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The end of a dream

Unreality is the defining feature of the fashionable ideas of the past decade. Perhaps only a more s

To look back on the ideas that shaped the past decade is to survey a scene of wreckage. Ten years ago, the best and the brightest were believers in the "Washington consensus" - the idea that the debt-fuelled free market that had existed in the US for little more than a decade was the only economic system consistent with the imperatives of modernity, and destined to spread universally.

It was not only the neocon right that believed this. Centre-left parties, whose historical role had been to set limits on free markets, bought in to this idea with enthusiasm. When Bill Clinton and Tony Blair embraced neoliberal economics, they did more than triangulate policies for the sake of electoral advantage. They endorsed the belief that a bubble engineered by Alan Greenspan at the end of the 1990s, when he lowered interest rates to artificial levels after the blow-up of a hedge fund, represented a new era in economic history. Both the triangulating politicians and many left-of-centre commentators became convinced that, for all practical purposes, neoliberal capitalism was indestructible.

For anyone with a sense of history, the idea that a post-cold-war bubble embodied a new world order was obviously absurd. The built-in instability of capitalism had not gone away - it had been accentuated, as the US and other western economies became ever more dependent on unsustainable debt. Far from being in­destructible, the neoliberal market order was highly fragile. But millennial fantasies regarding a short-lived variety of capitalism were far from being the only delusional beliefs that helped shape events during the decade.

Closely related was liberal interventionism - the policy, set out by Tony Blair in his 1999 Chicago speech on foreign policy, of using military force to spread liberal democracy. Here the delusions were multilayered, and first among them was a dream about America. Again, it was not only the right that bought in to a fantasy. For large sections of the left, the US in the first decade of the century had a role similar to that played in the progressive imagination by the USSR in earlier periods: for all its faults, the US was the world's emancipatory power, and the current embodiment of the best human hopes.

The delusive quality of this view lay not so much in the comical notion that universal freedom could be spearheaded by the witless figure of George W Bush, as in an unrealistic estimate of America's position in the world. US imperial overstretch had already been identified in 1987 by Paul Kennedy in his book The Rise and Fall of the Great Powers, but this weakness was forgotten in the triumphalism that surrounded the collapse of the Soviet Union. Not only did the US lack the skills needed to maintain its imperial role, but increasingly it was a role the US could not afford. Both these facts were brutally confirmed in the invasion of Iraq. Confident that liberal democracy would emerge of its own accord once tyranny had been overthrown, the Bush administration was unprepared for the sectarian warfare and near-anarchy that predictably erupted when Saddam Hussein's regime was destroyed. It was equally unprepared for the ruinous cost of the war, which was launched on the assumption that the price of oil would fall after regime change, setting off another global boom and making the entire exercise self-financing. The actual result was that the Americans racked up even more debt and the decline of US power accelerated.

Fashionable theories of globalisation had the effect of blocking the perception of American decline. From the late 1990s onwards, the idea that globalisation and Americanisation were one and the same became something like conventional wisdom, the New York Times correspondent Thomas Friedman pushing the equation in his bestselling books The Lexus and the Olive Tree (1999) and The World Is Flat (2005). The actual effect of globalisation is to transfer economic power to emerging countries with different models of capitalism, but for those who shared Friedman's dreamworld, globalisation was no more than the Anglo-American free market writ large. It was a notion that could persist only so long as the crisis was confined to powerless countries on the periphery of the system, such as Argentina and Thailand. It began to dissipate when the US financial system itself started to implode from mid-2007 onwards. Having run down and sold off much of its productive base, the US found itself the centre of a type of finance capitalism that was practically bankrupt.

It is not often that large-scale crises are due to intellectual error, but a single erroneous belief runs through all of the successive delusions of the past decade. With few exceptions, both left and right seem to think that history is a directional process whose end point - after many unfortunate detours - will be the worldwide duplication of people very like themselves. At the end of the decade, opinion-formers in Britain, the United States and continental Europe still imagine that the normal pattern of historical development leads eventually to an idealised version of western society, just as Francis Fukuyama forecast 20 years ago.

