Excerpt from Chapter 4 for Neoliberalism's Demons
CHAPTER 4
THIS PRESENT DARKNESS
In 1989 Francis Fukuyama published an essay entitled “The End of History?”1 Though the 1992 book-length version of the argument is better-known, the shorter essay is an interesting document in its own right. Coming before the fall of the Berlin Wall (which would happen in November of that year), much less the dissolution of the Soviet Union itself (which would endure through 1991), it is more cautious than one would expect from the book’s subsequent reputation. Where the latter appeared in the context of triumphalism, as Americans came to believe that they had “won” the Cold War, the shorter essay focuses more on “the total exhaustion of viable systematic alternatives to Western liberalism.” On the basis of this ambiguous victory in an ideological war of attrition, Fukuyama claims that “we may be witnessing . . . the end point of mankind’s ideological evolution and the universalization of Western liberal democracy as the final form of human government” (1).
This one-sided emphasis on liberal democracy as a political ideal is strange, given the primary evidence Fukuyama adduces for the global triumph of Western thought is precisely the spread of Western commercial culture: experimentation with markets in the Soviet Union, the popularity of Western classical music in Japan, “and the rock music enjoyed alike in Prague, Rangoon, and Tehran.” And though he attempts to obscure it somewhat through his idiosyncratic descriptions, the narrative arc he supplies for the twentieth century is one in which politics and economics are deeply intertwined:
The twentieth century saw the developed world descend into a paroxysm of ideological violence, as liberalism contended first with the remnants of absolutism, then bolshevism [sic] and fascism, and finally to an updated Marxism that threatened to lead to the ultimate apocalypse of nuclear war. But the century that began full of self-confidence in the ultimate triumph of Western liberal democracy seems at its close to be returning full circle to where it started: not to an “end of ideology” or a convergence between capitalism and socialism, as earlier predicted, but to an unabashed victory of economic and political liberalism. (1)
In terms of the main events, this is a narrative that critics and exponents of neoliberalism would recognize. Yet both would equally object to the idea that “economic and political liberalism” was somehow passively waiting for the various alternatives to exhaust themselves. As we have seen, the return to a new version of classical liberalism at the end of the twentieth century was not the simple reemergence of something that had always been lurking in the background but the result of an aggressive political movement. Fukuyama knows this very well, because he had not only witnessed that transformation—as a member of the Reagan administration, he actively participated in it.
Hence Marika Rose is right to connect Fukuyama’s “end of history” thesis to the triumph not of liberal democratic political institutions but of neoliberalism.2 And Fukuyama is actively contributing to the “end of history” that he claims to be documenting, insofar as he is hard at work naturalizing neoliberalism as what is left over once its ideological opponents have exhausted themselves. From this perspective his argument marks a turning point in the history of the neoliberal “end of history,” the shift, in Will Davies’s terms, from “combative neoliberalism” to “normative neoliberalism.”3 The former period, which Davies defines as lasting from 1979 through 1989, was the Reagan-Thatcher era, when neoliberalism “was a self-conscious insurgency, a social movement aimed at combating and ideally destroying the enemies of liberal capitalism” (126). The latter, ranging from 1989 to 2008, was the era when ostensibly progressive parties took the lead, responding to the new political terrain in which “a single political-economic system” had emerged victorious by embracing the “explicitly normative” project of “how to render that system ‘fair’” (127).
