Has Third Way Politics Failed?

    The Economist is currently having a debate on whether or not 'New Labour', or Third-Way (3W) politics, has failed. Certainly, if you read my blog enough, you would know that I think 3W politics is doomed to failure, because it has accepted the ideological terrain of 'the enemy', by leaving capitalism outside of contention. The politics of the 3W basically articulated a discourse that sought to satisfy everyone and in the end satisfied no one. As one of the debaters argued:

    New Labour was a centrist project, once charged with trying to be all things to    all people. Ironically, 13 years on, it often lacks advocates, as it is challenged    from the right for increasing spending and tax and from the left for not doing     more on inequality.

    This is exactly what the left has been warning about, the 'consensus politics' of the 3W alienates everyone, because it ignores what politics is supposed to be about: change, conflict and values, viz. antagonism. There is no such thing as consensus, there is only conflict and when a 'hegemonic bloc' has gained the upper-hand it institutionalizes its values through ideological hegemony--ISA's--or when that fails, institutionalized force--RSA's. The 3W tried to avoid all three, it tried to have Thactherism, which Zizek correctly argues became hegemonic only when Blair appropriated and accepted her logics, with social progressivism. It sought to tame the wild excesses of finance capitalism in the interests of progressive distribution of income, through an increase in the availability of public services, but not changing a thing about the actual structure of the economy; therefore, in reality the basis of a stable economy was eroding as demand was being constantly crunched by the flows of capital to the top percentage of the population, which lead to the current crisis by undermining the basis of a debt-economy: sound fundamentals. Finally, the push forth the 'cultural' card to replace the emancipatory project with one centred on formal recognition of reified social categories, i.e. gay, black, etc. As Wendy Brown argues:

    The retreat from more substantive visions of justice heralded by the promulgation of     tolerance today is part of a more general depoliticization of citizenship and power and     retreat     from political life itself. The cultivation of tolerance as a political end implicitly     constitutes a     rejection of politics as a domain in which conflict can be productively     articulated and addressed, a     domain in which citizens can be transformed by their     participation, a domain in which differences     are understood as created and negotiated politically,     indeed a domain in which “difference” makes up     much of the subject matter. To the contrary,     as it casts the political and the social as places where     individuals with fixed     identities, interests, and ideas chafe and bargain, tolerance discourse attempts     to remove from the political table as much of our putatively “natural” enmity as it can.

    New Labour has certainly increased the standard of living for many Britons over the last 13 years, "Real incomes in Britain rose just under 2% per year from 1996/97 to 2007/08, with not dissimilar growth to that of the Thatcher and Major years. The difference was that Labour's choices saw the gains distributed much more evenly across society: the bottom half did proportionately best under Labour; the top third under the Conservatives ". So what? It doesn't make 3W politics any less alienating; rather it may make it more-so, consider if the lowest rungs of the income latter are getting progressively better, without actually changing their state of alienation or the politics of nihilism that the 3W represents, it doesn't mean much to these voters apart from greater pessimism that is manifested in new forms of politics that have no chance for hegemony and this impossibility manifests into frustration and violence--i.e., radical Islam, which is rampant in England.
    Politics is not merely about mere pecuniary conditions, it fundamentally means a desire to change the very relations of power/subordination in a society. The greatest err of The Economist's debaters and the debate itself is its 'vulgarity', focusing only on the effects not the causes of the failure, confusing the effects for the causes. The great myth of 3W politics is the end of alternatives, that power exists as it does today and should not change, because it is the best alternative out there; this hubris was best manifested by PM Gordon Brown's statement that 3W had create the conditions to end the era of "boom and bust"--the UK's economy last year shrank by, at least, 5%.
    The reality is that alternatives are emerging but in the guise of proto-fascist, racist movements like the BNP in England. As this short clip from Al Jazeera shows, the rise of the BNP is directly tied to the end of emancipatory politics of the left:

http://www.youtube.com/watch?v=iJGv2byX4qU

    The far-right critically misinterprets the problem away from capitalism proper towards the 'insider/outsider' distinction, best manifested with the nativist reaction against 'the other'. This is a result of the end of the Enlightenment project of internationalism, best exemplified by socialism, and the re-emphasis on the nation with 'tolerant multiculturalism' embedded in liberalism. This emphasis on 'culture' is the problem in many respects, because it leads to the kind of politics of the past that sought to obfuscate the tensions within capitalism to present them instead as tensions immanent in human civilization--the 'clash of civilizations'. Habermas describes this situation well:

