Angrynomics (1)

I have just finished reading a book called Angrynomics by Eric Lonergan and Mark Blyth. They analyse the reasons why modern economic developments have created so much anger. Like many economists, they are better at identifying problems than developing solutions, but they have some really good insights.

A key problem that they identify is the hollowing out of democracy and the failure of politicians to connect with the concerns of their people.

What is curious about the Cold War-era is the extent to which fervent, motivating political identities were grounded in the economic ideologies of left and right, and these were in turn, deeply embedded in social and political institutions, such as vortical parties, trade unions, working men’s clubs, churches, and small associations.

People in this period did not identify politically primarily based on tribal, ethnic and nationalist grounds, as did in political identity during the Cold War years in what could legitimately be called an economic ideology – a collection of beliefs about the economy – concerning how it works, who owns what, who gets what, and why they do, or do not, deserve it Whether you were pro-state, or pro-market, a clear set of beliefs about your economic interests, whether You were pro-business or pro-labour, was the name of the game. People also had a very clear sense of the real differences between political parties on fundamental issues of policy, and that their interests were being represented by one party and not the other. These ideologies motivated people to vote. Those identities were quite stable.

The post-Cold War shift to neoliberalism was not just a huge shift in economic organization, it also destroyed the political identities of a great many people… post-Cold War era was defined by a loss of political identity and the political disengagement of large parts of the population, especially by those most hurt by the economic changes of the period.

There were no strongly motivating political identities or competing ideologies. Everyone was assumed to believe in some variant of a market economy and to embrace a cosmopolitan individualism. If you did not, you were considered a relic or worse, a nationalist. When those ideas went up in smoke in the financial crisis of 2008, politicians had to find something new, and they did. So much of what we see today is politicians attempting to fill the vacuum created by a discredited neoliberal consensus with a more motivating set of political identities.

The rise in tribal anger, and its exploitation by the media and the political class, is not a consequence of the financial crisis alone, or even the sources of legitimate moral outrage such as the neglect of the US Midwest or environmental degradation. It significantly precedes these phenomena, and it exists even in economies that have been far less economically stressed. The hollowing out of democracy, the corruption of the political classes, the seeming irrelevance of elections, the inability to prevent recessions, increases in wealth and income inequality, and rapid technological change, all matter. But these are channelled in different ways in different countries due to the coincidence of interests between politicians’ need to motivate a minority to win elections and the legitimate grievances of those most affected. Modern tribalism has its origins in a loss of motivating political identity. The political classes have responded to the dilemma of how to get people out to vote in the absence of motivating ideas by reverting to tribalism.

It is important to keep tribal anger and moral outrage distinct. The financial crisis, the brutal recession in its wake, the euro crisis, rising income and wealth inequality, and an abject failure of political representation, are at the core of our problems. They are and should be objects of moral rebuke. But while these factors motivate anger, and that anger finds its way into politics, this has to be separated from the energy of and the cynical exploitation by politicians and the media of latent nationalistic identities to get elected and to sell copy - how they chose to fill the vacuum created by an anodyne identity-free, political centrism. 28, 29

We described the era of neoliberalism as fostering a loss of political identity – creating a vacuum that tribal anger has filled. But an unintended consequence of the post-Cold War political convergence between parties in the 1990s and 2000s was the emergence of a lifeless and largely self-serving technocratic centre, which caused large segments of the electorate to feel voiceless and unrepresented, which was steadily reflected in declining electoral turnouts. 37

From this perspective, public anger is a response to a lack of representation, to a real sense of being ignored and not listened to. It is also a failure to present a compelling and motivating alternative to the centrist consensus. What has happened over the past ten years in Europe and America is similar. The political centre was totally blindsided by a crisis that they thought could never happen. And they had no response to it except to pile misery on the very people who didn’t cause it. Unsurprisingly, those people got very angry about that, and that anger has been amplified and hijacked in multiple ways. 38