You Can’t Have Market Polarization without Political Polarization! A Tale of Two Siblings: Liberalism and Fascism

By Ingar Solty

In the early 1990s, hardly anyone would have doubted that liberal market economics was the path towards technological innovation and efficiency, economic stability and political stability. Liberal economic policy, based on the three pillars liberalization of trade, deregulation of (labor, financial etc.) markets and privatization of public assets, would lead to prosperity and even democratization of authoritarian regimes. Liberal economics implied that releasing the forces of the market would tend towards “spontaneous orders” (F.A. Hayek) and the most efficient allocation of resources. In fact, mathematized and de-historicized, neo-classical economic theory is based on the assumption of an equilibrium and crises are not supposed to occur in a “self-regulating” market.

Real neoliberalism however has led to quite the opposite effect. Instead of creating an equilibrium, forty years of neoliberalism have led to disequilibrium to an unimaginable extent. Instead of reducing economic and social imbalances, not only has neoliberalism brought about the highest level of wealth inequality seen since the 1930s Great Depression, it has also unleashed tremendous centrifugal forces which created vast geographical divergences – between the global North and the global South, between a Eurozone core and periphery, between prosperous metropolitan regions like Germany’s Rhein-Main area adapted to the trans-nationalized economy and dilapidated and depopulated regions like Germany’s Mecklenburg-Vorpommern, between functioning inner-city islands of wealth like central Paris or Brussels and the dysfunctional banlieues of Clichy-sous-Bois and Molenbeek where hatred builds up among segregated immigrant working-class populations.

The notion that liberal market economies would lead to innovation, efficiency and economic as well as political stability has thus been shattered.

Neoliberalism is not innovative. Economists like Mariana Mazzucato have shown that neoliberalism was the opposite of innovative, given that almost all the innovations of the digital age came out of publicly funded research project eventually patented and plundered by hedge funds and other financial capital. Neoliberalism is not efficient. The climate catastrophe is the biggest market failure in the history of humankind. Neoliberalism has also not led to economic stability, as not only the aforementioned geographical divergences but also the never-ending cascades of financial crises since the 1980s have shown. And neoliberalism has led to the opposite of political stability. And that comes as no surprise: It is impossible to have market polarization without political polarization.

Liberal democracy therefore is in retreat and in crisis. The stable post-war democracies of the West are falling apart in front of our eyes, former catch-all parties like the French Socialist Party or Greece’s PASOK collapse, the post-war party systems are fragmented (“Italianized”), and forming stable governments is becoming ever-increasingly more difficult. The hegemonic crisis of the neoliberal-imperial center has created new political systems with three poles: a tremendously weakened neoliberal-imperial center, right-wing authoritarian nationalism, and a new class struggle-oriented neo-socialist left, embodied most prominently by Jeremy Corbyn’s Labour Party in the UK or the movement behind Bernie Sanders and Alexandria Ocasio-Cortez in the U.S.

The representation crisis, which neoliberalism brought about, created “right-wing populist” forces early on; since 2016, the far-Right has also proven that it is increasingly capable of seizing political power – in the U.S., Great Britain (Brexit), Hungary, Poland, Austria, Italy, Brazil, the Philippines, and India. Meanwhile, even the former conceptive ideologues of neoliberalism – Francis Fukuyama and Thomas L. Friedman – have lost faith in the healing capacities of liberal representative democracy, and they have expressed their open envy with regards to the enormous statecraft of the Chinese state and its one-party system.

And indeed, it is difficult to have faith in the problem-solving capacities of neoliberalism and representative democracy. The world has entered a six-dimensional crisis which stretches across (1) the crisis of an over-accumulating global economy with its speculative bubbles of surplus capital seeking profitable investment outlets in the financial markets and in metropolitan housing, (2) the crisis of social cohesion, which results from the imbalances neoliberalism has produced in combination with the precarization and insecurities that come with a capital-driven digitalization and the dismantling of the welfare into a workfare state, (3) the crisis of social reproduction, which the feminization of the labor market under neoliberal conditions and the re-familization of social reproductive labor following from austerity measures have caused; (4) the crisis of democracy described above, which is the result of the first three crises in particular; (5) the crisis of world order connected to the relative decline of the U.S. and its attempt to keep rising China in a subordinated position in the hierarchy of the international division of labor; and (6) the crisis of ecological sustainability and the imminent climate catastrophe, climate apocalypse.

