The plot against liberal America

In its pursuit of a free-market utopia, the US right tried to crush unions, the legal profession and

The most cherished dream of conservative Washington is that liberalism can somehow be defeated, finally and irreversibly, in the way that armies are beaten and pests are exterminated. Electoral victories by Republicans are just part of the story. The larger vision is of a future in which liberalism is physically barred from the control room - of an "end of history" in which taxes and onerous regulation will never be allowed to threaten the fortunes private individuals make for themselves. This is the longing behind the former White House aide Karl Rove's talk of "permanent majority" and, 20 years previously, disgraced lobbyist Jack Abramoff's declaration to the Republican convention that it's "the job of all revolutions to make permanent their gains".

When I first moved to contemplate this peculiar utopian vision, I was struck by its apparent futility. What I did not understand was that beating liberal ideas was not the goal. The Washington conservatives aim to make liberalism irrelevant not by debating, but by erasing it. Building a majority coalition has always been a part of the programme, and conservatives have enjoyed remarkable success at it for more than 30 years. But winning elections was not a bid for permanence by itself. It was only a means.

The end was capturing the state, and using it to destroy liberalism as a practical alternative. The pattern was set by Margaret Thatcher, who used state power of the heaviest-handed sort to implant permanently the anti-state ideology.

"Economics are the method; the object is to change the soul," she said, echoing Stalin. In the 34 years before she became prime minister, Britain rode a see-saw of nationalisation, privatisation and renationalisation; Thatcher set out to end the game for good. Her plan for privatising council housing was designed not only to enthrone the market, but to encourage an ownership mentality and "change the soul" of an entire class of voters. When she sold off nationally owned industries, she took steps to ensure that workers received shares at below-market rates, leading hopefully to the same soul transformation. Her brutal suppression of the miners' strike in 1984 showed what now awaited those who resisted the new order. As a Business Week reporter summarised it in 1987: "She sees her mission as nothing less than eradicating Labour Party socialism as a political alternative."

In their own pursuit of the free-market utopia, America's right-wingers did not have as far to travel as their British cousins, and they have never needed to use their state power so ruthlessly. But the pattern is the same: scatter the left's constituencies, hack open the liberal state and reward friendly businesses with the loot.

Grover Norquist, one of the most influential conservatives in Washington and the "field marshal of the Bush plan", according to the Nation magazine, has been most blunt about using the power of the state "to crush the structures of the left". He has outlined the plan countless times in countless venues: the liberal movement is supported by a number of "pillars", each of which can be toppled by conservatives when in power. Among Norquist's suggestions has been the undermining of defence lawyers - who in the US give millions of dollars to liberal causes - with measures "potentially costing [them] billions of dollars of lost income". Conservatives could also "crush labour unions as a political entity" by forcing unions to get annual written approval from every member before spending union funds on political activities. His coup de grâce is that the Democratic Party in its entirety would become "a dead man walking" with the privatisation of social security.

Much of this programme has already been accomplished, if not on the precise terms Norquist suggested. The shimmering dream of privatising social security, though, remains the great unreachable right-wing prize, and the right persists in the campaign, regardless of the measure's unpopularity or the number of political careers it costs. President Bush announced privatisation to be his top priority on the day after his re-election in 2004, although he had not emphasised this issue during the campaign. He proceeded to chase it deep into the land of political unpopularity, a region from which he never really returned.

He did this because the potential rewards of privatising social security justify any political cost. At one stroke, it would both de-fund the operations of government and utterly reconfigure the way Americans interact with the state. It would be irreversible, too; the "transition costs" in any scheme to convert social security are so vast that no country can consider incurring them twice. Once the deal has been done and the trillions of dollars that pass through social security have been diverted from the US Treasury to stocks in private companies, the effects would be locked in for good. First, there would be an immediate flood of money into Wall Street; second, there would be an equivalent flow of money out of government accounts, immediately propelling the federal deficit up into the stratosphere and de-funding a huge part of the federal activity.

Business elites

The overall effect for the nation's politics would be to elevate for ever the rationale of the financial markets over such vague liberalisms as "the common good" and "the public interest". The practical results of such a titanic redirection of the state are easy to predict, given the persistent political demands of Wall Street: low wage growth, even weaker labour organisations, a free hand for management in downsizing, in polluting, and so on.

