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Commentary :: International
The Populist Makers and Dangerous Optimism
28 Jan 2019
The people vote and capital decides. Another capitalism appears that is marked by an anti-liberal and intolerant culture. The goal of the new capitalists is the same as the old capitalists: to make the rich even richer. The governing elites fail to prevent the threatening climate collapse and gamble away the future of the coming generations.

On the End of Liberal Certainties

By Serge Halimi and Pierre Rimbert

[This article published on 9/13/2018 is translated abridged from the German on the Internet, Serge Halimi is the editor of Le Monde diplomatique.]

Donald Trump’s former chief strategist, Stephen Bannon, takes aim at Europe. In May 2018, he appeared in Budapest before Hungarian intellectuals and prominent persons. “The starting signal that triggered the Trump revolution occurred at 9 AM on September 15, 2008, when the Lehman Brothers investment bank declared bankruptcy.” He knew the financial crisis that began in 2008 was very severe in Hungary.

“The elite has brought their little boats into dry dock and completely socialized their risks,” declared Bannon, formerly an investment banker at Goldman Sachs. This “socialism for the rich” provoked “genuine populist revolts” in many parts of the world. In 2010, Viktor Orban returned to power in Hungary. For Bannon, he as a “Trump before Trump.”

Ten years after the tsunami on the financial markets, the worldwide economic collapse and the state debt crisis in Europe are not on the Bloomberg terminals any longer but their shockwaves worsen two great dislocations.

Firstly, the liberal worldwide economic order that arose after the Cold War relied on NATO, western financial institutions and the complete liberalization of world trade. Different from Mao Tse-tung’s prediction, the east wind did not defeat the west wind. Rather, its geopolitical restructuring is underway.

Chinese state capitalism expands its influence nearly 30 years after the fall of the Berlin Wall. Supported on the prosperity of its rising middle class, China’s “socialist market economy” pins its hopes on the advancing globalization of the markets under which the manufacturing industry in most western countries including the US industry must suffer…

Secondly, the shocks of 2008 and their aftershocks have shaken up the political order where the democratic market economy was regarded as the perfection of history. The polished technocracy that enforced unpopular measures from New York or Brussels in the name of expert knowledge and modernity paves the way for populist and conservative governments.

Trump, Orban and Jaroslaw Kaczynski appeal to capitalism like Barrack Obama, Angela Merkel or Emmanuel Macron. Another capitalism appears that is marked by an anti-liberal and intolerant national and authoritarian culture that represents the flat land more than the metropolises.

A tear runs through the ruling classes. This tear is deepened by the media that limits the political action possibilities of the hostile camp.

The goal of the new capitalists is the same as the old capitalists: to make the rich even richer. Only their method is different. They exploit the feelings that liberalism and the social democracy trigger among large parts of the working class: horror and loathing mixed with rage.

The reaction of politics to the 2008 crisis was in contradiction to the moral sermons on good government of the middle-right and middle-left governments constantly repeated since the fall of the Soviet Union. Globalization, democracy, and liberalism cannot escape unscathed.

Firstly, the internalization of the economy is not good for all countries or for the majority of workers in the West. With Trump, a man comes into the White House who was long convinced globalization accelerated the US decline and the rise of its rivals and did not benefit his country. For him, “America First” stands above the “Win-win” argument of free trade advocates.

At the beginning of August, Trump recalled the gigantic and growing budget deficit of the US at an appearance in Ohio, an industrial state: “$817 billion a year!” Here was his explanation: “I do not reproach the Chinese. But they can hardly grasp how long we have developed their country at our expense. We are actually rebuilding China. It is time to rebuild our country!” Ohio has lost 200,000 industrial jobs since China’s 2010 admission in the World Trade Organization, Trump complained again. “The WTO is a total catastrophe! For decades, our politicians let other countries steal our wealth and plunder our economy.”