In all of this, it is amazing to observe that liberal-democratic capitalism has proven to be unable to plan for the future. One would think that in a civilizational crisis this deep, political parties with a natural claim to power – like the German Christian Democrats, who have been governing almost throughout since the end of World War II – would formulate a vision which addresses all levels of this six-dimensional crisis in a coherent project and which seeks to lead all members of society out of this crisis. Instead, beyond leftist attempts like the UK Labour Party’s electoral platform or the socialist Green New Deal suggested by various radical left parties, the crisis of liberal democracy entails that all visions of a better tomorrow have shifted into Silicon Valley, ranging from liquid democracy via transhumanism to the colonization of space. Meanwhile, Western liberal-technocratic parties are increasingly turning into short-term oriented tactical and self-serving machines. And why should it be different? The average turnover time of private, for-profit capitalist enterprises’ management is four years, the internal economic plans of those enterprises is five years at best, and elections take place at least every four or five years. The mentality emerging from those structures: Let someone else figure out a solution to the climate apocalypse, we need to make profit resp. we need to be re-elected!

Now, the six-dimensional crisis has also led to a resurgence of anti-neoliberal opposition. 2011ff saw the biggest “cycle of contention” (Sydney G. Tarrow) since 1967 and 1973. Not only in the West, but all over the world hundreds of millions of people protested against the impact of the nearly global austerity turn of 2010ff. And when it became clear that no matter how many people poured out into the streets, governments still continued with their austerity measures, some of these protests were transformed into state power projects like SYRIZA in Greece or Podemos in Spain. And while the ruling elites’ response to the global financial crisis had been strategies of “internal devaluation” (of wages and costs) in the name “competitiveness,” these parties and movements outlined a socially inclusive, ecological exit strategy from the crisis based on “up-valuation”. Here is not the space to clarify why, but the point is: they were defeated. And the July 2015 defeat of the SYRIZA government by the Troika (ECB, EC, IMF) and the rise of the far-Right in the second half of 2015, during the European “refugee crisis”, and during 2016 must be seen as connected.

In his 1974 book “Fascism and Dictatorship,” the Greek-French Marxist state theorist Nicos Poulantzas analyzed the causes of different forms of authoritarian rule. Against the notion that, during capitalism’s crisis of the 1930s, fascism had come to power because of the strength of the socialist labor movement, he argued that it was, on the contrary, the weakness of the socialist labor movement to take power under conditions of deepest social crisis. The failure of an exit strategy from the crisis based on hope and the idea that there is enough for everyone created and creates the condition for exit strategies based on despair and the exclusion of the less-deserving. And like during all three previous big or organic crises of capitalism (the Long Depression 1873-1896, the Great Depression 1929-1939 and the crisis of Fordism 1967-1979), the far Right has also risen in today’s organic and six-dimensional crisis based on a right-wing radicalization of the “middle classes.” The “middle class,” i.e. the old and new petty bourgeoisie, is vulnerable to the appeal of fascism not only because its upwardly mobile and because its aspirations are tied to the bourgeoisie. In a situation of crisis, their strong belief in meritocracy, their internalization of market competition and the social-Darwinist belief that there is not enough for everyone anymore means that large middle class segments will seek to protect their economic status by appealing to the elites that they should punish the less deserving and exclude them: the hungry mouths of the domestic poor, the hungry mouths of the Greeks, the hungry mouths of Syrian refugees.[1] And this appeal to charismatic leaders to ensure this illiberalization is reinforced by the fact that many of them are structurally or psychologically unable to seek solidarity-based exit strategies, either because as self-employed or small-business people they cannot unionize or because their general embrace of the social-Darwinist logic of competition in the market has created an individual isolation and authoritarian outlook to the world, which is sparked by status fright.

