Weeds grow outside the gate of an abandoned General Motors automotive assembly plant in Moraine, Ohio. Photograph: Getty Images
Show Hide image

How the Midwest was won

The US car industry went into a tailspin in 2008 just as Barack Obama was preparing to take office. His prompt action to save it — and Mitt Romney’s callous counter-proposals — may just win him this year’s election.

For 11 years, Stacie Steward commuted a hundred miles by car from Saginaw, Michigan, to the Sterling Heights Assembly plant outside Detroit. She is an electrician, in charge of maintaining 40 of the 700 robots at the plant, robots that make the 3,000 welds needed to construct the Dodge Avenger saloons that roll out of the three-million-square-foot plant and wait, gleaming in the hazy autumn sunshine, for trucks to take them away.

Right now, Sterling Heights is operational 22 or 23 hours every day, with only a couple of hours’ downtime for maintenance. When it’s running, a new car emerges every 60 seconds, like clockwork. I stand at the entrance with Steward and watch them come out. Tick, tock. A new blue car. Tick, tock. A new red car. But for several weeks in 2008 to 2009, just as Barack Obama was taking over from George W Bush on a tidal wave of hope and change, the whole industry, Sterling Heights included, shut down completely. “It was a dark time everywhere,” she told me. “There was no traffic on the roads.” She remembers a picket where staff from local grocery stores and bars joined the auto workers. “They were all getting laid off, too.”

In 2007, the US car industry had directly employed more than a million people; but in 2008 alone it shed a tenth of those and was on the brink of catastrophe. Opinion is split on the main reason for this. Some say powerful unions led to unsustainable workforce practices: at the beginning of 2008, workers for American car manufacturers earned considerably more than their counterparts at foreign-owned car firms – up to 20 per cent more – and enjoyed better benefits. Others say that the Big Three US car firms (Chrysler, Ford and General Motors) suffered from outdated strategy, concentrating on big SUVs and pick-up trucks when consumers were turning towards more fuel-efficient models. Whatever the reason, when the credit crisis rolled around, the auto industry in Michigan and Ohio was already struggling.

“When the economy started taking the tank in 2007 our hours got cut; the number of cars getting built got cut,” says Steward, whose plant is owned by Chrysler. “I got laid off. My unemployment from the state ran out twice. I went through two times when I was like: ‘Oh my God, I’m not going to get any money at all.’ When I saw Obama on TV say that he was going to give the loans [to GM and Chrysler], it was like – it was like heaven. Heaven.”

In the closing days of the Bush administration, December 2008, just days before Obama took office, it became clear that General Motors and Chrysler were unable to cope, and they were given $17.4bn between them in emergency loans to stave off bankruptcy, using money from the federal $700bn bank bailout fund.

This alone wasn’t enough. When Obama moved in to the White House, he assembled a presidential task force, led by the financier and “car tsar”, Steven Rattner, and the treasury secretary, Tim Geithner. On 18 February, GM and Chrysler requested bridging loans: $16.6bn for General Motors and $5bn for Chrysler. They received them, but by April both were entering bankruptcy procedures. The task force stepped in and forced a restructuring of both companies – some loans, a rearrangement of assets, a deal for Chrysler that sold a 20 per cent stake in the firm to the Italian car manufacturer Fiat as well as 68 per cent to the union retirement medical fund, and a government stake of 61 per cent in GM.

Today, both are back from the brink and the future is bright. The US treasury still holds 26 per cent of GM, but the company is negotiating for ways to buy back its independence from the taxpayer – and on 24 May 2011, Chrysler repaid the last of its loans, several years ahead of schedule. The company held a party to celebrate, at the Sterling Heights Assembly plant.

****

North-west Ohio is flat. Dead flat. The kind of flat where you can see for miles, but where the horizon is always close. Between the towns, the roads are arrow-straight. Out here, where it could be 30 miles to the nearest shop or the nearest school, a car is more than just a tool; it’s a necessity. A religion.