At the beginning of the 20th century, protectionism was an important basis of the industrial upswing in the US and in many other nations. Customs long served the state as an important source of revenue since there was no US income tax before the First World War. Trump praised William McKinley, Republican president from 1897 to 1901. He understood the importance of customs for maintaining the country’s strength.” The White House uses this instrument without hesitation and with contempt for all WTO rules. Whether Turkey, Russia, Iran, the EU, Canada or China, hardly a week goes by without new US trade sanctions against friendly and unfriendly countries. Appealing to “national security” allows the US president to bypass the US Congress whose members depend on free trade – like the lobbyists who finance their election campaigns.

A consensus against China now prevails in the US. More than political questions of trade are involved. Peking is seen as the main strategic rival. Its expansionist policy in Asia triggers mistrust along with its economic power – eight times as great as Russia’s. Its authoritarian political model is in competition to the US model.

The American political scientist Francis Fukuyama holds to his 1989 theory about the irreversible and universal triumph of liberal capitalism. But, he also limits himself: “China is by far the greatest challenge for the theory of the `end of history’ because it is economically modernized and remains a dictatorship… I admit my thesis would be definitively refuted if growth continues in the coming years and China defends its place as the greatest economic power of the world.”

Trump and his domestic adversaries agree in at least one point, namely in decrying the costs of free trade for the US and the Chinese success as a threat for the US economy.

From geo- to domestic politics is only a small step. Globalization has destroyed jobs in western countries and eroded wages. Its share in the gross domestic product (GDP) has fallen in the United States in the last ten years from 64% to 58% - for every employee an annual loss of $7500 (6600 euros).

In industrial regions devastated by the Chinese competition, American workers have oriented themselves to the right in the last years. This voter change can be traced to a series of “cultural factors” like sexism, racism, weapon rapture, rejection of abortion and same-sex marriage and the like. People close their eyes to an economic explanation that is at least as convincing. Between 1992 and 2016, the number of voters declined in regions devastated by losses in manufacturing jobs… American workers have now had their fill of globalization, liberalism and the Democratic Party…

The People Vote and Capital Decides

The democratic character of liberal capitalism is now put in question. The question of whether equal political and civil rights are in force was raised intensively after 2008. “Not a single lawsuit was introduced against anyone from the boards of directors of the financial sector,” the journalist John Lancaster lamented. This is strikingly different from the savings and loan scandal of the 1980s in the US when 1100 persons were criminally prosecuted. “As French prisoners mocked – “Whoever steals an egg goes to jail. Whoever steals an ox goes to the Palais Bourbon (the French National Assembly).”

The people vote but capital decides. Left- and right-wing politicians confirm this suspicion since nearly all make election promises. So Obama was elected to end the conservative policy of his predecessor, reduced the budget deficit, cut social spending and forced America ns to contract health insurance with a private cartel…

After the consequences for globalization and democracy, the third contradiction that revealed the crisis is the economic dethronement of the state… The strength of the state offered stable framing conditions to capital…

The discrediting of the ruling class and the regaining of state power in the course of bailing out banks paved the way for a new style of government… Like Trump, Central Europe’s conservative heads of state made a strong state serving the rich seem legitimate. “A strong state” shows its power by closing its borders to migrants and declaring itself the guarantor of the “cultural identity” of the nation.

This strategy of taking up the need of many people for security and perverting it is becoming clearer. The causes of the financial crises continue. However, political life in countries like Italy and Hungary and regions like Bavaria is dominated almost exclusively by the refugee problematic. Parts of the western left, whether moderate or radical, attack the right here – with moderate success…

In its June 16, 2018 edition, the British Economist, the paper of the world’s liberal elites, deplored an “alarming decline of democracy since the 2007/2008 financial crisis.” The paper blamed only the populist politicians, not the dramatic wealth inequality, the destruction of industrial jobs or the contempt of the voters’ will by “democratic” leaders. “Independent judges and engaged journalists are democracy’s first line of defense,” the Economist concluded. Unfortunately, this line of defense is meager and crumbling.

