Vectors of Inflation

Federal Reserve chair Jerome Powell’s recent speech at the Jackson Hole conference, delivered to an audience of central bankers from around the world, was a highly anticipated event. He arrived there a chastened man, having previously claimed that US inflation was a transitory phenomenon while implementing the lax monetary policies that many blamed for its recent surge. Could he now pull off a ‘soft landing’, bringing inflation back down from its forty-year high of 9.1% to the desired 2%, without causing a recession?  

Central bank monetary policy has various tools at its disposal for managing inflation: higher rates, quantitative tightening (i.e. selling assets to reduce liquidity in the system) and managing expectations about future monetary policy through ‘forward guidance’. Powell began raising the policy rate in March, taking it from the pandemic-era low of 0.25% to 3.25% by the time he arrived at Jackson Hole in late August, through a series of incremental rises. Yet these increases still left interest rates well below inflation, making real rates negative. Meanwhile, the debate over monetary policy heated up. Inflation hawk Larry Summers accused Powell of underestimating the problem and doing too little too late. Another hawk, Henry Kaufman, advised him to shock the markets – to ‘hit them in the face’ as Paul Volcker had done in 1980, by hiking interest rates to 20%.

By inducing a deep and prolonged recession, Volcker’s move had elicited a backlash from progressive economists, with Robert Solow likenening it to ‘burning down the house to roast the pig’. Today, the prospect of a similar hike has prompted renewed criticism of the monetarist perspective which views inflation as the result of an increase in the money supply relative to output. For inflation doves, such as former Clinton Labor Secretary Robert Reich, the current period of inflation was not caused by the fiscal and monetary stimuli of the pandemic, unprecedented though they were. Nor is it the result of a wage-price spiral – since the uptick in union activity remains relatively modest in historical terms. Doves claim that inflation is rather the outcome of factors beyond the Federal Reserve’s ken: food and fuel price rises sparked by the war in Ukraine, plus ongoing price-gouging by large corporations. Hence, it cannot be solved by raising interest rates; it requires solutions such as those set out in Jamal Bowman’s Emergency Price Stabilization Act: monitoring and regulating consumer prices, alongside measures to safeguard the supply of essential goods and services.

The hawks are certainly wrong to see inflation as a purely monetary issue. Indeed, very little of the pandemic-related stimulus, fiscal or monetary, made it into the pockets of ordinary people. When it did, it largely went towards debt repayments and had a limited impact on demand. Yet the doves are also wrong to identify war-induced food and fuel prices as a major contributor. The August 2022 inflation rate of 8.3% may have been boosted by these factors; but the core US inflation figure of 6.3% – far higher than the European average – reflected a structural malady. The real culprit here is the diminution of US productive capacity, caused by four decades of neoliberal policies – disinvestment, deregulation, outsourcing – which have rendered the economy extremely vulnerable to supply chain disruption, and prevented supply-side measures to bring prices down.

That diminution is the flip-side of the ceaseless growth in financial activity since the early 1980s. This process is usually termed ‘financialization’, although the plural ‘financializations’ would be more accurate, since each historic expansion of the financial sector has involved different structures, practices, regulatory regimes and assets. In recent decades, financialization has come to rest on asset bubbles sustained by lax monetary policy. This has created the conditions for today’s rising prices, while inhibiting the only sort of anti-inflationary policy of which the current system is capable. Yet this crucial dynamic is overlooked by economists across the political spectrum.    

Prima facie, hawks and doves pull at opposite ends of the ‘dual mandate’ that the Federal Reserve acquired in 1977, when the Humphrey-Hawkins Act added high employment levels to its original price stability mandate. Some progressive economists now point to Alan Greenspan’s tenure in the 1990s as ‘an instructive model of what a full employment economy can look like’, implying that the Federal Reserve’s current leadership can and should revert to this paradigm. Yet the full employment mandate – a last gasp of Keynesianism in an increasingly hostile political environment – was never taken seriously. Indeed, Volcker proceeded to violate it almost immediately with his historic rate hikes. Since then, the Federal Reserve has consistently curbed both employment and wages, even if this has often been obscured by the statistical inflation of employment figures (for example, counting the partially employed while ignoring declining labour force participation).

Greenspan made the dramatic decision to increase interest rates despite inflation running at a modest level. To justify this step, he cited Milton Friedman’s complaint that the Federal Reserve always raised interest rates too late, and insisted instead on getting ‘ahead of the game’, pre-empting inflation rather than responding to it. Greenspan thus extinguished the nascent manufacturing revival which, as Robert Brenner writes, held out the possibility of a ‘break beyond stagnation’. When Greenspan eventually decided to loosen monetary policy, it was not to support the expansion of production and employment, but to inflate asset bubbles, starting with the so-called ‘Greenspan put’: an injection of liquidity into the financial system in response to the stock market crash of 1987. This policy (which was continued by Greenspan’s successors, such that it became known as the ‘Federal Reserve put’) generated speculative bonanzas for the rapidly deregulating financial sector and provided generous liquidity after each inevitable crash. It was rightly criticised for creating systemic moral hazard by inducing financial institutions to increase their risk exposure.  

In the 2000s, asset bubbles grew by new orders of magnitude and loose monetary policy became a permanent policy rather than an episodic fix. Yet, because not much of this money flowed into productive investment or translated into rising demand, its inflationary effect was negligible.  Moreover, other secular trends kept inflation low: workers were too insecure to fight for wage increases, even amid relatively high employment; manufacturing supply chains extended to producers in lower-wage locations; immigration cheapened services; and income deflation in the Third World suppressed global demand and commodity prices. Dollar overvaluation was also deeply intertwined with the Federal Reserve’s bubbles. By diverting investible funds from productive to financial investment, these bubbles – the market stocks of the 1990s, housing and credit of the 2000s, the ‘everything bubble’ of the 2010s – attracted enough foreign funds to dollar denominated assets to counter the downward pressure of US current account deficits on the dollar. This, too, helped to subdue inflation.

Since Greenspan lowered interest rates to deal with the 2000 dot-com crash, they have never returned to their 1990s peak. Meanwhile, quantitative easing – effectively Federal Reserve asset purchases – has become a systemic imperative to keep both asset markets and the dollar high. With fiscal policy largely missing in action (aside from tax cuts for the rich), this monetary policy created a highly peculiar political economy. Thanks to declining industry, low investment and fiscal austerity, the consumption of a narrowing well-to-do layer, facilitated by the ‘wealth effects’ of asset bubbles, came to act as the country’s primary economic motor. As a result, anaemic growth and extreme inequality is all that contemporary US capitalism can manage.

In this context, Powell’s priority is to avoid Volckeresque rate rises on the wing of slight rate increases and the prayer of forward guidance. Why? Because hawkish rate hikes – the only effective weapon against inflation from a monetary policy perspective – would burst the asset bubbles on which the American financial sector and ultra-rich depend. Back in the late 1970s, Volcker did not have to worry about this risk; but in the early 2020s, Powell very much does. Policy interest rates of 5% triggered the collapse of the housing and credit bubbles in 2007; the current 3.25% rate has hit real estate and venture capital, while stocks have suffered the worst streak of quarterly losses since 2008. Given the fragile makeup of the US economy, rate hikes constitute a real risk; which means that the Federal Reserve has become largely impotent. No wonder it is described in the pages of the FT as ‘the least credible Fed in the markets’ estimation since the 1970s’.

The markets’ lack of confidence reflects a structural dilemma. If Powell increases rates to required levels, the US can expect a recession that will make that of the 1980s seem like a boom. But if, as I believe is more likely, he refuses to do so, the US can expect chronic inflation whose origins lie in the productive debility of the US economy, recently exacerbated by supply chain disruption, trade and technology wars with China, and self-destructive sanctions on Russia. The Federal Reserve faces a fork in the road: one where both paths will damage working-class incomes and wellbeing.

In this sense, both hawks and doves miss the elephant in the room: financializations backed by easy money. The dynamics of financialization contribute to inflation by raising the value of housing and commodities while allowing the rich to maintain their spending at inflated prices. While doves rightly emphasize the need to expand production to ease inflation, they fail to appreciate the scale of state intervention this would entail. For four long decades, neoliberal policies have entrenched the Long Downturn, reversing Janos Kornai’s old adage that socialism is a supply-constrained system while capitalism is a demand-constrained one. Making contemporary US capitalism productive again would involve not only reversing the logic of financialization; it would require a state-led programme to lift supply constraints, which is almost unthinkable within the parameters of the present system.

Read on: Wolfgang Streeck, ‘The Crises of Democratic Capitalism’, NLR 71.


False Compromise

Since becoming leader of the British Labour Party in April 2020, Keir Starmer has comprehensively marginalized the left-wing tendency associated with his predecessor Jeremy Corbyn. At every turn, Starmer has depicted his moves against the Labour left as an exercise in moral hygiene to cleanse the party of antisemitism. This was the argument he used to justify the sacking of Rebecca Long-Bailey, his main rival in the 2020 leadership election, from the Labour shadow cabinet. It remains the rationale for depriving Corbyn of the Labour whip in the House of Commons.

On the eve of the 2021 party conference, Starmer categorically denied that he was engaged in a factional campaign against the Labour left: ‘The battles we’ve had in the Labour Party in the last 18 months have pretty well all been about antisemitism . . . you can’t have a united Labour Party if you’ve got antisemitism there.’ In January 2022, his Shadow Chancellor Rachel Reeves told the Financial Times that she was delighted to know that at least 150,000 people had torn up their Labour membership cards since Starmer became leader. According to Reeves, this was a price well worth paying to efface the ‘stain’ of antisemitism.

In making these claims, Starmer, Reeves and their allies rely upon a lurid media narrative about the Corbyn years that cannot withstand a moment’s scrutiny. The key points of that narrative were as follows: after Corbyn became leader, there was a sudden and horrifying escalation in levels of antisemitism among the party membership, to the point that such prejudice became ubiquitous. Instead of trying to combat this alarming trend, Corbyn and his allies deliberately encouraged it, presumably motivated by their own anti-Jewish bigotry.

It became commonplace to describe Corbyn as a dangerous antisemitic rabble-rouser without any analogue in Europe since 1945. During the 2019 election campaign, opponents of his party claimed that a Labour government would precipitate the departure of British Jews from the country en masse. Looking back on the election a year later, Guardian columnist Rafael Behr suggested that anyone who campaigned for Labour in 2019 would probably have turned their Jewish neighbours over to the Gestapo under the Third Reich. Such rhetoric has been bog-standard in Britain’s liberal commentariat as its members seek to rationalize their hostility to Corbyn’s project.

In reality, there was no evidence that antisemitic attitudes were more widespread under Corbyn than under previous Labour leaders. Nor, for that matter, was there any evidence that such attitudes were more widespread in Labour than in the other main parties. What changed after 2015 was the degree of scrutiny, with marginal, unrepresentative cases held up in the national media as if they were typical of the Labour membership. As we shall see, the narrative also relied upon the elision of sympathy for Palestinians with hostility to Jews, in a way that US politicians such as Ilhan Omar and Rashida Tlaib would find wearingly familiar.

In July of this year, the barrister Martin Forde finally delivered a report on Labour’s organizational culture that Starmer had commissioned two years earlier. It demolished one of the central planks of the case against Corbyn. Forde addressed the claims made most prominently in a 2019 BBC documentary presented by John Ware, ‘Is Labour Antisemitic?’, which accused the Corbyn leadership of systematically thwarting efforts by the party’s disciplinary unit to expel members with antisemitic views. His report confirmed that this version of events was ‘wholly misleading’ and indeed the opposite of the truth.

Staff in the leader’s office only intervened in a small number of cases after an ‘enthusiastic invitation’ from officials in the disciplinary unit who ‘refused to proceed’ without their advice. According to Forde, the villains of John Ware’s documentary ‘responded to the requests, for the most part, reasonably and in good faith.’ Corbyn’s critics presented ‘Is Labour Antisemitic?’ as a modern-day version of Bob Woodward and Carl Bernstein’s reporting on the Watergate scandal. To judge by the contents of Forde’s report, we should picture instead the Washington Post publishing an unexpurgated version of Richard Nixon’s enemies list on its front page as if it were the work of a courageous whistle-blower at the highest levels of government.

Yet the British commentariat has buried the findings of the report, just as it buried every previous rebuttal of a propaganda campaign that set new standards for mendacity in British public life. This is primarily a function of the power imbalance shaping this discursive field: the Conservative Party, the Labour right, and their respective media allies are determined to uphold these fictions about what happened under Corbyn’s leadership, and the megaphone they collectively possess can drown out dissenting voices. However, there is a subjective factor that we must also take into account. At leadership level, a significant part of the Labour left made a conscious decision not to challenge the false narrative that was gradually constructed from 2015 onwards.

Instead of enabling them to defuse the controversy and move on to other subjects, as they hoped it would, this approach merely encouraged their opponents to launch wave after wave of attacks. The best starting point for a retrospective evaluation is the summer of 2018, when Corbyn and his allies came under intense fire for their reluctance to adopt the International Holocaust Remembrance Alliance (IHRA) definition of antisemitism with its full, unamended list of examples.

Two of the insider accounts to have appeared after the 2019 election defeat – This Land by Owen Jones and Left Out by Gabriel Pogrund and Patrick Maguire – channel the perspective of those who believe that this controversy could easily have been avoided. In their opinion, the party leadership should have adopted the full IHRA text from the very start; failing that, it should have caved in as soon as the controversy erupted instead of trying to hold the line around an alternative definition of antisemitism. The books attribute this view to figures such as Andrew Fisher, chief author of the 2017 Labour manifesto, and above all Corbyn’s Shadow Chancellor John McDonnell, while Jones himself is very much in agreement with their thinking.

The problem with this line of argument is easy to identify. Instead of examining the IHRA controversy in its own right to determine what might have been an effective response, it starts from the assumption that there must have been a compromise available, so long as the will to compromise was there. Needless to say, the political field is littered with the corpses of those who were only too anxious to retreat under fire. Genuine pragmatism demands that you recognize when your opponents have no interest in compromise and will not halt their offensive no matter how much ground you concede.

The Corbyn leadership did not have the option of defusing the antisemitism controversy by making a concession to its critics at any point between 2015 and 2019, because it was never simply an empirical debate about the prevalence of antisemitism in the Labour Party, or the steps that should be taken by its leaders in response. That kind of discussion requires a shared understanding of what constitutes antisemitism, which is precisely what was lacking.

Corbyn’s most strident and influential critics, from Marie van der Zyl, president of the Board of Deputies of British Jews (BOD), to Stephen Pollard, editor of the Jewish Chronicle, all relied upon the concept of the ‘new antisemitism’, according to which the dominant contemporary form of antisemitism expresses itself through attitudes to Israel. The IHRA definition has become a totem for those who want to impose this understanding as a rigid orthodoxy. Several of the examples attached to it link certain forms of speech about Israel with antisemitism, and the wording of those examples is sufficiently vague that they can be used – and have been used – to stigmatize any kind of meaningful solidarity with the Palestinian people.

If the Labour left had accepted the IHRA definition in toto from the start, its leaders would simply have delayed the cycle of controversy rather than avoiding it. With the definition in hand, their opponents would have begun excavating statements about Israel by prominent left-wing activists, from Corbyn down, and presenting them as violations of the party’s new code. Instead of denouncing the party leadership for their refusal to adopt the definition, they would have denounced them for not putting it into practice.