This is the middle of the Rust Belt. The name came about as the industrial era was waning in the latter half of the 20th century, when the steel and manufacturing industries were beginning to lose out for the first time to cheaper competitors overseas that were faster to adapt to circumstances and less enthralled with unionisation and workers’ rights. The cities built on steel started to decay.

Today, because of the government rescue, the Rust Belt is still the home of the American auto industry. To the north in Michigan, Detroit - Motor City - is its beating heart, and Ohio is its muscle.

About 848,000 people here do jobs that are directly dependent on or tied to the auto industry. The Chevrolet plant in Lordstown produces the top-selling Cruze. A gigantic Chrysler plant in Toledo makes the Jeep Wrangler and Jeep Liberty; another factory there makes gearboxes for GM. The cities of Dayton, Kettering and Sandusky are home to GM parts-factories. Euclid, Ohio, makes seat covers. Vandalia, Ohio, has a door panel assembly factory. Chrysler makes steering columns and torque converters in Perrysburg, Ohio.

Defiance, Ohio, is a small town about an hour south of Toledo, three hours south of Detroit, with a population just shy of 17,000. On its outskirts is Defiance Casting Operations, a two-million-square-foot steel foundry that casts engine blocks and piston heads for GM. It directly employs 10 per cent of the town’s population. Downtown, in a branch of the private members’ club the Fraternal Order of Eagles, a poker tournament is in full swing.

One of the players at the tournament is Chris Mendez, an ex-marine who now works at the foundry. Does he feel like Obama saved his job? “There’s no doubt in my mind,” he says. “He saved all our jobs. [Before the bailout came,] over half the people at the plant were laid off. I was laid off. When they happened, when we had word that GM was going to be OK . . . it was great. I was overjoyed. I’ve got three kids; when I was laid off they were terrified. I’ll do everything I can to support him – and make sure he gets re-elected.”

Is the bailout his main reason for voting? “Yeah.” How does he feel about Mitt Romney? “I don’t like him. I think he’s for the rich. I think he’s anti-union and anti-labour.” Will the bail­out swing Ohio? “I really think it will.”

Outside the club, an old man with a walking stick, wearing a battered Stetson, is smoking a cigarette with hands that shake. Rick Kantout is a Vietnam veteran and retired GM employee, and when I bring up Romney his response is venomous. “I think he’s a son of a bitch.” He spits on the ground. “Romney and the Republicans aren’t for the middle class. They’re for their own self-interest.”

The White House may sit on Pennsylvania Avenue, but the state that makes most difference to winning it is Ohio. The ultimate bellwether, it may return only 18 votes in the electoral college, but only two presidents since 1896 have won the presidency without it. That’s why the candidates are making such a play for the hearts of its voters; both of the main campaigns have spent more money on advertising here than in any other state, and spent vast amounts of time on the stump here, too.

Romney supporters have been celebrating positive national polling in recent weeks. The first findings after the initial presidential debate on 3 October, by pollsters of the Pew Research Centre, showed Romney leading among likely voters for the first time by 4 points – an extraordinary 12-point swing from their previous poll in September. Gallup, too, found a (less dramatic) shift to Romney after the debate, showing him tied with the president on 47 per cent, and a Reuters/Ipsos poll showed the same. But in Ohio Obama has held his edge: a CNN poll released on 9 October put him still 4 points clear of Romney.

Why is this? The answer can be found in an op-ed article Romney wrote for the New York Times in November 2008, condemning the bailout. “If General Motors . . . and Chrysler get the bailout that their chief executives asked for yesterday, you can kiss the American automotive industry goodbye,” he declared, with devastating hubris.

The statement has been used against him endlessly. At the vice-presidential debate on 11 October, Joe Biden repeated Romney’s words twice in full. Romney has counterattacked on the campaign trail by pointing the finger at Chinese currency-lowpegging taking American jobs, but that argument is failing to fly here – unemployment in the state, at 7 per cent, is lower than the national average of 7.8 per cent, and that also is falling. One in every eight jobs in Ohio depends on the auto industry. As the local reporter Jack Palmer tells me, “Certainly, the Osama Bin Laden is dead and General Motors is alive message” – one of Obama’s and Biden’s central campaign slogans – “could go a very long way.”

