Neoliberalism, Globalisation and the State
Paolo Gerbaudo interviewed by the French website Le Vent Se Lève about his latest book, The Great Recoil.
LVSL : The central idea of your book is what you call a “Great Recoil” from neoliberalism and globalization, that have been hegemonic since the 1980s. In its place, you argue that a new zeitgeist is emerging, you call it “neo-statism”. What are the reasons that explain this change of hegemony ?
PG : The great recoil is the moment when neoliberal capitalism hits its ultimate limits, both economic, political and ecological. This bounceback is a net result of the very success of the neoliberal project and the way it has integrated ever more markets and countries within its grasp. Yet, as it happens with any ideological era, which is a key concept in the book, they tend at some point to exhaust their initial momentum and run into their own contradictions. This, in turn, opens the space for a new consensus to arise, which encompasses the entire political space and permeates all political actors, who need to position themselves vis-à-vis this dominant discourse.
This Great Recoil is as a response of society against the stress produced by neoliberal globalization, in the sense of exposure to economic forces beyond control, agoraphobia, the fear of openness, this fear of being out in the open with no defences against forces apparently beyond political control. In short, it’s about feeling that you are the object of politics rather than the subject of politics. What it leads to is a readjustment of common sense which is most visible within the mainstream. Even stalwarts of neoliberalism and austerity are now making concessions on the need to balance the excesses of a market eonomy, and swerve into the opposite direction. Examples of that include Joe Biden, who had a long career as a centrist and moderate Democrat but who has launched a significant program of public investment. Draghi is another example, he now speaks of "good debt". So the representatives of global capitalism are abandoning some of the dogmas of neoliberalism and appropriating themselves of certain forms of state interventions, though mostly with the ultimate aim of saving capital from itself rather than changing the economic system.
LVSL : This “end” of neoliberalism has often been announced, after the 2008 crisis for isntance, but a lot of people today might still be skeptical that neoliberalism has ended. You gave us some examples of this return of the state, but the case of Biden seems to also show the limits of this new era : he signed into law the 1 trillion dollar Infrastructure Bill, but the Reconciliation Bill, which is more focused on social spending, is still blocked by the US Senate. Aren’t we witnessing stronger state intervention in certain sectors of the economy, in order to support capital - or sections of capital - but not a return of a welfare state in that protects workers ?
PG We know from the Marxist theory of the state and the work of people like Althusser, Miliband and Poulantzas that the state that we are experiencing is a capitalist one. Therefore it is a state that reproduces the mechanisms of the capitalist economy. More specifically, we have long entered a monopolistic capitalism, as opposed to a more competitive capitalism that partly existed at the beginning of globalization. Now there are huge concentrations of power and money in many industries : Big pharma, big tech, big media companies, microchips production. The strategic sectors of our economy are marked by enormous levels of concentration. Let's only think of Jeff Bezos and Elon Musk, the two people battling to be the richest man in the world, who are demonstrations of grotesque concentrations of resources in society. In this context, the state is involved in shouldering and supporting capital, and in particular monopoly capital: protecting the spoils of previous waves of capitalist acccumulation..
As you say, this new capitalist neo-statism is very selective in the things it can allow and cannot allow. The infrastructure bill was approved because it was in the interest of large companies, since it means profits for construction companies, whereas social measures don’t have any direct utility for capital. For example, paid family leave and sick leave, that we take for granted in welfare states such as France, Italy or the UK, are not national statutory rights in the US! This social spending component of Biden’s program has so far been obstructed by centrists such as Joe Manchin and Krysten Sinema, who are bankrolled by large corporations and have opposed measures that would reduce the cost of pharmaceuticals.
The measures that were good for capital – though they also create jobs - have been approved while the things that were more about some kind of mild redistribution are being blocked. Many of the most radical measures that Biden promised are going to be severely watered down. It now looks like this so-called “new framework” of the social spending and climate pact would be approved, but the original $3 trillion figure would downsize to $1.75 trillion. It will still be an improvement of life conditions for millions of Americans, but its downsizing reveals the new challenges of the neo-statist era, the new political dilemmas that are emerging in the post-neoliberal era.