The longing for permanent victory over liberalism is not unique to the west. In country after country, business elites have come up with ingenious ways to limit the public's political choices. One of the most effective of these has been massive public debt. Naomi Klein has pointed out, in case after case, that the burden of debt has forced democratic countries to accept a laissez-faire system that they find deeply distasteful. Regardless of who borrowed the money, these debts must be repaid - and repaying them, in turn, means that a nation must agree to restructure its economy the way bankers bid: by deregulating, privatising and cutting spending.

Republicans have ridden to power again and again promising balanced budgets - government debt was "mortgaging our future", Ronald Reagan admonished in his inaugural address - but once in office they proceed, with a combination of tax cuts and spending increases, to inflate the federal deficit to levels far beyond those reached by their supposedly open-handed liberal rivals. The formal justification is one of the all-time great hoaxes. By cutting taxes, it is said, you will unleash such economic growth that federal revenues will actually increase, so all the additional government spending will be paid for.

Even the theory's proponents don't really believe it. David Stockman, the libertarian budget director of the first Reagan administration, did the maths in 1980 and realised it would not rescue the government; it would wreck the government. This is the point where most people would walk away. Instead, Stockman decided it had medicinal value. He realised that with their government brought to the brink of fiscal collapse, the liberals would either have to acquiesce in the reconfiguration of the state or else see the country destroyed. Stockman was candid about this: the left would "have to dismantle [the government's] bloated, wasteful, and unjust spending enterprises - or risk national ruin".

This is government-by-sabotage: deficits were a way to smash a liberal state. The Reagan deficits did precisely this. When Reagan took over in 1981, he inherited an annual deficit of $59bn and a national debt of $914bn; by the time he and his successor George Bush had finished their work, they had quintupled the deficit and pumped the debt up to more than $3trn. Bill Clinton called the deficit "Stockman's Revenge" - and it domin ated all other topics within his administration's economic teams. With the chairman of the Federal Reserve Alan Greenspan himself speaking of "financial catastrophe" unless steps were taken to control Reagan's deficit, Clinton was soon a convert. He got tough with the federal workforce.

So-called virtues

George W Bush proceeded to plunge the budget into deficit again. Indeed, after seeing how the Reagan deficit had forced Clinton's hand, it would have been foolish for a conservative not to spend his way back into the hole as rapidly as possible. "It's perfectly fine for them to waste money," says Robert Reich, a former labour secretary to Bill Clinton, summarising the conservative viewpoint. "If the public thinks government is wasteful, that's fine. That reduces public faith in government, which is precisely what the Republicans want."

In 1964, the political theorist James Burnham diagnosed liberalism as "the ideology of western suicide". What Burnham meant by this was that liberalism's so-called virtues - its openness and its insistence on equal rights for everyone - made it vulnerable to any party that refuses to play by the rules. The "suicide" that all of this was meant to describe was liberalism's inevitable destruction at the hands of communism, a movement in whose ranks Burnham had once marched himself. But his theory seems more accurately to describe the stratagems of its fans on the American right. And the correct term for the disasters that have disabled the liberal state is not suicide, but vandalism. Loot the Treasury, dynamite the dam, take a crowbar to the monument and throw a wrench into the gears. Slam the locomotive into reverse, toss something heavy on the throttle, and jump for it.

Mainstream American political commentary customarily assumes that the two political parties do whatever they do as mirror images of each other; that if one is guilty of some misstep, the other is equally culpable. But there is no symmetry. Liberalism, as we know it, arose out of a compromise between left-wing social movements and business interests. It depends on the efficient functioning of certain organs of the state; it does not call for all-out war on private industry.

Conservatism, on the other hand, speaks not of compromise, but of removing its adversaries from the field altogether. While no one dreams of sawing off those branches of the state that protect conservatism's constituents - the military, the police, legal privileges granted to corporations - conservatives openly fantasise about doing away with the bits of "big government" that serve liberal ends. While de-funding the left is the north star of the conservative project, there is no comparable campaign to "de-fund the right"; indeed, it would be difficult to imagine one.