By the time Labour’s national executive agreed to pass the full definition in September 2018, it was no longer necessary to comb through past utterances for supposedly incriminating material, because figures like the Labour MP Margaret Hodge had already normalized the most extravagant and defamatory claims about Corbyn and his movement. It was Hodge who opened the floodgates with a carefully planned and pre-rehearsed tirade against her party leader in the House of Commons, explicitly branding him as an antisemite. Stephen Pollard and his associates followed this up with a statement denouncing Corbyn’s party as an ‘existential threat to Jewish life in Britain’, while Marie van der Zyl claimed that the Labour leadership had ‘declared war on the Jews’.

In Left Out, Pogrund and Maguire inadvertently drive home the absurdity of these claims when they attempt to translate them into the language of political rationality:

Some thought the rhetoric overheated. To many Jewish leaders, allowing Israel to be characterised as a racist project did pose existential questions. If a Labour government adopted the same position, could Jewish bodies with links to Israel lose their charitable status? Would the government continue to fund Jewish security charities which had links to the Israeli embassy? Could Britain become a cold home to its Jews, the vast majority of whom did support Israel’s existence?

This passage combines inaccuracy with illogicality. First of all, Labour was not proposing to adopt, as its collective view, the proposition that the Zionist state-building project was a ‘racist endeavour’ (a phrase which appears in one of the IHRA examples). It was being urged to adopt a definition of antisemitism that would prohibit any Labour members from articulating that view, on pain of expulsion from the party. One is left with the implication that if a single Palestinian member of the Labour Party was allowed to recall what happened to their family during the Nakba, it would set off a chain of events that might culminate in the demise of Britain’s Jewish communities – a preposterous idea, of course, but a convenient one for those who would rather not hear about the Nakba at all.

Secondly, even if Labour did adopt the critical and historically accurate understanding of Zionism spelled out, for example, by Rashid Khalidi in his book The Hundred Years’ War on Palestine, it would not oblige a Labour government to sever all ties with the present-day Israeli state, let alone with Jewish organizations in Britain. Labour’s 2019 manifesto pledged to block the sale of weapons ‘used in violation of the human rights of Palestinian civilians’, not to expel Israeli diplomats from the UK. In itself, a freeze on arms sales from a previously staunch ally of Israel would have represented a significant breach in the wall of complicity.

It is vertiginously implausible to suggest that a government which carried out such a policy, in the teeth of fierce opposition, would then want to provoke an entirely avoidable row by stripping the Community Security Trust (CST) of its status as a recognized charity. In any case, talk of Labour posing an ‘existential threat’ to British Jews conjured up – and was intended to conjure up – a far more alarming picture. Margaret Hodge sketched it out explicitly when she compared the token reprimand that she received from Labour’s disciplinary process for her tirade against Corbyn to the persecution of Jews in Nazi Germany.

Pogrund and Maguire have to perform such intellectual contortions to avoid stating the obvious: the claims that were made by Hodge, Pollard, van der Zyl and others during the summer of 2018 had no basis in reality, and it doesn’t really matter what precise combination of delusion and dishonesty was at work in their respective minds. There was no practical step that the Labour leadership could have taken to address concerns that lacked any empirical foundation. The only pragmatic course of action available to them was to stand their ground and state the facts at every opportunity. Above all, they needed to challenge the relentless conflation of support for Palestinian rights with hostility to Jews that underpinned the media campaign against them.

Instead, there were two months of public paralysis as some of Corbyn’s allies pressed for an immediate climbdown. John McDonnell even went on Sky News in the week following Hodge’s outburst to affirm his belief in her sincerity:

I’ve worked with Margaret over the years. She’s got a good heart. Sometimes you can express anger – I’m one of those people who has in the past – and basically you have to accept that people can be quite heated in their expressions.

Hodge made it perfectly clear that she would not rest until the project of the Labour left was reduced to a heap of political rubble. Yet McDonnell was willing to put his own personal relationship with Corbyn under intense strain – according to Jones as well as Pogrund and Maguire, the two men were barely speaking at the time – in a forlorn bid to appease her. Hodge gladly pocketed the concession and carried on as before. By the time the summer of 2018 was over, Corbyn’s opponents had established a template that could be used over and over again, most damagingly in the run-up to the 2019 election.

When Corbyn stepped down, those who had wanted him to capitulate immediately over the IHRA definition believed it was their chance to start again with a clean slate. Rebecca Long-Bailey, the candidate supported by Momentum and the Socialist Campaign Group in the 2020 leadership election, immediately signed up to a list of ten pledges which the Board of Deputies had drafted. Those pledges really amounted to a single demand that the BOD would have the exclusive right to determine what constitutes antisemitism as well as what constitutes effective action against it.

In an article for Jewish News announcing this move in January 2020, Long-Bailey addressed the following message to her own would-be supporters:

My advice to Labour Party members is that it is never OK to respond to allegations of racism by being defensive. No-one is immune from racism as long as it exists in society, whatever their past credentials in opposing racism. The only acceptable response to any accusation of racist prejudice is self-scrutiny, self-criticism and self-improvement.

This would have been an extraordinarily naïve statement for anyone to make at the very beginning of Corbyn’s leadership. Coming just weeks after an election campaign of stupefying mendacity, during which British partisans of Narendra Modi added the charge of ‘Hinduphobia’ to the indictment of the Labour Party because its members would not support Modi’s violent clampdown in Kashmir, it beggared belief.

Long-Bailey followed up on this gesture by appearing at a hustings organized by the Jewish Labour Movement (JLM) and Labour Friends of Israel. The JLM had actively sought to depress the Labour vote in the recent election, having previously solicited an inquiry into the Labour Party by the Equality and Human Rights Commission (EHRC) with a dossier that was littered with inaccuracies concerning matters of public record. The moderator for the hustings, broadcaster Robert Peston, invited the candidates to agree that it was antisemitic to describe the circumstances around Israel’s foundation as ‘racist’. Long-Bailey did so.

This deferential stance towards political actors that openly favoured a Conservative victory in 2019 did Long-Bailey no good in her contest with Keir Starmer, which had almost certainly been lost before the leadership campaign officially began. It also did her no good when Starmer decided to force her out of the shadow cabinet because she was too closely aligned with the teachers’ union in her role as Shadow Education Secretary. Starmer grasped hold of a pretext when Long-Bailey shared an interview with the actress and left-wing activist Maxine Peake.

Peake had recently paid a visit to the occupied Palestinian territories, and she drew a connection between what she had witnessed there and the ongoing protests in the US after the murder of George Floyd. She referred to a statement by an Israeli peace activist, Neta Golan, who suggested that the Israeli security forces had passed on a specific restraint technique used by the officer who killed Floyd in the course of their training sessions with US police departments. Golan had seen the same technique used time and time again in the West Bank. She subsequently explained that this was an ‘unverified assumption’ on her part rather than an established fact: she had since discovered that US police officers were already kneeling on the necks of detainees before those training sessions began.

It was beyond question that Israeli security officials were systematically imparting the lessons they had learnt from ruling over an oppressed, stateless people for more than half a century to US police forces. Golan’s minor inaccuracy did not detract from this more substantial point about the elective affinity between two forms of state racism. Yet Starmer and his allies immediately began telling journalists that Peake was propagating an ‘antisemitic conspiracy theory’ and used this claim to justify Long-Bailey’s sacking.

Two things should have been clear after this episode. First of all, Starmer was determined to use spurious allegations of antisemitism against his inner-party opponents, in the context of a stampede away from Corbynism and his own platform for the 2020 leadership election. Secondly, no one on the Labour left would be immune to such allegations, because the concept of antisemitism deployed in the British public sphere no longer had even the most tenuous connection to prejudice against Jewish people. If all else failed, they could be accused of ‘antisemitism denial’ if they questioned the most lurid fabrications about the period between 2015 and 2019.

That was precisely what happened when Corbyn issued the following statement after the EHRC report was published in October 2020:

Anyone claiming there is no antisemitism in the Labour Party is wrong. Of course there is, as there is throughout society, and sometimes it is voiced by people who think of themselves as on the left. Jewish members of our party and the wider community were right to expect us to deal with it, and I regret that it took longer to deliver that change than it should. One antisemite is one too many, but the scale of the problem was also dramatically overstated for political reasons by our opponents inside and outside the party, as well as by much of the media. That combination hurt Jewish people and must never be repeated.

The most striking feature of Corbyn’s statement was its restraint. His observation that ‘the scale of the problem was also dramatically overstated’ was the very least that could be said by anyone who wanted to have a rational discussion. In particular, it was essential for the Labour left to be able to make such arguments if it wished to have a future in the party.

The Corbyn years were the first time since 1945 that the party’s left-wing tendency had won control of its leadership; neither Aneurin Bevan in the 1950s nor Tony Benn in the 1980s could manage that. If Corbyn and his supporters allowed the standard media narrative to go unchallenged, they would have to accept that Labour suddenly became infested with antisemitism after 2015 from top to bottom, with the eager complicity of its most senior figures, and that the actions of a Corbyn-led government might well have prompted British Jews to flee the country in large numbers.

In the event of a future leadership contest, any left-wing candidate would certainly have this fictitious concoction thrown in their faces. After all, if the claims made with such vehemence during and after the 2019 general election were well grounded in fact, the Labour left could hardly be trusted to administer a parish council, let alone the British state.

We can be sure that all the Labour MPs and Guardian columnists who responded to Corbyn’s statement with splenetic rage wholeheartedly believed that the media narrative was ‘dramatically overstated.’ If they genuinely thought that that Labour Party under Corbyn posed an ‘existential threat’ to British Jews, they would be implacably opposed to Starmer, who campaigned to elect Corbyn as the country’s Prime Minister in full knowledge of the dire warnings that his opponents had been issuing.

Starmer’s move to suspend Corbyn from the Labour Party was entirely of a piece with his established modus operandi. It should have been more surprising that some of Corbyn’s erstwhile supporters, including the Momentum founder Jon Lansman and the journalists Owen Jones and Rachel Shabi, explicitly criticized his statement, while John McDonnell might as well have done so when he made the following remarks in an interview:

Numerically, the number of cases of antisemitism within the Labour Party might be small, but that’s not the issue. It’s the pain . . . you don’t calculate the numbers, you calculate the pain that’s inflicted.

These increasingly tortuous efforts to avoid calling a spade a spade were inscribed in the logic of a strategy that had already proved to be a comprehensive failure. It is hard to think of another political movement whose leading voices were so anxious to take responsibility for the false perceptions that their opponents had created.

In the meantime, efforts were afoot behind closed doors to negotiate Corbyn’s return to the party. Allies of Starmer tacitly confirmed that Len McCluskey’s account of these efforts was accurate when they issued a blustering non-denial denial. The former Unite general secretary described his own reaction to the news of Corbyn’s suspension:

I genuinely thought Starmer had lost his temper and made a mistake; I didn’t want to think such a damaging move had been premeditated . . . that evening, in a Zoom call between leading figures on the left, it was agreed that before mobilising the membership against the suspension – and potentially splitting the party – we should see if a negotiated solution could be reached.

The agreement thrashed out with Starmer’s approval was that Corbyn would not have to apologise for his statement; instead, he would issue a clarification with an agreed wording, after which his suspension would end. When it came, the second statement actually muddled the clarity of what Corbyn had previously said, and bore the unmistakable stamp of having been drawn up by committee:

To be clear, concerns about antisemitism are neither ‘exaggerated’ nor ‘overstated’. The point I wished to make was that the vast majority of Labour Party members were and remain committed anti-racists deeply opposed to antisemitism.

A Labour disciplinary panel restored Corbyn to full membership. However, when organizations like the BOD and JLM denounced this move, Starmer immediately reneged on the deal and blocked the return of his predecessor to Labour’s parliamentary caucus. Margaret Hodge’s threat to resign as a Labour MP may have been the decisive factor behind Starmer’s change of heart.

The attempt to reach a ‘negotiated solution’ thus proved to be a failure on its own terms. It could only have been otherwise if Starmer was a trustworthy individual who was willing to stand up to his party’s right-wing tendency for the sake of better relations with its left. Nothing about his track record up to that point should have encouraged such beliefs about his character and political orientation.

This failed experiment in reaching out to Starmer came with a substantial opportunity cost. Not only did the leading figures on the Labour left refrain from ‘mobilising the membership’ against Corbyn’s suspension, as McCluskey explained. They also held back from enlisting their own voices in the battle by expanding upon the incontrovertible point that Corbyn had made. This would have generated a headache for Starmer and – more importantly – placed some of the basic facts on the public record.

In the period immediately following Corbyn’s suspension, the EHRC was scattering evidence of its crude political bias like confetti. One former commissioner, Ian Acheson, even boasted in the Spectator that its investigation of Labour was the result of a sustained effort to align the EHRC with the agenda of the Conservative Party through carefully targeted appointments. Those appointments also helped explain why the Commission had categorically refused to investigate Tory racism, despite the wealth of evidence submitted to it by those seeking an inquiry.

The EHRC’s threadbare report could only determine that Labour had engaged in ‘unlawful harassment’ by inventing a law that determined the boundaries of legitimate speech about Israel and applying it retrospectively. The British media studiously ignored the holes in the report’s logic, just as it ignored the lack of a single reference to the supposedly canonical BBC documentary about Labour’s internal culture. Yet there was no public challenge to the Commission’s authority from the Labour left.

In contrast, the LGBT charity Stonewall came out swinging in February 2022 when it found itself in the EHRC’s firing line:

The government is involved in appointing EHRC commissioners, ministers hold annual reviews with the chair, the government controls EHRC funding, and it has no independent relationship with parliament. The risk this creates – that the EHRC will not act to promote and protect the rights of all its citizens, but instead will be swayed by personal whims and the politics of the day – has now become a reality.

We cannot know whether an alternative strategy based on confrontation rather than compromise would have secured Corbyn’s readmission. Starmer’s leadership descended into a trough after his move against Corbyn. Labour trailed behind the Tories in opinion polls for much of 2021 and lost one high-profile by-election in Hartlepool. Another parliamentary contest in Batley and Spen would almost certainly have been fatal for Starmer’s leadership if a few hundred Labour voters had decided to stay at home. He might not have been able to cope with another conflagration during the same period.

At any rate, the outcome could not possibly have been worse for the Labour left than it was. Starmer paid no price for going back on his word, since there was no turn to a more confrontational approach by the Socialist Campaign Group after he did so. He had no reason to change direction when faced with this good cop/good cop routine.

The self-inflicted Tory meltdown of 2021–22 then supplied a new lease of life to his leadership, even though it remains as unimaginative and uninspiring as ever. Smelling blood in the water, Starmer and his allies have set out to obliterate what remains of the Labour left, targeting left-wing MPs for de-selection. In the case of the east London MP Apsana Begum, this has involved using domestic abuse as a weapon against their factional opponents.

While seeking to exclude socialist MPs from the party, Starmer has welcomed Conservative defectors like Christian Wakeford. Wakeford was an enthusiastic supporter of the xenophobic legislation that Boris Johnson and his Home Secretary Priti Patel enacted in 2021. Having been elected in 2019 with a razor-thin majority in a previously Labour-held seat, Wakeford was perilously exposed in the event of a swing towards Labour, so he decided to jump ship before he had to walk the plank.

