China’s largest imports from the US include Boeing aircraft and agricultural commodities. “China’s response will be unyielding and it will be swift,” he said.20

So the possibility looms of trade wars across the Pacific and the Atlantic. Clearly their development would not be in the interest of any capitalist class—as is shown by the example of the Smoot-Hawley Act 1930, through which Congress sharply increased tariffs, provoking retaliation and contributing to the collapse of global trade. But this example also highlights that inter-capitalist competition can bring down catastrophe on all the rivals’ heads. Short of that, does a protectionist turn work against the interests of US capital? Obama already lobbied hard to defend the American IT giants against the efforts of Brussels to regulate them. The border tax would be bad news for importers such as Walmart, but exporters are lobbying for it. It isn’t the only case where cross-border supply chains are threatened. If Brexit means that Britain loses access to the Single European Market, the supply chains radiating across the Channel might be threatened. It’s interesting, though, to see that Nissan, which has a huge car plant in Sunderland, reacted to this prospect by lobbying the government to create a £100 million fund to attract more car-industry suppliers to Britain.21

This example points to the adaptability of capital to changing political conditions. It also underlines the importance of the mix of incentives and sanctions states offer companies. Potentially Trump and his allies in Congress are offering US business a lot in the shape of deregulation and tax cuts. The third of Bannon’s “three verticals” (the first is “national sovereignty and security”) is “deconstruction of the administrative state”: “every business leader we’ve had in is saying not just taxes, but…it is also the regulation”.22 The administration is also talking about reforming corporate tax law in a way that would allow firms such as Apple to repatriate the huge profits they have been holding abroad for fear of the high rate of taxation they would currently attract if returned to the US.

Even a tilt towards bilateral trade deals need not represent a break with neoliberalism. After all, the Republican right’s great hero Ronald Reagan strong-armed Japan into informal trade restrictions during the 1980s. Moreover, Reagan’s combination of cutting taxes and boosting military spending hugely increased government borrowing, representing, according to Robert Brenner, “the greatest experiment in Keynesianism in the history of the world”.23 The US version of neoliberalism has always been more pragmatic and flexible than the variant Germany has imposed on the eurozone in recent decades.24 Paul Mason sees emerging around Trump “a corporate alliance of convenience against multilateral globalisation”, that involves, for example, “Exxon and the wider carbon lobby” and “the farming lobby”, all eager for reduced emission restrictions, banks and hedge funds demanding lighter regulation, and the military-industrial complex.25

But the economic direction of the Trump administration is far from settled. The Washington Post reports “class war” in the White House. On the one hand there is a “coterie of ascendant Manhattan business-figures-turned-presidential advisers”, headed by Gary Cohn, ex-president of Goldman Sachs and director of the National Economic Council, and Dina Powell, another former Goldman executive and now deputy national security adviser, allied to Ivanka Trump and her husband Jared Kushner, and to “the Cabinet’s industry barons—­commerce secretary Wilbur Ross, treasury secretary Steven Mnuchin and secretary of state Rex Tillerson”. “On the other side are the Republican populists driving much of Trump’s nationalist agenda and confrontations, led by chief strategist Stephen K Bannon, who has drawn closer to chief of staff Reince Priebus [a more conventional Republican conservative] in part to counter the New Yorkers.” The Post concludes, correctly, that “for the most part so far the ideologues are winning.” Symbolically, Trump went to Nashville in mid-March to celebrate the 250th birthday of Andrew Jackson, president 1829-37, a vicious, violent racist notorious for his theft of Native American land and championship of democracy for white men.26 But one shouldn’t assume that the outcome is settled, given the big hitters lined behind Cohn and Powell.

Struggles within the state

The mutual alignment of the state and capital in any case doesn’t simply represent the former’s servile adaptation to the latter. A few years ago I wrote about the partnership between state managers and capitalists, in which each side pursues their interests, while remaining interdependent:

the final outcome, however favourable to the interests of capital, may result from a protracted succession of interactions in which the equilibrium position is discovered through a process of trial and error. Moreover…the higgling among capitalists and state managers may serve to redefine the equilibrium position at a very different point, in terms of institutions and policy mix, from where they started. This is one way of conceiving major changes in economic policy regime—say the shift from laissez faire to Keynesianism in the 1930s and 1940s, or the adoption of neoliberalism in the 1970s and 1980s…—as a partially blind, partially ideologically directed discovery process that, in seeking to restore favourable conditions for capital accumulation, may significantly redefine the character of the accumulation process.27

