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Can We Learn Anything from Keynesianism Right Now?

by Geoff Mann on April 5, 2017

A dread smoldering in the hearts of many who identify with the Left burst into flames when Donald Trump captured the White House in November 2016. Brexit was scary; this was downright terrifying. There were those who cautioned against panic; they tried to assure us not to make too much of this one election. Republicans and Democrats, English Conservatives and French Socialists, they said, are all ultimately on the same neoliberal team. Trump and Boris Johnson are not symbols of a sea change, but just the latest variation on a theme—not a good or welcome theme, but a long-standing one nonetheless. And yet in the minds of most, Trump’s ascendancy is still an unmitigated, potentially irremediable, disaster. When George Bush, Jr. won in 2000, the Euro-American commentariat denounced the US electorate’s “stupidity”. When Trump won, they denounced it as “fascist”. There is a big difference, the difference between being duped and being spoken for.

However one might try to allay it by nitpicking over the popular vote, or the lack of an appealing anti-establishment Democratic alternative, the fact is panic is here. Just as with Brexit, that panic is the result of a situation in which the masses were given a choice, and, it seems, they chose myopia and hate. For many however, this was no surprise. On the contrary, it was to be expected. Because much of contemporary political wisdom—both “progressive” and conservative—is founded on the assumption that this fascist tendency always contaminates mass politics. Consequently, as I argue in In the Long Run We Are All Dead: Keynesianism, Political Economy and Revolution, suppressing it has been liberalism’s central organising principle for at least two hundred years.

We call this principle Keynesianism. It was not born in the Depression, and it did not die in the 1970s, but has always been, and remains, liberalism’s panic button, one it cannot live without. All Keynesians believe that if there is one thing that is not new with Trump, it is that “civilization” itself is at risk of the violence and disorder and demagoguery always latent in “the people”. For Keynesians, civilization is always at risk. We are just that much closer to the precipice today because ruling elites refuse to recognize the “collective death wish” that is neoliberalism.

Clearly, for anyone to the left of Paul Ryan the results of the US election represent a political failure. The nature and causes of that failure are much less clear. It seems to me completely inadequate to understand Brexit or Trump as simply a political punctuation point in the unfolding economic crisis, as if the ongoing decline of purchasing power and rising wealth and inequality produced this situation on their own. If the white working classes were “left behind” by the liberal elite—and some of them surely were—they were not abandoned on strictly “economic” terrain. It is also true that only at the most superficial level could one derive the current political conjuncture from our volatile financialised world. The current situation is not in any useful way attributable to underconsumption or overaccumulation, and the idea that Trump’s victory is thus due to the Right’s capacity to connect on the only meaningful ground remaining—cultural conservatism—is just as hand-wavey an explanation.

Keynes himself, like Hegel before him, is often considered an underconsumptionist, his ideas reduced to a single narrative in which collapsing demand begins a vicious cycle of reduced investment and declining economic activity. Consumption matters, certainly, but neither Keynes nor Hegel would have put it at the base of their explanatory schemes. For both of them the real problem was underemployment, in the sense of a dearth of adequate employment opportunities. The difference has profound implications. The problem with capitalism on this view is not that it doesn’t put enough money in the right hands (hands that will spend it); the problem with capitalism is that it cannot find or produce a meaningful place for all. The Keynesian logic to which both adhered made fixing this—in however short-term a manner—the highest priority. The problem was not the wage rate or share, either. Both were all for people working for lower wages if that were possible. The problem as they saw it wasn’t that workers didn’t earn more or were unwilling to earn less—especially in a downturn, there were millions who would take a job at much less than the going rate—the problem was that there were just not enough jobs, and the free market was never going to produce them.

For Keynes, Hegel, and all other Keynesians, a meaningful place in the social order is a precondition for honour or dignity. The dire outcome of underemployment is not only poverty, but dishonour. On the Keynesian account, poverty on its own is inevitable, and (on this view) not necessarily a problem. But dishonoured masses—a hateful rabble—now that’s a problem for civilization, and money cannot necessarily fix it, especially retroactively. So the issue is ultimately not only “economic”, nor is it only “cultural”—it is political.

Neither Keynes nor Hegel was a radical thinker, but there is wisdom in this. It changes how we look at data that might seem confusing—the number of women or Latinos that voted for Trump, or the relatively high income his average supporter enjoys (USD $72,000; $62,000 for Clinton voters)—by focusing our attention on the failure of liberal capitalism’s ideological project. Indeed, it demonstrates the failure of its status as a project. It is really an incoherent mess of political naïveté, class hubris and ad hoc accumulation. In the wake of this anti-project, it is not only the mythical “white working classes” that understand themselves as stripped of their dignity, but millions of other self-identified victims whose “interests” many think are completely opposed to those of Trump and Theresa May. A substantial chunk of their support comes from people who have, from a straightforward income or wealth perspective, not done at all poorly since the (Bill) Clinton years, people who, it seems, “should” have voted for (Hilary) Clinton.

I think this points to one of the most important lessons we can and must learn from 2016. The political-economic scaffolds on which our communities hang are not just about the functional articulation of production, distribution and consumption. They are about legitimation, and legitimacy is impossible in a world full of people who understand themselves as dishonoured. We must, I think, respond to the present calamity by working to find a way of affirming the dignity of all, while also refusing the tempting expediency of re-engineering the legitimacy of a system that generates dishonour endogenously. The point cannot be to give the dishonoured masses sufficient dignity to pull back from the precipice and re-cement some milder version of the existing social order. That is the Keynesian urge, and it must be resisted. Nor, of course, can it involve the acquiescence or endorsement of a nationalist-racist vindictive urge in defence of “solidarity” with the disenfranchised. But we must also acknowledge the alienation of millions, not ridicule or dismiss it in the hope that they will be shamed into suppressing it. We have to oppose racism and imperialism, gendered and other oppressions, and the destruction of the planet’s ecosystems, but if that is not conjoined with a longer-term politics that can include more that just those who understand themselves as on the righteous side of history, it will never work.

The fact of the matter is that we are confronted with a moment in which that the meaning of dignity for many is almost totally defined by an order—liberal capitalism—that is doomed. That search for dignity breeds desperation, and not just on the Right. I feel certain that any effort to construct a kinder liberal capitalism in the long run is as sure to fail as Trump’s know-nothing call to roll back history to the way we never were. A somewhere-close-to-peaceful and just transition to what comes after liberal capitalism is impossible without a compelling alternative conception of what it means to live a dignified life. As long as we find ourselves hoping that the masses won’t be handed the ship’s helm in a storm because we are terrified they will run us aground on the shoals of fascism or the Terror, we will know that alternative is not yet recognisable.

Geoff Mann
Geoff Mann is a professor of economic geography at Simon Fraser University. His research and teaching concern the political economy of contemporary capitalism, with a particular focus on the politics of macroeconomic policy, the interaction of economic governance and efforts to address climate change, and social and political theory. His most recent books are In the Long Run We Are All Dead: Keynesianism, Political Economy and Revolution (Verso, 2017); The General Theory of Employment, Interest and Money: A Reader’s Companion (Verso, 2017); and Disassembly Required: A Field Guide to Actually Existing Capitalism (AK Press, 2013). Money and Finance After the Crisis: Critical Thinking for Uncertain Times (Wiley), co-edited with Brett Christophers and Andrew Leyshon, will appear at the end of 2017.
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