The Obama for America campaign has spent an astonishing $52.75m so far in Ohio, its highest spend on any state in the US. One omni­present advert runs footage of Romney defending his position on Detroit. “Yes, that’s exactly what I said,” he says, in footage taken from a television interview: “that headline you read... ‘Let Detroit go bankrupt’.” Over and over again, it repeats. The message is inescapable and, to people like Rick Kantout, irrevocably damning.

****

The United Auto Workers union has more than 390,000 working members and twice that many retirees, most of them here in Ohio and in Michigan. As it is restricted by law from using union funds to run political activities, it has a separately funded political wing, known as the CAP – the Community Action Programme.

The CAP boss in north-west Ohio is Joe Eureste. A lifelong union man, he started working for General Motors four days after graduating from high school in 1972 and has been there ever since. He has a deep sense of mission. “When people get fat and happy, they say it doesn’t matter,” Eureste tells me. “But it does. We have to make sure we keep it to the forefront that [the collapse of the auto industry] could have happened, and could happen again. A lot of people are appreciative of having their jobs, getting rehired. Our job is to make sure they don’t forget it.

“We were going to lose eight jobs in the community to every GM job lost. That’s a lot of people.” He laughs, and then refers to Romney’s old firm. “You were going to have your Bain Capitalists come in and pluck the meat off the bones, and discard pensions; how could they restructure otherwise? So when the government stepped in they helped us all survive.

“I keep telling people: make sure you remember who was on your side and who helped you. Some people have short memories. Our job is to make sure we don’t.”

In the parking lots that surround the vast steel fortress of the Defiance foundry are acres of Chevrolets, Buicks, Lincolns and Oldsmobiles, Fords and Cadillacs. I can’t see a single imported car. A bumper sticker on a GM pick-up truck says: “Out of a job yet? Keep buying foreign.” Opposite the main exit to the plant, a billboard carries the local Obama campaign’s favoured slogan: “Osama Bin Laden is dead. General Motors is alive.”

Dwight Chatham is the just-retired president of UAW Local 211, the union’s chapter in Defiance, which has 5,000 members – more than a quarter of the town – of whom roughly 3,500 are retirees. When I meet him at a coffee shop halfway between downtown and the foundry, I ask what would have happened if GM and Chrysler had been allowed to go under. He chews thoughtfully on a toothpick. “A lot of people would be out of work. A lot of people. I truly believe that if Obama hadn’t stepped in, the Defiance plant would have closed.”

What would that have done to the community? “It would have been devastating. Devastating. This is the largest plant in the county; it funnels a lot of money back in, to schools, the town. If it had closed –” he pauses, and shakes his head – “devastating.”

The chair of the Defiance County Democratic Party, Charlie Gray, grew up in a union household. “My father was the first shop committee chairman at this plant,” he says. “My mother was a union organiser.” I ask Gray if he thinks the bailout will help the president win votes. “It’s helped the president a lot. [People] realise what the situation would have been like without it.”

David Jackson, associate professor of political science at Bowling Green State University, 20 minutes south of Toledo, tells me that the bailout is a powerful influence on votes in the industrial north of Ohio. “It will definitely energise the union base. The bailout could be a real factor for turnout.”

That is crucial, he says. “This is looking like a turnout election, like 2004. It’s all about who can get their base out. [The bailout] will certainly get out the base for the Democrats.”

That’s important when you consider the diverse political make-up of Ohio as a whole. “Take the state of Ohio and draw the letter C on it in reverse, starting in Toledo,” Jackson says. “Going east along the top through Cleveland . . . that’s the section of the state where union membership is the strongest, the north part. In the 2010 election – a landslide year for Republicans nationally – the governor [Ted Strickland, a Democrat] came closest to re-election in the north.

“Then, going down the eastern border with Pennsylvania and West Virginia [in the old coal-mining areas of the Appalachian Mountains], that is Democrat as well, though in 2008 Obama underperformed Bill Clinton in those areas – because those are the working-class white voters he’s had trouble with.” The middle is more rural: conservative heartland, agricultural areas and wealthier towns. It is this diversity that makes Ohio such an important political indicator.