In retrospect, the 1990s and early 2000s were the classical era of neoliberalism, the period when the project shifted from its one-sidedly polemical emphasis toward a more positive and constructive stance. Embracing the ethos of omnipresent competition, center-left neoliberals like Clinton and Blair attempted “to ensure that ‘winners’ were clearly distinguishable from ‘losers,’ and that the contest was perceived as fair” (127). Under normative neoliberalism “neoclassical economics becomes a soft constitution for government, or ‘governance’ in its devolved forms. Normative questions of fairness, reward, and recognition become channeled into economic tests of efficiency and comparisons of ‘excellence.’ Coupled to markets and quasi-market contests, the ideal is that of meritocracy, of reward being legitimately earned, rather than arbitrarily inherited” (128). In other words, where the combative stage had been content to secure the actual victory of neoliberalism, the normative stage undertook to legitimate it. And they were largely successful, as rising income inequality did not become a major political issue as long as economic growth continued and the various economic and quasi-market testing regimes appeared to be fair and evenhanded. The mantra of “there is no alternative”—which under Thatcher and Reagan had been at once an aspiration and a threat—fell aside as meritocratic metrics took on an “a priori status” throughout all levels of society. Only with the Global Financial Crisis was the spell truly broken, when “it emerged that systems of audit and economic modeling could potentially serve vested political and economic interests.” This means that massive income inequality, “which had been rising in most of the Global North since the 1980s, returned as a major concern only once the tests of legitimate inequality had been found to be faulty” (129).
In the wake of the crisis, Davies believes we moved into a new stage: punitive neoliberalism. Where normative neoliberalism had witnessed an explosion of credit at every level, justified as a motor for creating economic opportunity, punitive neoliberalism marks the moment when the bill comes due: “The transfer of banking debts onto government balance sheets, creating the justification for austerity, has triggered a third phase of neoliberalism, which operates with an ethos of heavily moralized—as opposed to utilitarian—punishment. What distinguishes the spirit of punishment is its post jure logic, that is, the sense that the moment of judgment has already passed, and questions of value or guilt are no longer open to deliberation” (130). As Rose points out, this is the “end of history” with a vengeance: a Last Judgment that consigns us all to the hell of eternal indebtedness. Here Agamben’s vision of the hellishness of modernity’s eternal economizing is horrifically overlain with Christian eschatology—the ultimate synthesis of providential neoliberalism and demonizing neoconservatism. Under this regime, public policy takes increasingly punitive forms that in terms of “most standards of orthodox economic evaluation . . . are self-destructive.” The overall ethos is one of retribution, driven by “the sense that we ‘deserve’ to suffer for credit-fuelled economic growth” (130). “There is no alternative” does not name a project—whether the negative one of tearing down public institutions or the positive one of constructing elaborate artificial markets—so much as the absolute trump card that silences all debate and dissent. Davies quotes former Greek Finance Minister Yanis Varoufakis’s description of his experience negotiating the terms of his country’s debt as exemplary: “You put forward an argument that you’ve really worked on—to make sure it’s logically coherent—and you’re just faced with blank stares. It’s as if you haven’t spoken” (121).
Aside from the intrinsic interest of his analysis, what makes Davies’s piece so valuable for thinking through our present is the perspective he brings. I mean this in two senses. First, he is writing before the twin shocks of 2016: the Brexit vote and the cruel Electoral College technicality that led to the Trump presidency.4 Second, he is writing from a British perspective, meaning that “punitive neoliberalism” had clearly been in force long before 2016. With Davies’s periodization in mind we can see that Obama represented a failed attempt to salvage normative neoliberalism in the United States. Seemingly through sheer force of personal charisma, he was able to maintain the presidency for two terms, allowing him to expand health care access along normative neoliberal lines and subsequently to restrain the worst excesses of the more clearly punitive neoliberalism espoused by Tea Party Republicans. At every level of government below the presidency, however, punitive neoliberalism made more and more gains with every election, creating a situation in which the Republicans could come close enough to winning the popular vote to seize the presidency.
If we follow Melinda Cooper in viewing the neoliberal era as defined by the alliance between neoconservatives and neoliberals, then Davies’s periodization could look like a cycle in which each partner takes turns leading the way. In terms of my analysis, that alternation would correspond to a greater focus on either demonization (neoconservatives) or the providential opportunity for redemption (neoliberals). Within such a scheme, our present moment could be interpreted as “normal” in the broad run of things, and we may even allow ourselves to hope that the current neoconservative phase will be succeeded by a new Obama-style “neoliberalism with a human face.”