    The neoconservative does not uncover the economic and social causes for the altered    attitudes towards work, consumption, achievement and leisure...The mood which feeds     neoconservativism today in no way originate from discontent     about the antinomian     consequences of a culture breaking from the museums into the     street of ordinary life. This     discontent has not been called into life by modernist     intellectuals. It is rooted in deep-seated     reactions against the process of societal     modernization. Under the pressures of the     dynamics of economic growth and the     organizational accomplishments of the state, the social     modernization penetrates     deeper and deeper into previous forms of human existence. I would     describe this     subordination of the life-worlds under the system's imperatives as a matter of     disturbing     the communicative infrastructure of everyday life. (Modernity--An Incomplete Project, p.      7-8)

Capitalism is a system characterized by deep and sharp social changes an inherent instability in symbolic representation and material security. When liberals, like the 3W and now even the Conservatives, trumpet the multicultural/progressive ethos of social liberalism they are only making this situation worse by not tying these evolution into an wider project--the Jewish Question redux. Without being tied to a greater project for full emancipation, even if that project is impossible, makes the rise of reactionary movements stronger and even more dangerous.
    The multiculturalist 3W politics has another dangerous aspect. The ossification of cultural difference as something that can never be superseded, but something that is to nurtured--another signal of abandonment of the Enlightenment project. This assumes that people cannot be changed by praxis of struggle, as Zizek notes:

        Perhaps, nothing expresses better the inconsistency of the post-political liberal project than its implicit paradoxical identification of culture and nature, the two traditional opposites: culture itself is naturalized, posited as something given...Actual universality is not the »deep« feeling that, above all differences, different civilizations share the same basic values, etc.; actual universality »appears« (actualizes itself) as the experience of negativity, of the inadequacy-to-itself, of a particular identity. The formula of revolutionary solidarity is not »let us tolerate our differences,« it is not a pact of civilizations, but a pact of struggles which cut across civilizations, a pact between what, in each civilization, undermines its identity from  within, fights against its oppressive kernel. What unites us is the same struggle...In other words, in the emancipatory struggle, it is not the cultures in their identity which join hands, it is the repressed, the exploited and suffering, the 'parts of no-part' of every culture which come together in a shared struggle.
   
    The 3W's strength, and greatest threat, comes in by 'transforming' demands in a hyper-institutionalized way that makes existing inequalities in power, alienation, subordination and hopelessness even greater. As exploitation, unemployment, stagnating wages, massive inequalities in income grow, the population's demands are institutionally absorbed, denying them the possibility of creating 'equivalencies' with other demands that could turn into a veritable struggle for emancipation--Laclau's populism thesis. With the resistance against capitalism dead--indeed the very term capitalism has been replaced with 'the economy' making anti-capitalism seem anti-economy--the encroaching of capitalist subjectivity that Habermas and the entire socialist project warns about is reaching epic proportions. The unending commodification, bureaucratization, de-democraticization and depoliticalization of our lives is the true success of the 3W, by preventing people from coming together to see each other's individual struggles as a meta-struggle against a system that has no end to its exploitative effects.
    This is the lost message of the left, that it doesn't matter if the economy functions better, it doesn't matter if we have expansive social programs, because none of this is making people's lives any more tolerable it merely alienates them further. As this crisis shows, the means by which the economy grows and profits are accrued are at the direct cost of the average citizen through unemployment, increasing productivity without commensurate income growth, the increase in debt bondage all leading to the erosion  or social mobility, the amplification of hopelessness, social marginalization...essentially proletarianism. The task of the modern left is to move beyond the growth fetishism, to fight for an end to growth--indeed, the earth cannot sustain more growth--and with the end of this fetishism, we should then fight for the democraticization of our lives.