"Over the past 30 years, American politics has become more money-centred at exactly the same time that American society has grown more unequal," the political scientists Jacob Hacker and Paul Pierson have written. The resources and organisational heft of the well-off and hyper-conservative have exploded. But the org anisational resources of middle-income Amer icans . . . have atrophied. The resulting inequality has greatly benefited the Republican Party while drawing it closer to its most affluent and extreme supporters."

In this sense, conservative Washington is a botch that keeps on working, constructing an imbalance that will tilt our politics rightward for years, a plutocracy that will stand, regardless of who wins the next few elections. And as American inequality widens, the clout of money will only grow more powerful.

As I write this, the lobbyist-fuelled conservative boom of the past ten years is being supplanted by a distinct conservative bust: like the real-estate speculators who are dumping properties all over the country, conservative senators and representatives are heading for the revolving door in record numbers.

Plutocracy

The Democrats who have taken their place are an improvement, certainly, but for the party's more entrepreneurial leaders electoral success in 2006 was merely an opportunity to accelerate their own courtship of Washington's lobbyists, think-tanks and pressure groups staked out on K Street. Democratic leaders have proved themselves the Republicans' equals in circumvention of campaign finance laws.

Throwing the rascals out is no longer enough. The problem is structural; it is inscribed on the map; it glows from the illuminated logos on the contractors' office buildings; it is built into the systems of governance themselves. A friend of mine summarised this concisely as we were lunching in one of those restaurants where the suits and the soldiers get together. Sweeping his hand so as to take in our fellow diners and all the contractors' offices beyond, he said, "So you think all of this is just going to go away if Obama gets in?" This whole economy, all these profits?

He's right, of course; maybe even righter than he realised. It would be nice if electing Democrats was all that was required to resuscitate the America that the right flattened, but it will take far more than that. A century ago, an epidemic of public theft persisted, despite a long string of reformers in the White House, Republicans and Democrats, each promising to clean the place up. Nothing worked, and for this simple reason: democracy cannot work when wealth is distributed as lopsidedly as theirs was-and as ours is. The inevitable consequence of plutocracy, then and now, is bought government.

This is an edited extract from Thomas Frank's "The Wrecking Crew", published this month by Harvill Secker (£14.99)

© Thomas Frank, 2008

This article first appeared in the 18 August 2008 issue of the New Statesman, Superpower swoop

Photo: STEFAN BONESS/PANOS
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What Britain needs to understand about the profound and ancient divisions in Germany

As Angela Merkel campaigns for re-election, the balance of power in Europe is changing.

On 24 September, Angela Merkel will be re-elected chancellor of Germany and that, we might think, will be that. With Merkel and France’s Emmanuel Macron in control of the European project, populism will surely be vanquished and the old Franco-German core of the EU restored. Yet things are changing, and if western Europe wants Germany to keep singing “Ode to Joy” as enthusiastically as “Deutschlandlied”, it will have some work to do. Our Brexit negotiators need to see how important this is to Macron, to other European leaders and, above all, to thinking Germans.

For we may all soon miss the old, self-effacing Germany. Despite having such economic power, it always seemed to have no greater wish than to exist as part of a larger whole. Konrad Adenauer, its first postwar chancellor and founding father, made Westbindung (“binding to the West”) the heart of West German politics. Adenauer came from the deeply Catholic Rhineland, “amid the vineyards” as he put it, “where Germany’s windows are open to the West”. His instinctive cultural sympathy was with France, but he knew that West Germany’s existence depended on keeping America in Europe. France he courted out of profound conviction, the US out of clear-eyed necessity, and he was worried that after him this twin course might be abandoned. His demands for reassurance during his final year in office led to John F Kennedy’s “Ich bin ein Berliner” speech of 1963. Every West German knew about that, and about the Berlin Airlift: these became locations of national memory from which West Germany triangulated its sense of self.

There were some Germans for whom this was too much. Anti-Americanism was ingrained among West Germany’s hard left, the early Green Party and the tiny hard right. But even Germans who were suspicious of America had no fear of tying themselves closer to Europe. On the contrary, that was exactly what they wanted. The standard explanation of this is guilt. West Germans, in this argument, felt so remorseful about the horrors of the Second World War that they wanted to make amends. This idea fitted with others’ belief that Germany did indeed have much to feel guilty about.