What such a vision of alternating emphases misses, however, is that the overlap between neoliberals and neoconservatives was never complete. On the one hand, a vocal minority of neoconservatives has always rejected the basic legitimacy of their neoliberal partners and thoroughly demonized them. In the United States one thinks of the Clinton impeachment and the “Birther” conspiracy theory that claimed Obama was not even a US citizen and, in the United Kingdom, of the scapegoating of the European Union and the immigrants it brought with it. Both Clinton and Obama were happy to forge bipartisan deals with the neoconservatives who sought to annihilate them, just as New Labour was eager to listen to “legitimate concerns” around immigration, even as the neoconservatives grew ever more implacable and demanding. On the other hand, the traditionally progressive parties that neoliberals used as a flag of convenience still housed a remnant faithful to the Fordist social welfare state (such as Bernie Sanders and Jeremy Corbyn), who have skillfully exploited unexpected opportunities and thereby reintroduced pre-neoliberal values into the public debate. As these tensions have grown more and more unmanageable, we seem to have entered new terrain, where the spell of “there is no alternative” has been broken. Whereas for an entire generation it was impossible to vote against the neoliberal consensus, now we are witnessing the emergence of political leaders who explicitly reject neoliberalism.
Is this the end of neoliberalism? In this chapter and the conclusion that follows, I will not attempt to answer this question in any straightforward way. Instead, I will seek to interrogate the question itself using the tools of political theology that I have developed so far. This means asking what it might mean for neoliberalism to end and how we could tell if a genuine alternative were taking form, rather than merely a new variation on the theme. Naturally, I will be largely (though not exclusively) concerned with analyzing the present political conjuncture. My primary focus will be the debacle unfolding in the United States, as that is the setting where the reactionary wave has most directly taken power so far. This chapter was initially drafted in the summer of 2017, when there were seemingly daily revelations surrounding the Trump-Russia connection and UK politics took on an increasingly surreal tone with Teresa May’s ill-fated snap election. Rather than update it with later news events that will seem almost equally dated by the time this book is ultimately published, I have chosen to limit my examples to events from that baffling period of time. I hope the reader will forgive the out-of-date references, in recognition of the fact that my aim in this chapter is neither journalistic nor predictive, but diagnostic and retrospective. Rather than trying to guess at the outcome of a confusing political moment, I will be treating the unexpected and often quite disturbing political forces that have emerged in recent years as a source of new information about neoliberalism’s weaknesses and internal contradictions as a political-theological paradigm.
I Wish We’d All Been Ready
The immediate aftermath of the 2008 Global Financial Crisis is arguably the last time that the alliance between neoliberals and neoconservatives was fully functional in the United States. Though the Democrats, who by then controlled Congress, required some coaxing—Treasury Secretary Hank Paulson “literally bent down on one knee” to beg House Speaker Nancy Pelosi to support the bill,5 which ultimately passed only after an initial failed vote caused a stock market crash—in the end both sides of the alliance (represented roughly by the two major political parties) came together to pass and implement the bailout policy. In what was reportedly one of the smoothest presidential transitions in history, outgoing Bush officials worked closely with their incoming Obama administration counterparts to administer the largest financial-sector bailout ever seen. And as I pointed out in my first chapter, it all proceeded according to neoliberal chapter and verse. The US bailouts ultimately solved the massive market failure by injecting funds into all major players, in a way designed to minimize state influence over each firm’s internal decision making, while turning a modest profit for the US Treasury.
Yet despite the studious avoidance of direct state control over the major banks, the period immediately following the crisis was also the point when the illusion of a clear separation between state and economy—so crucial for neoliberalism’s attempt to naturalize the economic order it had installed—began to break down. Even the most casual observer could recognize that for the first several years after the crisis, financial markets moved primarily in response to central bank pronouncements on monetary policy rather than any purely economic trends. And on the fiscal policy side, the ideas of John Maynard Keynes, so crucial to the development of the postwar Fordist order that neoliberalism had dismantled, enjoyed a brief vogue as economists argued that government deficit spending could boost economic output overall. This led to the passage of the relatively modest stimulus bill, which consisted primarily in accelerating the funding for already-approved projects and was the last major Obama initiative to enjoy any support from Republicans. By the time he turned to health care reform—starting with a template developed by conservative think tanks and implemented at the state level by the Republican Mitt Romney when he was governor of Massachusetts—the Republicans began the program of unrelenting opposition and obstruction that would characterize the remainder of Obama’s presidency.
