Grenfell Tower Fire: Infrastructure Disasters as Portends for Major Ideological Shifts, or, Why Neoliberalism is Finished

The slow demise of social democracy was marked by a series of tragic infrastructure disasters that seemed to make clear the insufficiency of the postwar consensus. As Margaret Thatcher sought to privatize Britain and tear down the welfare state she was helped along by a series of highly public disasters. These included the Bradford City stadium fire in 1985, in which 56 were killed, the Hillsborough Disaster in 1989, where 96 Liverpool fans were killed in a human crush, and the King’s Cross fire in 1987, which resulted in 31 deaths. The United States did not have tragedies on a corresponding scale, but there the decline of social democracy was accompanied by disasters such as the collapse of an eighty foot section of the West Side Highway in New York City in 1973. These disasters were all the consequence of severe under-investment in infrastructure and were made acute by the manufactured budget crises that enabled the success of the anti-social democratic agenda.

In the late-1970s London appeared dilapidated and crumbling. Neoliberalism responded in the way it responds to everything. Public assets and services were privatized and banking regulations were loosened. It was under Thatcher that the idea of the Public Private Partnership really began to be developed, though her primary actions were to sell off as much as the state as possible. Such privatizations have been a constant of the last thirty years as underfunded governments sell their assets to private investors in return for capital in the present. This comes at the cost of long-term income for the government in question while the services themselves become both more expensive and of lower quality. However, when the first round of privatizations were taking place, financial centers such as London or New York City were flooded with capital. London became a city of bankers and lawyers and the city took on the appearance of wealth and success. It has become considerably shinier as rentier landlords have sought to turn the entire city into luxury housing for money launderers. The entire city has been given an attractive highly flammable façade, chosen because it saved £5000 over the fire resistant alternative.

Thus, the Grenfell Tower fire points to two structural failures of neoliberalism. The first is that neoliberalism is a rentier economy that works entirely by extracting an ever greater share of the wealth from the bottom and transferring it upwards. It is inherently destructive in the long-term because it is incapable of creation. All that neoliberalism can do is squeeze greater rents out of what was already there to begin with while actively destroying all sources of production. Thus, Britain has become nearly fully deindustrialized since the 1980s and is now reliant entirely on the banking industry (which make most of their profits laundering money for druglords and dictators and other criminal behaviour) and the property market in London (which also profits heavily from money laundering). Meanwhile, most of the population has been reduced to poorly paid service jobs while basic life goals become ever more unattainable and even just daily survival more difficult.

This points toward the second failure of neoliberalism. Because it cannot create wealth, the neoliberal economy cannot survive in the long-term. In order to continue to extract rents, the capitalist class is forced to continue to drive up property values (such as through loose banking regulations that allowed the sub-prime loans that created the US housing bubble that collapsed to cause the 2008 financial crisis) and to constantly seek ways of reducing costs. The need for lower costs escalates moves toward off-shore manufacturing, automation, efforts to push down wages and, most significantly, the widespread tax avoidance carried out by corporations and the capitalist classes. Thus, the constant since 2010 has been austerity as necessary services have been horrifically and criminally defunded while multibillionaires and politicians alike hide their money in tax shelters.

Infrastructure crises are portends to major ideological shifts because they make it impossible to hide how the status quo has failed. The cruelty and inhumanity of neoliberalism has been laid bare by entirely avoidable disasters such as at Grenfell Tower or the water crisis in Flint, Michigan. In the UK it has been recognized by many over the last several years that the status quo had failed Britain, but there was no real alternative. Thanks to Blairism, Labour Party offered little different than what the Tories did. Worse, it had been Labour who had led Britain into the financial crises that resulted in the present austerity in the first place. The only groups presenting an anti-austerity argument were the nationalists (while the neo-fascist UKIP has received the bulk of the attention, not all nationalist parties are far right as demonstrated by the center-left SNP). The lack of a viable, credible left has allowed neoliberalism to continue in its increasingly violent death throes for the last decade. As of the just completed UK election, this is no longer the case. The mantra of Margaret Thatcher was that “there is no alternative,” Jeremy Corbyn has provided an alternative. In the immediate wake of the Grenfell Fire, the anger has been rightly directed toward the authors of austerity and the ideology that caused it.

