This post is part of our symposium on Mutant Neoliberalism. The second part of this post is available here, and you can find the full symposium here.
Mutant Neoliberalism is an excellent collection of essays canvassing what editors William Callison and Zachary Manfredi rightly diagnose as the changing face of neoliberalism – really, the multiplicity of national, transnational and post-national neoliberalisms – evolving in the aftermath of the 2007-2008 financial crisis. Instead of a mortal wounding, the crisis generated the paradox, as several authors in the collection note, that neoliberalism’s failures led to more, not less, neoliberalism. Crises generated by neoliberal prescriptions (privatization, financialization, austerity, etc.) are said to be solvable using more of the same, while radical reform proposals face the usual assessment (TINA = “there is no alternative”). This fact led to the conception of neoliberalism after the crisis as a “zombie” formation, the onward march of the undead, but Callison and Manfredi rightly note that events around 2016 seem to have altered this diagnosis. Instead, neoliberalism now seems less “zombie” than what they term “mutant,” proliferating in new forms, and hybridizing with traditional and new right social and political movements, sometimes in spite of manifest ideological and programmatic differences between them and the “pure” form of post-war neoliberalism (of Hayek, Mont Pellerin, and so ).
All this seems right and interesting. I want to focus in this brief response on the place of the “international” in this diagnosis, particularly as it concerns debates in the European context. It seems to me that both the undead (“zombie”) and the hybridizing (“mutant”) aspects of contemporary neoliberalism are deeply interrelated and best understood in relation to the problem of international economic integration (a.k.a. “global capitalism”). I will focus therefore on two excellent contributions to the volume, one by Melinda Cooper (“Anti-Austerity on the Far Right”), which looks at the anti-neoliberal politics of far-right movements in Europe during the interwar rise of fascism, and then again from the 1970s to the present; and another by Quinn Slobodian and Dieter Plehwe (“Neoliberals against Europe”), which studies right-wing Euroscepticism in relation to a politics of national neoliberalisms.
Cooper studies the rise of an agenda of anti-austerity—more broadly, of anti-neoliberalism—among parties of the far right in France and Italy, in particular, with some attention to the complex case of the AfD in Germany. She correctly notes that fiscal and monetary experimentation defying neoliberal prescriptions can be undertaken by either right or left parties (and, we may add, center ones); in this sense, being anti-austerity need not automatically track the traditional right/left divide, which makes it urgent, in her words, to ask “What then is the difference between an anti-austerity politics of the far left and the far right?…More to the point, what should be the difference between an anti-austerity politics of the far left and far right?” (p. 116).
Her main suggestion in response, after a study of the interwar period, is that the “anti-austerity politics of the far right is defined by the attempt to overcome the threat of deflation [i.e., internal devaluation] without substantially threatening the existing distribution of wealth and income” (p. 126). This definition seems broadly right to me, following the outlines of Polanyi’s old but indispensable analysis: if the left does not effectively manage a global economy gone awry, the right will step in with alacrity. However, her definition raises the following two complexities.
First, almost the same definition could be used to describe any number of liberal Keynesian interventions in the post-war period, undertaken by technocrats keen to manage the business cycle without reshaping distributive outcomes in a way that would go beyond their formal or informal mandates. Adding the proviso that we are thinking about “the threat of deflation in moments when it seems capitalism is itself in full crisis” may help clarify. Taking Cooper’s lead, the desire of far-right parties is accordingly—just as leftists in the interwar period always alleged—to save capitalism from itself without undermining the social order. The same aim was of course alleged about Keynes, unfairly, but perhaps comprehensibly when taking in the history of post-war neoclassical Keynesianism. Put differently, many people who have been (and may still be) keen to use policy experiments to uphold the status quo are hard to classify as “far right.”
