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Governing in the New Hard Times

Andrew Gamble
p. 31-47

Résumé

After the financial crash of 2008 and the recession of 2009 the western capitalist democracies entered a new era of hard times, marked by a very weak recovery, austerity, powerful deflationary pressures, and the persistence of emergency measures such as record low interest rates and quantitative easing. National-populist parties began to attract increasing support for an anti-globalisation, anti-immigration, and anti-elite platform. The western political order remained resilient, until the vote for BREXIT in the UK and the election of Donald Trump in the US in 2016. In seeking to respond to the cultural and economic grievances that lie at the heart of the national-populist surge, governments are obliged to confront three deep structural problems : secular stagnation, international deadlocks, and political legitimacy. The intractability of these problems has contributed to a sense of drift and failure, and is contributing to the pressure for more radical policies which seek to change fundamentally the shape of the liberal international market order as it has existed for the last seventy years.

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Introduction

  • 1 Gamble, A., The Spectre at the Feast: capitalist crisis and the politics of recession, London, Palg (...)

1More than eight years have elapsed since September 15th 2008. On that day Lehman Brothers filed for bankruptcy and the financial crisis which had been steadily building for the past eighteen months entered its most dramatic and dangerous phase. The decision of the US administration to refuse to bail out Lehmans, in order to send a message to the rest of the financial sector that no bank was too big to fail created panic in the markets and the prospect not of an orderly deleveraging but of an uncontrolled financial meltdown with incalculable consequences not just for the US economy but for the whole international economy, which over the past twenty years had become more and more integrated both through trade, the increasing free movement of people and vast flows of money and financial claims.1

  • 2 Blyth, M., Austerity: the history of a dangerous idea, London, Oxford University Press 2013.
  • 3 Streeck, W., Buying Time: the delayed crisis of democratic capitalism, London: Verso, 2014.

2The swift response of governments on both sides of the Atlantic to the Lehman collapse averted a major economic slump, but there was still a heavy cost. The recession in 2009 was severe, the worst in many countries since 1945, and eight years on there has still not been a proper recovery. It has become the slowest on record. The political forces upholding the post-war liberal international market order have been in retreat, compelled to adopt a defensive strategy with emergency measures such as record low interest rates and large-scale quantitative easing still in force. Austerity programmes and fiscal consolidation were adopted almost universally,2 and again these have become semi-permanent, with no end in sight to deficits and high levels of public and private debt.3Some countries had already accumulated high levels of debt during the boom and they increased further after the crash, when maintaining public spending was vital to offsetting the sharp falls in corporate and household spending.

  • 4 Papaconstantinou, G., Game Over: the inside story of the Greek crisis, Amazon, Createspace, 2016.

3As a result of the measures which western governments took, the liberal international market order proved remarkably resilient in the period following the financial crash. Until the dramatic events of 2016, there were many changes of government and many incumbents were ousted, but the parties which succeeded them in government were mainstream parties whether Centre-Left or Centre-Right, committed to sustaining the core principles and multilateral institutions of the international order, in respect to both economic relations and security. The main exception to this was the election in Greece of Syriza in January 2015, pledged to reverse the austerity programme which had been imposed on Greece by the Eurozone and the IMF. This breakthrough was short lived because the Syriza Government, after winning a referendum opposing the terms of the deal which it was offered, was then forced to capitulate, and although it remained in office, its decision not to take the radical option and leave the Eurozone and the EU, made it an unwilling agent of the austerity policies it had pledged to reverse.4

The Rise of National Populism

  • 5 Jan-Werner Muller, What is Populism?, Philadelphia, University of Pennsylvania Press 2016.