Basically, any redistributive policy these days is a zero-sum game, which means you need to go for the money that is already there, which there is plenty of, and not only in the expansion of monetary supply! Companies like Apple have half a trillion dollars stored away. However, Biden's proposals are far from the high tax rates of the post-war period that were seen under Eisenhower or Lyndon Johnson. The rich are furiously refusing such tax rates, they don't even want to give away a small part of their wealth. If this resistance wins the battle, we risk having another Donald Trump, because the small redistributive measures of Biden won’t be enough to calm the discontent in the US working class. The novelty of Biden is that he has realized, alongside others in the neoliberal establishment, that Trump doesn't come from nowhere, but that he comes from the effects of globalization, from the pain suffered by left-behind workers. Thus, he understands the need for pragmatic policies to address these issues. However, in their watered-down version, they risk not being enough to confront the forces that led to the election of Donald Trump.
LVSL : You talked about agoraphobia and discontent of the workers, but maybe another reason for this change and this drift towards neo-statism is the rise of China and the geopolitical rivalry that is emerging ?
PG - Yes definitely the rise of China and the success of Chinese economy, now temporarily obfuscated by the Evergrande affair, are one of the prime motors of this readjustment of the mainstream, which involves some selective abandonment of monetarist policies and the return of Keynesian demand management with stimulus spending in the form of public investment. There are different pillars of neoliberalism, some still stand, but those who have been the most outrageously knocked are the fanatic belief of tight budgets and fiscal prudence, hence the recuperation of Keynesian demand management. Chinese state capitalism has been performing far better, in terms of productivity, innovation or prosperity, than the neoliberal model of capitalism. Under Xi Jinping, China, after a brief continuation on the path of openness policies put forward by Deng Xiaoping, has basically gone backwards to more statist policies. In a way, it has alrady experienced its own recoil against neoliberalism. 60% of the Chinese economy is directly or indirectly controlled by the state. So it looks as if the US wants to be more like China, that they want more of an “activist state” to use the words of Boris Johnson. The UK and the US are the two countries where these shifts are more visible.
Yet at the same time, there are significant differences between the US state and the Chinese state : the US state doesn't control the commanding heights of the economy, by which I mean the most strategic firms that are fundamental for the efficacy and competitiveness of the system at large, such as utilities and energy, construction... It means that the neo-statism in the US or other countries amounts to the emergence of an « out-contractor state ». While the state goes back to spending and investing compared to the austerity of the 2010s, this spending ultimately feeds the private market. The projects that are funded are carried out by private companies, on the terms of private companies and to their benefit. So this expansion of the state, in reality, isn't accompanied by an expansion of actual political and democratic control over the economy as one might expect.[book-strip index="1" style="buy"]
LVSL : One aspect of current evolutions of the state that was perhaps less studied in your book was the strong reinforcement of the surveillance, particularly since the War on terror and the COVID pandemic. This may be another evolution of the state that favours the interests of big companies rather than the people, don’t you think ?
PG – The state comprises different apparatuses. As we know from Althusser, there are the repressive apparatuses, the ideological apparatuses, plus the great phenomenon of the 20th century has been the development of the state economic apparatus. Historically, one major part of the repressive apparatus is the surveillance of activists and protest movements. It is quite obvious that the pandemic has introduced in emergency fashion some widespread surveillance and control measures in the way of containment of contagion, of contract tracing, of the state telling people what they are allowed to do, whether they can travel or not, the need to have tests all the time, to be vaccinated... This is an element of the state that is quite unfamiliar to many people, especially for those of us who have never been through any major cataclysm or war conflict, or even had to serve in the military for a year as was the case for our fathers or grandparents. Now it is quite obvious that these forms of surveillance create angry responses. They are viewed by many as an intermission of the state in their everyday lives, especially since the state has essentially given up on many other interventions that would have been far more welcome and positive. So as the economic apparatus of the state receded under neoliberalism, the repressive structures of the state were strengthened, while at the same the ideological apparatus of the state was fading away or becoming confused because of the idea of the centrality of the market. I think the risk there is a discourse of cultural suspicion towards authority in any way or form, most evidently seen in the antivax or anti-mask movement, that expresses suspicion and anger at measures that mostly materially affect some people such as those who work in restaurants or the tourism sector, where damages have been considerable.