“The question,” Jackson says, “is can the union turnout in industrial north Ohio compensate for the Appalachian white Democrats [in the south and east] not turning out? That’s the question. I certainly think Obama has to be looking at it. Maybe it’s time he got Bill Clinton out campaigning for him down there.”

Not every GM employee is enamoured with the bailout, nor is it the most important political issue for everyone in the north. Randy Peabody is a metalworker for GM of nearly 39 years’ standing, and a proud Republican for “moral reasons”. “I don’t support Obama,” he explains, “and I think the investors got a bad deal. The workers were given the farm; they did really, really well out of it. The auto industry . . . I think the government ought to stay out of it.”

There is no doubt that the United Auto Workers did extremely well from the bailout – or at least escaped most of the hardships that unionised labour usually suffers in a bankruptcy. Gold-plated pensions and benefits were protected for all those retiring, and workers at General Motors still enjoy wages 10 per cent higher on average than those at their foreign competitors.

President Obama has been accused of fav­ouritism, even cronyism, with the UAW. In the bankruptcy of Delphi, a parts manufacturer for GM, UAW members were paid certain benefits while non-union workers – 41,000 of them – were not. Local car dealerships, too, were cut with brute speed during the bailout. But none of them would have stayed open if GM and Chrysler had been allowed to go bankrupt, and union workers have taken some hits: there is still a no-strike clause in force at Chrysler and GM plants. “I think if we had more time, we might have asked all the stakeholders to sacrifice a little bit more,” Steven Rattner, one of the architects of the bailout under Obama, confessed at an event in 2011.

“We didn’t ask any active worker to cut his or her pay. We didn’t ask them to sacrifice any of their pension, and we maybe could have asked them to do a little bit more.” He said that, nonetheless, he considered the bailout to have been very successful overall: “A happy ending.”

I am reminded of this while on hold to Solidarity House, the UAW’s regional headquarters in Detroit. The hold-music is a pop song by Kelly Clarkson. “What doesn’t kill you makes you stronger,” she sings. 

****

The Renaissance Centre, on the shoreline that separates Detroit from Canada, is a vast 1970s edifice of seven enormous towers topped with a five-storey-high General Motors logo. Around its base, Motor City skulks like a shadow. At the base of the central tower is a showroom filled with gleaming new Cadillacs and Corvettes.

Greg Martin is GM’s director of global communications. “I can’t wait until this election is over,” he tells me. “We’re in a position no other company’s ever been in before, where we’re a central part in a political debate.” He shrugs helplessly. “We just want to be a great car company. We don’t want to be a political football.”

The year 2011 was the most profitable in GM’s history – $7.6bn in net income, $150.3bn revenue, after ten consecutive quarters of profitability. A stock-market flotation in 2010 generated $13.6bn for the US treasury and reduced government ownership from 60.8 per cent to 32 per cent. The company has just invested $47m in making improvements to the Defiance foundry. Chrysler’s balance sheet, too, is looking better. This year, the company had its best September since before the 2007 financial crisis, with sales up 12 per cent on September 2011. The Dodge Avenger – made at the plant in Sterling Heights – is up 89 per cent to a record high. Chrysler is spending $850m to expand the site to include a million-square-foot body shop and a new paint shop.

The day I meet Stacie Steward there, it is “Obama Tuesday”, when the workers wear campaign badges and talk about politics, showing their support for the president. This isn’t union-organised: just ordinary workers showing grass-roots support.

“I’d say the feeling in my plant is probably 80 to 85 per cent in support of Obama,” she says, “but you always run into those people that are hardcore Republicans. That’s fine, it’s a democracy. But like I tell everybody: ‘You be what you wanna be, but you gotta think about your job when you go into that ballot box. Think about who saved your job.’”

I ask what she thinks of Mitt Romney. “How could he say he’d have let Detroit go bankrupt? How could his heart be there? I think he’s an elitist, and his heart doesn’t know what middle class is. He’s out of touch. He’s not evil; he has a good Christian heart. But he just don’t un­derstand what it’s like to be a regular working Joe Blow that gotta go to work every day. He just don’t get it.”