4Elsewhere there was a steady rise of new national-populist parties and movements based not only on resistance to austerity but also on opposition to migration, globalisation and the elites which supported them. Many of these parties, like the Freedom Party in Austria and the Party for Freedom in the Netherlands and the Front national in France were also strongly anti-Muslim. But none of these succeeded in breaking through in national elections. This was in sharp contrast to the 1930s. Four years after the 1929 crash the United States had enacted protectionism, the gold standard had collapsed and Hitler was in power in Germany. Political convulsions followed the economic convulsions. The 2008 crash was on the same scale as the financial crash in 1929, with the potential of being even more destructive, but the political reaction meant that the crisis was defused. The problem for governments was that the means used did not resolve the causes of the crisis and made a return to business as usual fraught with risk. A new period of hard times began. Governments tried to maintain their commitment to the liberal international market order while implementing fiscal consolidation and hoping that the economy would quickly bounce back. But this balancing act became increasingly difficult to sustain when the economy failed to do so. The period since 2008 has seen the slow draining of support for established elites and the erosion of their legitimacy. This has spurred the increasing strength of populist movements in many countries. Populism can often be a vague term, but it does have a reasonably precise meaning, even if there will always be important differences between populist parties. The new populist movements have been mainly movements of the right and should be described as national-populist, because they are both anti-system, anti-establishment parties, and at the same time are ethno-nationalist in the core appeal they make to their electorate. Only in a few countries, notably Spain and Greece, have the protests against the political establishment taken a left-wing form. The national-populist movements of the right are populist in the classical sense. They construct their political discourse and messages around the notion of a virtuous and homogenous people, which is contrasted with a set of established elites and dangerous ‘others’, who are attempting to deprive the sovereign people of their rights, values, prosperity, identity and voice.5These national populists tend to be economic and ethno-nationalists and social conservatives, although there are variations. Many of them are not overtly racist but attract racist fringes, and use coded racist language.

5The countries of Anglo-America, Britain and the United States, also saw the rise of national-populist movements in this period, the Tea Party and the alt-right within the Republican party, and the UK Independence party (UKIP). What was unforeseen was that it would be in Britain and the United States, that the national-populist right would win its first major victories, in the form of the vote for BREXIT in the UK referendum in June 2016 and the election of Donald Trump in November. Of the two events the most significant was the Trump victory, because although Trump had won as the Republican nominee, he had run against the Republican party establishment, and was disowned by much of it. Some of his key advisers such as Steve Bannon and Steve Miller are members of the alt-right, which embraces an extreme ethno-nationalist and economic nationalist programme. They plan to tear down the liberal order both within the United States and across the world. This contrasts with Britain, where the BREXIT vote led to the resignation of David Cameron but not the removal of the Conservatives from office, who under the new Prime Minister, Theresa May, have consolidated their position. UKIP still has only one seat in the Westminster Parliament. The Conservatives are not economic nationalists but instead proclaim their ambition to make Britain post-BREXIT the champion of free trade throughout the world, a global Britain. The more likely outcome is that in leaving the EU Britain will become less global and less able to champion free trade, especially in a world which is becoming ever more nationalist and protectionist. British politicians like to claim that they have a unique special relationship with the United States and sometimes in the past that has had substance. But with Trump as President, there is now a chasm between British and US views of the world and their essential interests in both trade and security. No amount of holding hands in the White House will make up for that.

  • 6 Charlie Laderman & Brendan Simms, Donald Trump: The making of a world view (Endeavour Press, 2017).

6It is ironic but also perhaps rather fitting that the two countries which led the way in embracing neo-liberalism in the 1980s and reconstructing the international market order along neo-liberal lines should be the countries that eight years after the crash that revealed the exhaustion of neo-liberalism as a set of governing principles, it should be the same two countries which in different ways are taking actions that are starting to dismantle the form of international market order which was neo-liberalism’s most striking achievement. The Trump administration in particular seems intent on undermining many of the international institutions and forms of multilateral engagement established since 1945 in favour of a return to the pursuit of great power interests, bilateral relations and spheres of interest.6 If this comes to pass then we will move from hard times to dangerous times.