What went wrong? Though there was significant public outrage related to the bank bailouts, particularly after bailed-out firms paid bonuses to their employees despite having caused a world-historical economic downturn, political elites were largely unresponsive to such concerns. The problem was not the bailouts or even the economic downturn as such. The neoliberal era had seen its share of both, and none had seriously called the legitimacy of the system into question. What made this crisis different was that it was so intimately tied up with the household and hence raised profound questions of legitimacy.
As Cooper has shown, what Davies calls combative neoliberalism came to power in part through its skillful manipulation of anxieties surrounding family structure, crafting a narrative that reinterpreted the economic crisis of the late 1970s as a reflection of a moral crisis that had thrown gender roles, sexual norms, and racial hierarchies into disarray. Less than a month after Obama’s inauguration, a similar narrative began to crystallize around an odd political rant delivered from the floor of the Chicago Board of Trade by the stock trader Rick Santelli, during a segment on the business news network CNBC. Castigating the government policies that he believed would reward the “losers” who had freely chosen to buy houses they could not afford, Santelli called for a “Chicago Tea Party” to protest the state’s refusal to let people bear the consequences of their actions.6
This was certainly a counterintuitive setting and messenger for the Tea Party movement, at least if we accept the identification of that movement as “populist.” It makes perfect sense, however, if we view Santelli as expressing the intuitions behind Davies’s punitive neoliberalism, over against Obama’s attempt to extend the normative neoliberal era. This conflict could be couched as a dispute within the neoliberal side of the alliance, insofar as, at least in its early days, the Tea Party was normally viewed as jettisoning the religiously inflected “culture wars” baggage of neoconservatism in favor of a more principled libertarian noninterventionism. Yet already in Santelli’s rant we can see that the real emphasis was not on economic policy or GDP growth, but on making sure that people suffer for making bad choices. That is to say, the debate was not primarily economic but moral—and the specific inflection of that morality fit with the neoconservative tendency toward demonization rather than the neoliberal rhetoric of redemption through equality of opportunity.
As in the early days of combative neoliberalism, this moral discourse was also a racial discourse. The problem for the Tea Party was not merely that “losers” had unaccountably decided to get mortgages they could not afford, but specifically that ostensibly undeserving members of racial minorities had received government support for their financial largess. The Community Reinvestment Act (CRA), which outlawed discrimination against minority neighborhoods in mortgage lending (known as “redlining”), took on the same role that Aid to Families with Dependent Children (AFDC) played in the Reagan-era neoliberal imaginary. Once again, a minor program was granted the quasi-demonic power to bring the entire global economy to its knees, and this time the demonization was even more absurd, because the CRA does not even provide direct subsidies to mortgage applicants.
The Tea Party’s moral discourse was also a gendered discourse, and in a much more disturbing way. Rather than focusing on any program or policy that supposedly benefited women, the first wave of Tea Party candidates was characterized by a shocking number of callous comments about rape, including claims that women could not become pregnant in cases of “legitimate rape” and that women routinely make rape accusations as a way of avoiding the embarrassment of admitting they had consensual sex with an undesirable partner.7 These comments, which most commentators treated as bizarre non sequiturs, provoked considerable outrage, and thankfully all of the rape-apologist candidates lost their respective elections. In retrospect, however, they arguably paved the way for a presidential candidate who openly boasted on tape about committing sexual assault.
Overall, the idea that the Tea Party represented an innovative shift away from the “culture wars” quickly proved to be wishful thinking, as did the notion that Tea Partiers were primarily interested in libertarian economics and an abstractly “small” government. Like the Reagan Revolution before it—though at a considerably lower level of sophistication and refinement—the Tea Party movement represented an attempt to reassert the proper order of the household, in order to solve a moral crisis of which the economic crisis was only a symptom. The initial focus was on race and gender, but once their power was solidified in individual states, they moved on to sexual norms in the bizarre controversy over transgender bathroom access.