   

Hayek would have supported Obamacare

If you are angered by the recent passage of the US health-care bill as an undue expansion of the government into the market system, turning American into a socialist state then you must not know what socialism is, what liberalism is, or what capitalism is. Indeed, it was F.A. Hayek, the arch-defender of the free market that actually supported the logic of the bill fifty years before its passage:

"Furthermore, Hayek (1960, p. 287) is careful to distinguish between ‘compulsory insurance’ and ‘compulsory membership in a unitary organization controlled by the state’, and at least one of the drawbacks of such an organization, he contends, would be that it would thwart the process by which ever more effective insurance regimes could be devised. ‘If we commit ourselves to a single comprehensive organization because its immediate coverage is greater’, Hayek writes, ‘we may well prevent the evolution of other organizations whose eventual contribution to welfare might have been greater’ (1960, pp. 288, 291–292). Indeed, in The constitution of liberty (1960, chapter 19, pp. 287–305) he is at pains to reject a direct role for the state in provision of welfare services in general. Rather, and in order to secure the epistemological benefits of the market mechanism, he defends a system ‘under which individuals pay for benefits offered by competing institutions’ (Hayek, 1960, p. 304, emphasis added) with the role of the state being merely to temporarily expend public monies to stimulate the growth of a market for this kind of insurance (1960, p. 287). " (Tebble, 597)

First thing is first, the last sentence of the aforementioned quote is basically the US health-care in a nutshell.

Secondly, the health-care bill does not nationalize any private insurance company--lemon socialism--, and it does not subordinate the profit-motive to humanitarian motives--socialism. Rather the health-care bill is subordinate to the profit-motive by shaping the contours of the bill in such a way that would guarantee super-profits for the health-care companies, mostly by adding 35 million  young and healthy customers, often supported by government subsidizes--which, in my opinion is another government bail-out to corporate America. So the first hurdle has been passed according Hayek, the private market remains.

Thirdly, Hayek supports the notion of 'compulsory insurance', he certainly does not see this as an infringement on an individual's freedom, but as a condition of it.  To Hayek, the infringement would be if the consumer did not have a choice buy to use a government insurance plan--the horror! Indeed, the current health-care bill includes a mandate in order to allow all Americans to be covered since, if you expand the base of clients to include the young and healthy, individual costs go down--or the rate of inflation decreases--and profits can be retained as those with illnesses can still be covered. There is no compulsion, since one can still choose where to buy insurance.

Fourthly, this jives with the 'American as apple pie' notion that competition works. The bill does not rid the system of private insurance, and implicitly assumes some form of competition; indeed, the logic of the bill is that competition would increase from these regulations in terms of better terms of insurance contracts or cost reductions for individuals. Thus,  private insurance in health-care is better than state owned insurance, because "competition" leads to better results, as Hayek argues. In order to believe this you have to ignore the tendency of capital to aggregate, thereby rendering the free market inherently unable to remain a "free market" system and thus destroying its own through its own "rationality"--that is to say, as one firm gains differential advantage over others, it uses its leverage in the credit markets to gain the capital necessary to merge and acquire other firms increasing its market power and undermining the whole framework. Secondly, you have to ignore that branding, advertising, goodwill create mini-monopolies--Sraffa, Nitzan, etc.--that undermine the whole notion of easy substitution, the inability of firms to determine prices--they clearly do and can--, and thus, equilibrium.

But all in all, Hayek supports Obama...

Debunking Inequality as a Social Good

    This post is a continuation of the 'war of position' against the neoclassical/neoliberal ideology that still retains a lot, but certainly declining, sway among the general public. One of the most important arguments they have to retain capitalist power relations is through the defense of the indefensible: very high inequality is a sure means to boost economic growth and therefore is a ethical thing to do. They argue that having egalitarian distributions of income inevitability leads to lower growth since economic agents would not be sufficiently rewarded for the efforts they put in and lower economic growth leads to lower standards of living for everyone. While, in countries that have higher levels of inequality, rewards more "productive" people and therefore have more innovation and are more dynamic. Therefore, via the notion that a 'rising tide lifts all boats', they are normatively unconcerned with inequality, because as long as there is a pareto optimal outcome, things are just--something to be criticized later.