Margaret Thatcher was wrong. There is an alternative. The death of neoliberalism has been evident since at least 2008 for anyone with a brain who has been paying attention (so not David Frum), but until recently there was a very real possibility that it was going to be the far right who would benefit. It was far right movements led by elites disguised as populists who were the only ones really offering a different vision of the future than the solitary, poor, nasty, brutish and short life of man described by Thomas Hobbes. These movements were led by frauds like Donald Trump, Nigel Farrage, Boris Johnson and Marine Le Pen, but at least they weren’t telling people whose lives have been crushed by de-industrialization and the collapse of coal mining that actually things are already great. The shift to the far right was a move of desperation, but fascism has always appealed to a small, but significant, part of the population in times of economic deprivation. Moreover, fascism is amenable to the capitalists because it does not challenge their economic power or threaten their ill-gotten wealth. Until last week it appeared as though neoliberalism would collapse into fascism or some sort of Mad Max dystopia. Whatever allows the rich to cling to their gold is acceptable to them no matter how many die as a result.

Fortunately, for the first time the leader of a mainstream, leading political party has been willing to make a clear, left-wing case against neoliberalism and to present a positive, socialist vision of the future. The right-wing establishment threw everything they had at Corbyn to little avail. Though idiot centrists have taken up desperate rearguard action in defense of the status quo and desperately point to Emmanuel Macron and Justin Trudeau as signs that neoliberalism is not dead, but it is too late for them. The cruel failures of neoliberalism are too transparently obvious to fool the masses any longer.

Becoming Neoliberal: An Introduction

The time appears to have come for full-throated defenses of the neoliberal center. While this is an improvement over idiotic denials that neoliberalism even exists, it is at best intellectually dishonest and ahistorical in its understanding of the economic and political history of the world between 1945 and the present. A recent version of this “actually neoliberalism is good” genre has been brought to us by Noah Smith (though my personal favorite remains this oxymoronic call for a “radical center”). Smith’s argument is weakened by the fact that he apparently doesn’t know anything about the history of neoliberalism and only the vaguest sense of what people who criticize it are talking about (“Many will disagree, but to me FDR seems like the original neoliberal”). I have been working on putting together a set of posts on the emergence of neoliberalism and this one will serve to introduce the concept and give some very brief context.

Before we can go any further, the first step required is to define neoliberalism. According to Smith it is a vague and slippery term. Of course, neoliberalism isn’t actually any less well-defined than most terms. For example, try defining capitalism. Nonetheless, Smith suggests this definition: “It loosely refers to free-market economic ideas, combined with a technocratic, incrementalist approach to fixing market failures and redistributing wealth.” It’s not a great definition and misses a lot of the key underlying ideology that has resulted in the left’s opposition to neoliberalism and also shows why Smith thinks that FDR was a neoliberal. In his essential book on the history of neoliberalism, David Harvey defines neoliberalism as:

A theory of political economic practices that proposes that human well-being can best be advanced by liberating individual entrepreneurial freedoms and skills within an institutional framework characterized by strong private property rights, free markets, and free trade. The role of the state is to create and preserve an institutional framework appropriate to such practices.

The snide retort is that it’s basically just a definition of capitalism and thus is meaningless as a critique. That is actually kind of the point, since neoliberalism is a conscious reference to nineteenth-century liberalism. Unlike how liberal tends to be used today, liberalism in the nineteenth century (especially Victorian Britain) meant free markets, global trade, colonialism and industrialization combined with a general sense of egalitarianism (thus opposition to slavery, child labor, etc.). Neoliberalism is a form of capitalism in which the primary role of the government is to protect and expand the rights of global capital. This is why recent “free trade agreements” are more concerned with intellectual property law than reducing tariffs.

As Smith demonstrates, you can easily frame the basic principles of neoliberalism in a way that makes it sound ridiculous to oppose it, but Smith’s defense exists entirely removed from any historical context. There are two key elements missing from Smith’s article. First, what preceded neoliberalism? Why did it become the dominant ideology and why did it come to power when it did? Second, what has been the result of neoliberalism? Essentially, what have the neoliberals done?

Calling FDR the first neoliberal is absurd and ahistorical because FDR was, in fact, the leading representative of the political economic consensus that came before neoliberalism: social democracy. Social democracy came to power as a result of the Great Depression and the Second World War. The catastrophic failure of the banks that resulted in the Great Depression demonstrated to center-leftists like FDR the imperative that banks be regulated and the citizen protected against the worst excesses of capitalism. The deprivation that occurred as a result of the Depression led to the creation of state welfare as governments began to see protecting the welfare of their citizens as their primary duty. The Second World War that immediately followed the Depression created conditions of total warfare in which the government rapidly expanded into every aspect of life. This meant that a level of government involvement in the economy that was previously unimaginable became accepted as necessary to the circumstances.