The flip side of that coin is that many right-wing governments might well be pushed to deliver significant redistribution in order to make good on their own anti-neoliberal electoral promises. In Cooper’s definition, much depends on what we take “substantially” to mean. Some far-right parties, particularly protest parties hard to locate in the conventional right-left spectrum, may very well be willing to reshape the distribution of income and wealth, particularly in the way that Cooper documents the Nazis doing – i.e., selectively privileging some citizens on the basis of socio-ethnic or religious identity while indirectly or directly punishing others. Less drastically, whether under the pressure of electoral competition or out of genuine ideological transformation, successful right-wing parties elected on an anti-austerity mandate may actually have to deliver some (substantial?) changes, particularly in terms of international trade, access to personal credit, infrastructure development, and regional inequality. Witness Boris Johnson’s effort to maintain the working class vote in the North of England, which had formerly been the bulwark of Labour, but had become effectively unrepresented by New Labour and had then voted Brexit. Will Johnson deliver for these people in a way that “substantially” changes things? I think he knows very well that his chances at reelection depend on it, so we will see what a social Toryism can accomplish, post-Brexit, particularly in the new crucible of the COVID-19 pandemic. Note that Johnson has already dispatched unceremoniously one Chancellor who showed an unwillingness to fall into line but echoed instead that sound money doctrine so favored in Britain since the time of John Locke and the Recoinage Crisis.
What does all this mean for contemporary neoliberalism in Europe? Cooper notes that “The defeat of the far-left economic alternative in Greece and the subsequent failure of the social democratic left to push through even a modest reform of the Eurozone has left the door wide open for the far right” (p. 118). She is not wrong when she claims that not even a “modest reform” has been accomplished, in spite of the consensus she notes of mainstream and heterodox economists who argue that the current halfway house of the Euro is unworkable. As this blog goes to publication, the current question is whether we will see any debt pooling at the European level in response to the COVID-19 crisis (i.e., the issuance of so-called “coronabonds”). The lack of any such “modest reforms” is now said, by the center-left Italian government, no less, to risk the disintegration of the EU project.
That it has come to this requires a slight detour through monetary politics for it is worth observing how this apparently unworkable arrangement has been maintained so doggedly: not only through varieties of “depoliticization,” as scholars from Wolfgang Streeck to Thomas Biebricher to Stefan Eich have noted, but also because, when push comes to shove, European banks and the European banking system are given privileged access to dollar assets via swap lines arranged (arguably outside its formal mandate) by the U.S. Federal Reserve. This was true following the financial crisis and it is on full display now again in the midst of the massive disruption following COVID-19 lockdowns across the continent. The financial halfway house of European Monetary Union (EMU) is thus a great example of what the economists call “moral hazard.” Having once been bailed out by the U.S. Fed, what incentive was there to do the right thing in advance of the next crisis (which is now, alas, upon us)—whether full federalization (of debt, transfer payments, etc.) or breaking up the Euro (which could be creatively and progressively done, adapting Keynes’ proposal for an International Clearinghouse Union to a reformed EMU)?
This conclusion was very much on my mind when I came to the final lines of Cooper’s contribution, with which I was in full agreement: “If the left were able to exploit this reprieve [i.e., a brief return to neoliberalism by the right in France and elsewhere] to advance a comprehensive—macroeconomic and constitutional—alternative to the Eurozone, it might still have some chance of stemming the rising tide of the far right” (p. 138). The difficulty is that, even “moral hazard” and dollar bailouts aside, I see no practicable path forward for real constitutional reform of the Eurozone. Perhaps the COVID-19 pandemic will force a new reckoning, though I rather doubt it; the European Left has obviously failed to advance any such “comprehensive alternative” in good times and it is not clear what resources (electoral, ideological, institutional) it has to fall back on now during bad times. Beyond outsider-utopian organizations, such as Varoufakis’s DiEM25, the urgent need to “democratize” the structures of the European Union is not even discussed anymore; a call to defend “Europe” now seems to suffice for the progressive side of the debate. More modestly, the transfer of powers from the European Commission to the European Parliament (in line with reform proposals by Thomas Piketty and others) or even the creation of a joint Franco-German budget (as Emmanuel Macron has more dubiously proposed) seem to be going nowhere fast. Meanwhile, Angela Merkel’s governing coalition is falling apart, and, in retrospect, what will be said of her with regard to her European leadership is that she kept the show on the road without compromising Germany’s place in it all: apres elle, le deluge.