This did not stop the JLM chairman Mike Katz from presenting Wakeford’s defection as a ‘positive choice’ inspired by ‘Starmer’s integrity and leadership – not least on the issue of tackling antisemitism’. Katz highlighted the fact that Wakeford had been ‘active in Conservative Friends of Israel’ as a reassuring sign. With men like Wakeford on board, Katz informed us, Labour had taken the first steps on ‘a journey back to political respectability, where Jews will ask if Starmer has the right policies, not whether he is a racist.’

There could hardly be a better example of the way in which Labour’s dominant right-wing faction has cynically deployed the issue of antisemitism as a cloak for its own political agenda. Katz is no doubt well aware that members of other ethnic minorities have repeatedly asked whether Starmer and his associates see them as equals. Martin Forde’s report identified a pervasive culture of racism and Islamophobia within the Labour Party, and black Labour MPs were infuriated when Starmer brushed that finding contemptuously aside. For Katz and his co-thinkers, this is irrelevant, and certainly has no bearing on the question of ‘political respectability’.

The main purpose of this propaganda campaign has not been to discourage prejudice against Jews, or even to protect Israel from scrutiny. It has been to create a Labour Party that is a hostile environment for socialists like Jeremy Corbyn and Apsana Begum, and a welcoming home for right-wingers like Christian Wakeford. The Labour left would be in a stronger position today if its leaders had recognized that a long time ago. Whether or not it can recover from its current position of defeat and disorientation, there are important lessons to be learnt from the sequence of events that led to this point.  

Read on: Daniel Finn, ‘Crosscurrents’, NLR 118.


Sweden’s Pariahs

The runup to Sweden’s parliamentary election, held on 11 September, read like a Houellebecq novel. A party with roots in the neo-Nazi movement is surging. In Muslim neighbourhoods, a far-right Danish politician accused of soliciting sadomasochist sex from teenage boys is livestreaming himself burning the Quran. Riots break out across the country. Indolent centre-left politicians issue limp pleas for tolerance. The Social Democrats, having been willingly cannibalized by NATO and financial markets, fail to rally support. Meanwhile an insurgent Islamist party is making inroads in immigrant neighbourhoods once considered strongholds of the left. Mainstream conservatives, who for years positioned themselves as a bulwark against the far-right, realize that the clearest path to power involves joining forces with it. All this with unrest already on the rise, a war in Europe and a winter energy crisis looming.

But this wasn’t fiction. A few days after the election, Social Democratic Prime Minister Magdalena Andersson resigned and the right-wing coalition declared a narrow victory. In the final count, the left-wing bloc of the Social Democrats, Left Party and the Greens netted 173 seats in the Riksdag. Its rival grouping, made up of the far-right Sweden Democrats, conservative Moderates and the Liberal Party, secured a total of 176. But the biggest victory belonged to the Sweden Democrats. Political pariahs until recently, they are now the second most popular party in Sweden, with 20.5% of the vote. Only the outgoing Social Democrats, who campaigned primarily on not being the Sweden Democrats (while also parroting some of their rhetoric), received a larger vote share, 30.3%. But in the end, it was not enough.

Now, Moderate leader Ulf Kristersson has been tasked with assembling a new government. In a historic overture to the far-right, Kristersson has included the Sweden Democrats in these talks. Jimmie Akesson, the party’s studiously bland leader, says that a coalition including his party would faithfully reflect the country. He may not get his wish, but whatever happens he will wield considerable power. It appears likely that Kristersson’s Moderates will form a minority government with the Liberal Party and Christian Democrats, with the Sweden Democrats providing external support via a confidence-and-supply agreement.

The election concludes eight years of Social Democrat-led governance. For much of the twentieth century, the party enjoyed near unrivalled power in Sweden. But in recent years it has been challenged by the liberal centre and mainstream conservatives – who have now given legitimation to the far-right. Back in 2018, Moderate leader Ulf Kristersson met with Swedish Holocaust survivor Hedi Fried and solemnly pledged before the media that he would never collaborate with the Sweden Democrats. After Kristersson changed his mind, the Moderates sought to deflect criticism by purchasing Google ads with the keyword ‘Hedi Fried’, which led to a page explaining that it was all a misunderstanding: the Moderates, they said, had merely promised that their previous coalition ‘Alliance for Sweden’ would not work with the Sweden Democrats for the 2018 election. Now, four years later, this promise no longer applied.

Founded in 1988, the Sweden Democrats capitalized on the upsurge in far-right extremism generated by the financial crisis of the early nineties. In 1991, the Moderate-led government of Carl Bildt began to administer a series of predictably disastrous neoliberal reforms – following on from the Social Democrats’ dismantling of the Keynesian infrastructure that undergirded the Swedish welfare model during the previous decade. Amid the deregulation of credit and capital markets, unemployment more than quadrupled, from 2% in 1990 to 10% in 1993. GDP fell by 4%, and it cost another 4% of GDP to bail out the banks. This economic downturn coincided with a wave of neo-Nazi street violence, including bombings and targeted attacks on political opponents: trade unionists, journalists, left-wing activists, the Stockholm gay pride parade.

Back then, the links between the white nationalist movement and the Sweden Democrats were explicit. Founding members came from the fascist Bevara Sverige Svenskt (‘Keep Sweden Swedish’) organisation. The Sweden Democrats’ first chairperson had been an activist in the Nordic Realm Party, and their first treasurer had served as a translator and propagandist in the Waffen-SS. But when Akesson became party leader in 2005, he embarked on a thorough rebranding aimed at making the party more palatable to mainstream voters. They redesigned their logo, ditching a flaming torch in the colors of the Swedish flag for a hippie-ish anemone. They dropped the slogan ‘Keep Sweden Swedish’ and swapped pseudoscientific racism for national chauvinism.

Few were convinced. Major media outlets remained wary, and the postal service reportedly refused to deliver their leaflets. This outsider status would turn out to be something of a mixed blessing. With fewer traditional channels of communication open, the Sweden Democrats turned to then-nascent social media platforms. A few years after Akesson became leader, the Sweden Democrats had a Facebook presence more than eight times the size of the Social Democrats. Ahead of this month’s election, a massive online troll army, reportedly funded by the party’s communications office, helped shape the online discourse on immigration and crime.

Two additional macroeconomic shocks aided the Sweden Democrats’s ascent. In 2006, the Alliance for Sweden – also led by Bildt’s Moderates – implemented a package of austerity and tax cuts designed to ‘make work pay’. This sparked a significant rise in inequality: the largest in any OECD country. One study found that during this period, ‘incomes continued to grow among labour-market “insiders” with stable employment, while cuts in benefits implied a stagnation of disposable incomes for labour-market “outsiders” with unstable or no jobs.’ By 2008, however, even the ‘insiders’ had been precaritized by the effects of the financial crash. A new layer of workers began to emerge who remained in stable employment, yet were hit by stagnant wages and the threat of automation. These two marginal groups – labour-market outsiders and vulnerable insiders – are overrepresented among the Sweden Democrats’ politicians. The party also gained the most votes in areas where the incomes of ‘outsiders’ had dropped the most relative to ‘insiders’, and among the long-term unemployed. Their strongest base was in the country’s provincial south, as one might guess from Akesson’s distinctive drawl, redolent of a humble farmer from Scania.

The Sweden Democrats also enjoy striking levels of support among those that depend on social insurance. And not without reason. During the leadup to the 2014 election, the Social Democrats criticized the Alliance’s restrictions on sickness and disability benefits, vowing to rebuild the welfare state. Yet, once in power, the exact opposite happened. The Ministry of Social Security vowed to reduce the number of people reliant on sickness benefits. Over the next four years, we saw a five-fold increase in rejections for long-term sickness benefits. For those with disabilities requesting personal assistance, the rejection rate rose to 90%. Facebook groups sprung up in which people posted about friends and relatives who had taken their own lives as a result of these restrictions. The Sweden Democrats’ representative on the Riksdag’s Committee on Social Insurance began to leave posts and comments, becoming a regular presence on these platforms.  

The Sweden Democrats claimed the government had cut sickness benefits to free up resources for immigrants. At the centre of their ideology is nostalgia for Folkhemmet, or ‘people’s home’, a concept coined by the Social Democrats’ Per Albin Hansson in 1928. For the Sweden Democrats, the welfare state is a zero-sum social good that is threatened by globalization, the EU and immigration. They have pilloried the Social Democrats for betraying their own legacy by serving globalist elites instead of ordinary Swedes.

Perhaps unsurprisingly then, the Sweden Democrats have managed to poach voters from their centre-left opponents. Support for the party has even grown within the Social Democrats’ own union, the Swedish Trade Union Confederation, or LO. A recent survey indicates that among LO members, the Sweden Democrats and Social Democrats now enjoy similar levels of support – with the former beating the latter among male members. (This mirrors trends in broader society: if only men voted in 2022, then right-wing and nationalist parties would have gotten nearly 60% and the Sweden Democrats would be the largest party).

This can be partly attributed to the Sweden Democrats’ success at foregrounding immigration in public discourse. For decades, Sweden was a European anomaly, experiencing waves of inward migration with minimal pushback. In 2011, the year after the Sweden Democrats entered parliament for the first time with 5.7% of the vote, only 8% of Swedes believed that migration was the most important issue facing the country. But as the effects of austerity began to bite, and as the Social Democrats lay supine – providing no effective opposition to the Alliance government – support for the Sweden Democrats rose steadily. Then came the 2015 migrant crisis, when more than 162,000 asylum seekers arrived in Sweden, at which point support for the Sweden Democrats jumped to 20%. The following year, the number of Swedes who cited immigration as the most important issue rose to 44%.

But the pivotal moment came a few years later, when the Moderates decided to make immigration the central issue of the 2018 election, setting the tone for all other bourgeois parties. When riots flared up in several Swedish cities after Rasmus Paludan’s public burning of the Quran, even Prime Minister Andersson attributed the unrest to the ‘failure to integrate’ immigrants and ‘the creation of parallel societies’. These riots offered the Sweden Democrats a critical boost ahead of the election. At the party’s election night celebration, one prominent Sweden Democrat posted a photo with the editor of a right-wing publication on Instagram with the caption ‘the Quran riots did their job’, plus a winking emoji. This prompted the more conspiratorially-minded to wonder whether the party may have orchestrated the Danish provocateur’s activities.

A small Islamist party – Nyans (meaning ‘nuance’) – emerged in response to the mainstreaming of anti-immigrant rhetoric. Though it didn’t cross the threshold necessary to enter parliament, it made a strong initial showing in some distressed immigrant areas. Its leader had been expelled from the Centre Party in 2018 for failing to disclose his personal ties to Turkey’s ultranationalist Grey Wolves. Turkish media have published a series of glowing profiles of Nyans, and some have even speculated that Erdogan plans to use it to exert his influence in Sweden. Predictably, right-wing media seized on this story to feed the general hysteria.

In recent years, the media has effectively incited moral panic about immigration and crime. (While certain crimes, such as shootings by organized criminal groups, have increased in recent years, the overall crime rate is actually down; but this is rarely acknowledged.) The media’s rightward turn was already underway during the 2010s. In that decade, free-market thinktanks proliferated; Sweden now has more than any other country in Europe besides Germany and the United Kingdom. Among the most prominent is the neoliberal advocacy group Timbro, modelled on the Cato Institute, which runs an academy for training young politicians and journalists. Timbro is funded by the Confederation of Swedish Enterprise, which has reportedly courted the Sweden Democrats in recent years. The confederation has lobbied the party to drop its opposition to for-profit welfare systems. In exchange, the Sweden Democrats have gained mainstream respectability and access to elite corridors that were previously closed to them. Speaking at the confederation’s SME committee meeting in February, Akesson adopted Timbro’s red-baiting register: ‘When the government says they’re going to “take back democratic control of welfare”, I get Soviet vibes.’

Thus, while the Sweden Democrats have retained much of their chauvinist welfare rhetoric, they have also steadily embraced a Thatcherite policy platform. Few may have noticed, but in the lead-up to the election, Akesson even U-turned on one of the party’s supposedly core values: Swedish jobs for Swedish workers. Until 2008, a test was used to restrict labour migration to those jobs facing domestic labour shortages. Under this system, employers, unions and the government would assess whether a given job could be filled by Swedish workers before opening it up to foreign applicants. But in an interview last month, Akesson said that he ‘doesn’t want unions to control work permits’ and voiced his opposition labour market tests – aligning himself with the bourgeois parties.

The Sweden Democrats have also started to echo mainstream parties’ support for membership in ‘globalist’ institutions like NATO. In 2016, when the Rikstag voted on whether to allow NATO forces to be stationed on Swedish territory, the Sweden Democrats were expected to join the Left Party in their bid to delay signing of the agreement pending a further review. But at the last hour, they decided to back closer military cooperation with the alliance, allowing the vote to pass with a broad majority. Then, in April, the party went so far as to complain that the Social Democrats’ timetable for joining NATO was ‘far too slow’. Now, former Prime Minister and uber-Atlanticist Carl Bildt has been floated as a potential foreign minister in the new government. How the Sweden Democrats will retain their anti-establishment, anti-globalist bonafides while working with a man who once rhapsodized about the ‘New World Order’ before his sponsors in Washington, is anyone’s guess.

Read on: Göran Therborn, ‘Twilight of Swedish Social Democracy’, NLR 113.


Sound Money?

On 6 September Liz Truss was appointed Prime Minister of the United Kingdom, after a Conservative leadership contest notable for its near-total lack of reference to the social calamity known as the cost-of-living crisis. While the ruling party spent the summer decrying ‘woke culture’ and praising the trickle-down theory, Keir Starmer’s Labour found a new spring in its step, calling for a windfall tax on energy firms and opening up a poll lead that could point towards the steps of Downing Street. Meanwhile, a wave of strikes and protests – centred on consumer prices and real wages – has given a shot in the arm to a radical left still emerging from the post-Corbyn doldrums. Don’t Pay UK, canvassing support for the mass non-payment of energy bills in the wake of a 56% April increase and an 80% hike scheduled for October, has amassed a pledge list of almost 200,000 refuseniks.

During this period, the cap on maximum domestic energy changes by Ofgem – toothless regulator of the privatized energy system – became the object of increasing discontent. This was not the intention of Theresa May’s government when it introduced the energy cap in 2018, in an attempt to allay pressure from Jeremy Corbyn’s Labour (the proposal for a cap itself dating as far back as Ed Miliband’s leadership). Yet as wholesale natural gas prices spiked across Eurasia over 2021, then skyrocketed following Russia’s invasion of Ukraine, Ofgem continued to raise its price ceiling to unprecedented heights, bound by legislation to guarantee a 1.9% profit to retailers. This brought with it the prospect of nationwide strikes plus mass civil disobedience. So, on the second day of Truss’s tenure, the government pledged a not-quite freeze on bills (the typical bill will go up £600 rather than £1,600) for the politically significant period of two years, up until the last possible date of the next general election. This was the largest single economic intervention in Britain’s peacetime history, dwarfing the eventual cost of the Covid furlough scheme.