Yet, the strategic attitude of the left should be the one like after the Second world war, when workers came back to the state that asked them to endure so many sacrifices and basically said “now, it is time we are compensated for our efforts”. It was time for the state to give back for all the sacrifices and hardships that ordinary people had to undergo with often the state not sufficiently supporting them financially. Andy Burnham, the mayor of Great Manchester, for instance, came out very strongly, demanding the state to be far more involved in social protection, otherwise it would be unfair for the people to continue undergoing such harsh social distancing measures with nefarious economic effects. I think this should be the attitude of the left : instead of seeing state control as something to be denounced on ethical grounds or legal grounds, the left should see it as something that can be accepted only insofar as, at the same time, the state provides economic relief. No state control without social protection.
LVSL - Here we get to key concepts of your book : the notions of control and protection. In your book, you argue that these notions, and the one of sovereignty, form the new political common sense nowadays. Yet, the actual meaning of these words is subject to a fight between the left and the right. So how do the left and the right define these concepts ?
PG - What I argue is that, in political discourses, you encounter master signifiers, which are words that appear all the time and are obsessively repeated and shared across the political aisle, from the left to the right. Neoliberalism came with familiar terms, such as opportunity, entrepreneurialism, modernization, openness and so on and so forth. In contemporary discourses, the terms are quite different. There are many slogans and key words, but those are most prominent, according to me, are protection, control and sovereignty.
Sovereignty raises the question of the supremacy of the state, a principle that was eroded during the neoliberal globalization, during which state power was fading away and corporate power was rising. Recent events have demonstrated that, in fact, the two things are not separated from one another : states are still decisive in acting as patrons for capital, as we saw during the bank bailouts after 2008 or when it comes to take measures to provide basic necessities as we saw during the pandemic. The right frames the notion of sovereignty as something exclusive that can be expressed as “national sovereignty” or “territorial sovereignty”. For the left, the supremacy of the state is something positive only insofar as it is the instrument of the popular will, of popular sovereignty. So for the left, sovereignty is an expression of democracy rather than identity and exclusion.
Protection is perhaps the most significant term of all because it is the one that has become iconic during the pandemic : "protect yourself and protect others" was a very common slogan. Protection is everywhere : in climate policies (against extreme weather events, by planting trees in the cities or by protecting beaches from erosion...) in social protection (protecting workers, jobs...) etc. To me, this master signifier is a battlefield in its own right. What is the meaning of protection ? What kind of security do different forces want to implement ? There again, you have two very different narratives : one is the proprietarian protectionism of the right, which is about protecting capital, protecting wealth, and protecting the status quo. Since capital doesn't have many hopes of finding new avenues for profits these days, protecting what is already there becomes the decisive element. Meanwhile, for the left, a politics of protection is – or should be - about reinstating basic forms of protection that were long taken for granted but have since faded away, as well as establishing new forms of protection : new measures against poverty, to protect communities from climate change, establishing a new paradigm of social security...
Finally, control has to do with how the state relates to citizens. The state is all about control : tax control, labour controls, contagion control during the pandemic. Control is a word that actually comes from the invention of statecraft, in the Middle Ages. Again, there are different paradigms : for the right, control has to do with territorial control, with exclusion, with keeping certain flows out, migrants in particular. For the left, control is about planning, determining the future after many years during which you were told that there was no need for a plan because the market would decide. But the only way planning can be progressive is if it is democratic. Indeed, the return of planning has also seen the return of technocracy, one of the risk of this neo-statism is the exacerbation of technocratic tendencies in society. In that regard, the fundamental way to avert new forms of suspicion towards the state is to create new forms of democratic participation that allow people to take decisions collectively, and not to let this power to experts, that may help such or such interests.
LVSL - If we look back at the Brexit referendum, the slogan of the Leave campaign was "Take back control". At the time, we saw that the left had a defensive position, since it campaigned for staying in the EU. In your chapter on the notion of sovereignty, you argue that even though the left sometimes promotes concepts like food sovereignty or energy sovereignty, when it comes to free trade and globalization, it seems much more moderate. Therefore, it sometimes looks like the Right has embraced protectionism more than the left. How would you explain this situation ?