But whereas this confidence-boosting notion was still genuinely believed a decade ago, today it is a kind of comfort blanket against an unfamiliar world. The reality, which is that western power is in retreat nearly everywhere, is insistently denied. Yet the rise of China means more than the emergence of a new great power. Its deeper import is that the ideologies of the past century - neoliberalism just as much as communism - are obsolete. Belief systems in which the categories of western religion are reproduced in the guise of pseudo-science, they are redundant in a world where the most rapidly advancing nation state has never been monotheist. Western societies are well worth defending, but they are not a model for all of humankind. In future they will be only one of several versions of tolerable modernity.

For secular western intellectuals to accept this fact would rob their life of meaning. Huddled in the tattered blanket of historical teleology, which tells them they are the leading lights of humanity, they screen out any development that demonstrates their increasing irrelevance. Religion is resurgent in many parts of the world, not least emerging powers such as Brazil and China, but for the secular intelligentsia this is just an unfortunate lag, a temporary setback in humanity's slow march to join them on the sunlit uplands of reason. The hysterical stridency of evangelical atheism - one of the most characteristic phenomena of the Noughties - is symptomatic of a pervasive cognitive dissonance. Like everyone else, these intellectuals assert their beliefs all the more adamantly when the only reason for holding them is a well-founded suspicion that they are not true.

Unreality is the defining feature of the ideas that have been in vogue over the past decade. The grandiose delusions with which the new century began have not been abandoned. Instead, they have been shrunk to a size at which they can still be maintained. The small world of British politics provides many examples of this tendency. Rather than acknowledge that neoliberalism has failed, politicians in all three main parties are seizing on a succession of intellectual gimmicks for solutions to the problems that the ideology has created. Gladwell's blink, Sunstein and Thaler's nudge, the wisdom of crowds - these and other ephemera of the airport bookstore are being taken up, promoted and then forgotten in the floundering attempt to deal with a crisis that is only in its early stages.

The intellectual default of politicians cannot be remedied by returning to the ideologies of the past. It is shared by much of the public, and comes from a chronic inability to engage with reality. Perhaps only a more serious crisis will overturn the delusive fancies on which so many policies are based. A run on sterling in the event of a hung parliament after the next general election; the cataclysmic defeat that will follow Barack Obama's decision to reinforce inevitable failure in Afghanistan; a spiral in oil prices after a flare-up over Iran; the collapse of the dollar as the world finally loses patience with American solipsism - any one of these eventualities, together with others that cannot be foreseen, could be a catalyst for rethinking.

But the omens are not encouraging. The make-believe that surrounds climate change - epitomised in the empty statements of intent regarding unachievable goals that will be the only outcome of the Copenhagen meeting - shows that the biggest challenge for the future is being evaded. It looks as if we may be wandering in the ruins of the Noughties for some time.

John Gray is the New Statesman's lead book reviewer. A new edition of his "False Dawn: the Delusions of Global Capitalism", which first appeared in 1998, was published by Granta Books in October (£8.99)

The ideas that shaped a decade

Neoliberalism: Three policies central to the neoliberal "Washington consensus" were low taxation, privatisation and the deregulation of financial services. Key thinkers: Friedrich Hayek, Milton Friedman, Robert Nozick.

Neoconservatism: The term was originally applied to disillusioned liberal critics of the welfare state. By the beginning of the 21st century, neoconservatism was associated principally with an aggressive US foreign policy. Key thinkers: Henry "Scoop" Jackson, Leo Strauss.

Political Islam: "Islamism", or political Islam, is dominated by two distinct and extreme strands of thought: the Salafist or Saudi Wahhabi tradition; and the work of Sayyid Qutb, who saw Islam as a political movement based on Quranic principles and from whom Osama Bin Laden derived the doctrine of violent jihad. Key thinkers: Sayyid Qutb, Mohammad Ibn Abdul Wahhab, Ayman al-Zawahiri.

John Gray is the New Statesman’s lead book reviewer. His latest book is The Soul of the Marionette: A Short Enquiry into Human Freedom.

This article first appeared in the 14 December 2009 issue of the New Statesman, The Muslim Jesus

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The New Times: Brexit, globalisation, the crisis in Labour and the future of the left

With essays by David Miliband, Paul Mason, John Harris, Lisa Nandy, Vince Cable and more.