In contrast to the Reagan moment, however, the emphasis was not on positively cultivating desirable family structures, but on making sure that those who failed to conform were stripped of any assistance or subsidy. These efforts were pitched as an attempt to correct an injustice whereby undesirable populations had achieved unfair advantages over the more deserving straight white population. Within this outlook, blacks should not get federal housing assistance that gives them a leg up over whites, for instance, and women should not get the supposed “unfair advantage” of being able to make spurious rape accusations at will and ruin a man’s reputation. This general outlook explains the seemingly ever-growing animus toward so-called political correctness, which many white men view as allowing previously subordinate populations to sit in judgment of them. The fact that these issues, rather than libertarian bromides, were the real libidinal center of gravity for the Obama-era neoconservative movement should be clear from the fact that many of those same aggrieved voters coalesced around Donald Trump, who has no apparent interest in conservative economic nostrums but virtually embodies the ideal of “political incorrectness.”
My goal is not to say that we all should have seen Donald Trump coming—I certainly did not—but to point out that Trump is the culmination of a political sequence that began with the Global Financial Crisis. Nor do I intend to claim that the rise of Trump, or indeed the success of the Tea Party, was somehow predestined. In both cases they benefited from quirks in the American electoral system. Trump, of course, lost the election by millions of popular votes but took office as a result of indirect selection of the president via the Electoral College. As for the Tea Party, it maintains its stranglehold on power because of the unfortunate coincidence that its first wave election corresponded with a census year, giving it control over the redrawing of electoral district boundaries. The Tea Party took advantage of the opportunity to create gerrymandered districts that rendered it virtually impossible for Democrats to win back control of the House of Representatives even with a considerable nationwide popular-vote advantage. In both cases, of course, the Tea Party presented its manipulations and unfair advantages as necessary to counteract cheating on the other side, but such claims are almost universally rejected outside the movement itself.
Overall, then, the rise of the Tea Party and then Trump to power represented highly contingent events. The very fact that Hillary Clinton, one of the most demonized and divisive politicians in America, was able to win such a strong popular vote plurality testifies to the fact that normative neoliberalism maintains some genuine electoral legitimacy in the United States, even if only as a lesser evil. Nevertheless, the fact that such a thing was possible at all highlights one signal weakness of the neoliberal order: its ambiguous relationship to electoral democracy. Particularly in the United States, the era of normative neoliberalism witnessed declining voter participation and narrower electoral margins. Bill Clinton won only a plurality of the popular vote in both his terms; George W. Bush narrowly lost and then narrowly won the popular vote; and Hillary Clinton also won only a plurality. Only Obama achieved a clear majority for both of his terms, though by a lesser margin than Ronald Reagan or even George H. W. Bush. This situation has often been explained in terms of the political acumen of the various candidates and campaigns, but individual campaign strategies cannot account for such a durable, decades-long pattern across both major political parties.8
The prevalence of narrow electoral outcomes under normative neoliberalism ultimately traces back to the political-theological problem of legitimacy. A political-theological order that bases its legitimacy so overwhelmingly on individual free choice must receive the consent of the community as a whole, which happens via the electoral system. At the same time, once it is firmly established, not only does it not need a clear popular mandate for any candidate or party, but it does not desire one, because this would create unwanted expectations of large-scale change. Rather, the goal is to eke out a narrow and ambiguous victory in order to secure just enough popular legitimacy but not too much. It certainly does render the practice of electoral democracy less and less meaningful, as Brown rightly laments, but the end logic of the position is not the total abolition of democracy that Brown fears, because on the deepest level, neoliberalism relies on consent for its legitimacy.
This system produces a stable equilibrium as long as both neoliberals and neoconservatives are willing to play along and pursue broadly similar policies. Yet when an apparent challenge to the neoliberal order emerges, the tendency toward intentionally narrow victories and the reluctance to engage in serious voter mobilization creates the possibility of an upset. As seen in the case of the rape-apologist Tea Party candidates and in the case of Trump, neoliberals tend to fall back on a negative strategy of exhorting voters to reject the unacceptable opponent. This approach has often proven effective, but over the long haul, it risks exposing the mechanism of the forced choice on which neoliberal electoral politics relies. How many times can people be expected to show up and vote for the idea that this election should not even be happening in the first place, to freely endorse the prospect that there should be no alternative?