There is an obvious precedent for Truss’s handout. When Thatcher became PM in May 1979 she immediately accepted the recommendation of the Clegg Commission, established by Callaghan after the Winter of Discontent, for an average public-sector pay rise of 25% – approximately double the rate of inflation. This elicited a backlash from the new breed of hardline monetarists, but Thatcher recognized that securing industrial peace was more important than appeasing them. As The Economist reported at the time, she entered office with a clear intention to buy off stronger sections of organized labour while confronting and defeating weaker ones. The 1977 Ridley Plan described this as the ‘salami’ approach – ‘one thin slice at a time but by the end the lot is gone.’ In the short term, wrote Ridley, the government would have no choice but to ‘pay up’ to those unions ‘that have the nation by the jugular vein.’

It seems that today’s Tories – even (or perhaps especially) their most committed ideologues – are once again prepared to ‘pay up’ if it allows them to win a class fight. And let’s not delude ourselves: Chancellor Kwasi Kwarteng’s mini-Budget, announced this morning, shows that a class fight is underway. His so-called ‘fiscal event’ was the most dramatically regressive announcement by any government for some time – giving a £4,500 tax cut to the richest 500,000 people in the country while further tightening Britain’s miserly benefits system. This smash-and-grab raid on behalf of the very wealthiest must be set in the context of recent global upsets: the shifting international balance of power, trade wars, Covid-19, the Russian invasion of Ukraine and worsening ecological crises. With growth rendered uncertain by such turbulence, but profits still demanded, working-class and middle-class living standards are on the line. We are entering an era of zero-sum capitalism, even more cut-throat than that of the early eighties.  

In this conjuncture, the old rules of Ukanian state management – according to which the Treasury’s books should be balanced and the free market should come first – appear to have been rewritten. The Tories of the Cameron-Osborne era are gone; in their place, we have austerity-sceptic Johnson followed by deficit-sceptic Truss. The former Chancellor Rishi Sunak has seen his drab bean-counting rejected by the Tory membership, while Truss is set to embark on a £150bn-plus borrowing bonanza. Reversing the NICs rise, cutting green levies on domestic energy bills and reversing Sunak’s planned Corporation Tax hike were the priorities she enumerated during the leadership campaign, the total cost of which could easily reach £30bn. These aren’t the Tories of old: neither Thatcher’s homilies on household budgets nor their repetition by Cameron and Osborne get a look in.

With that in mind, it is worth considering the Spectator’s fascinating survey of ‘Trussonomics’, based on interviews with her three leading economist supporters, for hints as to where the Tory right are headed. In it, Truss’s backers – who prefer to be known as ‘Trusketeers’, alas – outline a programme that deviates significantly from the traditional Conservative prospectus. Julian Jessop, former chief economist at the Institute of Economic Affairs, now asserts that the austerity of the 2010s was a mistake: ‘When the facts change, I change my mind…Ten years ago, I would have been much more conventional in my thinking that you need to get the budget deficit down as quickly as possible. But it’s clear that isn’t working.’ Patrick Minford, an early supporter of Thatcher, is currently reprising that role but flipped 180 degrees as he lays into the Treasury’s obsession with book-balancing: ‘We have policies in place which are raising taxation, that damaged growth in order to satisfy short-run borrowing constraints put forward by the Treasury.’

As for the monetarism Minford once expounded, with its insistence on a strict separation between the monetary authorities and the government as well as mechanical targets for monetary growth, Gerard Lyons, tipped as a member of Truss’s as-yet-unveiled Council of Economic Advisors, says he wants to ‘re-examine’ the Bank of England’s remit ‘to make sure it is fit for purpose’. Elsewhere, Kwarteng pays lip-service to the idea of central bank independence whilst simultaneously pledging that ‘fiscal and monetary policy must be coordinated’ – the passive voice happily disguising who, exactly, should be making the coordination happen. Put all this together, and the family resemblance is not so much to Thatcherism, with its rhetorical commitments to ‘sound money’ and balanced books, but to Reagonomics, with the US deficit under President Reagan ballooning to unprecedented levels thanks to tax cuts for the rich and vast increases in military spending. (Truss has promised to increase UK military spending to 3% of GDP by 2030, at an estimated cost of £157bn.)

Of course, these solutions are presented as short-term ones: a necessary yet temporary detour from the true path of deregulation and ‘sound money’. Minford has suggested that a 7% interest rate might ultimately be more appropriate for the British economy, while Jessop has suggested relaxing restrictions on financial services, ‘gene editing’ and data protection. But all this is for somewhere down the line. For now, the Trusketeers anticipate significant state intervention and large deficits, in part to provide a political cover for their long-term plans.

Will any of this work? Most economists would say no. The FT’s Martin Wolf claims it is a ‘fantasy’ to believe corporate tax cuts and deregulation will deliver improved growth, while Jonathan Portes asserts that deficit spending will stoke inflation. But here we might pause. With inflation largely driven by external factors – Putin’s invasion, environmental collapse, supply issues linked to the pandemic – conventional economic models of why prices rise, focusing on excessive demand, are falling short. Those still using them to talk up the inflationary risks of increased government deficits are likely to be proved quite wrong. It is therefore worth attempting a level-headed assessment of Truss’s economic prospectus – identifying its strengths and weaknesses, in the terms it has set itself – beyond the standard neoclassical framework.

The most pressing challenge for the British economy is currently the soaring price of essentials goods, causing households to spend less on desirable things like pubs, restaurants and local shops and more on undesirable things like fossil fuel companies – which means that government support, of the kind promised by Truss, will be necessary to sustain demand. Contra her detractors, this is unlikely to have much meaningful inflationary effect. If the government borrows money to cut domestic energy bills, the Institute of Public Policy Research estimates that 3.9% would be taken off the ONS’s calculation for the headline rate of inflation – a win-win, making life easier for households and reducing pressure on the Bank of England to further increase interest rates.

Other things being equal – the economist’s get-out clause – Truss’s plan to massively increase government borrowing will also have some impact on growth, if only because it’s hard to borrow and spend over £150bn without making something happen. Whether this is useful in the long-term is a different question: handing £30bn more to corporations, already squatting on a £950bn hoard in their bank accounts and showing no great inclination to invest, is hardly an effective use of the tax system. Then again, if corporations don’t actually spend their unexpected windfall in Britain, it is less likely to feed into inflationary pressures here.

So, when it comes to propping up demand, limiting inflation and stimulating immediate growth, Trussonomics won’t be as abortive as orthodox economists predict. And she needs only two years, at most, to prove something like competence before facing a general election. Yet there may be other fronts on which her domestic plan could falter. For one thing, the international situation today is more uncertain than in the 1970s, and Britain’s global position is far weaker. The UK retains immense privileges as a developed economy with deep, liquid capital markets and venerable institutions. But it is also undergoing a radical shift, via Brexit, in its relations with the rest of the world at a time of acute social stress. This will inevitably unsettle the Conservative’s traditional support base in big capital and finance, while the decrease in the value of the pound, presently hitting an almost forty-year nadir against the dollar, indicates the possibility of funding problems ahead.

This is compounded by Britain’s reliance on imported energy and food supplies. In the last true currency crisis face by a Conservative government – Black Wednesday in 1992 – Britain ran a small deficit on its energy consumption, soon to disappear as gas production peaked in 2000, and was 70% self-sufficient in food. Today, it imports roughly half its natural gas, and 45% of its food. The Black Wednesday crisis erupted because the government was unable to defend the value of the pound against the deutschmark inside the Exchange Rate Mechanism, a precursor to the euro. Today, Britain is out of the EU and the pound floats freely, but the currency crisis could be even more fundamental, if we are forced to pay higher sums for basic goods in a declining currency. Even if Truss – borrowing from the playbook of Anthony Barber, Chancellor under Heath in 1970 – manages to engineer a short-lived growth spurt at the beginning of her tenure, this will prove difficult to sustain. Indeed, it may have already evaporated by the time she is forced to face Starmer at the polls.

Truss also harbours unrealistic hopes of unlocking growth through a post-EU shake-up of employment laws, threatening the removal of rights on working time and, in a familiar trope, invoking the spectre of trade union militancy. But while the recent uptick in union membership and activity is to be welcomed, strikes in Britain remain rare, with the number of annual walkouts still close to the all-time lows of the last decade. Further restrictions on union organizing will not miraculously translate into improved productivity. Nor are there many remaining costs in Britain’s perilously neoliberal labour markets that could be removed without pushing further and deeper into living standards. If Truss wants to press ahead with such reforms, she will likely have to sweeten the pill or buy off discontent with further temporary handouts – which may draw opposition from the backbenches.  

But where Trussonomics is perhaps most likely to fall apart due to domestic factors is in failing to overcome the resistance of the Treasury. Rumours that the new energy plan would involve forcing ten-year loans onto households indicate the lingering presence of Treasury Brain (harking back to the equally daft forced loan scheme which Sunak cooked up for domestic energy bills last spring). That this misstep was avoided suggests someone, somewhere in government is prepared to put political strategy over Sunak-style bean-counting. Yet the fact that this supposed ‘price freeze’ doesn’t entirely freeze prices, seemingly in deference to vestigial accountancy concerns, also evinces the zombie-like persistence of the latter.

As a result, the policy’s political efficacy has been blunted, opening up a gap which Labour could easily exploit. And this is to say nothing of the evident hypocrisy of making £40bn of liquidity support available to energy companies whilst promising only six months of support to every other business, large or small. Kwarteng’s peremptory sacking of Tom Scholar, Permanent Secretary at the Treasury, having been Second Permanent Treasury as austerity was implemented in the early 2010s, was greeted with howls of outrage from the liberal end of the media. But it reveals the new administration’s determination to press ahead with its programme against concerted opposition. The new Chancellor knows that realizing major deficits and mighty tax cuts means overriding Treasury recalcitrance.

It was always a mistake to think of austerity as a programme that swivel-eyed true-believers were determined to force upon the rest of us. This may have applied to a small number of Thatcherite diehards baying for shrunken states and flat taxes. But, by and large, austerity was promoted, designed and delivered by a cadre of ideologically adaptable Sensible People like Scholar, poring over spreadsheets at the Treasury and the Institute for Fiscal Studies. They were the ones who inflicted a miserable lost decade on the country. Now, the current crop of Tories may have few compunctions about cutting spending when the time comes; but they know better than to insist on it as a strategic priority. The class battles ahead demand a more considered approach. And should Truss’s plan fall short, as prices spiral upwards, growth disintegrates and the capital markets turn sour, there are many forces waiting to move: from the Don’t Payers to the striking workers, to those in her own party sharpening their knives for the next leadership contest.

Read on: Tom Hazeldine, ‘Transformatrix’, NLR 131.


Privatized Universe

There is no limit to human megalomania. One recent example – which went largely unnoticed during this torrid and neurotic summer – was a bizarre exchange between NASA Administrator Bill Nelson and the Chinese authorities. ‘We must be very concerned that China is landing on the Moon and saying: “It’s ours now and you stay out”’, Nelson cautioned in an interview with Die Bild. A spokesman for the Chinese Foreign Ministry immediately hit back: ‘This is not the first time for the chief of NASA to lie through his teeth and smear China’.

Nelson’s accusation was strange, given that this December will mark fifty years since anyone has set foot on our natural satellite. Since then, moon exploration has been delegated to small, tracked vehicles which scuttle over its rocky outcrops. China has only deployed one such robot, which travelled to the moon’s ‘dark side’ in 2019. So the idea that it could establish sole dominion over an area the size of Asia, suspended in a vacuum at temperatures ranging from 120 degrees Celsius during the day to minus 130 degrees at night, exposed to cosmic radiation and more than 384,000 km from the closest supply base, was somewhat of a stretch.

The accusation was all the more outlandish given that it was the US, not China, that planned to launch a gargantuan rocket into space on 29 August, completing a few lunar orbits before returning to earth, all for the modest sum of $29bn. This would be the first leg of the Artemis mission – so-called after the Greek goddess of the moon and sister of the Sun-god Apollo – which eventually aims to establish a base worth $93bn on the moon by 2025. In theory, this lunar settlement will one day serve as a launch pad for a human expedition to Mars.

The question is: why are we interested in further trips to the moon? On their successful voyage in 1969, American astronauts collected a few curious stones but nothing else – so it is hard to find a scientific rationale for future missions. There may be a military objective: it was not for nothing that in late 2019 the US established the sixth branch of its armed forces, the Space Force, to manage all space-related military activities. But why the moon? Perhaps to install a military base from which to threaten an enemy on earth? Surely it would be sufficient to use the satellites already in orbit, which are much closer, cheaper and more precise.

Cynical onlookers such as the Financial Times and Economist insinuate that these missions are merely a ploy to bankroll the defence industry and distribute funds to strategic electoral constituencies. The latter publication reported that the Space Launch System (SLS) used in the Artemis project was nicknamed the ‘Senate Launch System’, and its technology, derived from the now defunct Shuttle programme, was intended to safeguard jobs in Alabama, where the bulk of the Shuttle’s components were manufactured.

Another hypothesis is that US wants to replay the game that eventually caused the USSR to collapse. The Strategic Defense Initiative, or ‘Star Wars’ programme, was a cosmic defence system whose pursuit brought the Russians to their knees, despite the fact that it was never realized. To keep pace with the American conquest of the moon, China would similarly have to divert a quantity of resources that would plunge its economy into crisis. Hence the US calling upon its vassals – Canada, Japan, the UK and EU – to participate in the Artemis mission.

Lest this New Cold War expenditure should strike the public as somewhat pointless, the government can always pull a rabbit out of its hat. In recent years we have seen countless economic gurus extolling the potential of resource mining, not only from the moon but also from asteroids. Names of great prestige from the world of finance have begun to sponsor this nascent industry. In 2009, Google’s Larry Page and Eric Schmidt joined with the director James Cameron and the aerospace entrepreneurs Eric Anderson and Peter Diamandis, among others, to found Planetary Resources, a company whose ultimate mission is to mine high-value minerals from asteroids and refine them into metal foams. Meanwhile, iSpace, a similar venture launched in Japan in 2010, claimed that

by taking advantage of lunar water resources, we can develop the space infrastructure needed to enrich our daily life on earth, as well as expand our living sphere into space. Also, by making the earth and Moon one system, a new economy with space infrastructure at its core will support human life, making sustainability a reality.

Fantastical enterprises of this ilk have since proliferated. In 2013, Deep Space Industries Inc. drew up an ambitious blueprint for identifying asteroids suitable for mining by 2015, returning samples to earth the following year, and commencing full-scale operations in 2023. Shortly after, a Californian company called OffWorld announced a grand plan to ‘develop a new generation of universal industrial robots to do the heavy lifting on the Moon, asteroids and Mars.’ It envisioned ‘millions of smart robots working under human supervision on and offworld, turning the inner solar system into a better, gentler, greener place for life and civilization’.

In a 98-page report to its clients in 2017, Goldman Sachs asserted that the prospect of mining platinum in space with ‘asteroid-grabbing spacecraft’ was becoming increasingly affordable, and forecast ever-increasing profits in the sector. Morgan Stanley followed suit. When such banks are encouraging their clients to invest in space mining industries, it is worth remembering that it was Goldman Sachs who managed Greece’s national debt, practically doubling it in the process. That is to say, large financial institutions are endlessly capable of squeezing their clients like lemons. In the end, despite the banks’ predictions, Deep Space was sold to Bradford Space, a comparatively modest trader of orbital flight systems and aircraft components, while Planetary Resources was liquidated and its assets auctioned off. Illusions, however, die hard: January 2022 saw the founding of AstroForge, another Californian firm which claims to have developed new lab-tested technology for processing asteroid material.