One reason why this process is complicated and may be protracted is that neither capital nor the state is homogeneous. Most of the big IT companies, which operate globally and employ cosmopolitan workforces, were quick to condemn the Muslim ban. Moreover, some of the managers of a key state apparatus—the national security bureaucracy through which the US has run its global empire since the late 1940s—are in more or less open revolt against the president. The most interesting thing about Lt General Michael Flynn’s brief tenure as Trump’s national security adviser is that, according to the Washington Post, no less than “nine current and former officials, who were in senior positions at multiple agencies at the time of the calls, spoke on the condition of anonymity to discuss intelligence matters,” helping the paper to break the story that Flynn held talks before Trump’s inauguration with the Russian ambassador to Washington about dropping sanctions.28

The affair, which led to Flynn’s resignation in mid-February, followed rows between Trump and his entourage and the so-called “intelligence community” over the role of Russian hacking. It was succeeded by accusations from the White House that the spooks were leaking against Trump and had been bugging his conversations during the election campaign—a row that has widened with the claim repeated by Trump and his press secretary that Britain’s GCHQ was involved in the bugging and with FBI director James Comey’s confirmation that his agency is investigating the Trump campaign’s Russian connections. These conflicts have led to discussion on the American left on the merits of the idea of the “deep state”, which was coined to refer to the secret networks through which the Turkish military dominated politics for many decades.29

Applied to the US, the concept is misleading since it implies some secret and hidden centre of power. One critic of this idea, Rafael Khachaturian, argues instead (following the Greek Marxist Nicos Poulantzas) that “the state is better understood as a temporary and historically contingent crystallisation of social forces, a formation whose institutions are as liable to come into conflict with each other in times of political duress as they are to align seamlessly in times of stability”.30 The French Marxist philosopher Louis Althusser rebutted this view of the state when it was first formulated in the late 1970s: “the state, at its heart, which is its force of physical, political and police intervention and of high administration, is made, as far as possible, to be not affected, or even ‘traversed’, by the class struggle”.31

The capitalist state is neither a secret conspiracy nor a contingent effect of social struggles. The military, police and intelligence necessarily form the core of the repressive apparatuses of every state and provide its institutions with a minimal degree of coherence. In the American case, they have the particularly important role of coordinating, implementing and managing US global policy and the ­projection of power world-wide. In an era where the US has been permanently at war in the Greater Middle East for the best part of 30 years, the national security bureaucracy has assumed particular prominence.32

The feud between Trump and the intelligence agencies over Russia may reflect genuine fears on the latter’s part that Moscow may have penetrated the new administration and maybe Democratic sympathies as well (though Comey’s intervention about the Clinton email scandal just before the election may have helped scupper her chances). But probably the bigger issue is Russia as a symbol of fears that Trump will destabilise the institutions both local and international (eg NATO) that are necessary to maintain US hegemony. The probes, leaks and Flynn’s defenestration may thus be a way of disciplining Trump and the likes of Bannon, forcing them to respect Washington’s instruments of imperial rule. Flynn appears to have been a relatively eccentric member of the US military establishment. Both his replacement, H R McMaster, and defense secretary James Mattis seem to be much more conventional generals, in whose hands the management of the empire can be safely confided.

The prominence of military men in policy making (Mattis so far has taken a more prominent diplomatic role than the nominal foreign minister, Tillerson) is reflected in Trump’s first budget, which proposes 30 percent cuts in the State Department and Environmental Protection Agency and a 9 percent increase in defence spending. The director of the Office of Management and Budget called it “a hard power budget”.33 Already the US is stepping up military operations in the Middle East, with heavy bombing aimed at Al Qaeda in Yemen and more troops being deployed to support the offensives against ISIS in Iraq and Syria. According to Foreign Policy:

When Obama’s national security advisor Susan Rice ran the policymaking process, “stuff moved like molasses through the National Security Council”, much to the frustration of military planners at US Central Command, a former senior defense official, who spoke on condition of anonymity, told Foreign Policy. The interagency discussions allowed plans to languish for weeks while debates swirled over when and how to act… There has been an immediate change in the tempo of operations [under Trump]. This reflects the new administration’s apparent preference for prompt military action over policy deliberations, and a more dominant role for the military in decision-making.34

Differences nevertheless remain. According to the Washington Post, McMaster and Mattis disagree with Trump in seeing the struggle against Al Qaeda and ISIS as a long global war.35 The inaugural address vaingloriously pledged to “unite the civilised world against radical Islamic terrorism, which we will eradicate completely from the face of the Earth”.36 But McMaster and Mattis say that ISIS and Al Qaeda will not be so easily dealt with, and dislike his talk of radical Islamic terrorism because it antagonises Muslims.37 US involvement in the storming of Mosul and the encirclement of Raqqa underlines the continuing efforts of Western imperialism to dominate the Middle East. Another case of the blowback these inevitably produce has come with the terrorist attack in Westminster, at the very heart of Washington’s closest ally, on 22 March. The new security measures imposed by the US and Britain on flights from Middle Eastern countries underline that the war for the Middle East continues, with no end in sight.

