Monday, November 14, 2016

Business Recorder Column Nov 14, 2016

Global rightward portents Rashed Rahman The surprise victory of Donald Trump over Hillary Clinton in the US presidential elections is a reflection of a global rightward trend visible in many countries. Before the US elections, the Brexit referendum in the UK indicated the shape of things to come. Now Trump’s victory has firmly established the trend. Beneficiaries of these developments include the far right Marine Le Pen in France in the upcoming presidential election in that country, as well as the right in various other countries in Europe. Are there deeper economic and political factors at work behind the rightward global drift? First and foremost, the collapse of the left in the 1980s, culminating in the collapse of the Soviet Union in 1991, left the field clear for a triumphalist capitalism to see now no obstacle to its horizontal global expansion, including into the former socialist countries of the Soviet bloc. That expansion proceeded in spectacular unfettered fashion, giving rise to billionaire oligarchs in Russia at one pole, and miserable millions deprived of even basic food and shelter at the other. The outsourcing of manufacturing to the developing world because of cheaper labour meant millions of traditional industrial manufacturing jobs in the developed world simply disappeared. This produced a working class whose older and new generations had no prospects for the future, not the least because they did not possess, nor were able easily to acquire, the skill sets for the remaining high tech industries that still remained on the developed world’s soil. To the historical and well recognised phenomenon of capitalism creating a reserve army of (unemployed) labour was now added an overwhelming army of unemployable labour. The collapse of the left globally also paved the path for the emergence of the ‘one percent’ of incredibly wealthy people. This reflected the logical continuation of the historical tendency of unregulated, unfettered capitalism to produce along with the unprecedented development of productive forces, increasing inequality and the concentration (if not monopolisation) of wealth by a very narrow elite (cf. the ‘robber barons’ of early capitalism’s rise after the late 18th century’s Industrial Revolution and the emergence of huge monopolies in the 19th to 20th centuries). Unfortunately, while there have been voices raised against the domination of global wealth by a few developed countries and the cross-countries one percent wealthy, they have not been as strong as the demagogic right. The systemic crises of 1997-98 and 2007-08 (reflecting the average ten year cycles of ‘boom and bust’) were resolved at the cost of shifting the burden onto the shoulders of working people (including the white collar working populace). The big banks, corporate sector and the wealthy not only got away scot-free, they were actually bailed out and even rewarded by governments and international financial institutions on the argument that they were simply ‘too big to fail’. Daylight robbery would be a mild description of this skullduggery. Unfettered globalizing capitalism since 1991 accelerated the historical (since the late 19th century) trend of the incremental domination of finance capital. Its deregulated avatar produced one of the most remarkable and spectacular phenomena in the history of political economy when a relatively minor sub-prime mortgage sector in the US’s inevitable (because of risky, unsecured mortgage loans) crisis sent such profound ripple effects through the financial system that collapsed and in turn, produced serious negative effects on the real economy (manufacturing and agriculture). How do such crises provide fuel for demagoguery, hate speech, misogyny and openly discriminatory attitudes such as were littered through Donald Trump’s election campaign? And why do such outrageous stances still find resonance in a considerable section of the electorate? First and foremost, in the absence of a credible case that demonstrates the real culprits and the underlying systemic tendencies that produce capitalism’s cyclical crises, the door is opened to misdirecting people’s discontent towards obvious, vulnerable targets that easily lend themselves to scapegoating (e.g. immigrants, non-white ethnic and religious minorities, etc). Manipulating public opinion has been by now honed into a fine art in an age of instant and global communication. The narrative is hegemonised and, in the immortal words of Marshall McLuhan, “The medium becomes the message.” What the political elite, pollsters and pundits in the US (and Brexit Britain) failed to see were the effects of the right wing, escapist, misdirected, scapegoatist narrative that also served to obfuscate the inherent systemic flaws of capitalism, which have produced the greatest contrasts of wealth and poverty the world has ever seen. That amidst the crises of capitalism, fraudulent demagogues can prevail should not come as a surprise as it is hardly a first. Just the example of what the Great Depression of the late 1920s to 1930s led to (fascism, world war) should be sufficient to understand what a can of worms can be opened in the wake of such crises. Donald Trump won the electoral college majority by a comfortable margin despite losing the popular vote to Hillary Clinton by a narrow margin. This is not the first time that the structure of the US presidential election process has produced this kind of contradictory result. This is because the rules of the US presidential election mean the election has to be won state by state. The popular vote is reflected in the electoral college makeup and numbers. However, if a candidate manages to win a majority of the electoral college votes in a particular state, all the electoral college votes of that state are awarded to the winner, irrespective of the popular vote. In this election, solidly Republican states voted for Donald Trump, while he managed to win a majority of the swing states in which the contest was at dead heat. Hence the upset result. Another factor was the inability of the Clinton camp to persuade a sufficient number of their own supporters and anti-Trump voters to turn out on D-Day. Democratic socialist and Clinton rival Bernie Sanders’ appeal to his supporters to turn out for Hillary after he lost the Democratic Party’s nomination to her failed to strike a chord with the young, female, college educated sections of his support. Some reports even say some of these disillusioned and uninspired by Hillary voters cast their ballots for Trump. Certainly the number of women who seem to have lined up behind Trump despite his appalling misogyny is a surprise. Some of them dismiss the criticism of him on this ground by arguing that even if he said or did some wrong things, his potential for doing good outweighed all this. For Pakistan, Donald Trump’s unexpected triumph may prove a cautionary tale. The chickens of our policy of duality on terrorism may well be coming home to roost. Our continued harbouring and utilisation of proxies to the west and east could prove costlier than we imagine. Trump is unlikely to adhere to successive US administration’s willingness to turn a blind eye to or criticise only softly softly this proxy penchant by Pakistan for bigger strategic considerations. There could, therefore be hard times ahead. Those convinced China can be an adequate replacement for an increasingly hostile US ignore the real power structures globally. The US may be on a slippery (but long) slope downwards from being the pre-eminent world power, but the tectonic shift in the global power architecture has still not matured to the point of such simplistic ‘substitution’.

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