For a long while, the upper class profited from three factors in elections: the increasingly frequent abstention of the working class, tactical voting to prevent extreme parties and the claim of centrist parties to represent the interests of the upper- and middle class. But, the situation now appears different. Reactionary demagogues mobilize non-voters. In many countries, the continuing recession has weakened the middle class and the policy of the moderates and their brilliant advisors has produced the greatest crisis of modern history.

The defenders of the open society are embittered over the disillusionment towards the new technologies. Until recently celebrated as prophets n a liberal-libertarian civilization, the Silicon Valley bosses have created a powerful surveillance machine that the Chinese government has adopted to maintain public order and the political system. The hope for a global public space created by universal connectivity has vanished. “By making manipulation and fake news simple and serving emotions more than reason, the new technologies strengthen above all cynics and dictators,” an editorial complains. [16]…

On July 17, 2018, Obama gave a perceptive analysis of the past decades. “Mistakes were made with globalization and there was too much greed,” he admitted. Globalization was
responsible for weakening unions and made it easier for capital to avoid tax laws and regulations of nation-states. Billions of dollars could be moved with a simple mouse click.” What is the solution? Enlightened “integrated capitalism” with the help of the humanist morality of capitalists,” was Obama’s answer.

The former US president did not deny the 2008 crisis and the often miserable strategies for its control favored a “politics of fear, resentment and retreat,” a “politics of the strong man” and an “authoritarian model according to the example of China that many developing countries prefer to a chaotic democracy.” Only the populists who skillfully exploit uncertainty and threaten to transplant the world into an “old, more dangerous and more brutal order” were blamed by the former US president. Obama spared the economic and intellectual elites, those who first created the presuppositions for the crisis and often profited from it.

This presentation is very advantageous to the elites. “Two very different versions of the future of humanity compete for the hearts and minds of citizens all over the world.” These two “versions” agree on how the production process is organized and how property is distributed or as the ex-president said, “the disproportionate economic, political and media influence at the top.” In this regard, a politician like Macron is hardly different from Trump. Both zealously lowered the capital gains tax when they came to power.

The reduction of politics to the confrontation between democracy and populism, openness and the strong state, will not help the growing band of disillusioned voters disappointed by a democracy that abandons them and by a left that has changed into a part of the educated bourgeoisie. Ten years after the outbreak of the financial crisis, other remedies are necessary to prevent the genesis of a “more dangerous and brutal order: first of all, a political power that can control the “enlightened technocrats” and the “angry billionaires.” [19] Only in that way can we avoid being mere henchmen or sidekicks of one of the two blocks who each in its way bring humanity into great dangers.

1. Francis Fukuyama, „End of History revisited”, Stanford CDDRL Podcast,, 16. November 2017. 
2. William Galston, „Wage stagnation is everyone’s problem“, The Wall Street Journal, 14. August 2018. Zur Vernichtung von Arbeitsplätzen durch die Globalisierung siehe Daron Acemoglu und andere, „Import competition and the great US employment sag of the 2000s”, Journal of Labor Economics, Bd. 34 (S1), Chicago, Januar 2016.
3. Bob Davis und Dante Chinni, „America’s factory towns, once solidly blue, are now a GOP haven“, The Wall Street Journal, 19. Juli 2018; sowie Bob Davis und Jon Hilsenrath, „How the China shock, deep and swift, spurred the rise of Trump“, The Wall Street Journal, 11. August 2016.
4. Zitiert in Adam Tooze, „Crashed. Wie zehn Jahre Finanzkrise die Welt verändert haben”, München (Siedler) 2018. 
5. John Lanchester, „After the fall“, London Review of Books, Bd. 40, Nr. 13, 5. Juli 2018. 
6. Jack Dion, „Les marchés contre les peuples“, in: Marianne, 1. Juni 2018. 
7. Yanis Varoufakis, „Adults in the Room. My Battle Against Europe’s Deep Establishment“, London (The Bodley Head) 2017. 
8. Pierre Moscovici, „Dans ce clair-obscur surgissent les monstres. Choses vues au cœur du pouvoir“, Paris (Plon) 2018. 
9. Siehe dazu Frédéric Lordon, „Schulden für alle“, LMd, Oktober 2008. 
10. Jean-Claude Trichet, „Nous sommes encore dans une situation dangereuse“, Le Monde, 14. September 2013. 
11. Adam Tooze, siehe Anmerkung 4. 
12. Drew Hinshaw und Marcus Walker, „In Orbán’s Hungary, a glimpse of Europe’s demise“, The Wall Street Journal, 9. August 2018. 
13. Siehe dazu Pierre Bourdieu und Loïc Wacquant, „Schöne neue Begriffswelt“, LMd, Mai 2000.
14. Viktor Orbáns Rede auf der 25. Freien Sommeruniversität in Băile Tușnad (Rumänien) am 26. Juli 2014,
15. Michael Ignatieff und Stefan Roch (Hrsg.), „Rethinking Open Society: New Adversaries and New Opportunities“, CEU Press, Budapest 2018.
16. Éric Le Boucher, „Le salut par l’éthique, la démocratie, l’Europe“, L’Opinion, 9. Juli 2018. 
17. Zitiert in: Michael Steinberger, „George Soros bet big on liberal democracy. Now he fears he is losing“, The New York Times Magazine, 17. Juli 2018.
18. Francis Fukuyama , „Il y a un risque de défaite de la démocratie“, Le Figaro Magazine, 6. April 2018. 
19. Thomas Frank, „Four more years“, Harper’s, April 2018. 