After the war, social democracy established itself as the prevailing worldview and social democratic ideas took hold in much of the so-called developed world. These ideas included universal healthcare, public ownership of key utilities, the massive expansion of access to secondary education, social security, the forty hour work week, widespread unionization, and so on. The social democratic victory seemed so complete that in the 1960 presidential election Richard Nixon campaigned on a social democratic platform. It turned out, however, to have been at its peak and would soon be faced with sustained pressure that would ultimately lead to its collapse. The Nixon who became president in 1968 did so in part because he was able to successfully reinvent himself and moved significantly to the right.

At its core conservatism is a reactionary worldview and the reactionaries responded immediately to the new social democratic consensus. As they regarded social democracy as an incipient socialism, a number of notable individuals such as Ayn Rand, Friedrich Hayek, Ludwig von Mises and Milton Friedman set about to establish a coherent critique of social democracy and to articulate an alternative. At the same time a group of conservative reactionaries within the Republican Party (led by the likes of William Buckley and the John Birch Society) sought to reconstruct the party along explicitly racist lines. As I will show in a future post, racism was a crucial element to the collapse of social democracy and the rise of neoliberalism and remains a core feature of neoliberalism to this day.

Despite what its defenders claim, neoliberalism has had devastating consequences. It has resulted in the significant decline in wages at the same time productivity and corporate profits have skyrocketed. It has ensured governments protect corporate interests and not the environment, which has meant that we’ve completely failed to meaningfully address climate change. Governments have handed over their regulatory power to corporations, leaving banks free to engage in ever more destructive and criminal behavior at the same time that individual freedom has become increasingly circumscribed and normal people subjected to constant surveillance in what have become privatized police states. Yet, the first neoliberal politicians were embraced with enthusiasm. Margaret Thatcher and Ronald Reagan were elected with historic majorities and remain popular even now when the disasters created by their policies are clear to be seen by anyone willing to look. It is important to recognize that the prescriptions advocated by neoliberalism were appealing to many in the context of the 1970s. Neoliberalism was a conservative reaction to social democracy, but when it arrived on the national stages in the 1970s, it was responding to real failures. Its solutions turned out to be far worse for most than the problems it claimed to solve, but this was not obvious to most voters at the time. Indeed, it is not obvious to most voters even now with the benefit of hindsight.

While social democracy was vigorously opposed by conservatives from the outset, it was not until the 1970s brought economic crises sufficient for it to be overthrown. When such crises arrived, it was the conservatives who were ready with a coherently expressed alternative that. The upshot of the groundwork laid in the 1940s and ‘50s eventually came to fruition in the 1970s. Social democracy operated in parallel with the rapid growth of Western economies following the Second World War and resulted in nearly thirty years of steady wage growth. By the 1970s, however, the social democratic economy was beginning to show significant signs of strain. Infrastructure that had largely been built during the depression was increasingly outdated and in need of repairs. Governments (especially municipal) were struggling with debt. After twenty-five years of growth, the economy was hit with recession. Finally, after the tumult of 1960s politics and the major changes it had wrought (Civil Rights, anti-war protests, decolonization, the 1968 protests), the middle classes were ready for some conservatism.

My goal is to provide some historical context in order to demonstrate both why neoliberalism was popular and why social democracy failed. In doing so, I hope to offer a detailed refutation of ahistorical centrism so that we can move forward with a clear-eyed understanding of where we have come from and what a truly leftist alternative can be. The first of these posts will be on the 1975 New York City bankruptcy crisis.

How Reclining Your Seat on an Airplane Explains Conservative Cruelty

The clearest evidence that humanity is not inclined toward altruistic behavior can be found in the frequency with which people recline their seat when flying. By putting your seat back you increase your marginal comfort on board an airplane. Since airplanes are deeply uncomfortable places to be, this seems like a reasonable decision to make; however, the choice to make your own situation more comfortable comes at the cost of the person seated behind you. When you recline your seat you reduce the already highly limited leg space available to the person in that seat. Thus, the choice of whether or not to put your seat back is a deeply ethical issue. The ethical question at the heart of the decision is should you maximize your own personal comfort even if it comes at the expense of someone else?

I do not have any quantifiable evidence of what percentage of people put their seat back, but based on the anecdotal evidence of having taken approximately 50-60 flights over the past decade, the number of people who recline their seat seems to be considerably higher than the number that do not. Probably very few of the people reclining their seat have thought about the decision in ethical terms. Indeed, likely few of them spent much time if any thinking about the decision at all or took into consideration the way in which their choice would affect the comfort of the person behind them.