In the short term, it is more likely to be domestic policy where Trump may start to come unstuck. He wants to squeeze so-called discretionary spending programmes, but boost investment on infrastructure and leave intact the core of the federal welfare state, Social Security and Medicare (respectively pensions and healthcare for the over-65s). This is popular with the markets, which hope the infrastructural expenditure will boost the economy, but anathema to the fiscal conservatives populating the Republican benches in Congress who are obsessed with cutting the federal debt.

Trump has let them draft the replacement to Obamacare, the health insurance programme that is one of his predecessor’s main legacies. This proposal, which, bizarrely, would have especially hit older whites, a demographic at the very core of Trump’s own base, had to be withdrawn because of the opposition of the ultra-conservative Freedom Caucus in the House of Representatives—a humiliating setback for the new administration. Trump will struggle to reconcile his campaign promises to revive blue-collar America with the small-state ideology of many of his Congressional allies. Intra-Republican conflicts over healthcare “reform” may delay the tax cuts whose prospect has helped send share prices soaring. Already there are signs that the “Trump bull run” in the markets may be fading.

A divided left

So Trump is destabilising global capitalism. Whether or not his administration will ever reach equilibrium with the American ruling class or even with itself is an open question. But the difficulties he is already facing show he is vulnerable. And—this is the third feature of the situation—Trump is provoking an international movement in opposition to him, as the huge protests at the time of his inauguration and against the Muslim ban showed.

But, fourthly, the left is split. I’m defining “the left” generously so that it extends from the anti-war anti-neoliberal radical left rightwards to include those subject to the gravitational pull of the Clinton wing of the Democratic Party, and the social democratic right that under the leadership of Tony Blair and Gerhard Schröder in the 1990s embraced the market in the name of the Third Way.38 This current is an important part of Ali’s “extreme centre”, which suffered two severe political defeats last year—first the British vote to leave the EU and then Trump’s election victory. But it is trying to hit back. The role played by Clinton supporters (and, in Britain, the Labour right) in the women’s marches on both sides of the Atlantic on 21 January is one sign of this.

This is absolutely no reason for the radical and revolutionary left to abstain from protests because of the involvement of liberal Democrats or right wing reformists. On the contrary, the past three months have made it plain that we are entering, certainly in Britain, a new wave of mass protests remarkable for their youth and political openness. It is no surprise that the centre-left should try to rebuild its credibility and influence through trying to lead this mass movement, and its ideas will initially cut with many drawn into protest action for the first time.

But that’s no reason to concede the leadership to the centre-left. Consider, for example, Mason’s proposal that the radical left should “make a strategic alliance with the remnants of neoliberalism to defend the rule of law, democracy and tolerance, similar to the Popular Front project sponsored by the Comintern in the 1930s”.39 Let’s leave aside the minor historical fact that the pursuit of the Popular Front strategy, most notably in France and Spain, led to the defeat of the workers’ movement and thereby contributed to the victory of fascism; Mason seems to have left his Trotskyist political training far behind.40

More concretely, what would such a “strategic alliance” mean today? Would it be effective in defending “the rule of law, democracy and tolerance”? One reason why it wouldn’t is illustrated by the row over Trump’s Russian connections. The leaks from the CIA and other intelligence agencies have been greeted by wave after wave of applause from liberal Democrats in the media and politics. The international relations academic Lawrence Freedman commented astringently: “Fascinating to see how Putin’s interference in US elections makes modern Democrats sound like Reagan Republicans on Russia!”41

All the old paranoia, fed by innumerable Hollywood movies and TV shows, about the “invisible government” vanished. No one seemed to pause to reflect that the CIA, with its history of electoral manipulation, coup-making, and assassination in Iran and Guatemala in the 1950s, Vietnam in the 1960s, Chile in the 1970s, Afghanistan in the 1980s, and Iraq in the 2000s, might not be the ideal defender of democracy. Indeed, one Clintonite rant against the “alt-left”, in other words those on the American left who had the temerity not to back Hillary against Trump and who are resisting the hysteria about Russia, concludes:

And here is where the alt-right and the alt-left press foreheads for a Vulcan mind-meld: the belief that the real enemy, the true Evil Empire, isn’t Putin’s Russia but the Deep State, the CIA/FBI/NSA alphabet-soup national-security matrix. But if the Deep State can rid us of the blighted presidency of Donald Trump, all I can say is “Go, State, go”.42

But there’s another reason why “a strategic alliance with the remnants of neoliberalism” might not be such a good idea—neoliberalism. Both the Brexit vote and Trump’s election fall into what Anderson calls “a widespread pattern of populist reactions against the neoliberal order regnant in the West since the eighties”.43 It is, to put it mildly, not a good idea to line up with those trying to prop up this order. This is particularly so since this order (contrary to what the implication of Mason’s reference to “remnants” implies) is still very much in place. This is true in Europe, but it also remains the case in the US, where it may well be that all Trump is able to achieve is a reconfiguration of the prevailing neoliberal regime. For the genuine left to ally itself to the left wing of the “extreme centre” may simply push more disaffected working class people into the arms of the racist and populist right. In the US it would also reinforce the subordination of much of the real left to the Democratic Party, which is certain to try and use the anti-Trump movement to help recover from its shattering electoral defeat in November 2016.

In Britain the problem takes a different form because the dominant issue is Brexit. Theresa May is trying to pursue what one might call a hard Brexit without tears in an effort simultaneously to keep both the Tory right and big business happy, with a wafer-thin majority in the House of Commons. This is already proving hard to sustain, as the fiasco of chancellor Philip Hammond’s budget showed. Jeremy Corbyn has responded by accepting the result of the referendum and therefore not opposing Brexit, but campaigning for an economic alternative to neoliberalism and austerity.

In principle, this is a sensible approach, but it has been feebly implemented and effectively wrecked by the insistence of the Labour right and soft left on staging a series of rebellions against the party whip over the passage of the bill authorising May to invoke article 50 of the Lisbon Treaty; the triggering of article 50, expected to take place on 29 March, will start the negotiations with the rest of the EU over Britain’s exit from the Union. The right wing offensive against Corbyn continues with what looks like the Guardian’s thoroughly orchestrated revelation of an alleged Momentum attempt to take over both Unite and the Labour Party, denounced on cue by witch-hunting deputy leader Tom Watson.

A section of the radical left have in effect backed Labour’s anti-Brexit rebels. This is justified by an assimilation of Trump and Brexit. This is a mistake analytically: voting against a neoliberal cartel of states is not the same as voting for a racist and sexist reactionary for the most powerful political office in the world. It’s also a mistake politically because it implies that where you stand on Brexit defines the dividing line in the British left today. If you prioritise opposing Brexit, this sets you against Corbyn and with the relatively small group of largely discredited politicians who are waging a last stand to keep Britain in the EU.44

The fact that Tony Blair is trying to set himself up as leader of the Remainer hold-outs underlines the bankruptcy of this approach. More than anything else, it is this determination to focus on resisting Brexit that underlies The Life of Brian-style difficulties in creating a united campaign against Trump’s state visit to Britain. Ideologically, since the EU is so central a pillar of the neoliberal order, defending it is likely to transform leftism, however well-intentioned, into liberalism. The pro-EU demonstration on 25 March, dominated politically by the Lib Dems and compered by Alastair Campbell, Blair’s co-conspirator in the destruction of Iraq, shows this logic at work.45

A more rational strategy would be to recognise that the referendum of 23 June last year divided the British working class. We should be looking for the issues that can begin to overcome these divisions. One is resistance to austerity, which May and Hammond are pressing on with, despite the fact it is beginning to undermine the functioning of the welfare state. The big demonstration on 4 March in defence of the National Health Service shows the potential for this kind of struggle.

But it is anti-racism that has probably been the most powerful driver of the wave of mass protests since Trump’s inauguration—not surprisingly since his election represented a super-charging of American racism and has given massive encouragement to the racist and populist right in Europe. This connection is particularly clear in Britain because of the efforts of the May government, desperately hunting for post-Brexit allies, to align itself with the new administration in Washington.46

It would be an absolute disaster for the radical and revolutionary left if they were to line up with the “extreme centre” against racism. Look at how Mark Rutte, centre-right prime minister of the Netherlands, saw off the challenge from Wilders—by playing the same Islamophobic game through a staged confrontation with Turkish president Recep Tayyip Erdoğan. German chancellor Angela Merkel may have cut a more dignified figure when meeting Trump in Washington than May managed to, but she has backed Rutte up, and will no doubt be prepared to use similar tactics to see off the electoral threat from the anti-EU racists of Alternative für Deutschland.

