What's up, Comrade Bush?

Cajoled for years to take on Western-style economic liberalism there's more than a wry smile on the

The irony has not been lost on the political leaders of Latin America’s insurgent left movements that the governments of Europe and the US are now taking measures that involve far deeper state intervention in the economy than actions they themselves used to harshly criticize when attempted in other regions.

Venezuelan President Hugo Chavez joked that George Bush “is finally beginning to understand the road to socialism” and notes that “he isn’t criticized for nationalizing the largest bank in the world.”

“What’s up, Comrade Bush,”* he said.

Jabs coming from the leaders of left-leaning governments, which now run the vast majority of the countries of Latin America, have flowed freely as they feel vindicated in their criticisms of neoliberal policy prescriptions and as some of their interventions into their economies have sheltered them to some extent from the colossal global crisis.

But they are coupled with a deepening of resentment over the vigour and force with which certain forms of free-market policies were proposed to them in the last thirty years, often imposed as the necessary conditions for crucial loans from international organizations such as the IMF.

Their anger at opposition coming from the north to their recent attempts to re-introduce elements of regulation and protection into their economies has only intensified as global market forces and unrestricted capitalism brought even the most powerful states in the world to their knees.

Soon after important election victories for the left in Ecuador and Paraguay, the influence of neoliberal economic and ideas and of the United States, already by all accounts at an all-time low, have taken another hit in the region with the economic crisis.

John Ross, who along with Ken Livingstone is providing advice to the Venezuelan government, said that “they have abandoned every policy that they've advocated that other governments should follow over the past 20 years. And they've adopted the measures that they've condemned other governments for taking.”*

These sentiments are echoed by even the most centrist of the region’s left-of-centre governments, such as Brazil’s Luiz Inacio Lula de Silva. "We did our homework — and they didn't, they who've been telling us for three decades what to do,” he complained.

And the normally reserved Chilean president Michele Bachelet felt secure enough in the changed political climate to make the following joke, in the US, about the country’s history of intervention in the region.

“Why has there never been a coup in the United States?” she asked a group of investors.
“Because there is no U.S. embassy in the United States.”

Bachelet, the country’s first female president and member of the Socialist Party, was imprisoned and tortured by the government of Augusto Pinochet who took power in a US-supported military coup in 1973.

She was forced into exile as the government killed thousands of supporters of the democratically elected socialist Salvador Allende. The Pinochet government ruthlessly imposed neoliberal prescriptions and counted on Milton Friedman as an economic consultant.

But in the case of Chile at least the country did experience strong economic growth during the dictatorship. However, the movement of left leaders elected in the last ten years in the region was a self-conscious movement against neoliberalism, which in most cases led to unprecedented levels of inequality and historically low rates of economic growth in Latin America.

In many cases these polices were imposed under duress when these countries had their own crises. In 1982 when many Latin American countries defaulted on their huge debts to the developed world, rescue packages from international organizations influenced by the governments of Reagan and Thatcher were conditional on the acceptance of austere structural adjustment programs.

In theaftermath of the Asian financial crisis of 1997, the response from the IMF caused many commentators, especially in Asia, to complain that the measures imposed would never be so harsh if something similar happened in the West. Now that it has, leaders of the Latin American left are seeing it this way and many are disgusted at how easily the banks and rich are getting off.

Nicaraguan Congressman Edwin Castro said that "We think the Bush administration should follow the same policies that they and the International Monetary Fund have always told us to follow when we have economic problems.

"One of our economists was telling us that Bush has just implemented communism for the rich."

The Nicaraguan party to which Castro belongs is the Sandinistas, the leftist party violently opposed by the Reagan-backed Contras in the 1980s and which returned to power in 2006.

Hugo Chavez, elected in Venezuela in 1998, was the first of these left-leaning leaders to come to the fore and receives the lion’s share of attention due to his country’s oil money and his unique and controversial approach to public speaking. But since then, left-of-centre governments have also come to power in Argentina, Brazil, Chile, Bolivia, Ecuador, Nicaragua, Uruguay, and most recently, Paraguay.