PG - Because for a long time, there was a very diffuse debate about protectionism among the left, about whether it should tactically side with free trade or protectionism. In a very famous speech at the convention of free trade, around 1848, Karl Marx basically said "i'm in favour of free trade because it is going to accelerate the downfall of capitalism". In other words, free trade would bring capitalism to its contradictions and therefore create the conditions for revolution. Also, it wasn't just a matter of doctrine for the left, but also about the fact that Europeans workers in factories etc were often more in favour of free trade than protectionism for very material reasons : as we know, protectionism tends to affect consumption by raising the prices of basic goods. Therefore, for workers, it is an immediate loss of purchasing power, which was already meager.
In this sense, protectionism has always been a difficult question for the left, whereas for the right, it could fit with their nationalist agenda, or with the interests of protected industries. Because, obviously, the firms that are shielded by tariffs, quotas and regulatory barriers have a vested interest in protectionism. So, my contention is that, pragmatically, while free trade can be good for certain things (there's no denying it can bring advantages to producers and consumers), the low-tariff trade we are now experiencing, which is unprecedented in history, has extremely disruptive effects. This disruption is mostly felt by the most fragile parts of the economy, especially in peripheral or rural areas, where most of manufacturing is located today. But when it comes to most services, they are not as exposed to international competition at the same level that manufacturing can be, because everything cannot be outsourced and produced overseas.
I think the socialist left should recuperate some mild forms of trade protectionism, both in terms of applying tariffs and in terms of regulation, in order to prevent the race to the bottom that we have before our eyes. As we all know today, many goods are produced with enormous environmental damage and by people with extremely low wages. The idea of "solidarity protectionism" promoted by Mélenchon is a step in the right direction, since it advocates for redefining the limits and criteria of global trade.
LVSL - You said that two of the reasons that may explain why the left is fearful of protectionism were the doctrine inherited from Marxism and because free trade sometimes serves the consumerist interests of the working class. But don't you think that there is also a sort of shallow cosmopolitanism among the left that leads it to consider that protectionism is bad because it is associated the right's will to close borders for instance ? I mean, sometimes it sounds like the left focuses on cultural aspects of protectionism rather than on its economic aspect, and therefore rejects it. What's you opinion on that ?
PG - With the Brexit referendum, the left found itself divided : the great majority of the Labour party supported remaining in the EU, even though there was also a Lexit component, which was quite minoritarian. in the electorate of Labour, though, the split was more pronounced : something like 30/70. It was a nightmare scenario for the left, because in these years, we were coming from strong criticism of the European Union, of austerity imposed in many countries etc. Let's not forget the Greek referendum of July 2015, a huge moment of confrontation between a left government and the EU, happended just a year before. Therefore, during the Brexit campaign, the left found itself fundamentally defending the established order of things under the banner of "Remain and reform", even though it was never clear what the reform part would be. I think it speaks more generally to a certain difficulty of the left to formulate clear demands vis-à-vis the European Union. Still, around that time, there was a group of left-wing parties around people like Varoufakis and Mélenchon, who basically said "we need to radically reform the EU, and if it doesn't happen, then exiting the EU would be legitimate".
I think the left has struggled to come together around a consensus plan, a unity plan on what needed to be achieved in order to make the EU more acceptable. In the book, when I discuss the EU, I don't take an exitist position, nor do I defend the EU as it is. In certain respects, it plays certain functions of coordination between member states, that in the current historical phase are perhaps impossible to avoid. Yet, at the same time, it is a major source of political illegitimacy, of lack of democratic control. The EU has been the means through which national elites imposed on their citizens measures that were highly unpopular, with the excuse that they were recommended by Brussels. This question, in the end, haunted the British left and was the main cause of the downfall of Corbyn : had there been an open debate on the European Union, things would probably be very different now.
LVSL - Something we also saw during the Brexit campaign, but not only, is that the right often invokes the notions of the nation and the state and talks about patriotism and nationalism as if there were synonyms. But as you remind us in your book, there are no synonyms and the ideal of patriotism historically comes from the left. And yet, the left doesn't seem very willing to embrace this concept anymore. Why is that ?