David Jackson at Bowling Green State University is a betting man. “I put money on sports, horse races, so why not politics?” He says his money is still on the president despite Romney’s recent poll boost. “I think it’s going to be a 2- or 3-point nationwide Obama victory and a slightly larger electoral college victory.”

He is unequivocal about his home state. “Obama will carry Ohio. It’ll be an election based on turnout, and they [the unions and the Obama campaign] have a better turnout operation. That’s something that’s really changed over eight years: [John] Kerry had a terrible turnout operation [in 2004]. But Obama doesn’t mess around with this stuff, and this – this is a turnout election.”

As I get off the phone, the ad spot is running again on the TV. The sound is off but I know the words by heart now. Most of the population of Ohio does. “Yes, that’s exactly what I said,” Romney is saying. On the screen he even seems to sag, but the punchline is as inevitable as ever. I read his lips: “Let Detroit . . . go bankrupt.”

Nicky Woolf is a writer for the Guardian based in the US. He tweets @NickyWoolf.

This article first appeared in the 05 November 2012 issue of the New Statesman, What if Romney wins?

Show Hide image

Why the elites always rule

Since an Italian sociologist coined the word “elite” in 1902, it has become a term of abuse. But history is the story of one elite replacing another – as the votes for Trump and Brexit have shown.

Donald Trump’s successful presidential campaign was based on the rejection of the “establishment”. Theresa May condemned the rootless “international elites” in her leader’s speech at last October’s Conservative party conference. On the European continent, increasingly popular right-wing parties such as Marine Le Pen’s Front National and the German Alternative für Deutschland, as well as Poland’s ruling Law and Justice party, delight in denouncing the “Eurocratic” elites. But where does the term “elite” come from, and what does it mean?

It was Vilfredo Pareto who, in 1902, gave the term the meaning that it has today. We mostly think of Pareto as the economist who came up with ideas such as “Pareto efficiency” and the “Pareto principle”. The latter – sometimes known as the “power law”, or the “80/20 rule” – stipulates that 80 per cent of the land always ends up belonging to 20 per cent of the population. Pareto deduced this by studying land distribution in Italy at the turn of the 20th century. He also found that 20 per cent of the pea pods in his garden produced 80 per cent of the peas. Pareto, however, was not only an economist. In later life, he turned his hand to sociology, and it was in this field that he developed his theory of the “circulation of elites”.

The term élite, used in its current socio­logical sense, first appeared in his 1902 book Les systèmes socialistes (“socialist systems”). Its aim was to analyse Marxism as a new form of “secular” religion. And it was the French word élite that he used: naturally, one might say, for a book written in French. Pareto, who was bilingual, wrote in French and Italian. He was born in Paris in 1848 to a French mother and an Italian father; his father was a Genoese marquis who had accompanied the political activist Giuseppe Mazzini into exile. In honour of the revolution that was taking place in Germany at the time, Pareto was at first named Fritz Wilfried. This was latinised into Vilfredo Federico on the family’s return to Italy in 1858.

When Pareto wrote his masterpiece – the 3,000-page Trattato di sociologia ­generale (“treatise on general sociology”) – in 1916, he retained the French word élite even though the work was in Italian. Previously, he had used “aristocracy”, but that didn’t seem to fit the democratic regime that had come into existence after Italian unification. Nor did he want to use his rival Gaetano Mosca’s term “ruling class”; the two had bitter arguments about who first came up with the idea of a ruling minority.

Pareto wanted to capture the idea that a minority will always rule without recourse to outdated notions of heredity or Marxist concepts of class. So he settled on élite, an old French word that has its origins in the Latin eligere, meaning “to select” (the best).

In the Trattato, he offered his definition of an elite. His idea was to rank everyone on a scale of one to ten and that those with the highest marks in their field would be considered the elite. Pareto was willing to judge lawyers, politicians, swindlers, courtesans or chess players. This ranking was to be morally neutral: beyond “good and evil”, to use the language of the time. So one could identify the best thief, whether that was considered a worthy profession or not.