    However, as per usual, the facts aren't in favour of this 'idealist absurdity'. As usual, Sweden disproves the entire neoclassical paradigm; if any country on earth would be on the "Road to Serfdom", it would be Sweden. Throughout the Cold War and beyond, Sweden had the world's most egalitarian distribution of income; so egalitarian that Sweden was more egalitarian than the USSR:

Thus, does Sweden have an utterly uncompetitive economy with a fascist/socialist--since they are the same thing in a Hayekian framework--dictatorship? No, Sweden is internationally recognized as not only one of the most open liberal democracies in the world, but it is also a  country where the population leads amongst the best lives in the world, measured by the HDI. Thirdly, Sweden has a per capita income of $52,180 ($37,333 PPP), while Britain, which engaged in radical neoliberal reform has a per capita income of $43,733 ($36,357 PPP) in 2008. Finally, its exports as a percentage of GDP is also higher, suggesting a much more competitive economy. Importantly, it also has a  more innovative economy than those with higher rates of inequality, according to The Spirit Level:

    Rather than stimulating innovation and progress, great inequality wastes the talents of a     large proportion of the population.  The evidence shows that it reduces children’s     educational performance as well as reducing social mobility.  Economic studies of the     relationship between the extent of inequality and economic growth rates have mixed     results: most suggest that greater equality is beneficial to growth but a few suggest the     opposite...There is a weak but statistically significant tendency for more equal societies to     gain more patents per head than less equal ones. (http://www.equalitytrust.org.uk/why/    evidence/frequently-asked-questions#innovation)

    I realize that the economy does not determine all, something that eludes the neoliberals. Reasons why country a does not grow, or descends into a dictatorship is due  a overdetermination of causes that cannot be easily reduced to the economic problematic. As Althusser states:

    If, as in this situation, a vast accumulation of ‘contradictions’ come into play in the    same court, some of which are radically heterogeneous—of different origins, different    sense, different levels and points of application—but which nevertheless ‘group    themselves’ into a ruptural unity, we can no longer talk of the sole, unique power of   the general ‘contradiction’ [the economy]   

Hayek's rather simplistic and wrong thesis needs to expunged from the social body in order to bring a more just society (http://perspectivos.blogspot.com/2009/12/on-hayek-part-i.html). On Pareto optimality, because it deals only with absolute measures it is certainly a normatively inappropriate means to determine what is ethically and even economically sensible. As Tony Smith states:

    Critics of neoliberalism also note that the very notion of Pareto optimality     is deeply flawed from a normative standpoint with respect to     distributional issues. A society in which a small handful of individuals     appropriates almost all the income and wealth of a society, leaving the     vast majority in hopeless poverty, can count as ‘optimal’ according to this     notion.

Idealist Absurdities, the Paradox of Victory

Is capitalism going to collapse via a proletarian revolution? Unlikely, it isn’t impossible, but in the past two hundred years we have not had a truly proletarian revolution anywhere in the world. The major revolutions that occurred all occurred in countries with large peasant populations, with encroaching industrialization and increasing commodification of the average person’s life, the reaction was strong—as it was in Europe during the 19^th century, i.e., Chartism, 1848, etc. In addition, many of the revolutions were ersatz in the sense they played a double role; certainly, they all played lip service to socialist internationalism, but the Thing they were really striving for was the anti-imperialist/nationalist bias of revolutionary movements.

In all the countries where revolution occurred, capitalism clearly was incomplete and the state was unable to adequately address new demands that were emerging from the new social relations that capitalism brought with it. In these countries, all lacking liberal-democratic forms of governance, the state could be defeated rather easily in what Gramsci called a ‘war of maneuver’, because the ‘state’—as conceived by Gramsci—was clearly not hegemonic, but rather depended on repression and pre-modern notions of statecraft—as Foucault notes, pre-modern states were primarily concerned with ‘sovereignty’ of the rulers leaving the unknown notion of the ‘population’ largely to its own devices, leaving them unarticulated by the state; the modern state was concerned with ‘governmentality’, or the organization of society to make it more productive with the wellbeing of the newly conceived notion of the ‘population’ as the new loci of state-craft, creating institutions to articulate and to discipline individuals.

Thus, in order to challenge liberal-democratic regimes, Gramsci noted that the proletariat and its allies must engage in a ‘war of position’ to ideologically disaggregate and replace the ‘nodal points’ that keep capitalist hegemony intact.  Thus, according to Gramsci, the counter-hegemonic force, prior to taking power, must first achieve hegemony. Thus, the Marxist notion that the proletariat, being the universal class, would—inevitably—overthrow capitalism, due to the contradictions embedded in capitalism has been, hitherto, been proven false. The way to revolution, or radical change, is partly through political/ideological intermediation and then, in the last instance, material force; however, these two things are not mutually exclusive. As Marx states, “The weapon of criticism obviously cannot replace the criticism of weapons. Material force must be overthrown by material force. But theory also becomes a material force once it has gripped the masses”. 