In any given case, of course, most people will accept the logic of the forced choice. Yet as we saw in our discussion of the first day of Creation, even among the very angels of the Lord, there will always be a certain number who will act out—all the more so when voting has been downgraded to an empty gesture. Many Brexit voters, for instance, reported viewing their vote as a gesture of protest, one they could afford to make because they assumed it would be impossible for Brexit to win. Surely the same logic was at work among at least some Trump voters in the three traditionally Democratic states that swung the Electoral College. If there is no alternative, if genuine change is impossible, why not vote as a way of letting off steam, confident that the system will prevent any seriously adverse consequences?
The curious thing about the response to both the Brexit vote—which claimed a narrow majority amid surprisingly low turnout, not the supermajority normally required for a major constitutional change—and the Trump technicality—which occurred amid suspicions of foreign interference and illegal voter suppression—is how quickly the authorities submitted to the outcomes, treating them as clear declarations of the people’s will despite the ambiguities in both results. In both cases we are dealing with a huge self-inflicted wound, facilitated by authorities that clearly opposed both outcomes. The legal options were limited in the US context, but in the United Kingdom a nonbinding referendum was taken as the word of God: “Brexit means Brexit!” We can speculate about the motives of the individuals involved, but on the political-theological level, it makes a certain perverse sense. Neoliberals have always preferred the narrative of redemption, but they have not been shy about using the tools of demonization. When they find themselves repudiated, they can do nothing but take a page from the neoconservative playbook, demonizing the deplorable people who voted the wrong way and abandoning them to the suffering they have brought upon themselves. Surely by the next election they will have learned their lesson and will start making good choices again.
Notes
1. Francis Fukuyama, “The End of History?” National Interest, Summer 1989, 1–18. Subsequent references will be given in-text.
2. Marika Rose, “After the Eschaton: The Prince of This World Book Event,” An und für sich, April 27, 2017, https://itself.blog/2017/04/27/after-the-eschaton-the-prince-of-this-world-book-event.
3. Will Davies, “The New Neoliberalism,” New Left Review 101 (Sept.-Oct. 2016): 121–34. Subsequent references will be given in-text. I owe this reference to Marika Rose.
4. Though the article was published after the Brexit vote, it does not mention Brexit, and Davies has confirmed to me that it was finalized before he could take that event into account.
5. David M. Herszenhorn, Carl Hulse, and Sheryl Gay Stolberg, “Talks Implode During a Day of Chaos; Fate of Bailout Plan Remains Unresolved,” New York Times, Sept. 25, 2008, www.nytimes.com/2008/09/26/business/26bailout.html?mcubz=1.
6. For video of the rant, and excerpts of contemporaneous (strongly approving) reactions from conservative publications, see Eric Etheride, “Rick Santelli: Tea Party Time,” New York Times Opinionator, Feb. 20, 2009, https://opinionator.blogs.nytimes.com/2009/02/20/rick-santelli-tea-party-time/?mcubz=1&_r=0.
7. See Lore Moore, “Rep. Todd Akin: The Statement and the Reaction,” New York Times, August 20, 2012, www.nytimes.com/2012/08/21/us/politics/rep-todd-akin-legitimate-rape-statement-and-reaction.html?mcubz=1; and Patrick Marley, “Rep. Roger Rivard Criticized for ‘Some Girls Rape Easy’ Remark,” Milwaukee Journal-Sentinel, Oct. 10, 2012, http://archive.jsonline.com/news/statepolitics/state-legislator-criticized-for-comments-on-rape-hj76f4k-173587961.html.
8. Tony Blair’s New Labour also won an ever-decreasing plurality in every general election, starting with 1997, though I am less well-versed in the intricacies of UK politics and therefore less willing to make strong claims about the significance of this fact.