Napoleon was his prime example: whether he was a good or a bad man was irrelevant, as were the policies he might have pursued. Napoleon had undeniable political qualities that, according to Pareto, marked him out as one of the elite. Napoleon is important
because Pareto made a distinction within the elite – everyone with the highest indices within their branch of activity was a member of an elite – separating out the governing from the non-governing elite. The former was what interested him most.

This is not to suggest that the non-governing elite and the non-elite were of no interest to him, but they had a specific and limited role to play, which was the replenishment of the governing elite. For Pareto, this group was the key to understanding society as a whole – for whatever values this elite incarnated would be reflected in society. But he believed that there was an inevitable “physiological” law that stipulated the continuous decline of the elite, thereby making way for a new elite. As he put it in one of his most memorable phrases, “History is the graveyard of elites.”

***

Pareto’s thesis was that elites always rule. There is always the domination of the minority over the majority. And history is just the story of one elite replacing another. This is what he called the “circulation of elites”. When the current elite starts to decline, it is challenged and makes way for another. Pareto thought that this came about in two ways: either through assimilation, the new elite merging with elements of the old, or through revolution, the new elite wiping out the old. He used the metaphor of a river to make his point. Most of the time, the river flows continuously, smoothly incorporating its tributaries, but sometimes, after a storm, it floods and breaks its banks.

Drawing on his Italian predecessor Machiavelli, Pareto identified two types of elite rulers. The first, whom he called the “foxes”, are those who dominate mainly through combinazioni (“combination”): deceit, cunning, manipulation and co-optation. Their rule is characterised by decentralisation, plurality and scepticism, and they are uneasy with the use of force. “Lions”, on the other hand, are more conservative. They emphasise unity, homogeneity, established ways, the established faith, and rule through small, centralised and hierarchical bureaucracies, and they are far more at ease with the use of force than the devious foxes. History is the slow swing of the pendulum from one type of elite to the other, from foxes to lions and back again.

The relevance of Pareto’s theories to the world today is clear. After a period of foxes in power, the lions are back with renewed vigour. Donald Trump, as his behaviour during the US presidential campaign confirmed, is perfectly at ease with the use of intimidation and violence. He claimed that he wants to have a wall built between the United States and Mexico. His mooted economic policies are largely based on protectionism and tariffs. Regardless of his dubious personal ethics – a classic separation between the elite and the people – he stands for the traditional (white) American way of life and religion.

This is in stark contrast to the Obama administration and the Cameron government, both of which, compared to what has come since the votes for Trump and Brexit, were relatively open and liberal. Pareto’s schema goes beyond the left/right divide; the whole point of his Systèmes socialistes was to demonstrate that Marxism, as a secular religion, signalled a return to faith, and thus the return of the lions in politics.

In today’s context, the foxes are the forces of globalisation and liberalism – in the positive sense of developing an open, inter­connected and tolerant world; and in the negative sense of neoliberalism and the dehumanising extension of an economic calculus to all aspects of human life. The lions represent the reaction, centring themselves in the community, to which they may be more attentive, but bringing increased xenophobia, intolerance and conservatism. For Pareto, the lions and foxes are two different types of rule, both with strengths and weaknesses. Yet the elite is always composed of the two elements. The question is: which one dominates at any given time?

What we know of Theresa May’s government suggests that she runs a tight ship. She has a close – and closed – group of confidants, and she keeps a firm grip on the people under her. She is willing to dispense with parliament in her negotiation of Brexit, deeming it within the royal prerogative. Nobody yet knows her plan.

The European Union is a quintessentially foxlike project, based on negotiation, compromise and combination. Its rejection is a victory of the lions over the foxes. The lions are gaining prominence across the Western world, not just in Trumpland and Brexit Britain. Far-right movements have risen by rejecting the EU. It should come as no surprise that many of these movements (including Trump in the US) admire Vladimir Putin, at least for his strongman style.