Bloomberg has warned us in no uncertain terms about these sci-fi-esque enterprises:

Where would science fiction be without space mining? From Ellen Ripley in Alien and Dave Lister in Red Dwarf, to Sam Bell in Moon and The Expanse’s Naomi Nagata, the grittier end of interstellar drama would be bereft if it weren’t for overalled engineers and their mineral-processing operations…It’s wonderful that people are shooting for the stars – but those who declined to fund the expansive plans of the nascent space mining industry were right about the fundamentals. Space mining won’t get off the ground in any foreseeable future – and you only have to look at the history of civilization to see why. One factor rules out most space mining at the outset: gravity. On one hand, it guarantees that most of the solar system’s best mineral resources are to be found under our feet. earth is the largest rocky planet orbiting the sun. As a result, the cornucopia of minerals the globe attracted as it coalesced is as rich as will be found this side of Alpha Centauri. Gravity poses a more technical problem, too. Escaping earth’s gravitational field makes transporting the volumes of material needed in a mining operation hugely expensive.

Indeed, if we exchange illusion for reality for a moment, we realize there are good reasons why very few people over the last fifty years have poked their heads out of the immediate vicinity of our planet. The International Space Station orbits the earth at only 400km from the earth’s surface – if one were to represent the earth as a sphere a meter in diameter, it would hover just 3cm above it. The moon, on the other hand, is almost a thousand times further, and the shortest distance between the earth and Mars is 55 million kilometres. This doesn’t mean that humans will never exit the solar system, but doing so would require a scientific paradigm shift beyond Einsteinian physics, plus staggering technological advances which would revolutionize transportation in a manner as unthinkable as the reaction engine would have been in the age of the horse-drawn carriage.

The mirage of space exploration obeys the same iron law which Horkheimer and Adorno identified in the culture industry. Namely, it works by indefinitely postponing satisfaction: ‘The culture industry perpetually cheats its consumers of what it perpetually promises. The promissory note which, with its plots and staging, it draws on pleasure is endlessly prolonged.’ We are constantly told that in two, five, ten years’ time, a new mission will land on the moon – or better still, build a base there. Likewise, we will always be twenty, thirty or forty years away from establishing colonies on Mars. Deadlines for space flights are infinitely delayed, as demonstrated by Artemis, whose launch was first scheduled for 2020, then for the end of 2021, then 29 August 2022, then 3 September and now, ‘probably’, for later this month, or maybe next…

There’s a stark difference, though, between the ‘normal’ culture industry and the space mirage; the former is produced for the masses, the latter for the capitalist class. It is the Larry Pages, the Elon Musks and the Jeff Bezoses that tell themselves such fairytales – believing, with frenzied hubris, that they can turn fiction into science. From this point of view, the exploration (or exploitation) of space takes a form that is closer to religious postulate than plebeian superstition. For the concrete fact which continues to vex capitalists is that the earth is round (and therefore limited, finite). Capitalism is an intrinsically expansionist system; without unrestricted growth, the profit mechanism jams. We’ve frequently witness this phenomenon as capitalists are forced to open new frontiers of industrialization and accumulation; after Britain and the US it was France, then Germany, then Japan and Italy; now it is China and Vietnam, and one day it will be Africa. Yet the earth remains stubbornly spherical – and this poses an insurmountable problem unless the market can expand beyond its frontiers; or maybe even further, beyond those of the solar system. The capitalists’ dream is of an infinite, universal market, where you can buy shares of the Andromeda Galaxy and futures on the commodities produced on the three planets which orbit the pulsar PSR B1257+1 in the Virgo constellation, 980 lightyears away from our solar system. Imagine: an entire cosmos to exploit! 

Yet capitalism is not simply an expansionist economy; it also involves a proprietary relation to the external world. It is enough to recall the paeans which accompanied last year’s flea-jumps out of the earth’s atmosphere by three billionaires (Branson, Bezos, Musk), heralding the private conquest of space (obviously far more efficient than any public equivalent). Here we must reckon with the notion of the privatized universe: entire star systems recast as private property. Our billionaires have no trouble thinking on this scale. Nor, for that matter, are they reluctant to embrace the ridiculous.

The history of space conquest stretches back to the middle of the last century. The moment humankind peeped out of the earth’s atmosphere (Laika the dog in 1957; Yuri Gagarin in 1961), governments immediately began using international fora to stake their claims on the cosmos. To prevent future galactic incursions and imperialisms, they solemnly signed the Outer Space Treaty in 1967, which recommended that the ‘exploration and use of outer space should be carried out for the benefit and in the interests of all countries and shall be the province of all mankind’. But this peacemaking was merely a facade. In 1979, when the Moon Treaty declared the moon and its natural resources ‘CHM’ (Common Heritage of Mankind) and called for ‘an equitable sharing by all countries in the benefits derived from these resources’, many states including the US refused to ratify it. Nine years later, the US government’s Department of Commerce established the Office of Space Commerce, whose mission was ‘to foster the conditions for the economic growth and technological advancement of the US commercial space industry’.

Now, over the last decade, Washington has intensified its efforts to create a legal framework that would enable the exploitation of resources in space:

The Obama administration signed the US Commercial Space Launch Competitiveness Act of 2015, allowing US citizens to ‘engage in the commercial exploration and exploitation of space resoources’. In April 2020, the Trump administration issued an executive order supporting US mining on the Moon and asteroids. In May 2020 NASA unveiled the Artemis Accords, which included the development of safety zones around lunar mining sites.

At this rate, it won’t be long until law firms begin to handle space-related controversies, hiring lawyers who specialize in the intricacies of interplanetary commerce. And all this before anyone has even returned to the moon itself! The problem is that, while we pursue such extravagant schemes, we are simultaneously condemning this small, singular, fabulous planet of ours to destruction. 

Translated by Francesco Anselmetti.

Read on: Eva Díaz, ‘Art and the New Space Age’, NLR 112.


Chile’s Rejection

Pinochet and his legacy have proven hard to kill. The 2022 draft constitution – the most progressive constitution ever written in terms of socio-economic rights, gender equality, indigenous rights and the protection of nature – was rejected by almost 62% of voters in a national plebiscite on 4 September. How could Chileans, after rising up in October 2019 to demand a new constitution, then voting by an overwhelming majority to initiate the constituent process, reject the proposed draft? Why would they align with right-wing forces seeking to preserve the Pinochet constitution? This astonishing result surely demands a multi-causal explanation. Here I will focus on two of the most prominent ones: the right-wing disinformation campaign across traditional and social media, and the exclusion of the popular sectors from the constituent process, which I have highlighted in previous analyses.

Support for Rechazo (‘Reject’) was strongest in low-income municipalities, where turnout was also higher than in upper-class neighbourhoods. While in the 2020 plebiscite the opposition to the constituent process was led by the three wealthiest municipalities, this time around the poorest neighbourhoods turned out en masse to vote against the proposed draft. Also in contrast to 2020, voting was mandatory – with fines for non-compliance – which forced the popular sectors to cast a vote for fear of the pecuniary costs of abstention. Turnout increased substantially from 50% to 86%; and of the 5.4 million new votes cast, 96% opted to reject. In total, the draft constitution received only 4.8 million votes – one million less than voted in favour of redrafting two years earlier. This was not only a vote against the new constitutional text, however. It was also a rejection of Gabriel Boric’s administration and its parties: the ‘new left’ coalition including Frente Amplio, the Communist Party and the parties of the old Concertación. Apruebo (‘Approve’) was supported by roughly the same number of people that voted for Boric in the runoff against the far-right candidate José Antonio Kast in December 2021 – suggesting that he has been unable to expand his constituency since taking office.

At least a million dollars were poured into the month-long campaign to raise awareness about the draft constitution. About 90% of these funds were spent by the Rechazo camp, comprising the right-wing parties, parts of the Christian Democrats and the new centrist coalition ‘Amarillos por Chile’. They repeatedly denounced the document as ‘extremist’ and ‘poorly written’ on morning talk shows and evening news programmes, while conservative thinktanks bombarded audiences with opinion polls of doubtful accuracy showing that most people would vote down the new draft. Such efforts were bolstered by the spread of disinformation on social media, as well as the distribution of fake copies of the draft constitution with doctored articles. In one illustrative episode, the far-right Convention representative Constanza Hube was caught giving out fake copies of the constitution during a Rechazo meeting.

Exit polls and vox pops revealed that many people were confused about what the plebiscite was actually about; some even thought that by voting to reject they were abolishing the Pinochet constitution. This is not surprising given that the only official information on the constitutional draft amounted to thirty minutes of television broadcasting a day, divided equally between Rechazo and Apruebo, over a 28-day period. Since the broadcasting space was allocated to an array of political parties and civil society groups, the messaging was fragmented. For the Apruebo campaign, ten organizations participated in the broadcasts; even after various deals were struck between them, some ended up having less than five seconds to say their piece. There were no official campaign adverts, nor leaflets sent to people’s homes, nor in-person information sessions; all the outreach was done by political parties, NGOs, or volunteers. It remains unclear why the Boric administration did such a poor job informing the electorate on such a crucial matter.

While the daily information broadcasts for and against the new constitution had little impact on voters – only about 720,000 people tuned in each day – the endless stream of TV shows featuring politicians and self-styled intellectuals spreading disinformation about the content of the draft surely did. Among the most pervasive falsehoods were that the new constitution would abolish homeownership for the working classes, allow on-demand late-term abortions, and open the door for the secession of indigenous territories.

A testing ground for disinformation was the Araucanía region, a militarized zone – placed under a state of exception due to the Mapuche conflict – where 74% of voters chose to reject the constitutional draft: the second highest level of support for Rechazo nationwide. A traditional right-wing stronghold, Araucanía was one of only two regions that voted to keep Pinochet in power in 1988, although it subsequently voted to initiate the constituent process in 2020. In late June Francisco Orrego, a young lawyer and Rechazo spokesperson, went all-out to convince the working-class community of Angol that the draft constitution’s right to housing – one of the few articles proposed by grassroots organizations that eventually made it to the final text – would abolish people’s right to own their homes if they had bought them with social subsidies (a situation that applied to about 40% of the population). Although this was immediately denounced as fake news, Orrego nonetheless continued to appear as a regular pundit on political talk shows, where he could disseminate such lies to larger audiences.

Meanwhile, the evangelical churches, which recently entered into an alliance with the far-right Republican Party, have a strong presence in Araucanía, with their membership constituting about 27% of the population. In late February, before the article on gender rights was even approved by the Convention, representatives from more than 2,700 churches in the region called on their communities to reject the draft, citing abortion as their main concern. Although the draft constitution codified the right to abortion in general terms by mandating the state to guarantee the ‘voluntary interruption of pregnancy’, the public had a warped perception of this provision. Felipe Kast, the right-wing Senator for Araucanía, used conservative radio stations to broadcast an advert claiming that the draft constitution ‘allowed for abortion until the ninth month of pregnancy’, decrying this as a ‘violation of the human rights of unborn children.’ Although Apruebo advocates tried to push back against these falsehoods, they became impossible to dislodge from the popular imaginary.

Perhaps the most controversial and weaponized topic, however, was that of indigenous rights. Although the text merely followed the commitments established in the ILO Convention No. 169 on indigenous rights, which Chile had ratified in 2008 but never implemented, right-wing politicians and pundits wove a narrative in which indigenous peoples would gain the ability to dismember the country. Ximena Rincón, Senator for the Christian Democrats, claimed in early July that she was supporting Rechazo because it would give indigenous peoples (who constitute less than 10% of the national population) veto power over constitutional reforms. Even though she was told on live television that this was untrue, she refused to change her line – and such distortions continued to influence the national discourse.

At the same time, the voting results coming out of the prison system, where the inmates’ only information came from television broadcasts, revealed the powerful effects of conservative media in shaping public opinion. For the first time in history inmates were allowed to vote, and it was expected that they would swing behind Apruebo, since the draft constitution gave new rights to incarcerated people such as free legal defence, the prohibition of double jeopardy, and a People’s Ombudsman to prevent against abuses. Yet, in the end, just one of the fourteen prison complexes voted to approve it. This was, by no coincidence, the only one where physical copies of the draft constitution were actually distributed to prisoners and information sessions were held with legal aid volunteers. Those who actually learned about the text approved of its reforms; those who relied solely on the media coverage were implacably hostile to it.

According to a recent report, at least 36 organizations not subject to electoral controls, and therefore not mandated to disclose their funding, spent $130,000 advertising on Facebook and Instagram during the months before the plebiscite; 97.4% of these adverts pushed to reject the draft constitution. Ultimately, it seems that bias in traditional media, plus the millions spent to influence opinion via social media, helped to consolidate the narrative that the Convention was a political circus that had drafted a sloppy and unprofessional document.

In addition to this disinformation campaign, those on the extra-parliamentary left were sceptical of a Convention that had betrayed the mass mobilizations of 2019. Many of them voted to reject rather than legitimize the process. They rightly pointed out that the Pact of 15 November 2019, which was agreed in a backroom deal between Boric and a hard-right Senator, and which set out the framework for the Constitutional Convention, was intended to constrain rather than channel popular energies. It instituted an antidemocratic two-thirds supermajority rule for passing new constitutional articles and gave establishment parties outsize influence over the drafting process. From the beginning, the constituent process was captured by elites, who intensified their attempts to preserve the status quo as the plebiscite approached.

On 14 May, the Convention delivered a lengthy first draft that incorporated progressive constitutional innovations such as plurinationality and ecological rights. Two special committees were formed to ‘harmonize’ and edit the final document, which included a total of 388 articles, and to decide on transitional arrangements. However, the Convention’s autonomy was soon violated by negotiations over how to transition from one constitutional framework to another. On 16 May, the government sent a document to the Convention recommending that the current regulations on natural resources, water and indigenous lands be preserved until new legislation is approved – so as to assure an ‘orderly and gradual transition’. This meant, for instance, that water would remain private until right-wing Senators who control half of the Senate – and who voted in 2020 against making water a human right – agreed to nationalize it. The government also recommended that Boric, whose approval rating stood at just above 30%, as well as members of Congress, see out their original terms and stay in post for three and a half more years. The Convention bowed to these self-serving demands. For many activists, this was seen as unacceptable collusion between the constituent body and the executive, which served to discredit the drafting process as a whole.

Three weeks before the plebiscite, the parties of the governing coalition began to set out the changes they intended to pursue if the draft constitution was approved. Attempting to placate the parties on the right as well as those of the former Concertación (which now control 38% of the government ministries), Boric pledged to strictly delimit the rights of indigenous people, stressing that their input on national policy issues would be non-binding. He also reassured the establishment that the current neoliberal framework – in which basic services such as healthcare, education and pensions are largely provided by private companies – would remain in place. Indeed, while the draft constitution mandated the creation of a public education system, national health system and a public social security system, it did not explicitly dismantle the current voucher system in education, nor the insurance model in healthcare, nor the individual savings scheme that forces the Chilean working class to subsist on poverty pensions. Instead of pushing to reform these dictatorship-era systems, as protesters have been demanding since 2009, Boric agreed to preserve them.

