Thursday 17 October 2019

Dan O'Brien: 'Politics is shifting left, not right, as faith in free markets ebbs away'

Despite the perceived rise of right-wing populism, the real movement is in the opposite direction, writes Dan O'Brien

Bernie Sanders. Photo: SAUL LOEB/AFP/Getty Images
Bernie Sanders. Photo: SAUL LOEB/AFP/Getty Images

There has been no end of talk about the rise of the far right. There have been dark mutterings for some time that a rerun of the 1930s is at hand. Some excitable souls even see fascists under every bed.

While the rise in support for populist parties on the right of the political spectrum has certainly taken place in recent years, it has usually been exaggerated. The recent European Parliament elections were but the latest example. Prior to the vote there had been dire warnings that hordes of Farage-like populists would be returned to Strasbourg and seek the end of the EU. As it turned out, such parties made only small gains and the centre ground still dominates Strasbourg's multinational assembly.

The narrative of the "death of democracy" (the title of a recent book) as a result of the likes of Donald Trump, Matteo Salvini and Viktor Orban coming to power has got considerably more attention than the growing number of predictions that the ''end of capitalism'' is nigh. That is despite a resurgence in critiques of free markets, a shift towards state-led solutions across the western world and electoral gains for the hard left in some surprising places. In the battle of ideas on how to manage and govern modern economies, the left is on the front foot today in a way that it has not been since the 1960s when the Irish Labour Party claimed - not implausibly - that the "1970s would be socialist".

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Jeremy Corbyn. Photo: REUTERS/Toby Melville
Jeremy Corbyn. Photo: REUTERS/Toby Melville

One reason is the cyclical way in which political ideas become fashionable, then fade, and then become fashionable again. The Great Depression of the 1930s heralded decades of more active government and a decline in the belief that free markets produce the best outcomes for individuals and societies when left to their own devices. The economic crises of the 1970s exposed the failures - again, both real and perceived - of post-war statism. Free markets came back into vogue. Now the cycle is changing again.

Bernie Sanders, known as "the socialist from Vermont", has been the most left wing politician in the US to rise to prominence in many decades. He is not an aberration. The Democrats have veered to the left in recent years.

But it is not only the Democrats who have changed. Free trade among nations is one of the most cherished positions for those who believe in free markets. Both American parties have drifted away from that position and the current (Republican) administration is the most anti-free trade since the 1930s.

The shift away from laissez faire capitalism among American rightists is not just about free trade internationally. Conservative Sohrab Ahmari, a journalist at the New York Post, created considerable debate with a recent essay. He wrote disapprovingly that since Ronald Reagan (a scourge of big government), the conservative mainstream has had "a great horror of the state, of traditional authority and the use of the public power to advance the common good".

All of this is reflected in public attitudes. James Stimson, an American political scientist who analyses polls looking at his compatriots' views and attitudes, finds that "big-government" policies win wider support today than at any time since the 1960s.

On this side of the Atlantic, the rise of Jeremy Corbyn in Britain and the high vote share his Labour Party won in the 2017 general election is another sign of a marked leftward shift. Corbyn and his allies are committed to renationalising many of the entities, such as the railways and the post office, which were once in public ownership, forcing private companies to give equity to employees and hiking taxes on the companies' profit and the better off. Last Friday, James Meadway, one of the architects of Labour's economic policies under Corbyn, was in Dublin to explain them in detail. At the Institute of International and European Affairs (where I work) he sounded very much like a man preparing for government.

In Ireland the drift leftwards manifests mostly in the policy preferences and choices rather than in electoral outcomes, though there have been big wins - close to half of the Irish contingent to the incoming European Parliament will be firmly to the left of the Labour Party.

In the late 1970s, people took to the streets of Dublin in their tens of thousands demanding tax cuts and the Progressive Democrats came into being to further a tax cutting agenda in the following decade. Today, polls repeatedly show people favouring more public spending over tax cuts and not a single TD in the current Dail publicly advocates prioritising tax cuts over expanding the size of the state.

The statist shift is also reflected in discussions and policy choices of the most controversial issues in Ireland politics currently - health and housing. On the former, public discussion revolves around opposition politicians and commentators urging the building of more social housing.

No party or commentator in the area opposes this or questions it - it is worth recalling that European countries, including the Nordics, have reduced public provision of housing in recent decades because providing it on a large scale in the mid-20th century generated downsides, most notably the creation of communities in which intergenerational poverty became endemic and intractable.

In healthcare, too, an expansion of public provision and the reduction or elimination of a range of charges are the objective of the Government's centrepiece Slaintecare plan.

The cross-party Oireachtas committee on the future of healthcare strongly endorses that plan and there are few voices in politics or outside politics calling for non-state solutions in healthcare. ''Privatisation'', once a dirty word only on the hard left, is a prescription that dare not speak its name in today's left-of-centre Ireland.

The rest of Europe is more similar to Ireland than the big Anglophone countries in that the leftward shift is showing up more in policy choices than in electoral outcomes. One of the most obvious manifestations of this is how frequently state-driven ''industrial policy'' is mentioned in EU circles.

In the past, governments attempted to steer individual companies or entire industries to success. Too often they backed losers and the taxpayers were left to pick up the bill. The litany of failures made activist industrial policy unfashionable for decades.

But industrial policy was never as unsuccessful of the consensus view circa 2000 would have had it. Ireland was one example where more winners than losers have been picked by the IDA's bureaucrats (though not to sound unfashionably outdated, the name of the policy was changed from "industrial" to "enterprise").

A much more important example of state-led support for industry is China. The autocrats of Beijing have overseen a stunning modernisation of their economy over four decades to the point that Germans, in particular, have quite suddenly become spooked by China's advances in high-tech industries in which Europe's biggest economy has traditionally excelled. The current German government has shifted noticeably towards a return to old-style industrial policy as a means of fending off the Chinese.

The 2020s may not turn out to be socialist, but as we enter the final months of the second decade of the 21st century, the shift to the left across the west is unmistakable.

Sunday Independent

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