Asia hasn’t been spared this movement, either. After years of tentative openness in China, at least with the economy, Xi Jinping has declared himself the “core” leader, in the mould of the previous strongmen Mao Zedong and Deng Xiaoping. Japan’s prime minister, Shinzo Abe, has also hardened his stance, and he was the first world leader to meet with President-Elect Donald Trump. Narendra Modi in India and Rodrigo Duterte in the Philippines are in the same mould, the latter coming to power on the back of promising to kill criminals and drug dealers. After the failed coup against him in July, Recep Tayyip Erdogan has also been cracking down on Turkey.

***


In Les systèmes socialistes, Pareto elaborated on how a new elite replaces the old. A, the old elite, would be challenged by B, the new, in alliance with C, the people. B would win the support of C by making promises that, once in power, it wouldn’t keep. If that sounds like the behaviour of most politicians, that is because it probably is. But what Pareto was pointing out was how, in its struggle for power, the new elite politicised groups that were not political before.

What we know of Trump supporters and Brexiteers is that many feel disenfranchised: the turnout in the EU referendum could not have been greater than in the 2015 general election otherwise, and significant numbers of those who voted for Trump had never voted before. There is no reason to think that they, too, won’t be betrayed by the new leaders they helped to bring to power.

In the last years of his life, Pareto offered a commentary on Italy in the 1920s. He denounced the state’s inability to enforce its decisions and the way that Italians spent their time flaunting their ability to break the law and get away with it. He coined the phrase “demagogic plutocracy” to characterise the period, in which the rich ruled behind a façade of democratic politics. He thought this particularly insidious for two reasons: those in power were more interested in siphoning off wealth for their personal ends than encouraging the production of new wealth, and consequently undermined national prosperity (remember Pareto’s training as an economist); and, as the demagogic elites govern through deceit and cunning, they are able to mask their rule for longer periods.

Much has been made of Trump’s “populism”, but the term “demagogic plutocrat” seems particularly apt for him, too: he is a wealthy man who will advance the interests of his small clique to the detriment of the well-being of the nation, all behind the smokescreen of democratic politics.

There are other ways in which Pareto can help us understand our predicament. After all, he coined the 80/20 rule, of which we hear an intensified echo in the idea of “the One Per Cent”. Trump is a fully paid-up member of the One Per Cent, a group that he claims to be defending the 99 Per Cent from (or, perhaps, he is an unpaid-up member, given that what unites the One Per Cent is its reluctance to pay taxes). When we perceive the natural inequality of the distribution of resources as expressed through Pareto’s “power law”, we are intellectually empowered to try to do something about it.

Those writings on 1920s Italy landed Pareto in trouble, as his theory of the circulation of elites predicted that a “demagogic plutocracy”, dominated by foxes, would necessarily make way for a “military plutocracy”, this time led by lions willing to restore the power of the state. In this, he was often considered a defender of Mussolini, and Il Duce certainly tried to make the best of that possibility by making Pareto a senator. Yet there is a difference between prediction and endorsement, and Pareto, who died in 1923, had already been living as a recluse in Céligny in Switzerland for some time – earning him the nickname “the hermit of Céligny” – with only his cats for company, far removed from day-to-day Italian politics. He remained a liberal to his death, content to stay above the fray.

Like all good liberals, Pareto admired Britain above all. As an economist, he had vehemently defended its system of free trade in the face of outraged opposition in Italy. He also advocated British pluralism and tolerance. Liberalism is important here: in proposing to set up new trade barriers and restrict freedom of movement, exacerbated by their more or less blatant xenophobia, Trump and Brexit challenge the values at the heart of the liberal world.

***


What was crucial for Pareto was that new elites would rise and challenge the old. It was through the “circulation of elites” that history moved. Yet the fear today is that history has come to a standstill, that elites have ­become fossilised. Electors are fed up with choosing between the same old candidates, who seem to be proposing the same old thing. No wonder people are willing to try something new.

This fear of the immobility of elites has been expressed before. In 1956, the American sociologist C Wright Mills published The Power Elite. The book has not been out of print since. It is thanks to him that the term was anglicised and took on the pejorative sense it has today. For Mills, Cold War America had come to be dominated by a unified political, commercial and military elite. With the 20th century came the growth of nationwide US corporations, replacing the older, more self-sufficient farmers of the 19th century.