Right-wing authoritarian nationalism therefore is no false consciousness. Furthermore, it is wrong to say that capital is behind fascism. Yes, certain individual billionaires, fossil-fuel and energy-intensive capital factions, domestically oriented or internationally non-competitive capital fractions may support right-wing authoritarian nationalist forces. And yet, while historic fascism was functional to the dominant fractions of then still nationally organized bourgeoisies, today’s right-wing authoritarian nationalism and neo-fascism is dysfunctional to the dominant capital fraction in the power blocs of the core capitalist countries today: transnational capital. For instance, as long as the German far-Right party AfD does not embrace the Euro (as the precondition of German capital’s transnationalization), the EU (as the political stepping stone for future power projection around the world) and NATO and trans-Atlanticism (as today’s precondition of protecting private property around the world with the military capacities of the American Empire), then this party cannot be in national coalitions with the Christian Democrats, understood as the natural ally of transnationalized capital in Germany.

In other words, right-wing authoritarian nationalism is undoubtedly a friction of the abovementioned economic instabilities caused by the implementation of actually existing neoliberalism. As was said, it is impossible to have economic polarization without political polarization.

Still, the problem is that right-wing authoritarian nationalism may be a friction of the globalization of capitalism, but at the same time it always only fights against the symptoms and never the root causes of it. Hence, right-wing authoritarian nationalism will fight against refugees and migrants, but it never tackles its root causes “free” trade agreements which lead to state failure and racialized and confessionalized armed conflicts which then create the record numbers of displaced people. Right-wing authoritarian nationalism (RAN) also always scandalizes crime (as long as it has been committed by people which do not fit into RAN’s “völkisch” ideas of homogeneity); but RAN never addresses the root cause of crime: rampant wealth and income inequality, even though the most unequal countries in the world also happen to be the most crime-infested and insecure countries in the world. And thirdly, RAN expresses a toxic masculinity which seeks to “put women into their place” again, i.e. seeks to re-establish patriarchal power over women and revolts against women’s ambitions to distribute social reproductive labor equally; but RAN never tackles the origins of the feminist rebellion: the ever-increasing exhaustion of female workers who are on the verge of breaking down under the strain and dual exploitation of vocational and social reproductive labor.

Here is not the place to speculate why this is the case that RAN only tackles symptoms but never the root causes: capitalism and patriarchy. It can be discussed whether it has to do with the fact that conservatism and fascism as conservatism’s radicalized form are literally reactionary ideologies. Unlike liberalism and socialism, conservatism never has had a coherent state and social theory and no coherent program as to how construct the economy, society etc. In fact, ever since its birth in opposition to the French Revolution, conservatism has always revolted against the very idea of constructing “ideal” orders in the head. In that sense, to quote the neo-conservative David Horowitz, “conservatives know what [they’re] against”, the left and its vision of equality, “but [they] don’t know what [they’re] for.”

However, such a blind revolt against the modernity of globalized capitalism, which has radically forced subjects to alter their social behavior, (language, cross-cultural etc.) skills, culture, mentality etc., is extremely dangerous. And just as much as neoliberalism can always argue “neoliberalism has not failed, we just have to deepen it” (because the total unleashing of market forces would completely destroy society and therefore always creates movements defending society against the nightmare which is neoliberalism), right-wing authoritarian nationalism also is a Sisyphean task. It is neoliberalism’s offspring and its policies, when it is in power, continue to make the effects of neoliberalism worse and worse. Like a self-fulfilling prophecy, they create the conditions of a global civil war they keep warning about in ever-more extreme ways.

Neoliberalism and fascism are like siblings: The ruthless behavior of the older creates the blind rage of the younger, moving the world further and further down the slippery slope of liberalism into fascism.


[1] [When solidarity fails or rather when it is defeated, then it turns exclusive: solidarity with the deserving, solidarity with the in-group, the homogenous “Volk.”]

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