However, capitalism has shown its adaptability, because it has been able to grow enough to satisfy demands through institutions and has been able, via liberal democratic mechanisms, been able to give the concessions necessary to retain its hegemony. This ‘condition of impossibility’ is what makes capitalism possible, according to Zizek:

...what Marx overlooked is that, to put it in standard Derridean terms, this inherent obstacle/antagonism as the "condition of impossibility" of the full deployment of the productive forces is simultaneously its "condition of possibility": if we abolish the obstacle, the inherent contradiction of capitalism, we do not get the fully unleashed drive finally freed from its shackles, but rather we lose precisely this very productivity that seemed to be simultaneously generated and stifled by capitalism, for it simply dissipates . . . And it is as if this logic of the "obstacle as a positive condition" which underlay the failure of socialist attempts to overcome capitalism, is now returning with a vengeance in capitalism itself: capitalism can fully thrive not in the unencumbered reign of the market, but only when an obstacle (from minimal welfare-state intervention, up to and including the direct political rule of the Communist Party, as in the case of China) constrains its unimpeded rampage (190).


However, the ‘common sense’ economics that sprouts from neoliberal economists suggests the opposite is true. The market, if encumbered by the government’s intervention, distorts the market by creating disincentives for worker to work; it artificially raises prices and lowers quality of services that could be better rendered by the for profit private sector; counter-cyclical economic policies do not help, but make matters worse by not allowing the market to correct, automatically, the causes of the crisis. Basically, the ethos is, the market does everything better, democracy is a false god and leads eventually to totalitarianism—Hayek’s thesis in The Road to Serfdom. Therefore, citizens should no longer conceive themselves as citizens in the sense they can use that power to change things politically, but rather they should be market agents who’s only aim is the maximization of their utility, with a given distribution of income, and the outcomes are inherently just because the responsibility for success or failure rests squarely on your shoulders.

However, as Jean Baudrillard notes, as interpreted by Sylvere Lotringer:

This is what Baudrillard meant by a total revolution: a strategy geared to escalate the system and push it to its breaking point. Then, giving up on every pretence of rationality, it would start revolving and achieve in the process a circularity of its own: "We know the potential of tautology when it reinforces the system's claim to perfect sphericity (Ubu Roi's belly)" (SE, p. 4)... After all, wasn't capitalism itself a pataphysical proposition? It was endlessly cutting the branch on which it sits, devastating the planet and endangering the human species while claiming to improve its lot. Capital didn't care a fig for the fate of humanity. The real wasn't its business. It had cancelled the principle of reality and substituted a codification of a higher order, a hyper-reality that made the real obsolete. Its dirge-like flows were self-referential, leaving everything else in a state of self-induced simulation. The flows of capital were posthumous, post-human. In their nihilistic energy, they carried the seeds of their own destruction.

Thus, is the lesson for the left still Lenin’s quip that ‘worse is better’? Leaving the market to its own devices will create the conditions for a revolution? As Baudrillard states:

"Every system that approaches perfect operativity simultaneously approaches its downfall. . .  it approaches absolute power and total absurdity; that is, immediate and probable subversion. A gentle push in the right place is enough to bring it crashing down" (5E, p. 4).

Leaving the market to operate as close to the ideal as possible would, fundamentally undermine the operation of the market itself. Total capitalist victory, the neoliberal world-order would, in essence take away the “condition of impossibility" that simultaneously creates the “condition of possibility”. Arguably, the most successful capitalist states are those where a balance between the market and the social has been created where capital has little option but to invest in investments that increase the well-being of the population, examples can go from Sweden to China; whilst, countries that have gone to the opposite extremes are facing severe crisis, e,g., Argentina in 2001, the United States, the United Kingdom, etc.

Therefore, neoliberalism has created the seeds of its own downfall for engaging in what Baidou calls ‘idealist absurdies’ that abstract away the social and pretend that the models in neoclassical economics can actually exist, which presupposes that ‘there is no society, just individual men and women’ engaged in a marketplace. It has also created the conditions of unending hubris, leading to a form of intellectual laziness, or worse, ideological blindness that lead to the current crisis. Therefore, the rush towards the triumph of capitalism has lead to its greatest crisis. Thus, as Baudrillard argues, maybe we should be triumphing the capitalist market economy; maybe the ultimate agent of capitalism’s demise is capital itself.