The evidence of reclining one’s seat on airplanes is that people are not motivated by altruism, but deep self-interest. The claim that people seek to maximize their own interests is one of the foundational arguments of economics and is central to capitalism as an ideology. Unlike orthodox economists, I do not think humanity is inherently motivated solely by self-interest. Indeed, people frequently act altruistically, especially toward people with whom they have a relationship. I would suggest that such behavior as putting your seat back on an airplane at the expense of the person behind you is the consequence of capitalist socialization. We have embedded the idea of self-interest and personal comfort and view the flight as a consumer. Having paid a great deal of money to be in that seat, surely one is entitled to be as comfortable as possible even if that means reducing the comfort of someone else.

The essential conceit of economics is that the discipline is removed from ethics; that it provides models of how the economy ought to behave and describes how it actually does. As such, economists claim an amoral discipline. It is not concerned with the consequences of capitalism, only explaining how it might work better (where working better is defined by how capital can more efficiently dispossess and exploit its workers and consumers). There are a lot of implications as a result of this complete failure by economists to address ethics, but one of the more tangible, everyday consequences has been a society increasingly built on selfishness. To support conservatism one has to be either a sociopath or completely inured to the effects of one’s actions. Most people are not actually sociopaths, but have been conditioned not to feel empathy toward strangers. Such dissociation is necessary to function in a world where hundreds of millions are at risk from warfare and billions from poverty and disease. Indeed, we live in a world where it is virtually impossible to purchase basic goods without participating in the severe exploitation and even enslavement of workers.

Neoliberalism has exacerbated the consequences of this human tendency toward localization and self-interest because it is premised on globalization while it has also exacerbated the destruction of the pillars of community that had previously moderated some of the worst excesses of self-interest. The long history of warfare, factionalism and racism make stark the limitations of pre-neoliberal community, but neoliberalism has gotten rid of the local and left us with a cold, harsh global. Thus, the basic structures that made life liveable and meaningful have been destroyed in the pursuit of economic growth. The technocrats who have benefited, locked into their amoral worldview as they are, are incapable of recognizing what the failure even is.

Because we have been taught not to recognize economic and political questions as being primarily concerned with ethics, we find the Democratic leadership such as Nancy Pelosi furiously opposing universal healthcare even though many thousands will die as a result. For politicians such as Pelosi, who are wealthy and receive large donations from interest groups opposed to improving American healthcare, the self-interest is obvious and the cruelty comprehensible though not forgivable. The example of reclining one’s seat in an airplane, however, points to the smaller, pettier self-interests upon which conservatism has been able to prey and thrive. It is with the healthcare debate that these issues are laid most bare. Sometimes the selfishness is expressed directly, as seen in demands as to why should one’s hard-earned money go to support the healthcare of someone else (with the implication that the individual benefiting is less deserving, after all if they were deserving they would not need the financial assistance). Similar views are expressed in attitudes against welfare recipients regarded as living off the government instead of getting a job. When race and immigration are added to the mix, the resentments become more explicit and when economic anxiety is introduced the stew is at risk of becoming truly toxic. Though sometimes racism is stated explicitly, often it is expressed in more subtle language – such as the white homeowner who “has nothing against black people,” but is concerned about his or her property value.

It has been this deeply ingrained selfishness on which conservatism depends. No one particularly wants to pay taxes and are happy to starve the government of funds right up until the programs they happen to use personally are cut and then they are enraged, but still don’t want to pay taxes. The great challenge for conservatism in the 1960s was how to dismantle popular programs created by the New Deal without completely discrediting conservative Republicanism. The story of how this was accomplished is a long and complicated one, but human selfishness was crucial in allowing Reaganism/Thatcherism to happen.

The central objective for the left ought to be the formation of a local community that can also strive toward internationalist ideals. More importantly, we need to reject amoral economics and demand politicians whose actions are guided by altruism and whose worldview is deeply informed by a strong, coherent ethical philosophy.

And stop reclining your seat on airplanes.

The Nihilism of Neoliberalism

Nihilists! Fuck me. I mean, say what you want about the tenets of National Socialism, Dude, at least it’s an ethos.
-Walter Sobchak, The Big Lebowski

When Francis Fukuyama infamously declared the end of history he was right, though likely not in the way he intended. The collapse of the Soviet Union was supposed to signify the victory of capitalism, but, in fact, marked the very opposite. Without communism as a counterweight, capitalism has become ever more vicious and corrupt. What we have been left with is a deeply nihilistic present.