Though the region will certainly be hurt by depressed commodity prices, to the extent that these governments have been able to push reforms past local and international opposition, taking forms ranging from political opposition, military coups to threats of capital flight, they have ironically served to insulate them somewhat from the current crisis.

For example, the FT’s Benedict Mander called the Caracas stock exchange an “oasis of calm” due to the country’s currency controls, implemented in 2003.

Reuters pointed out that: “Venezuela has suffered little direct effect from the market chaos because Chavez nationalised the most important companies that once traded on the minuscule Caracas stock exchange and because its currency is fixed by exchange controls.”

These kinds of economic policies, like those of Ecuador’s recently approved new constitution which allows greater government control over banks, are the exact opposite of the unregulated free-market policies promoted quite powerfully by international organizations and institutions influenced by the U.S., Europe and Japan. And pushing them through required facing stiff international opposition.

Eric Wingerter of left-leaning Latin America blog borev.net raised a comparison between the financial sector’s treatment praise of the U.S.’s recent forced nationalization of major banks and its reaction to Hugo Chavez’s decision two months ago to purchase a single and profitable bank on the open market.

The Wall Street Journal then claimed that move could lead to “mass withdrawls” that could “snowball into a systemic bank run that puts the economy and political system at play.”

Policymakers and analysts in the US and Europe will probably be concentrating on their own countries for the next weeks, or perhaps months. But if they ever turn back to Latin America, they will find they face a very difficult task if they would like to restore their credibility.

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Why Jeremy Corbyn is a new leader for the New Times

In an inspired election campaign, he confounded his detractors and showed that he was – more than any other leader – in tune with the times.

There have been two great political turning points in postwar Britain. The first was in 1945 with the election of the Attlee government. Driven by a popular wave of determination that peacetime Britain would look very different from the mass unemployment of the 1930s, and built on the foundations of the solidaristic spirit of the war, the Labour government ushered in full employment, the welfare state (including the NHS) and nationalisation of the basic industries, notably coal and the railways. It was a reforming government the like of which Britain had not previously experienced in the first half of the 20th century. The popular support enjoyed by the reforms was such that the ensuing social-democratic consensus was to last until the end of the 1970s, with Tory as well as Labour governments broadly operating within its framework.

During the 1970s, however, opposition to the social-democratic consensus grew steadily, led by the rise of the radical right, which culminated in 1979 in the election of Margaret Thatcher’s first government. In the process, the Thatcherites redefined the political debate, broadening it beyond the rather institutionalised and truncated forms that it had previously taken: they conducted a highly populist campaign that was for individualism and against collectivism; for the market and against the state; for liberty and against trade unionism; for law and order and against crime.

These ideas were dismissed by the left as just an extreme version of the same old Toryism, entirely failing to recognise their novelty and therefore the kind of threat they posed. The 1979 election, followed by Ronald Reagan’s US victory in 1980, began the neoliberal era, which remained hegemonic in Britain, and more widely in the West, for three decades. Tory and Labour governments alike operated within the terms and by the logic of neoliberalism. The only thing new about New Labour was its acquiescence in neoliberalism; even in this sense, it was not new but derivative of Thatcherism.

The financial crisis of 2007-2008 marked the beginning of the end of neoliberalism. Unlike the social-democratic consensus, which was undermined by the ideological challenge posed by Thatcherism, neoliberalism was brought to its knees not by any ideological alternative – such was the hegemonic sway of neoliberalism – but by the biggest financial crisis since 1931. This was the consequence of the fragility of a financial sector left to its own devices as a result of sweeping deregulation, and the corrupt and extreme practices that this encouraged.

The origin of the crisis lay not in the Labour government – complicit though it was in the neoliberal indulgence of the financial sector – but in the deregulation of the banking sector on both sides of the Atlantic in the 1980s. Neoliberalism limped on in the period after 2007-2008 but as real wages stagnated, recovery proved a mirage, and, with the behaviour of the bankers exposed, a deep disillusionment spread across society. During 2015-16, a populist wave of opposition to the establishment engulfed much of Europe and the United States.

