William Mitchell - Reclaiming the State: A Progressive Vision of Sovereignty for a Post-Neoliberal World

Reclaiming the State

Both authors would like to specially acknowledge the valuable administrative and editorial assistance they received from Melinda Hannan (at CofFEE). Thomas Fazi would also like to thank Cristina for her love and patience.

The overall project is dedicated however to the millions of nameless unemployed workers who have been denied the opportunity to live fulfilled lives by the implementation of neoliberal economic policies abetted by orthodox economists who, unfortunately, bear none of the costs of their folly.

While many have offered help and advice, all errors remain the responsibility of the authors.

A Progressive Vision of Sovereignty
for a Post-Neoliberal World

William Mitchell and Thomas Fazi

First published 2017 by Pluto Press

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Copyright William Mitchell and Thomas Fazi 2017

The right of William Mitchell and Thomas Fazi to be identified as the authors of this work has been asserted by them in accordance with the Copyright, Designs and Patents Act 1988.

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A catalogue record for this book is available from the British Library

ISBN 978 0 7453 3733 3 Hardback

ISBN 978 0 7453 3732 6 Paperback

ISBN 978 1 7868 0148 7 PDF eBook

ISBN 978 1 7868 0150 0 Kindle eBook

ISBN 978 1 7868 0149 4 EPUB eBook

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Simultaneously printed in the United Kingdom and United States of America

PART I
The Great Transformation Redux:
From Keynesianism to Neoliberalism and Beyond

PART II
A Progressive Strategy for the Twenty-First Century

The West is currently in the midst of an anti-establishment revolt of historic proportions.

The Brexit vote in the United Kingdom, the election of Donald Trump in the United States, the rejection of Matteo Renzis neoliberal constitutional reform in Italy, the EUs unprecedented crisis of legitimation: although these interrelated phenomena differ in ideology and goals, they are all rejections of the (neo)liberal order that has dominated the world and in particular the West for the past 30 years.

Even though the system has thus proven capable (for the most part) of absorbing and neutralising these electoral uprisings, At the same time, support for mainstream parties including traditional social-democratic parties has collapsed.

The reasons for this backlash are rather obvious. The financial crisis of 20079 laid bare the scorched earth left behind by neoliberalism, which the elites had gone to great lengths to conceal, in both material (financialisation) and ideological (the end of history) terms. As credit dried up, it became apparent that for years the economy had continued to grow primarily because banks were distributing the purchasing power through debt that businesses were not providing in salaries. To paraphrase Warren Buffett, the receding tide of the debt-fuelled boom revealed that most people were, in fact, swimming naked.

The situation was (is) further exacerbated by the post-crisis policies of fiscal austerity and wage deflation pursued by a number of Western governments, particularly in Europe, which saw the financial crisis as an opportunity to impose an even more radical neoliberal regime and to push through policies designed to suit the financial sector and the wealthy, at the expense of everyone else. Thus, the unfinished agenda of privatisation, deregulation and welfare state retrenchment temporarily interrupted by the financial crisis was reinstated with even greater vigour.

Amid growing popular dissatisfaction, social unrest and mass unemployment (in a number of European countries), political elites on both sides of the Atlantic responded with business-as-usual policies and discourses. As a result, the social contract binding citizens to traditional ruling parties is more strained today than at any other time since World War II and in some countries has arguably already been broken.

Of course, even if we limit the scope of our analysis to the post-war period, anti-systemic movements and parties are not new in the West. Up until the 1980s, anti-capitalism remained a major force to be reckoned with. The novelty is that today unlike 20, 30 or 40 years ago it is movements and parties of the right and extreme right (along with new parties of the neoliberal extreme centre, such as the new French president Emmanuel Macrons party En Marche!) that are leading the revolt, far outweighing the movements and parties of the left in terms of voting strength and opinion-shaping. With few exceptions, left parties that is, parties to the left of traditional social-democratic parties are relegated to the margins of the political spectrum in most countries. Meanwhile, in Europe, traditional social-democratic parties are being pasokified that is, reduced to parliamentary insignificance, like many of their centre-right counterparts, due to their embrace of neoliberalism and failure to offer a meaningful alternative to the status quo in one country after another. The term refers to the Greek social-democratic party PASOK, which was virtually wiped out of existence in 2014, due to its inane handling of the Greek debt crisis, after dominating the Greek political scene for more than three decades. A similar fate has befallen other former behemoths of the social-democratic establishment, such as the French Socialist Party and the Dutch Labour Party (PvdA). Support for social-democratic parties is today at the lowest level in 70 years and falling.

How should we explain the decline of the left not just the electoral decline of those parties that are commonly associated with the left side of the political spectrum, regardless of their effective political orientation, but also the decline of core left values within those parties and within society in general? Why has the anti-establishment left proven unable to fill the vacuum left by the collapse of the establishment left? More broadly, how did the left come to count so little in global politics? Can the left, both culturally and politically, become a major force in our societies again? And if so, how? These are some of the questions that we attempt to answer in this book.

Though the left has been making inroads in some countries in recent years notable examples include Bernie Sanders in the United States, Jeremy Corbyn in the UK, Podemos in Spain and Jean-Luc Mlenchon in France and has even succeeded in taking power in Greece (though the SYRIZA government was rapidly brought to heel by the European establishment), there is no denying that, for the most part, movements and parties of the extreme right have been more effective than left-wing or progressive forces at tapping into the legitimate grievances of the masses disenfranchised, marginalised, impoverished and dispossessed by the 40-year-long neoliberal class war waged from above. In particular, they are the only forces that have been able to provide a (more or less) coherent response to the widespread and growing yearning for greater territorial or national sovereignty, increasingly seen as the only way, in the absence of effective supranational mechanisms of representation, to regain some degree of collective control over politics and society, and in particular over the flows of capital, trade and people that constitute the essence of neoliberal globalisation.