A nuanced version of this held that the western Germans thought they had somehow “got away with it”, compared with their brethren in the east, who had felt the weight of Soviet vengeance: rape, pillage, occupation. Accordingly, Germany’s willingness to subsume itself so thoroughly, even as it footed the bills for the European Economic Community and later the European Union, was accepted with little gratitude, almost as an ongoing war debt repayment.

This guilt thesis is based on a misunderstanding of German history, especially of the experience of western Germans. The most graphic illustration of this comes from Adenauer. In 1955, he privately informed the British that while he was obliged to act in public as though he wished for reunification, he intended to devote his remaining years to blocking it. In 1961, he secretly proposed to the Americans that they offer the Russians a swap: they and he should, he said, give up West Berlin in return for Thuringia (the region containing Leipzig and Weimar). He wanted, in effect, to make the River Elbe the eastern border of Germany.

Why did Adenauer dislike the eastern Germans, think Berlin was expendable and consider the River Elbe to be the natural frontier? Simple: he knew that the Elbe was Germany’s Mason-Dixon line. Beyond it lay the flat, grim Prussian heartlands, which until 1945 stretched into present-day Russia. This vast region was known to Germans as “Ostelbien” – East Elbia. Adenauer viewed the “unification” of Germany in 1871 as East Elbia’s annexation of the west. That’s why in 1919, as mayor of Cologne, and again in 1923, he tried to get Britain and France to back a breakaway western German state. Having failed, he is said to have muttered, “Here we go, Asia again,” and closed the blinds every time his train crossed east over the Elbe.

Prussia was a different country. The victorious Allies agreed. On 25 February 1947, they declared: “The Prussian state, which from early days has been a bearer of militarism and reaction in Germany… together with its central government and all its agencies are abolished.” The name Prussia was eradicated. The Prussian hegemony of 1871-1945, an anomaly in the two millennia of German history, was over.

If we understand this, we understand what West Germany really was and why it acted as it did; why the “reunification” of 1990 – or, at least, the way it was handled – was such a mistake; why we may all have to stop taking Germany quite so much for granted now that East Elbia is back; and why our Brexit negotiators are on a hiding to nothing if they believe that the Germans have no more urgent business to consider than their car exports to us. Far more important to liberal Germans is keeping safe the western soul of Germany.

***

West Germany was anything but an artificial construct. It was the historical Germany, being almost geographically identical to what was, for almost 1,200 years, the only Germany. Julius Caesar named the land, together with its people, in 58 BC; 49 years later, Drusus, the greatest commander of the infant Roman empire, is said to have been supernaturally advised that after defeating every tribe he met in Germania, he should halt at the River Elbe. By 100 AD, Roman rule was shown by a fortified border, the Limes Germanicus. You can still walk large stretches of it; it encompasses most of the richest land in modern Germany and all of the great cities except Hamburg, Berlin and the 19th-century industrial monocultures of the Ruhr. Even these last were born as trading posts or forward bases within what archaeologists call the “market region” of Germania – the lands beyond the limes where commerce with the Roman empire defined the whole culture. Southern and western Germany’s cultural roots are almost as Roman as France’s.

But what about 9 AD and the destruction of three Roman legions by the German tribes under Arminius? There is a popular myth that this kept all Germany free and different. We owe this idea to Martin Luther and his supporters: Luther claimed from 1520 onwards to be a German, anti-Roman hero and identified himself with the newly rediscovered tale of Arminius. More decisively, the events of 9 AD were an obsession of later Prussian historians, who had an interest in claiming that the real Germany was one that was pure and un-Romanised. Yet the reverse is true. Under the Romans, then the Merovingians, then the Franks, the Rhine/Danube super-region of Germany remained politically and culturally a part of western Europe. After Charlemagne, a Rhineland German, “restored the Roman empire” (as his seals put it) in 800 AD, western Germany was the very centre of things. It was never a nation state, but always the key part of a greater whole, the Holy Roman empire.