These intended reforms not only demonstrated the government’s intention to preserve the core features of Chilean neoliberalism; they also signalled the contempt in which Boric’s coalition held both the draft document and the popular will. His announcement that he would seek to reform the constitution – even before it was put to a popular vote – compounded the impression that it was not fit for purpose. This played into the hands of the Rechazo campaign. It also conveyed to the electorate that they would merely be voting on a provisional text, rather than having a meaningful say in the country’s future. 

Chile now finds itself in an awkward position, without a clear path to resolve its impending socio-political crisis. By voting in favour of initiating a constituent process, Chileans indirectly rejected the current 1980 Constitution. Yet by rejecting the new proposed constitutional text, the process set in motion by the November Pact has officially been terminated, leaving no standing provision for a new drafting process. The constitutional reform resulting from the Pact merely stipulated that if the draft constitution were to be rejected, the old one would remain in force. So, what will happen next?

Before the plebiscite, President Boric vowed to call a new constituent process if the proposed draft was rejected. However, the only way to start such a process is through a new constitutional process, which requires a supermajority in Congress. This will be difficult enough to secure due to the right-wing opposition. But given that conservative forces control the Senate, convening a constituent assembly with adequate mechanisms of popular participation seems like an impossibility. It is therefore likely that Boric will try to establish another Convention based on rules negotiated from a position of weakness, which will be even more accommodating to the demands of the political class. This will be a party-led process – dominated by ‘experts’ and insulated from popular pressures. Pundits are already blaming the few independents in the Convention for the draft’s defeat, setting the stage for an eclipse of whatever radical potential the process previously had. Yet, at the same time, Chileans are already taking to the streets again to demand their own constituent process – one in which there are no backroom negotiations, and the people themselves have the power to make binding decisions.

Read on: Camila Vergara, ‘The Battle for Chile’s Constitution’, NLR 135.


The Great Unfettering

In a recent contribution to Sidecar, Matthew Huber claims to present a ‘Marxist alternative’ to the ‘mish-mash ecologism’ and dead-end ‘utopianism’ that he says afflicts parts of the climate left. Finding evidence of these maladies in two recently published books – The Future is Degrowth by Aaron Vansintjan, Andrea Vetter, and Matthias Schmelzer, and Half-Earth Socialism by Drew Pendergrass and Troy Vettese – Huber makes an impassioned plea for the left to walk away from utopian arcadias and embrace the more realistic option of a ‘socialist eco-modernist… transformation of production’.

Huber’s essay rehearses a line of criticism that he has elaborated on several occasions and that finds its most systematic form in his recently published book, Climate Change as Class War. In part an argument for appealing to working-class interests to win a Green New Deal, in part a polemic against degrowth, which Huber associates with the environmentalism of the ‘professional managerial class’, the book aims to further the cause of so-called ‘eco-modernism’.

Briefly put, advocates of degrowth call for an end to the fetishization of growth in contemporary society, a reduction in energy use and material throughputs in the Global North, and a globally just distribution of wealth and resources. This is necessary, they claim, to phase out fossil fuels, regenerate the planet’s damaged ecosystems and attain a decent quality of life for all. Such a programme would require reductions in resource and energy use for many in the Global North, yet this need not lead to asceticism. Rather, its supporters argue it would enable communal luxury within ecological limits. Though disagreements exist within the degrowth movement, most of its adherents envision a future where food production is localized, people have democratic control over issues that affect them, renewable energy infrastructure is decentralized and collectively owned, and public transportation is commonplace.

For left eco-modernists such as Huber and Leigh Phillips, this is a decidedly middle-class agenda – a ‘politics of less’ which, by calling on workers to reduce their energy and resource use, is destined to be unpopular and unattainable. For Huber, the problem is not the consumption habits of the Global North’s proletarianized groups; it is rather the activities of a capitalist class that consumes too much and profits from planet-destroying fossil fuels. As such, the antidote is class struggle, stronger unions and a parliamentary path to a Green New Deal.

From this perspective, degrowth’s inclination towards the local and the particular, and its relative silence on class struggle, create insurmountable barriers to socialist emancipation. In contrast, eco-modernists propose largescale nuclear energy projects, hydroelectric dams and industrialized agriculture, arguing that this is what it means to think and act in the Marxist tradition. Capital’s large-scale industry and exploitation of the world’s producers sets the stage for its abolition through a working-class seizure of the means of production. In Huber’s words, ‘industrial capitalism makes emancipation and freedom possible for all of society. This vision of freedom through social control over industrial abundance is key to mobilizing the masses to the socialist fight.’

In his Sidecar contribution, Huber adds that social control of industry will remove the primary impediment to a green transition: capital’s pursuit of profit. ‘All known technological pathways to halting environmental breakdown’ – Huber gives the examples of renewable energy, ‘green nitrogen production’ and lab meat – ‘are “fettered” by the social relations of production’. He goes on to explain that ‘while the utopian eco-socialists would likely scoff at these “techno-fixes” – technological solutions which don’t challenge capitalist social relations – an eco-modern socialist perspective would insist these technologies will not be developed unless we challenge capitalist social relations.’

Huber’s Climate Change as Class War has so far been the apogee of the eco-modernist position in a debate that has done much to further the discussion of desirable post-capitalist futures. The book’s emphasis on class struggle, thinking at scale, the state as a terrain of struggle, and the dynamics of transition are valuable contributions. Huber’s Sidecar essay reiterates many of these themes, stressing the need to imagine a green transition rooted in a Marxist study of the ‘historical economic conditions’, rather than abstract utopian speculation.

There is no question that there are important critiques of degrowth to be made from a Marxist perspective. Whereas Marxism’s critique of capitalism flows from a study of the historically determinate way it realizes value – through the exploitation of labour and the natural world – degrowth instead opts for an abstract critique of ‘growth’ as such. This is more than just a difference of terminology. Degrowth’s simplified conceptual apparatus has obscured the political stakes of a green transition to such a extent that it has been adopted by various irreconcilable traditions: from anti-capitalists to those pursuing a reformist politics of redistribution and reduced consumption. However, by unreflexively aligning Marxism with eco-modernism, Huber obscures Marxist alternatives to degrowth that are not eco-modernist in orientation but that nevertheless strive for the revolutionary overthrow of capitalism in the pursuit of a liveable planet for all human and non-human life.

At the heart of Climate Change as Class War is the claim that a successful climate politics must win over the majority of the world’s population. As Huber rightly claims, that majority is the ‘global proletariat’ in its myriad of forms: manufacturing labour, service workers, informal workers, agricultural work, unwaged work, reproductive work and more. The issue of how the world’s exploited and oppressed can unite in struggle is of course a crucial one for any left politics. It is all the more striking, then, that Huber does not try to answer it. In a footnote to Climate Change as Class War, Huber explicitly narrows the scope of his study:

My analysis of class in this book will focus mostly on the US context… While there is no justifiable basis for analyzing class in territorial terms – as if particular classes are only contained within national boundaries – a reason for this analytical focus is the simple fact that US political culture is the largest barrier to climate action globally… I will also admit my own scholarly (and personal) expertise is based in American Studies and US politics.

This amounts to an admission of methodological nationalism. If the goal is to appeal to the majority of the world’s population, this should lead to an analysis of the global working class in all its complexity – not the minority of that class living in the US. Moreover, if ‘US political culture’ is indeed one of the greatest stumbling blocks to climate action, this should involve an interrogation of not just the US’s internal political economy but its external role as the world’s leading imperialist power and orchestrator of wars, coups, sanctions, ‘development programmes’, ‘human rights interventions’, assassinations and arms sales that have devastated the world’s working classes and the ecological systems their lives depend on.

A thorough analysis of US class politics should also involve a consideration of how imperial predation in the periphery shapes class interests and struggles in the US. Yet in his critique of climate justice politics, Huber categorically rules out this line of inquiry: ‘climate justice politics often positions the struggle in territorial terms, as a struggle between Global North and Global South, and not as a global class struggle between capital and an international working class.’ He goes on to cite Jason Hickel’s work on value transfers and uneven ecological exchange as an example of a degrowth paradigm that fails to ‘differentiate “income” based on wages versus capital ownership’, writing that such scholars falsely ‘assume all income – whether it flows to capital or labour – is a form of ecological imperialism.’

This approach leads Huber into a false choice between a politics that attends to imperialist domination and one focussed on class struggle. As anti-colonial Marxists such as Walter Rodney, Samir Amin and Sam Moyo have long argued, this is to ignore one of the fundamental issues of working-class politics today: the national self-determination of oppressed peoples. As Enrique Dussel explains, Marx repeatedly intimated in his writings that an analysis of global capitalism must investigate both competitive relations between ‘capitalist nations’, which are defined by ‘dependency’ and the ‘extraction of surplus-value by the stronger capital’, and relations of class struggle, or ‘the exploitation of one class by another, of labor by capital.’

Huber’s criticism of Hickel also ignores a wealth of scholarship on how value transfers and uneven ecological exchange are used to reduce labour unrest in the core. Utsa and Prabhat Patnaik, for instance, describe how the imperialist world-system rests on the devaluation of currencies in the periphery to strengthen the currencies and increase the living standards of both capitalists and workers in the Global North, while Gurminder Bhambra traces the genealogy of Euro-American welfare systems back to their origins in colonial plunder and exploitation. None of this is to say that workers in the core are not exploited; it is merely to point out that they benefit from a capitalist system that pits them against their peripheral counterparts. If you drink coffee in the United States or Europe, eat chocolate, own a phone or wear clothes, you are in all likelihood a participant in the super-exploitation of the periphery’s lands and labour. To recognize this is a precondition for meaningful internationalism. Since the Global North’s energy and resource use cannot be extended to the rest of the world without exceeding the planet’s biophysical limits, anti-imperialist politics requires that those in the core – including many workers – reduce their overall consumption.

In 1848 Marx and Engels wrote that ‘the proletariat of each country must, of course, first of all settle matters with its own bourgeoisie’. This, I would hazard, is what animates Huber’s approach to Marxist politics. But by 1869 Marx had come to realize that for workers in colonial countries, this would be impossible without first tackling the colonial question that divided the world’s working classes into ‘hostile camps’. As Marx argued, and as history verified, workers often have conflicting interests that pose a challenge to the kind of mass mobilization that Huber envisions. His image of the ‘planetary proletariat’ is not attuned to how conflicting interests, misogyny, racism and chauvinism drive a wedge between workers. It refuses to acknowledge that shared interests, far from being an objective reality, must be composed in and through struggle. Indeed, it is particularly concerning that Huber’s proposal to implement a Green New Deal in the imperialist heartland overlooks such messy realities. As critics of the GND have argued, a green transition that does not take heed of such divisions will merely entrench neo-colonial and ecologically unsustainable relations of labour, land and resource exploitation.

Huber’s belief in the necessity of climate ‘megaprojects’ – involving large-scale, state-led ecological planning – leads him to rebuke those on the left with a ‘penchant for a retreat to small-scale agriculture’, which he says ‘implies hunger, if not starvation, for the world’s mega-slums’. In a telling aside, he remarks that ‘as Russia’s invasion of Ukraine demonstrates, urban gardens are no substitute for industrial agriculture’. This reveals a major problem with the eco-modernist mentality. Far from discrediting urban gardens, the Ukraine conflict makes the case for localized, resilient and diverse food systems. The global dependence on a few select crops, produced by industrialized monocultural systems that are vulnerable to geopolitical antagonisms – and unpredictable weather events like floods, droughts and wildfires – now looks entirely unsustainable in light of the war. What matters here is that, like all eco-modernists, Huber assumes capitalist industrialization is the pinnacle of technological advancement. Technology progresses, they suppose, in a linear fashion from inefficient and labour-intensive systems to efficient, energy-intensive, labour-saving ones. Hence, for Huber as for Phillips, the aim should be ‘to take over the machine, not turn it off!’

But things are not as simple as this stageist, almost Whiggish, theory of history would suggest. David Noble and Langdon Winner have argued that technologies do not exist independently from the social relations that produced them (and which they help to reproduce). Andreas Malm’s Fossil Capital recounts how the introduction of fossil fuels in the early nineteenth century was an effect of class struggle rather than linear progression. Mill owners transitioned from using water energy in the countryside to coal – a more expensive energy source – because it enabled them to access a more disciplined and dependable labour supply in industrializing cities. In Carbon Democracy, Timothy Mitchell explains how the eventual shift from coal to oil similarly empowered capitalists to discipline labour by limiting the ability for workers to conspire and organize together to disrupt production. In other words, from the perspective of class struggle, a given technology and the social relations it instates might not be preferable to the one it replaces. The transition from labour-intensive agricultural systems to centralized industrial ones may not, as Huber assumes, pave the way for socialism.

Technology must also be understood in a broader sense than eco-modernists permit. Anti-colonial Marxists have described how colonialism de-developed and supplanted more ecologically sustainable technologies in the periphery, from vernacular architecture to agroecological farming systems. To take just one example from Climate Change as Class War, Huber argues that synthetic nitrogen production unleashed previously unknown levels of agricultural productivity – yet, on closer inspection, this claim does not stand up to scrutiny. Eric Ross and Glenn Stone have shown that the Green Revolution of the 1950s and 60s was entirely unnecessary to feed the world. Its main achievements were chronic overproduction, profits for input producers in the core, the loss of smallholder independence and suppression of communist and agrarian struggles for land reform. Ironically, by displacing producers from the land, it also accelerated the emergence of the mega-slums Huber cites as an argument against smallholder agriculture. All of which suggests that capitalist technological advancements may not be in the ultimate interest of the world’s producing classes. Historically, they have often conflicted with greener forms of production.

Instead of seeing capital’s abolition as the unfettering of productive forces, it is better to view it as freeing the world’s producers to choose from a richer and more diverse array of technologies and socio-ecological relations than capitalist industrialization can offer. Of course, it would be unwise to reject contemporary medical advances, green steel production or lithium batteries; but we might want to avoid nuclear in a world destined for water shortages, unpredictable weather events and geopolitical instability. And instead of using ‘green hydrogen’ to produce synthetic fertilizer, we might consider supporting and expanding agroecological farming systems, which already provide between 50% and 70% of food calories consumed globally, with fewer high energy off-farm inputs, and greater biodiversity and climate resilience than industrialized agriculture.

The question, then, is not about whether one is for or against technology – as if this were possible. It is about adopting appropriate technologies and collectively managing energy and food systems at relevant scales. A promising alternative to Huber’s vision lies in an anti-imperialist eco-communism that understands how relations of dependency and uneven ecological exchange devastate ecologies and exploit workers in both core and periphery. Such a politics must do the difficult work of developing strategies of struggle and ecological transition that meet the needs of the exploited and oppressed in the Global North in ways that are compatible with demands for colonial reparations, technology transfers, food sovereignty, land back, the lifting of sanctions, the end of occupations and the atmospheric space to develop freely and independently. This knotty problem can neither be wished away nor delayed until the US working class has won a Green New Deal. Huber is right that capital’s pursuit of profit is a fetter on our collective liberation. What he misses is that eco-modernism similarly fetters a world of flourishing for all.

Read on: Mark Burton & Peter Somerville, ‘Degrowth: A Defence’, NLR 115.


New Reality?