As the film-maker Adam Curtis has argued, the late capitalist “West” has taken on many of the features of late communist USSR. Curtis has adopted the term “hypernormalisation”—coined by Alex Yurchak to describe the last days of the Soviet Union when everyone knew the system was failing and no one believed in it anymore, yet persisted because they did not see an alternative. They could not imagine a different future and, therefore, they could not imagine a future at all. The post-communist world is small-minded and bereft of imagination. Of bureaucrats, politicians and political operatives who cannot imagine a future. The development of humanity has reached its apex, the end of its progression, with liberal democracy and capitalism. From such a point-of-view, there is nothing better to be found in the future and self-delusions of the greatness of the present have to be clung to. Thus, as Hillary Clinton proclaimed during her campaign, America is already great. The suffering of millions under the conditions of capitalism and the increasing hopelessness of the future for many be damned.

The last two years have made stark the implications of neoliberal nihilism for anyone willing to view the situation honestly. Brexit, Donald Trump, the possibility of President Marine Le Pen. These are the direct consequence of this nihilism and can only be halted from the left. As the widespread indifference and complicity by the so-called center as fascism rose to power in the 1920s and 1930s demonstrate, the center will cannot offer solutions. Indeed, as the repeated interventions by the neo-imperialist American government in support of far-right military coups against democratically elected leftist governments show, not only will the center not meaningfully oppose fascism, it is only too happy to bring it about. One only needs to observe the vicious destruction by the liberal establishment of Jeremy Corbyn in the UK or the slanderous assaults against Bernie Sanders in the US. These attacks have come even though Sanders, Corbyn and Jean-Luc Mélenchon are the only real hope that the “West” has against a fascist future. The neoliberal “left” of Hillary Clinton, Barack Obama and Tony Blair cannot imagine a future and, thus, condemn the world to nihilistic despair. Since the neoliberals can only offer a nihilistic nothingness, they are irrelevant. Unlike neoliberalism, the Right and the Left both offer visions of the future and it is between these competing visions that the present elections are really about, though few have really grasped this yet or realized what this means.

The future imagined by the Right has been clearly articulated in the best-selling novel Soumission by the right wing French novelist and would-be intellectual Michel Houellebecq. In the novel Houellebecq foresees a future in which France has become, to use a word popular among internet neo-nazis, cucked by Muslims. Political correctness and tolerance has the consequence, for Houellebecq, of the destruction of French culture by Islam. Thus, the novel ends with the protagonist converting to Islam along with many of his colleagues as non-Muslims become barred from academic posts. The version of Islam represented in the novel is one of the cruelty of sharia law and an imagined hedonism of polygamy and child brides. Thus, the toleration and cosmopolitan ambitions of the European Union result in the “destruction” of France.

It is against this threat, imagined and absurd though it is, that the nationalists represented by Marine Le Pen fight. They see politics as a battle to save the Christian world. Thus, we can understand the immediacy of their politics and the radicalness of their intentions. The nationalist far right is not wedded to the fantasy of liberal democracy and, therefore, accept authoritarianism if that will protect them from the dark future of their imagination. Of course, the corrupt kleptocracy that will result if these nationalists obtain power will mean that the future they bring will be one every bit as grim as the one their supporters imagine they are protecting themselves against.

The Left, on the other hand, offers an actual alternative. In rejecting capitalist destruction, the Left demands a future centered on principles of human dignity and equality. The ambitions of the current representatives of the left are rather small. Healthcare-for-all, a living wage, bankers who are not allowed to destroy the economy and get a trillion dollar bailout and multi-million dollar bonuses for their trouble. Yet even this very limited and insufficient agenda is derided as unfeasible and is beyond the imagination of the nihilists. A healthcare system accessible to all is seen by those such as Hillary Clinton as something that will never, ever happen and her proclamation of such is celebrated as pragmatic. Is it any wonder that Donald Trump, despite his buffoonery and obvious meanness is now president?

With the first round of the French presidential elections tomorrow I see a few possible scenarios listed from least likely to most likely:

  1. Jean-Luc Mélenchon makes it through the first round, wins in the second and is able to enact enough of his leftist agenda to prevent France from its final descent into fascism.
  2. Jean-Luc Mélenchon makes it through the first round, wins the second and is completely stymied by forces of the French establishment. A likely result is Marine Le Pen is elected in the next election.
  3. Marine Le Pen wins the election.
  4. Emmanuel Macron is elected and continues to press forward with nihilistic neoliberalism and the National Front sweeps to power in the following elections.