Along the Elbe, things were different. Charlemagne extracted tribute from the pagan Slavs across the river, and his successors tried to build on this, but the German conquest and settlement of East Elbia only really began with the Wendish Crusade of 1147, the northern arm of the Second Crusade. Three centuries later, the entire region was still hotly disputed by Balts and Slavs, with German supremacy threatened by major defeats at Tannenberg (1410) and in the Hussite Wars (1419-34).

Long-contested frontier lands breed a special kind of society. The German incomers cowed the natives, such as the pagan Pruscie from whom they ultimately borrowed their name, through brute force. Where they couldn’t, they had to make armed deals with local elites. In this new sort-of-Germany, the Junkers, an aggressive landowning caste, lorded it over the Slavs and Balts – as well as poorer Germans, who knew that the locals would cut their throats if the Junker castles fell, so were loyal and subservient to their masters. East Prussia remained like this within living memory.

In 1525, Prussia named itself and declared itself the first Protestant state. From then on, it had absolute rulers, the Hohenzollern dynasty, backed by a quiescent Lutheran state church. The Junkers swore loyalty in return for exclusive access to all officer-level jobs in the army and the administration. By the mid-18th century, Voltaire quipped that while other states had armies, the Prussian army had a state. The overriding strategic concern of Prussia was always with the east. In his 1758-59 campaigns, Frederick the Great was shocked to find the Russians extremely hard to beat. He bequeathed to his successors a policy of keeping the tsars onside. Partitioning Poland between them was the sticking plaster that masked this Russian-Prussian rivalry, right until 1941.

This thoroughly east-facing power was, by the normal standards of European statehood – history, social structures, religion, geography – a different country from the Rhineland, Swabia or Bavaria. It defeated them all in 1866, laying the ground for the “unification” of 1871. The Prussian empire (for that is what it was) could now enlist the wealth, industry and manpower of Germany in pursuit of its ancient goal: hegemony over north-eastern Europe. By 1887, the future imperial chancellor Bernhard von Bülow was already musing on how to destroy Russia “for a generation”, cleanse Prussia of its Poles, set up a puppet Ukrainian state and take the Prussian armies to the banks of the Volga. This is the bloody Prussian – not German – thread that leads directly to the Nazi onslaught of 1941. In 1945, that centuries-long struggle was settled, in almost inconceivable violence. Half of East Elbia was ruthlessly stripped of Germans and handed over to Poles or Russians; the rump became the German Democratic Republic (GDR), a mere satrap of the Red Army.

So while it is easy and comfortable to say that the otherness of eastern Germany today is the result of that 40-year Soviet occupation, history says otherwise. East Elbia has always been different. Take the voting patterns: from 1871 to 1933, East Elbia outside Berlin (always a left-liberal political island) was the main electoral reservoir for the authoritarian right. The Prussian Conservative Party under the empire, the Deutschnationale Volkspartei until 1928 and the Nazis from 1930 depended on rural and small-town East Elbian voters. It was they who (just) swung things in 1933, by going 50-60 per cent for the “Hitler coalition”. Had all Germany voted like the Rhineland or Bavaria, Hitler and his Junker allies would have got nowhere close to a majority. Small wonder that Adenauer didn’t want East Elbia back and was secretly delighted to have it safely fenced off behind the Iron Curtain.

***

West Germany (1949-90) – Germany shorn of Prussia – was, then, no historical fluke, and nor was the supra­national way it acted. This was the real Germany. But the hasty reunification of 1990 (there was no referendum or election on the issue) changed things. Why should the inhabitants of the former GDR, rather than Poles and Czechs, get immediate access to the wealth and benefits of the West? Because they were Germans. With that, the chancellor Helmut Kohl embraced the notion that being German overrode all considerations of social, economic or historical difference. He also subliminally revived the idea, common to the Second Empire and the Third Reich, that East Elbia was special and needed subsidising by the rich west of Germany. The director of the Bundesbank, Germany’s central bank, resigned in 1991 over this abandoning of economic sanity for political nationalism.

Since 1990, the former East Germany has received more than €2trn from the old West Germany, for a fast-ageing, shrinking and disproportionately male population of only 16 million, including Berlin. That’s the equivalent of a Greek bailout every year since 1990, and as a straight gift, not a loan. This represents a huge shift in financial priorities, overshadowing Germany’s annual net EU budget contribution (currently €15.5bn). In 1990, Kohl promised that western German aid would soon turn the new states into “blooming” areas, but they have become, instead, proof that age-old differences resist even the most gigantic subsidies.