Except at the extremes – Greece perhaps being the most notable example – the left was not a beneficiary: on the contrary it, too, was punished by the people in the same manner as the parties of the mainstream right were. The reason was straightforward enough. The left was tarnished with the same brush as the right: almost everywhere social-democratic parties, albeit to varying degrees, had pursued neoliberal policies. Bill Clinton and Tony Blair became – and presented themselves as – leaders of neoliberalism and as enthusiastic advocates of a strategy of hyper-globalisation, which resulted in growing inequality. In this fundamental respect these parties were more or less ­indistinguishable from the right.

***

The first signs of open revolt against New Labour – the representatives and evangelists of neoliberal ideas in the Labour Party – came in the aftermath of the 2015 ­election and the entirely unpredicted and overwhelming victory of Jeremy Corbyn in the leadership election. Something was happening. Yet much of the left, along with the media, summarily dismissed it as a revival of far-left entryism; that these were for the most part no more than a bunch of Trots. There is a powerful, often overwhelming, tendency to see new phenomena in terms of the past. The new and unfamiliar is much more difficult to understand than the old and familiar: it requires serious intellectual effort and an open and inquiring mind. The left is not alone in this syndrome. The right condemned the 2017 Labour Party manifesto as a replica of Labour’s 1983 manifesto. They couldn’t have been more wrong.

That Corbyn had been a veteran of the far left for so long lent credence to the idea that he was merely a retread of a failed past: there was nothing new about him. In a brilliant election campaign, Corbyn not only gave the lie to this but also demonstrated that he, far more than any of the other party leaders, was in tune with the times, the candidate of modernity.

Crises, great turning points, new conjunctures, new forms of consciousness are by definition incubators of the new. That is one of the great sources of their fascination. We can now see the line of linkage between the thousands of young people who gave Corbyn his overwhelming victory in the leadership election in 2015 and the millions of young people who were enthused by his general election campaign in 2017. It is no accident that it was the young rather than the middle-aged or the seniors who were in the vanguard: the young are the bearers and products of the new, they are the lightning conductors of change. Their elders, by contrast, are steeped in old ways of thinking and doing, having lived through and internalised the values and norms of neoliberalism for more than 30 years.

Yet there is another, rather more important aspect to how we identify the new, namely the way we see politics and how politics is conceived. Electoral politics is a highly institutionalised and tribal activity. There have been, as I argued earlier, two great turning points in postwar politics: the social-democratic era ushered in by the 1945 Labour government and the neoliberal era launched by the Tory government in 1979.

The average Tory MP or activist, no doubt, would interpret history primarily in terms of Tory and Labour governments; Labour MPs and activists would do similarly. But this is a superficial reading of politics based on party labels which ignores the deeper forces that shape different eras, generate crises and result in new paradigms.

Alas, most political journalists and columnists are afflicted with the same inability to distinguish the wood (an understanding of the deeper historical forces at work) from the trees (the day-to-day manoeuvring of parties and politicians). In normal times, this may not be so important, because life continues for the most part as before, but at moments of great paradigmatic change it is absolutely critical.

If the political journalists, and indeed the PLP, had understood the deeper forces and profound changes now at work, they would never have failed en masse to rise above the banal and predictable in their assessment of Corbyn. Something deep, indeed, is happening. A historical era – namely, that of neoliberalism – is in its death throes. All the old assumptions can no longer be assumed. We are in new territory: we haven’t been here before. The smart suits long preferred by New Labour wannabes are no longer a symbol of success and ambition but of alienation from, and rejection of, those who have been left behind; who, from being ignored and dismissed, are in the process of moving to the centre of the political stage.

Corbyn, you may recall, was instantly rejected and ridiculed for his sartorial style, and yet we can now see that, with a little smartening, it conveys an authenticity and affinity with the times that made his style of dress more or less immune from criticism during the general election campaign. Yet fashion is only a way to illustrate a much deeper point.