Six months into the conflict, a Russian army incapable of taking Kyiv is presented as a threat to the entire continent. Ukraine has become, according to President Zelensky, ‘a springboard for an attack on other nations of Europe’. For the US Defense Secretary Lloyd Austin, Russia represents nothing less than ‘a challenge to free people everywhere’. Given in the American airbase of Ramstein, Germany, his speech sounded like a script for a historical reenactment of the Cold War.

The war in Ukraine is widely regarded a war against Russian expansionism and thus a war for Europe. The Cold War fantasy of seeing Cossacks watering their horses in the fountains of Saint Peter of Rome has gained a second life. The Cossacks are now motorized, and nothing short of a coalition of the so-called free world will prevent Kilo-class submarines from mooring in Gdansk or columns of T-14s from racing down the Autobahn. If we don’t want to stock up on flour and sugar, we need to enlarge NATO by bringing in Sweden and Finland. And while we are at it, why not fight and defeat Russia on the battlefield, with NATO on the front lines?

Realism is in short supply these days and we are teetering on the edge of a global war. It wouldn’t hurt to remind ourselves more often that since 1945 nuclear arsenals have set absolute limits to worldwide conflicts and to the possibility of substantially modifying the global order. Between nuclear powers, there is a tacit agreement that this order cannot be radically altered. We should not try to find out where the breaking point is.

Despite recurrent announcements that we live in a ‘new reality’, neither the end of the Cold War nor globalization have fundamentally altered this situation. A world interconnected by global markets and productive and communication systems is less flexible than we imagine. With its abundant reserves of raw materials and highly developed sectors in military and space technologies, it is already clear that Russia will continue to be part of the global system despite Western sanctions. At most, these limits have become less visible and more fragile. Nothing would be more dangerous than to mistake a proxy war between nuclear powers for an asymmetric conflict against a ‘terrorist state’ fought in the name of lofty ideals such as ‘democracy’ or ‘human rights’.

If realism struggles to be heard, it is also because in wartime everything is grist for the propaganda mill. Democracy, antifascist resistance, and the fight against imperialism are noble goals but they are also easily pliable (not so long ago, they motivated the special military operation to ‘denazify’ Iraq). Since they are now the main narrative for the Ukrainian resistance to the Russian invasion, realism has become de facto assimilated to Kremlin propaganda or worse. Whether it’s John Mearsheimer or Jürgen Habermas, woe betide those who dare to balance idealism against the realities of international politics!

And yet, we need a sober assessment of the objectives pursued by the coalition of countries supporting Ukraine. Is it to kick the Russians out of the country and to take back its eastern provinces? Despite the stunning performance of the Ukrainian military and even without considering Crimea, it is unlikely this can be achieved. Is it to put an end to the atrocious war crimes that Russian troops seem to commit on a daily basis? Only a perverse logic can seek justice in the continuation of a war that enables such crimes in the first place. Or is to deal Russia a decisive defeat on the battlefield, which would leave the country ‘weakened’ if not ‘humiliated’? This goes beyond Kyiv’s most intransigent demands and runs the risk of escalating the conflict and increasing the chances that non-conventional weapons are used. In any case, any talk of ‘victory’ is meaningless.

In this dangerous situation, what should Europe do? There is no doubt that the war in Ukraine represents a turning-point in which the future of Europe is at stake – but not for the reasons usually invoked. There is a distinct possibility that the war might generate a fracture between eastern and western Europe and spell the end of Europe as a political project. It is in the interest of the Europeans – and of the Ukrainians, who will eventually join the Union – to make sure that this project does not become a collateral victim of the conflict. To prevent this, a return to realism is necessary.

First, Europe must recognize that, increasingly, its interests do not coincide with those of Washington. It bears repeating that European unity was achieved outside the strategies that furthered US national interests: for the US, NATO has always been a greater priority than European unity. Yet, no matter how painstaking and tentative it may be, this unity has recently reached important milestones (with the mutualization of debt to face the pandemic, for instance). It should not be sacrificed to the goal of weakening Russia.

The United States can afford to bet on a protracted conflict and to raise the stakes because the consequences of these decisions are born mostly by Europe: the resettlement of millions of refugees, the cost of sanctions that are devastating for European economies, and the need to scramble for new sources of energy. The increase of European defense budgets will further impact welfare systems already weakened by decades of neoliberal policies and the 2008 crisis, which are nevertheless central to the regulation of the social equilibria upon which the political stability of the Union is premised. Finally, should the conflict escalate, Europe would become its primary theatre.

The war in Ukraine offers Washington an opportunity to shore up its declining hegemony by shifting onto European countries some of its costs while also drafting them in its global confrontation with China. In this respect, the continuity between the Trump and Biden administrations is striking. This would have a major impact on Europe’s constitutional order that will diminish the capacity of its historical members to define the political orientation of the Union, in favour of more docile governments.

The political weakening of Europe has become an explicit goal of NATO enlargement, especially among neoconservatives reinvigorated by the prospects of a war with Russia sold as a fight for democracy. To counteract the risk of an alliance made unwieldy by its swelling membership and a tumescent mission that now includes the containment of China, some suggest using NATO enlargement to adjust the balance of power within the Union. Their goal is to promote a coalition that would include ‘the Eastern European and Baltic states, with Poland in the lead…the Scandinavian states, in particular Finland and Norway’ but also ‘the English-speaking external powers, including the United Kingdom and Canada’. The same strategy is behind the recent British proposition of creating a ‘European Commonwealth’, which would amount to establishing a shadow Union more aligned with transatlantic agendas. This approach finds support in the new NATO strategic concept, which promotes the ‘fullest involvement’ of non-EU members in European defense efforts.

Against this backdrop, Sweden and Finland’s bid to join NATO stands out for its political implications rather than its strategic significance. As Adam Tooze has pointed out, their decision to apply was made possible by the weakness of the Russian military, not by the threat it represented. It’s too early to say how the emergence of a Nordic and rather hawkish NATO constituency will shape the conflict but it makes visible new fault lines in Europe.

Can we save Ukraine, and yet save Europe as well? As the physicist Carlo Rovelli recently wrote, ‘the problem of wars is not to win them: it is to put an end to them’. Europe is not a club of winners. It was built upon the rejection of war, the limitation of state sovereignty, and the adoption of federalism as a founding principle. Its main goal was always to organize peace on the continent and it must remain the same today if Europe is to survive.

The support of European governments to Ukraine cannot be the vehicle for strategies that prevent Europe’s further political integration. This does not mean abandoning Kyiv to its own devices or refusing to send military assistance. It means that this assistance must be accompanied by explicit diplomatic conditionalities, and that it must be carefully calibrated so as not to prevent future negotiations or future relations with Russia. Sooner or later, there will be a negotiated solution which will probably approximate the contours of the Minsk agreements.

Europe must also keep a safe distance from a US grand strategy that has not yet found the political formula for accommodating the global decline of American power and its loss of prestige. Going back to the Cold War will not restore American supremacy but it will hurt Europe. It will not restore prestige either: leading a global fight for ‘democracy’ is less convincing when the leading country is one whose Senate is holding hearings about a coup attempt, where women’s rights are trampled by the jurisdictions supposed to protect them, and where the possibility of civil war is a recurrent conversation topic. Unsurprisingly, most of the world does not go along.

It would be a mistake for Europe to throw its lot in with this strategy. Rather, it should bet on the rising cadre of ‘restrainers’ in Washington who advocate a different and less bellicose foreign policy, far from the unctuous homilies about the liberal international order and its military underpinnings. Caught between the crisis of American hegemony and the sly maneuvering of the Kremlin, which seeks to bolster the most anti-European and reactionary political forces, Europe must become a political subject and develop strategic autonomy at the global level. The war in Ukraine has made this an urgent task that can no longer be postponed.

Read on: Tony Wood, ‘Matrix of War’, NLR 133/4.


Mish-Mash Ecologism

Things seemed to be looking up in late 2020. After yet another catastrophic season of fires, floods and heat, the US elected a president with the most ambitious climate plan of any candidate in history, directly shaped by the Sunrise Movement and the campaign for a Green New Deal. Yet here we are in 2022, and it’s all gone awry. The fossil fuel industry is earning windfall profits, and asset manager titans have reversed their efforts to shift the financial sector away from such enticing returns. Joe Biden’s breakthrough climate legislation, the misleadingly named Inflation Reduction Act (IRA), includes major concessions to the fossil fuel industry and has been met with their approval.

The IRA greenlights offshore oil and gas leases in Alaska and the Gulf of Mexico for the next ten years and backs the bitterly contested Mountain Valley pipeline. At its core, it aims to ‘derisk’ private capital investment in the green transition, in line with what Daniela Gabor calls the ‘Wall Street Consensus’. Its major policy tool is its tax-credit programme, available for mostly middle-class homeowners looking to buy EVs or new appliances and private companies that develop and manufacture electric cars, wind turbines, solar panels and batteries. (A direct pay provision might open the door for expanding publicly owned clean energy, but it will have to compete in a largely private market).  

Such measures have been hailed as the largest climate investment in US history – but that is not saying much. It is estimated that decarbonizing the US power grid alone will cost $4.5 trillion. Biden’s Act offers a mere $369 billion to be spent over a decade. Most of it will be handed to the private sector, including the fossil-fuel industry itself. The tax credit programme does contain prevailing wage and domestic content standards that aim to reinvigorate domestic industrial policy toward solar, wind and EV manufacturing, but it’s not clear if such standards can be met or how they will be enforced. Optimistic models suggest the IRA will lead to 40% reductions in carbon emissions by 2030, but they also admit that doing nothing at all would lead to reductions of between 24% and 35%. The wager for the planet thus appears to be that state-supported green capital can beat fossil fuels on the free market.

Meanwhile, fossil capital continues to win. In June, it was reported that of the top ten best performing stocks of 2022, three were coal producers and five were linked to the oil and gas industry. If it wasn’t clear already, it should be now: those who profit from the production of fossil fuels will continue to do so unless forced to stop. Market-based solutions such as the IRA neglect basic questions of political and economic power. As such, it is worth pausing to consider what answers eco-socialism can offer in the present conjuncture. Two new books – The Future is Degrowth by Matthias Schmelzer, Aaron Vansintjan and Andrea Vetter and Half Earth Socialism by Troy Vettese and Drew Pendergrass – both embrace utopianism as an Archimedean vantage point from which to imagine a reconfiguration of the world, beyond the narrow confines of mainstream climate policy.

Co-authored by an economic historian (Schmelzer), a political ecologist (Vansintjan) and a journalist (Vetter), The Future of Degrowth argues that the global economy must be scaled down to align with its natural limits. The book offers a broad overview of the degrowth movement and its critique of the postwar Keynesian paradigm – along with the colonialist, capitalist and patriarchal ideologies that underpinned it. Though the authors acknowledge ‘overlaps and similarities’ between their framework and the Green New Deal, they argue that the latter is fundamentally flawed. Not only is it hitched to a fantasy of ‘progressive productivism’, it would also require a neo-colonial mining regime for its build-out of renewable-energy infrastructure. Against this trend in climate policymaking, The Future is Degrowth articulates a form of utopianism rooted in the here and now, based on what Engels once called ‘model experiments’. Engaging with the work of Erik Olin Wright, the authors describe a series of ‘nowtopias’ – community-supported agriculture, communing, cooperative economies – which they see as an antidote to climate ‘megaprojects’ (on which they propose a blanket ‘moratoria’).

While defining degrowth in bland terms – ‘a fair reduction of production and consumption that encompasses both human well-being and ecological sustainability’ – Schmelzer et al. also lay out a concrete agenda: the ‘Global North’ must lower consumption while switching to renewable energy and more localized production. How will this ‘fundamental political and economic reorganization of society’ be brought about? The authors admit it may require ‘confrontations with private ownership structures’. Historically, they write, such transformations ‘have always been marked by fierce controversies, public disputes and, up to now, (violent) conflict.’ Yet their main strategy for enacting this green transition is borrowed from the well-worn post-1968 playbook of turning the Leninist Antonio Gramsci into an ecumenical pluralist. They predict that degrowth alternatives will add up, one by one, into a powerful ‘counter-hegemony’ able to simultaneously offer alternative lifestyles, pass ‘non-reformist reforms’ via the state machinery, and build revolutionary ‘dual power’ ready for ruptural crises.

Half Earth Socialism shares some features with the degrowthers: it too focuses on natural limits and calls for lower consumption, renewable energy and deindustrialized agriculture in the Global North. But the books differ in their focus and ambition. While The Future of Degrowth envisions a ‘pluriverse’ of diverse and localized alternatives, letting a thousand degrowth flowers bloom, Half Earth Socialism is much bolder, imagining nothing less than planetary-scale ecological planning. Co-authored by an environmental historian (Vettese) and an environmental engineer (Pendergrass), the book rejects the standard solutions to climate change – bioenergy, carbon capture, geoengineering and nuclear power. Instead, it combines the socio-biologist E.O. Wilson’s proposal to leave half the planet’s habitable surface to wild nature with Pendergrass’s computer models of a world defined by 100% renewable energy.

Whereas The Future of Degrowth avoids ‘indulging in the euphoria of expert-led planning’ and attempts to ‘give space for many different visions for the future’, Half Earth Socialism wants to resuscitate the socialist planning tradition. It draws on the work of Austrian philosopher Otto Neurath and Soviet mathematician Leonid Kantorovich to mount a trenchant critique of Hayekian planning-scepticism. Yet Vettese and Pendergrass explicitly reject Marxism as part of a Hegelian-Promethean thought-system marked by the ‘humanization of nature’ – ‘the process by which humanity overcomes its alienation from nature by instilling the latter with human consciousness through the process of labour.’

By contrast, the authors’ vision is almost as austere as Pol Pot’s. Their core claim is that nature should largely be left to itself, free from human manipulation. Citing Morris’s News from Nowhere, they imagine a world 25 years in the future, run on the principles of cooperation, democracy and ecological restoration. With Pendergrass’s algorithms to guide them, the ecological planners of the 2040s develop a variety of land-use models and let people democratically choose which scenario they prefer – some with more/less energy per capita, some with more/less land left to wilderness. The energy quotas range from 2,000 Watts per person to as low as 750.

One of Half Earth Socialism’s merits is that its authors take the land-use needs of different energy-production systems seriously. But their penchant is for the most land-hungry options – solar and wind power – even as they accept that the intermittency of these energy sources is likely to lead to regular blackouts. Their models also include land-intensive biofuels which, in one scenario, are estimated to cover 26% of land surface. And their plan to rewild half the Earth’s habitable surface would require perhaps the most preposterous proposal of all: the imposition of universal mandatory veganism (otherwise the numbers would never add up). They also reject the energy source that could free up space for biodiversity by using less land than all the others: nuclear power.

Vettese and Pendergrass invite us to imagine that ‘the Half-Earth socialist revolution happens tomorrow’, but they do not explain how this might occur. Though they gesture towards a pro-Half Earth political coalition, its members are vaguely delineated: ‘there should be animal-rights activists and organic farmers there, as well as socialists, feminists and scientists’ – constituencies that make up miniscule fractions of the eight billion-strong population they hope to corral. As for broader layers such as social classes, Half Earth Socialism is largely silent. Like The Future is Degrowth and much of the left for the last half-century, the authors assume that a ‘movements of movements’ – uniting various disparate and subaltern groups – will eventually gain enough power to confront capital.