By Elmar Altvater

[This article published on 10/18/2010 is translated from the German on the Internet, Elmar Altvater was a beloved author and professor of political economy for over two decades at the Free University of Berlin.]

The crisis seems overcome. However, speculators are again on the lookout for new business models – and drive the state into dependence. The growing monetary differences have the potential to permanently disturb the global balance.

The higher the profits, the more short-sighted and myopic are the stockbrokers and financial investors. The most severe financial crisis in the history of capitalism is nearly forgotten. The collapse of Lehman Brothers is expunged from the memory. The “charts” with economic curves and price developments point upwards again. The incoming orders of the German export economy are high. Profit gushes again in some branches.

Cheap money seduces to new speculation

Still, optimism is dangerous. The financial crisis still simmers, as shown by the stress test of European banks. Their supply of capital is still inadequate. Commercial banks are furnished with cheap money by the central banks. They can invest again in securities and government bonds and not in mortgage credits. These banks help them out of a predicament with capital and with the acceptance of “toxic securities” in the hundreds of billions of euros. What a perverse game! The state is also the “borrower of last resort” and not only the “lender of last resort.”

The financial crisis became the bank crisis. It intensified into the crisis of state indebtedness and continues as a monetary crisis. Now it can become really dangerous. Sovereign states are involved in the geopolitical conflicts around the value of the currency and not only market actors… At the announced meeting of the Bretton Woods institutions, the IMF director Dominique Strauss-Kahn spoke of a “currency war” in which the world threatens to skid.

Race into the cul-de-sac

The “structural imbalances” of the world economy – the enormous balance of payments deficits of the US and similarly gigantic surpluses in China and elsewhere – cannot be borne over a long time period. But can the imbalances be redressed through an upgrading of the Chinese currency or must not the US make adjustments and cut the incomes of the middle- and upper classes to mobilize the resources for export?

If these questions are not so important, then the stupendous inability of the governing elites in the world to prevent the threatening climate collapse is crucial for the future of humanity. Rather, they do everything to overcome the economic- and financial crisis with “growth acceleration” without the least regard for the energy reserves coming to an end and the climate consequences of their combustion. They gamble away the future of coming generations extremely irresponsibly.

The cul-de-sacs of development and the unwillingness of the ruling elites to change to another path are the real reason why there is no reason for rejoicing over the hesitant upswing. Solutions and countermeasures exist: More and better regulation of the financial sector, a redistribution of income and wealth from top to bottom, and a sustainable, post-fossil energy model to prevent climate collapse.


Elmar Altvater and Raul Zelik, “Surveying Utopia,” 2012
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