More About “Elite Failure”

And then there’s this by Yanis Varoufakis in The Guardian that also describes perfectly what I mean by elite failure:

The era of neoliberalism ended in the autumn of 2008 with the bonfire of financialisation’s illusions. The fetishisation of unfettered markets that Margaret Thatcher and Ronald Reagan brought to the fore in the late 1970s had been the necessary ideological cover for the unleashing of financiers to enable the capital flows essential to a new phase of globalisation in which the United States deficits provided the aggregate demand for the world’s factories (whose profits flowed back to Wall Street closing the loop nicely).

Meanwhile, billions of people in the “third” world were pulled out of poverty while hundreds of millions of western workers were slowly sidelined, pushed into more precarious jobs, and forced to financialise themselves either through their pension funds or their homes. And when the bottom fell out of this increasingly unstable feedback loop, neoliberalism’s illusions burned down and the west’s working class ended up too expensive and too indebted to be of interest to a panicking global establishment.

Thatcher’s and Reagan’s neoliberalism had sought to persuade that privatisation of everything would produce a fair and efficient society unimpeded by vested interests or bureaucratic fiat. That narrative, of course, hid from public view what was really happening: a tremendous buildup of super-state bureaucracies, unaccountable supra-state institutions (World Trade Organisation, Nafta, the European Central Bank), behemoth corporations, and a global financial sector heading for the rocks.

After the events of 2008 something remarkable happened. For the first time in modern times the establishment no longer cared to persuade the masses that its way was socially optimal. Overwhelmed by the collapsing financial pyramids, the inexorable buildup of unsustainable debt, a eurozone in an advanced state of disintegration and a China increasingly relying on an impossible credit boom, the establishment’s functionaries set aside the aspiration to persuade or to represent. Instead, they concentrated on clamping down.

In the UK, more than a million benefit applicants faced punitive sanctions. In the Eurozone, the troika ruthlessly sought to reduce the pensions of the poorest of the poor. In the United States, both parties promised drastic cuts to social security spending. During our deflationary times none of these policies helped stabilise capitalism at a national or at a global level. So, why were they pursued?

Their purpose was to impose acquiescence to a clueless establishment that had lost its ambition to maintain its legitimacy. When the UK government forced benefit claimants to declare in writing that “my only limits are the ones I set myself”, or when the troika forced the Greek or Irish governments to write letters “requesting” predatory loans from the European Central Bank that benefited Frankfurt-based bankers at the expense of their people, the idea was to maintain power via calculated humiliation. Similarly, in America the establishment habitually blamed the victims of predatory lending and the failed health system.

Western elites gave up trying to govern democratically, and instead, following 2008, with the politics of austerity, governed punitively. Governed as bureaucratic despots who doubled down and were unwilling to consider that the very policies, programs, and projects they championed were the cause of so much misery, dislocation, and fear.

In this, the promises of democracy — majority rule, accountability — were shown to be shams. Lies. The elite were no longer accountable in any meaningful way, and national governments were increasingly hamstrung by predatory international institutions. Donald Trump is a continuation of this without any pretense. And that, in a world where unaccountable, undemocratic governance has become the norm (and been so for at least a decade), is at least some kind of control and some kind of change.

Varoufakis is calling for a transatlantic New Deal, a nice call, but it is likely far too late. The people who govern the West are incapable of such thought any more. Which means the governments of the West are past being able to do what Varoufakis calls for.

Yes, Trump will fail. But we were facing failure anyway. The only choice we have is how. Not if.

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