What is needed is a mass anti-racist movement that is built from below and that is based on a broad unity of working class organisations and communities. The role that Stand Up to Racism has played in the protests of these past three months, culminating in the demonstrations in London, Glasgow and Cardiff on 18 March, which were matched in Athens, Paris, Vienna and other cities in continental Europe, shows its potential to become this movement. It deserves the support of the entire left.

Alex Callinicos is Professor of European Studies at King’s College London and editor of International Socialism


1 See the sensible discussion in Wood, 2017. Thanks to Joseph Choonara and Camilla Royle for their comments on this article in draft.

2 Ali, 2015.

3 Streeck, 2016, paints a powerful portrait of the decay of neoliberal capitalism.

4 Anderson, 2017, p58.

5 See the discussion of the racist and populist right and its relationship to classical fascism in Callinicos, 2017, pp10-15, and Rob Ferguson’s article in this issue.

6 Feder, 2016.

7 Beckwith, 2017.

9 Laderman and Simms, 2017, Kindle locations 153-159, 196.

10 Panitch and Gindin, 2012, and Callinicos, 2009, chapters 4 and 5.

11 Beckwith, 2017.

13 Jones and Fleming, 2017.

14 Donnan, 2017.

15 UNCTAD, 2013. For an academic analysis, see Gereffi, 2014. Smith, 2016, stresses the importance of outsourcing production to the Global South for contemporary TNCs.

16 Chazan, 2017.

17 Donnan, Jopson and McClean, 2017.

18 Clover and Crooks, 2017.

19 Harding, Mitchell and Peel, 2017.

20 Mitchell, 2017.

21 Campbell, 2017.

22 Beckwith, 2017.

23 Brenner, 1998, p182, part of a detailed discussion of the US economy under Reagan—Brenner, pp181-93.

24 Engelbert Stockhammer distinguishes between two “neoliberal growth models”, export-driven (Germany, China and Japan) and debt-driven (the US, Britain and southern Europe)—Stockhammer, 2016.

25 Mason, 2017. See also the interesting discussions of the political and economic viability of a Republican-led protectionist coalition by the economic historian Adam Tooze—Tooze, 2017a and b.

26 Rucker and Costa, 2017. The neoconservative writer Walter Russell Mead has identified, alongside more familiar currents such as Wilsonian liberal internationalism, a distinctive Jacksonian approach to American foreign policy, what he calls “a deeply embedded, widely spread populist and popular culture of honour, independence, courage and military pride”—Mead, 2002, p88 (and more generally chapter 7). It certainly seems that Trump has been able to tap this tradition, however improbable a vehicle for it he may be.

27 Callinicos, 2009, p87.

28 Miller, Entous, and Nakashima, 2017.

29 Grandin, 2017, and Khachaturian, 2017.

30 Khachaturian, 2017; see Poulantzas, 1978.

31 Althusser, 1994, p437. Poulantzas developed a much richer political theory than Althusser, and there is much more to be said about it. But on this fundamental question Althusser provides a corrective to the aspect of Poulantzas’s final state theory that has been used to justify reformist strategies as recently as Greece in 2015. For much more on the state see Harman, 1991, and Callinicos, 2009, chapter 2.

32 Glennon, 2014, and Bacevich, 2016.

33 Weaver, 2017.

34 De Luce and McLeary, 2017.

35 Jaffe, 2017.

37 Jaffe, 2017.

38 Callinicos, 2001.

39 Mason, 2017.

40 See the critique of the Popular Front strategy in Callinicos, 1985, pp153-165.

42 Wolcott, 2017.

43 Anderson, 2017, p54.

44 The situation is, of course, different in Scotland, where the ruling Scottish National Party (SNP) successfully campaigned against Brexit, and is now demanding a second independence referendum. The Scottish people undoubtedly have the right to another vote, but the SNP still has to explain how its objective of “independence within the European Union” can be achieved without even more austerity than it is currently implementing. One of the bugbears of the 2014 referendum debate—the currency of an independent Scottish state —has got worse thanks to Brexit. The SNP position in 2014 of keeping the pound would now mean Scotland, inside the EU, being in a monetary union with a rump UK, outside the EU. Moreover, 36 percent of SNP supporters voted to leave the EU last June, which further complicates first minister Nicola Sturgeon’s task. See Swan, 2017 (though some polls published since this article was posted show an uptick in support for independence).

45 For a useful critique of this approach see Finn, 2017.

46 See Lynch, 2017, for the remarkable story of how Britain started to line up with Trump (via his son-in-law Jared Kushner) over Middle East policy even before Obama had left the White House.


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