Is there a Marxist alternative to this 21st-century utopianism? In Socialism: Utopian and Scientific, Engels saw the emergence of 19th-century utopian socialism, signalled by the work of Saint-Simon, Fourier and Owen, as a reaction to the defeated aspirations of the French Revolution. By the early 1800s it was already clear that it had failed to deliver the kingdom of reason and justice promised by the Enlightenment; instead, the triumph of the big bourgeoisie had brought corruption, war and the poverty produced by super-abundance. Industrial production was barely developed, and the proletariat, wrote Engels, appeared to these radicals as ‘incapable of independent political action’ – ‘an oppressed, suffering order’ which required help from outside. In these conditions, the utopian socialists attempted in idealist fashion to evolve the solution to social problems ‘out of the human brain’:

Society presented nothing but wrongs; to remove these was the task of reason. It was necessary, then, to discover a new and more perfect system of social order and to impose this upon society from without by propaganda, and, wherever it was possible, by the example of model experiments. These new social systems were foredoomed as utopian; the more completely they were worked out in detail, the more they could not avoid drifting off into pure phantasies.

Two hundred years on – and in the wake of the defeated aspirations of the 20th-century revolutions – utopian eco-socialists appear to be repeating the same pattern. A new ecological order will be conjured up out of their brains, trialed in micro-experiments – as in The Future of Degrowth – or, as in Half Earth Socialism, ‘imposed from without by propaganda’. What is missing here is any analysis of the concrete class relationships that both inhibit such transformations or might bring them about. For Engels, winning real socialism hinges on class struggle: ‘Socialism was no longer an accidental discovery of this or that ingenious brain, but the necessary outcome of the struggle between two historically developed classes – the proletariat and the bourgeoisie.’

As idealists, 19th-century socialists saw their mental adumbrations as the expression of an absolute truth – although, as Engels pointed out, the absolute truth differed for the founder of each school; each was mutually exclusive and hence the sects were in permanent conflict with each other. As a result, nothing could come of the early-socialist movement but ‘a kind of eclectic, average socialism’ – ‘a mish-mash allowing of the most manifold shades of opinion’:

A mish-mash of such critical statements, economic theories, pictures of future society by the founders of different sects, as excite a minimum of opposition; a mish-mash which is the more easily brewed the more definite sharp edges of the individual constituents are rubbed down in the stream of debate, like rounded pebbles in a brook.

Hard not to think of Engels when one reads The Future of Degrowth’s evocation of the ‘pluriverse’ or ‘mosaic of alternatives’ which will supposedly overwhelm the tightly defended capitalist interests of the ‘Global North’. In Socialism: Utopian and Scientific he insisted, on the contrary, that socialism could only emerge from the historical economic conditions of the age. This did not involve any condemnation of utopianism as such. Rather than crow over the failure of Owenite experiments, Engels wrote, ‘we delight in the stupendously grand thoughts and germs of thought that everywhere break out through their phantastic covering.’

In present conditions, as Mike Davis has put it, ‘utopian thinking can clarify the minimal conditions for the preservation of human solidarity in face of convergent planetary crises.’ But the initial problem remains: those who benefit from their massive fixed investments in fossil fuels seem hell-bent on sustaining them. Does this utopianism yield a strategy to confront the political and economic power of the planet’s opponents – in the first instance, key sectors of the American ruling class?

As Ellen Meiksins Wood wrote nearly four decades ago, the working class has done more to challenge power than any other social force. Where does it stand today? Engels argued that ‘scientific’ – that is, self-critical, rigorously conceptualized and empirically tested – socialism must be rooted in an investigation of historical development: ‘the process of evolution of humanity.’ He himself lived through the epochal ruptures of mass proletarianization and the industrial revolution. The 20th century saw those processes accelerate, in what Farshad Araghi calls ‘global depeasantization’ – a process continuing in China today, in what is probably the largest rural-urban migration in human history. According to David Harvey, global capitalism has added something like two billion people to the global proletariat over the past twenty years. While Marx and Engels thought this mass proletarianization would swell industrial factories, the result has more been the rise of a vast ‘informal proletariat’ deemed superfluous to the needs of capital; a surplus humanity, housed in a Planet of Slums.

Planetary proletarianization should be a central issue for eco-socialism: capitalism produces an urbanized majority with no direct relation to the ecological conditions of existence. The most pressing question of our times is how we can solve ecological problems while restructuring production to provision a society largely torn from the land. If that provisioning requires large-scale democratic planning – as Vettese and Pendergrass rightly assert it does – the ‘demos’ must include the global proletariat. But the eco-socialist penchant for a retreat to small-scale agriculture – Half Earth Socialism’s fictionalized utopia concedes agriculture will require ‘a lot more labor, for sure’ – implies hunger, if not starvation, for the world’s mega-slums (and, as Russia’s invasion of Ukraine demonstrates, urban gardens are no substitute for industrial scale grain production).  

The question of the actually existing productive forces poses a further set of problems. Eric Hobsbawm called the Industrial Revolution ‘probably the most important event in world history’. Machines and fossil fuels replaced a good deal of human and animal muscle-power – as he put it, ‘the shackles were taken off the productive power of human societies.’ In the 21st century it is easy to take this transformation for granted, while blaming it for our present ecological predicament. The Future is Degrowth offers a wholesale critique of ‘industrialism’ and proclaims, ‘the goal of degrowth society must be to overcome industrialism and towards a post-industrial society.’  Yet it was only with the development of modern productive forces that it became possible to envisage a standard of life that could allow the free development of all. Solving climate change undoubtedly requires massive new industrial infrastructure in energy, public transit and housing. We do need to develop the productive forces – but ecologically. 

A socialist eco-modernism should make the transformation of production and the productive forces the fulcrum of any new relation to the planet. One of the few thinkers to have explored this problem is Jonathan Hughes, who speculated about ‘ecologically benign forms of technological development.’ Clearly, the productive forces must develop beyond their historically entrenched reliance upon fossil fuel. Yet, the private ownership of energy prevents this from taking place – a contradiction realized through the wider crisis of planetary climate change, from rising seas in Bangladesh to drought in the horn of Africa. All known technological pathways to halting environmental breakdown are ‘fettered’ by the social relations of production: renewable energy might be getting cheaper, but that does not necessarily translate to profits. Other solutions like nuclear fission, green hydrogen, scaled geothermal and carbon removal all present the same key obstacle: they cost too much, and fossil fuels are more profitable. In sum, solving climate change requires new social relations of production that would develop the productive forces toward clean production.

While the utopian eco-socialists would likely scoff at these as ‘techno-fixes’ – technological solutions which don’t challenge capitalist social relations – an eco-modern socialist perspective would insist these technologies will not be developed unless we challenge capitalist social relations. Beyond climate, most other aspects of the ecological crisis hinge on developing new forms of production: greening nitrogen production and consumption and finding less land-intensive production to preserve biodiversity (e.g. lab meat). All of these ecological forms of production struggle to compete with dirtier and more profitable alternatives under capitalism.

In this context, the climate left does not lack for utopian imaginaries, which can make for productive (and enjoyable) exercises. But such utopianism can too easily avoid the material realities of the world as it exists. We need a climate politics that aims outward, beyond the already converted – towards the exploited and atomized working class.

Read on: Kenta Tsuda, ‘Naïve Questions on Degrowth’, NLR 128.


Odourless Utopia

In Europe, the war bulletins come not just from Ukraine, but also from the climate front. The French government has cracked down on water use, banning watering lawns and washing cars in 62 of 101 departments, as more than 100 municipalities no longer have potable water. Nuclear power plants on the Rhône and Garonne have had to reduce production due to insufficient water in the rivers. In Italy, the government has declared a state of emergency in 5 of 20 regions, while Second World War bombs are discovered on the beds of its largest river, the dried-up Po. In Germany, the Rhine is so low that the barges plying its 1,000 kilometres from Austria to Holland have had to reduce their cargo from 3,000 to 900 tons so as not to run aground, and the river is expected to soon become impassable to freight traffic. In England, for the first time on record, the source of the Thames has dried up and the river is beginning to flow more than 5 miles further downstream. In Spain, restrictions on water consumption have been imposed in Catalonia, Galicia and Andalusia.

These are all warning signs. In a few centuries, the idea of water as an abundant resource and universal right may be unimaginable. It is easy to forget that even in the so-called advanced world, domestic running water – for toilets, cooking, personal hygiene, washing clothes and dishes – is a very recent and ephemeral phenomenon, dating back less than a century. In 1940, 45% of households in the US lacked complete plumbing; in 1950, only 44% of homes in Italy had either indoor or outdoor plumbing. In 1954, only 58% of houses in France had running water and only 26% had a toilet. In 1967, 25% of homes in England and Wales still lacked a bath or shower, an indoor toilet, a sink and hot- and cold-water taps. In Romania, 36% of the population lacked a flushing toilet solely for their household in 2012 (down to 22% in 2021).

The availability of domestic running water varies depending on one’s individual wealth and on the affluence of one’s nation. While in Western Europe and the US, the number of households with toilets equipped with running water currently exceeds 99%, in a number of African countries the percentage is between 1 and 4: Ethiopia 1.76%; Burkina Faso 1.87%; Burundi 2.32%; Uganda 2.37%; Chad 2.50%; Niger 2.76%; Madagascar 2.83%; Mozambique 2.87%; Mali 3.71%; Rwanda 3.99%; Congo 4.17%. In these countries the toilet is a marker of class status; in Ethiopia less than one in 56 households has one. The data also contains some surprises: there are more toilets in Bangladesh (35%) than in Moldova (29%), India is in roughly the same situation as South Africa (44% versus 45%) and just ahead of Azerbaijan (40%). While in Baghdad the number of houses with flushing toilets is 94.8%, in central Kabul it is 26%, and in Afghanistan as a whole it is 13.7%.

It is possible to trace the social and geopolitical history of running water. Its widespread accessibility was the the result of two primary factors: 1) the industrial revolution that provided the pipelines and purification plants needed for this colossal planetary enterprise; and 2) urbanization, for it is fairly obvious that bringing running water to a series of isolated cottages is far more expensive and complex than to centres of high population density. Urbanization was stimulated by the industrial revolution, and then in turn by the availability of running water for newly-arrived citizens. This may well be one of the most significant, and most peculiar, features of contemporary civilization. For what it created was the utopia of an odourless society. This would not have been possible without the spread of running water, but it was accelerated by the growing desire to deodorize the human habitat. In the twenty-first-century, we no longer perceive smells as our ancestors did.

In The Foul and the Fragrant (1988), Alain Corbin asks, ‘What is the meaning of this more refined alertness to smell? What produced the mysterious and alarming strategy of deodorization of everything that offends our muted olfactory environment? By what stages has this far-reaching anthropological transformation taken place?’ An incisive answer is offered by Ivan Illich in his brilliant little book, H2O and the Waters of Forgetfulness (1986), which reminds us that it was not until the last years of Louis XIV’s reign that a decree was passed for the weekly removal of faeces from the corridors of Versailles. It was in this era that the project to deodorize began. ‘The sense of smell’, Illich writes,

was the only means for identifying the city’s exhalations. The osmologists (students of odors) collected ‘airs’ and smelly materials in tightly corked bottles and compared notes by opening them at a later time as though they were dealing with vintage wines. A dozen treatises focusing on the odours of Paris were published during the second part of the eighteenth century…By the end of the century, this avant-garde of deodorant ideologues is causing social attitudes toward body wastes to change…Toward the middle of the century shitting, for the first time in history, became a sex specific activity…At the end of the century, Marie Antoinette has a door installed to make her defecation private. The act turns into an intimate function…Not only excrement but the body itself, it was discovered, emanates bad odours. Underwear that up to this time had served to keep one warm or attractive began to be connected with the elimination of sweat. The upper classes began to use and wash it more frequently, and in France the bidet came into fashion. Bed sheets and their regular laundering acquired a new importance, and to sleep in one’s own bed between sheets was charged with moral and medical significance…On November 15, 1793, the revolutionary convention solemnly declared each man’s right to his own bed as part of the rights of man.

Being odourless thus became a symbol of status:

smelling now began to become class-specific. Medical students observed that the poor are those who smell with particular intensity and, in addition, do not notice their own smell. Colonial officers and missionaries brought home reports that savages smelled differently from Europeans. Samojeds, Negroes and Hottentots could each be recognized by their racial smell, which changes neither with diet nor with more careful washing.

Naturally this myth was self-fulfilling, to the extent that colonized peoples were denied running water, soap and flushing toilets. Subaltern classes also began to smell and arouse revulsion. ‘Slowly’, Illich continues,

education has shaped the new sense for cleanly individualism. The new individual feels compelled to live in a space without qualities and expects everyone else to stay within the bounds of his or her own skin. He learns to be ashamed when his aura is noticed. He is embarrassed at the thought that his origin could be smelled out, and he is sickened by others if they smell. Shame at being smelled, embarrassment at coming from a smelly environment, and a new proneness to be offended by smell – all taken together place the citizen in a new kind of space.

Realizing this ideal of olfactory neutrality required increasing amounts of water. Before the Second World War, bathing once a week was considered hygienist paranoia. Only with the mass production of household washing machines did cleaning clothes become more frequent. I remember the London of the 1970s: on the Underground, the City clerks could be recognized by their detachable cuffs and collars; the former were changed regularly but the latter were grayish from having been worn for a week straight. The families that hosted us would ask us to insert coins into a special hot water meter: breakfast was included in the price, showering was not.

Now, though, the utopia of an odourless humanity has conquered much of the planet. Yet, as with many aspects of modernity, the moment we acquired the means to achieve a goal, its enabling condition (namely the abundant, unlimited availability of water) was lost. An ever more populous and rapidly warming planet will likely return to a state in which water is scarce and contested. This future may however be marked by a significant cultural difference. Whereas in the past, water was scarce for a humanity able to live happily with odours, now it will be scarce for one that considers their own odours insufferable, not to mention those of others.

I remember being struck by the extraordinary success of the Canadian TV drama H2O (2004), whose trailer announced:

A dead Prime Minister. A country in turmoil. A battle for Canada’s most precious resource – water. On the eve of testy discussions with the US Secretary of State, Prime Minister Matthew McLaughlin is killed in an accident. His son, Tom McLaughlin, returns to Canada to attend his fathers’ funeral where he delivers a eulogy that stirs the public propelling him into politics and ultimately the Prime Minister’s office. The investigation into his father’s death, however, reveals that it was no accident, raising the possibility of assassination. The trail of evidence triggers a series of events that uncovers a shocking plot to sell one of Canada’s most valuable resources – water.

As James Salzman noted in his book Drinking Water (2012), this omitted ‘the most exciting part, where American troops invade Canada to plunder their water supply’. A US–Canadian war over water! Until now, such conflicts seemed to be the preserve of semi-desert areas in the Middle East (think of Eyal Weizman’s writing on the Israelis’ use of water to surveil and punish Palestinians), or torrid Africa (as in the latent conflict between Egypt, Sudan and Ethiopia over the Grand Ethiopian Renaissance Dam built on the Blue Nile). But with the possible desertification of the central European plain, war for water will become a real prospect, even in regions once famous for high rainfall and water infrastructure. We citizens of ‘rich countries’, ‘industrialized nations’, ‘more developed powers’, will fight to smell less.

Translated by Francesco Anselmetti.

Read more: Nancy Fraser, ‘Climates of Capital’, NLR 127.