The end of neoliberalism, once so hegemonic, so commanding, is turning Britain on its head. That is why – extraordinary when you think about it – all the attempts by the right to dismiss Corbyn as a far-left extremist failed miserably, even proved counterproductive, because that was not how people saw him, not how they heard him. He was speaking a language and voicing concerns that a broad cross-section of the public could understand and identify with.

***

The reason a large majority of the PLP was opposed to Corbyn, desperate to be rid of him, was because they were still living in the neoliberal era, still slaves to its ideology, still in thrall to its logic. They knew no other way of thinking or political being. They accused Corbyn of being out of time when in fact it was most of the PLP – not to mention the likes of Mandelson and Blair – who were still imprisoned in an earlier historical era. The end of neoliberalism marks the death of New Labour. In contrast, Corbyn is aligned with the world as it is rather than as it was. What a wonderful irony.

Corbyn’s success in the general election requires us to revisit some of the assumptions that have underpinned much political commentary over the past several years. The turmoil in Labour ranks and the ridiculing of Corbyn persuaded many, including on the left, that Labour stood on the edge of the abyss and that the Tories would continue to dominate for long into the future. With Corbyn having seized the political initiative, the Tories are now cast in a new light. With Labour in the process of burying its New Labour legacy and addressing a very new conjuncture, then the end of neoliberalism poses a much more serious challenge to the Tories than it does the Labour Party.

The Cameron/Osborne leadership was still very much of a neoliberal frame of mind, not least in their emphasis on austerity. It would appear that, in the light of the new popular mood, the government will now be forced to abandon austerity. Theresa May, on taking office, talked about a return to One Nation Toryism and the need to help the worst-off, but that has never moved beyond rhetoric: now she is dead in the water.

Meanwhile, the Tories are in fast retreat over Brexit. They held a referendum over the EU for narrowly party reasons which, from a national point of view, was entirely unnecessary. As a result of the Brexit vote, the Cameron leadership was forced to resign and the Brexiteers took de facto command. But now, after the election, the Tories are in headlong retreat from anything like a “hard Brexit”. In short, they have utterly lost control of the political agenda and are being driven by events. Above all, they are frightened of another election from which Corbyn is likely to emerge as leader with a political agenda that will owe nothing to neoliberalism.

Apart from Corbyn’s extraordinary emergence as a leader who understands – and is entirely comfortable with – the imperatives of the new conjuncture and the need for a new political paradigm, the key to Labour’s transformed position in the eyes of the public was its 2017 manifesto, arguably its best and most important since 1945. You may recall that for three decades the dominant themes were marketisation, privatisation, trickle-down economics, the wastefulness and inefficiencies of the state, the incontrovertible case for hyper-globalisation, and bankers and financiers as the New Gods.

Labour’s manifesto offered a very different vision: a fairer society, bearing down on inequality, a more redistributive tax system, the centrality of the social, proper funding of public services, nationalisation of the railways and water industry, and people as the priority rather than business and the City. The title captured the spirit – For the Many Not the Few. Or, to put in another way, After Neoliberalism. The vision is not yet the answer to the latter question, but it represents the beginnings of an answer.

Ever since the late 1970s, Labour has been on the defensive, struggling to deal with a world where the right has been hegemonic. We can now begin to glimpse a different possibility, one in which the left can begin to take ownership – at least in some degree – of a new, post-neoliberal political settlement. But we should not underestimate the enormous problems that lie in wait. The relative economic prospects for the country are far worse than they have been at any time since 1945. As we saw in the Brexit vote, the forces of conservatism, nativism, racism and imperial nostalgia remain hugely powerful. Not only has the country rejected continued membership of the European Union, but, along with the rest of the West, it is far from reconciled with the new world that is in the process of being created before our very eyes, in which the developing world will be paramount and in which China will be the global leader.

Nonetheless, to be able to entertain a sense of optimism about our own country is a novel experience after 30 years of being out in the cold. No wonder so many are feeling energised again.

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

Martin Jacques is the former editor of Marxism Today. 

This article first appeared in the 15 June 2017 issue of the New Statesman, Corbyn: revenge of the rebel

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