What is to be done? Political priorities for progressives
The ascendancy of the 1% has been stalled by the revolt of the abandoned, alienated and excluded, symbolised by Brexit and Trump, Islamic State and the mass trek of millions desperate for a better life, away from poverty and war.
The revolt of the abandoned reflects the insecurity and corruption of the global economy, which in turn reflects the basic instabilities of neoliberal capitalism and the rising imbalances of economic globalisation.
However, the changing configurations of political forces will not necessarily lead to a more equitable, more sustainable and more convivial world. The July 2 federal elections in Australia revealed a widening polarisation of the political spectrum: a movement to the Left (the Greens) and to the Right (One Nation) and a movement away from the centrist duopoly (the nice and the nasty neoliberals at the middle of the spectrum). This political polarisation is evident in other countries. The continuing rise of neo-fascism (xenophobia, violence, environmental neglect) cannot be dismissed. This would involve further movement from the political centre to the Right as the abandoned, alienated and excluded are increasingly disillusioned with the humanist promises of the Enlightenment legacy.
Progressive forces need to offer a powerful alternative: understanding, hope, and practical pathways of change. The fundamental challenge is movement building: social, political and cultural movements; movements for security, sustainability and solidarity; movement activism which crosses borders and boundaries; activism inspired by hope and guided by understanding.
The forces and dynamics which motivate the global political economy are complex and in many respects can only be perceived clearly at the global scale. However, the experiences which motivate people to engage politically and the opportunities for political action are intrinsically local. The task of bridging across the global and the local is both cultural and cognitive. It is cultural in that it calls for solidarity across boundaries; the sharing of local experiences and collaboration which addresses the problems so shared. It is also cognitive in that an understanding of the structures of economic globalisation is critical for making sense of the many locals and for developing shared programs of action which reach from the local to the global.
Class analysis, adapted to contemporary globalisation, is critical. At one pole is the transnational capitalist class, a richly networked, self-aware class comprising the owners and managers of big business, and their political hangers-on (the 1%). Counter-posed to the 1% are the much more dispersed, and nationally-oriented working classes, middle classes and marginalised classes. These classes, the global 99%, lack the shared identity and communication channels of the transnational capitalist class. Fragmentation and dispersal mitigate against identification and solidarity and deliberate collective action.
Macroeconomics is a key battleground with a global ideological machine promulgating the mythologies of neoclassical economics. One of the critical issues here concerns the role of the banks (and the financial sector more broadly). Neoclassical economics positions the banks as simply mediators between lenders and borrowers. The role of the banks in creating debt, de novo, is ignored. Accordingly neoclassical economists refuse to recognise the critical role of private debt in generating the instabilities and prolonged stagnation of modern capitalist economies.
The global economy is slipping into a crisis of over-production (and under-consumption). We can produce more stuff for more people with fewer workers (relatively) than ever before. This is fine except that fewer workers means slowing demand because fewer people have wages to buy stuff. Slowing demand would drag down profits except for rising credit creation through the financial sector; credit which supports speculation and debt fuelled demand (and a continuing tithe to the rent seekers of the financial sector). Asset bubbles follow which lead to financial crisis when the brakes are applied to private debt creation and the bubble bursts. Prolonged stagnation follows as business pays down debt and the government buys and writes off debt. Economic contraction and austerity see widening inequality and recurrent crises contribute to further uncertainty and insecurity.
These are dynamics which operate within national economies. However, with continuing economic integration and the domination of the global economy by transnational corporations a further range of system adjustments are available to the capitalists. The transnational capitalist class seeks to shore up its position in the face of instability and slowing growth by not paying taxes, demanding small government and privatisation, forcing wages down (for those who still have jobs) and externalising production costs to the environment (deferring action on climate change). The global supply chain enables transnational corporations to force countries to compete for investment and jobs by offering lower taxes (small government, privatisation) and lower wages (deregulated labour markets) and guarantees against government regulation (including the regulation of greenhouse gas production). Critical to this program are the trade deals which drive economic integration, raise the rent on intellectual property rights, and prevent government regulation of transnational capitalist enterprise.
An economic program for the 99% will include far reaching economic reforms at the national and global levels to address the instabilities and imbalances which are leading to widening inequality and environmental degradation. These reforms will include: inclusive, steady-state economies, containment of the financial sector, and the development of local, national and regional value chains releasing the grip of the transnational behemoths. A cultural and social program directed to fostering existential security is also needed. This personal and community security is a precondition for thinking generously beyond self; empathising and collaborating with a myriad of others in their different contexts and localities.