This made it increasingly difficult to ­distinguish between the interests of large US companies and those of the nation as a whole. “What’s good for General Motors,” as the phrase went, “is good for America.” As a result, political and commercial interests were becoming ever more intertwined. One had only to add the Cold War to the mix to see how the military would join such a nexus.

Mills theorised what President Dwight D Eisenhower denounced in his January 1961 farewell speech as the “military-industrial complex” (Eisenhower had wanted to add the word “congressional”, but that was thought to be too risky and was struck out of the speech). For Mills, the circulation of elites – a new elite rising to challenge the old – had come to an end. If there was any circulation at all, it was the ease with which this new power elite moved from one part of the elite to the other: the “revolving door”.

The Cold War is over but there is a similar sense of immobility at present concerning the political elite. Must one be the child or wife of a past US president to run for that office? After Hillary Clinton, will Chelsea run, too? Must one have gone to Eton, or at least Oxford or Cambridge, to reach the cabinet? In France is it Sciences Po and Éna?

The vote for Brexit, Trump and the rise of the far right are, beyond doubt, reactions to this sentiment. And they bear out Pareto’s theses: the new elites have aligned themselves with the people to challenge the old elites. The lions are challenging the foxes. Needless to say, the lions, too, are prototypically elites. Trump is a plutocrat. Boris Johnson, the co-leader of the Leave campaign, is as “establishment” as they come (he is an Old Etonian and an Oxford graduate). Nigel Farage is a public-school-educated, multimillionaire ex-stockbroker. Marine Le Pen is the daughter of Jean-Marie Le Pen. Putin is ex-KGB.

Pareto placed his hopes for the continuing circulation of elites in technological, economic and social developments. He believed that these transformations would give rise to new elites that would challenge the old political ruling class.

We are now living through one of the biggest ever technological revolutions, brought about by the internet. Some have argued that social media tipped the vote in favour of Brexit. Arron Banks’s Leave.EU website relentlessly targeted disgruntled blue-collar workers through social media, using simple, sometimes grotesque anti-immigration messages (as a recent profile of Banks in the New Statesman made clear) that mimicked the strategies of the US hard right.

Trump’s most vocal supporters include the conspiracy theorist Alex Jones, who has found the internet a valuable tool for propagating his ideas. In Poland, Jarosław Kaczynski, the leader of the Law and Justice party, claims that the Russian plane crash in 2010 that killed his twin brother (then the country’s president) was a political assassination, and has accused the Polish prime minister of the time, Donald Tusk, now the president of the European Council, of being “at least morally” responsible. (The official explanation is that the poorly trained pilots crashed the plane in heavy fog.)

It need not be like this. Silicon Valley is a world unto itself, but when some of its members – a new technological elite – start to play a more active role in politics, that might become a catalyst for change. In the UK, it has been the legal, financial and technological sectors that so far have led the pushback against a “hard” Brexit. And we should not forget how the social movements that grew out of Occupy have already been changing the nature of politics in many southern European countries.

The pendulum is swinging back to the lions. In some respects, this might be welcome, because globalisation has left too many behind and they need to be helped. However, Pareto’s lesson was one of moderation. Both lions and foxes have their strengths and weaknesses, and political elites are a combination of the two, with one element dominating temporarily. Pareto, as he did in Italy in the 1920s, would have predicted a return of the lions. But as a liberal, he would have cautioned against xenophobia, protectionism and violence.

If the lions can serve as correctives to the excesses of globalisation, their return is salutary. Yet the circulation of elites is a process more often of amalgamation than replacement. The challenge to liberal politics is to articulate a balance between the values of an open, welcoming society and of one that takes care of its most vulnerable members. Now, as ever, the task is to find the balance between the lions and the foxes. l

Hugo Drochon is the author of “Nietzsche’s Great Politics” (Princeton University Press)

This article first appeared in the 12 January 2017 issue of the New Statesman, Putin's revenge