Between 30 and 40 per cent of voters in East Elbia have declared over the past two years that at the general election, they intend to support either Alternative für Deutschland (Germany’s Ukip), Die Linke (heirs to the old East German Communist Party) or the all but openly neo-Nazi National Democratic Party (the NPD, currently represented in the Mecklenburg-Vorpommern state parliament). Though theoretical enemies, these three parties are united by cultural affinities: all despise economic liberalism, oppose Nato and the EU and want closer relations with Russia.

East Elbia no longer has the population to swing the entire German electorate of more than 61 million but many liberal western Germans are nervous. They recoil at the sight of anti-asylum-seeker attacks, which are proportionally far more common in East Elbia than in the west, or when they see Merkel heckled by right-wingers. They call East Elbia Dunkeldeutschland (“Dark Germany”) and joke bitterly that if Britain can have a Brexit, why can’t the old East Germans, whom they lump together under the name of Saxons, have a “Säxit”? But it’s no laughing matter. They know there are those only too aware of any anti-western drift in Germany and eager to give succour to it.

Alexander Saldostanov, the rabid leader of Russia’s “Night Wolves” bikers and a public friend of Vladimir Putin, recently told Germany’s bestselling daily, Bild, that he dreams of a grand union between Germany and Russia: “We have so much in common. You simply have to free yourself at last from America, that scourge of humanity. Together, we can, should and must take power.”

There’s no danger of that, but there is a sense in which eastern Europe is, to Germans, no longer “the other”. It’s the place whence natural gas flows from Russia, where labour is cheap but skilled and where the people are keen to work with Germany on setting up new sites of joint national memory. From Kaliningrad to Prague, museums and projects are springing up in which the horrors of the past are neither denied nor used as ammunition in today’s negotiations. In eastern Europe, perhaps because Russia is so close, the Germans are rarely made to feel guilty for their grandfathers’ sins. Meanwhile in the west, from Greece to Britain, people can’t resist mentioning the war whenever the Germans don’t act as desired.

***

Germany’s resources are not infinite. Nor is the patience of the 40 per cent of Germans who “have net worths of essentially zero”, as Die Welt reported last year – largely because German home ownership rates are the lowest in the EU. They are disproportionately concentrated in the old east, the region that never had supranational, western European connections. From them come ever-louder voices saying that Germany’s EU contribution is too high. And with Britain out, the maths will look even worse to such voters. If south-western Germany’s taxes have to keep bailing out the country’s east, while also helping out the old and new EU lands, what is left for, say, the post-industrial Ruhr, which has financial and social problems of its own? There are tough choices ahead, and it’s not hard to imagine a day when Germany decides to aim its subsidies and investments where they seem most welcome. The old idea of Mitteleuropa – a multi-ethnic, German-centred Middle Europe, neither of the West nor of the East – no longer seems so antiquarian. Nothing would gladden Putin’s heart more.

So, yes, Merkel will win the election and will have a chance to revive the EU’s Franco-­German core. Yet the relative strengths of France and Germany are different now. As for their leaders, while Adenauer was a devoted Catholic Rhinelander, Merkel is a Lutheran vicar’s daughter from the east. Bonn was physically close to Paris, Brussels, The Hague, even London; Berlin is closer to Prague and Warsaw.

With Donald Trump’s wavering on Nato and his noisy anti-German protectionism, along with Brexit, the West may no longer seem vital to Germany’s future. During Merkel’s election debate with her main challenger, Martin Schulz, on 3 September, Brexit was not even mentioned. The old EU core will have to work to keep Germany anchored, resisting any new call from the east. Macron and German liberals know that; that’s why there will be no Franco-German split over Brexit just to sell us a few more Audis. The sooner David Davis and Liam Fox realise that the Germans have far bigger issues to deal with, the better.

James Hawes is the author of “The Shortest History of Germany” (Old Street Publishing)

This article first appeared in the 18 August 2008 issue of the New Statesman, Superpower swoop