PG - The approach of the left towards the nation is a key strategic question, because it is one issue on which the left has constantly taken a defensive position. Even when the left does not adopt a cosmopolitan and elitist view towards the nation, it often fails to articulate positively what the nation and its identity are. These days, the left often has this mistaken belief that nation-states are somehow an anachronistic phenomena or a residual phenomena. In other words, states are still there and will continue to be for some time, but will have less and less importance. But in recent years, we have seen a revival of national identities at all levels : in protest movements against austerity, in the return of state interventionism… During the pandemic we saw an explosion of patriotic sentiments, in the form of isolationist patriotism, when citizens felt that their nation was in trouble and that they all had to abide by the rules... Ultimately, the history of the left starts with the struggle of national liberation. Patriotism was then understoof in the sense that the people define the political community that needs to be emancipated and achieve self government. It is something that Marxists and republicans shared. Ultimately the modern idea of the nation comes from the Jacobins, who are sort of the founding fathers of the left. Hence, in a way, it is surprising that the left is in such difficulty to process the question of the nation.
However, my argument is that, speaking to a sense of identity, a sense of belonging, a sense of place and position is fundamental in order to articulate a progressive vision. Because, in the end, when the left promotes an ideal of what the future of a community will look like, it invariably plays out at the level of the state. It doesn't mean that there are no class interests, or that everyone agrees with each other and unites, but the left always has to articulate different interests around the idea of a common society.
I also think there is a lot of confusion among the left between internationalism and globalism. The standard left-wing position, as Marx and Engels said in the Communist manifesto, was the brotherhood of all people in the world. But if the working class is international, it first needs to fight concrete struggles in every nation. So i invite the left to be more sober and to adopt a less hysterical attitude when it comes to identity and the national question, because that attitude has been exploited by the right to basically say that leftists are unanchored, ungrounded citizens of nowhere, that they are not responsible to a community.
LVSL - Earlier, when we talked about sovereignty, you said that the left lost most of its support from manufacturing workers due to its position on free trade. In your book, you dedicate a whole chapter to the new class coalitions of the left and the right. You seem to mostly agree with Piketty, who describes what he calls a "Merchant right" and a "Brahmine left". Could you explain what these concepts mean ?
PG - I attempt to clarify this question with the map of class support for different political parties, because there is a mistaken perception that class allegiances have flipped over, whereby before the left represented the working class and the right represented the middle class and now according to some the situation has moved to a point where the left now represents the middle class and that the right represents working people. This analysis is oversimplistic. What I show in my map is that both the working class and the middle class are sliced into two parts, that, to a great extent, can be explained by the rural/urban divide. There is a part of the working class, mostly people working low-wage jobs in services and who are very exposed to exploitation (cleaning workers, delivery workers, transportation workers, care workers...), where the left has been capable of great mobilization and organization in recent years. In a way, it is one of the few good news for the left when it comes to reconnecting with the working class.
But at the same time, many workers in manufacturing jobs have been slipping away from the left. Here, I disagree with the common argument that these people have stopped supporting the left for cultural reasons, because they are concerned with migration, because they want to protect the traditional family etc. To the contrary, these people have turned their back to the left, because, as Piketty also said, they don't feel protected by the left anymore. They feel like the left has sacrificed them on the altar of free trade and globalization because it was convenient for the urban middle classes. So, in order to recuperate this section of the working class, the only way is to build policies in terms of regional development, in terms of offering well-paid manual jobs, that the state offers qualified, secure manual jobs. Otherwise, it is obvious that there are material interests that will push these workers towards the right because of its postures against globalization.
LSVL - Yes definitely. Recently, Jacobin published a poll conducted by Yougov, in which they studied the reaction of the working class people vis-à-vis different political messages. And the conclusion was that the agenda you described - regional development, creating new jobs... - was much more likely to win their votes than a discourse focused on identity politics.
I think we unfortunately tend to read everything through the lense of identity politics nowadays. It has led to very vicious conflicts between alleged « culturally progressive » and « culturally conservative » people. But this is actually more of a war inside the middle class than one that involves the working class. It is true that workers living outside of big cities may have a more conservative outlook, and it has always been the case. But in the past, the left had an economic offer that was alluring enough for these people to set aside their cultural or social concerns. By voting for the left, they could obtain something the right could not give them. So, in a sense, the same needs to happen now. There is no way to win back these people by attacking immigrants or by adopting a very shallow patriotism that doesn't have any economic substance, as is for example the case of Keir Starmer here in the UK.[book-strip index="2" style="buy"]