Once again the “new times” are associated with the ascendancy of the right. The financial crash of 2007-2008 – and the Great Recession and sovereign debt crises that were a consequence of it – were meant to have marked the end of an era of runaway “turbocapitalism”. It never came close to happening. The crash was a crisis of capitalism but not the crisis of capitalism. As Lenin observed, there is “no such thing as an absolutely hopeless situation” for capitalism, and so we discovered again. Instead, the greatest burden of the period of fiscal retrenchment that followed the crash was carried by the poorest in society, those most directly affected by austerity, and this in turn has contributed to a deepening distrust of elites and a wider crisis of governance.

Where are we now and in which direction are we heading?

Some of the contributors to this special issue believe that we have reached the end of the “neoliberal” era. I am more sceptical. In any event, the end of neoliberalism, however you define it, will not lead to a social-democratic revival: it looks as if, in many Western countries, we are entering an age in which centre-left parties cannot form ruling majorities, having leaked support to nationalists, populists and more radical alternatives.

Certainly the British Labour Party, riven by a war between its parliamentary representatives and much of its membership, is in a critical condition. At the same time, Jeremy Corbyn’s leadership has inspired a remarkable re-engagement with left-wing politics, even as his party slumps in the polls. His own views may seem frozen in time, but hundreds of thousands of people, many of them young graduates, have responded to his anti-austerity rhetoric, his candour and his shambolic, unspun style.

The EU referendum, in which as much as one-third of Labour supporters voted for Brexit, exposed another chasm in Labour – this time between educated metropolitan liberals and the more socially conservative white working class on whose loyalty the party has long depended. This no longer looks like a viable election-winning coalition, especially after the collapse of Labour in Scotland and the concomitant rise of nationalism in England.

In Marxism Today’s “New Times” issue of October 1988, Stuart Hall wrote: “The left seems not just displaced by Thatcherism, but disabled, flattened, becalmed by the very prospect of change; afraid of rooting itself in ‘the new’ and unable to make the leap of imagination required to engage the future.” Something similar could be said of the left today as it confronts Brexit, the disunities within the United Kingdom, and, in Theresa May, a prime minister who has indicated that she might be prepared to break with the orthodoxies of the past three decades.

The Labour leadership contest between Corbyn and Owen Smith was largely an exercise in nostalgia, both candidates seeking to revive policies that defined an era of mass production and working-class solidarity when Labour was strong. On matters such as immigration, digital disruption, the new gig economy or the power of networks, they had little to say. They proposed a politics of opposition – against austerity, against grammar schools. But what were they for? Neither man seemed capable of embracing the “leading edge of change” or of making the imaginative leap necessary to engage the future.

So is there a politics of the left that will allow us to ride with the currents of these turbulent “new times” and thus shape rather than be flattened by them? Over the next 34 pages 18 writers, offering many perspectives, attempt to answer this and related questions as they analyse the forces shaping a world in which power is shifting to the East, wars rage unchecked in the Middle East, refugees drown en masse in the Mediterranean, technology is outstripping our capacity to understand it, and globalisation begins to fragment.

— Jason Cowley, Editor 

Tom Kibasi on what the left fails to see

Philip Collins on why it's time for Labour to end its crisis

John Harris on why Labour is losing its heartland

Lisa Nandy on how Labour has been halted and hollowed out

David Runciman on networks and the digital revolution

John Gray on why the right, not the left, has grasped the new times

Mariana Mazzucato on why it's time for progressives to rethink capitalism

Robert Ford on why the left must reckon with the anger of those left behind

Ros Wynne-Jones on the people who need a Labour government most

Gary Gerstle on Corbyn, Sanders and the populist surge

Nick Pearce on why the left is haunted by the ghosts of the 1930s

Paul Mason on why the left must be ready to cause a commotion

Neal Lawson on what the new, 21st-century left needs now

Charles Leadbeater explains why we are all existentialists now

John Bew mourns the lost left

Marc Stears on why democracy is a long, hard, slow business

Vince Cable on how a financial crisis empowered the right

David Miliband on why the left needs to move forward, not back

This article first appeared in the 22 September 2016 issue of the New Statesman, The New Times