7The period between 2008 and 2016 was one of hard times in which governing was difficult, more difficult than at any time since the end of the cold war in 1991. But one source of stability was that despite the economic and financial turbulence the basic institutions of the liberal international market order proved resilient, in part because US leadership under President Obama remained fully committed to them. With Trump taking office at the beginning of 2017, the world moves into a much more dangerous phase. The hard times are likely to become still harder, now that there is a US administration which sees itself as part of the national-populist wave sweeping western countries and which actively welcomes the breakup of the EU. Its vision of the world is one of strong nation states, based on strong ethno-nationalism and strong borders. How far this national-populist surge may go is uncertain. The Freedom party in Austria failed in 2016 to take the Austrian presidency at the second attempt, but they achieved almost half the vote. The Italian referendum which saw the defeat of the Government’s constitutional proposals led to the resignation of Matteo Renzi. It was a victory for the anarchist-populists of the Five Star movement and national-populists of the Northern League, but it did not lead to the fall of the Government. 2017 will see major elections in the Netherlands, in France and in Germany, as well as the risk of the return of political crisis in Greece. The resilience of the political order of the EU will be severely tested. If a national-populist party was able to win a major election and form a government in one of the core EU countries it could bring the disintegration of the euro and perhaps of the EU itself. The fragmentation of the EU has long been an aim of Russia under Putin, but now it has become an aim of the United States as well. The UK’s decision to leave the EU is a further factor which contributes to this. Although the UK was already semi-detached from the EU, and therefore separation may make less practical difference than some expect, the symbolism of exit is important, and like the election of Donald Trump has been hailed by national-populists across Europe. Steve Bannon, Donald Trump’s chief strategist, spoke in 2014 about his wish to see a global Tea Party, embracing the conservative movement in the US as well as UKIP, the Front national, and other populist parties in Europe.7It looked fanciful in 2014, but less so now.

  • 8 Colin Crouch, Making Capitlaism Fit for Society, Cambridge, Polity 2013; Guy Standing, The Precaria (...)

8The main driver in the rise of national-populism is a politics of resentment, fed by economic and cultural grievances. The economic grievances stem from the displacement of many workers from jobs in manufacturing. This is a process which stretches back to the 1980s and has seen the blighting of formerly prosperous industrial regions and the creation of long-term worklessness and dependency. At the same time, wages have stagnated or risen only very slowly in many countries particularly since 2000, so at a time when inequality was increasing and the wealth of the top 1 per cent was growing quite dramatically, many working class and middle-income citizens saw little if any improvement in their standard of living and were forced into borrowing to sustain their standard of living. The social wage in the form of public services and employment protection was maintained during the boom years, but has come under sustained attack in the austerity programmes implemented since 2008. These economic grievances are often blamed on globalisation. The rapid pace of change, the introduction of new technologies, competition from immigrant labour, the outsourcing of jobs to other cheaper jurisdictions, the weakening of trade unions, have all combined to reduce labour’s share in national income and weaken labour’s bargaining strength.8Many workers have come to feel resentful at being left behind and ignored, and they have become as a result increasingly disconnected from mainstream politics and government.

  • 9 Robert Ford & Matthew Goodwin, Revolt on the Right: explaining support for the radical right in Bri (...)

9Important though economic grievances have been in fuelling populism, many analysts regard cultural grievances as even more important. These are captured in the BREXIT slogan ‘we want our country back’, and stem in particular from the widespread belief that there are too many immigrants. The fear of immigrants is partly about access to public services like education, hospitals, and housing. Native citizens fear being crowded out. But it is also about preserving a particular culture and way of life, and perceiving immigrants as interlopers who threaten it.9 The immigrants that are targeted vary, although many of the national-populist parties have become a vehicle for expressing anti-Muslim sentiment. There is an obvious racial element here, but more important is the cultural one, the distinctiveness of Muslim culture and the unwillingness of some Muslims to be assimilated into the dominant culture. Many of the citizens attracted to the national-populist right dislike the cultural and ethnic diversity which has grown up around them without them ever being asked whether they wanted it, still less voting for it. Many neighbourhoods have changed as a result, and in some big cities there is increasing segregation. The resentment is directed at the newcomers but also increasingly at the liberal, cosmopolitan corporate and political elites who allowed this to happen, and at times actively promoted it. There is resentment too at many of the social changes of recent decades, particularly changing attitudes to gender roles, the undermining of the traditional patriarchal family and the greater acceptance of other sexual orientations.

10The emergence of this new national-populism creates difficult problems for government. It both feeds off and accentuates a new set of political divides in the electorate, around generations, regions, and education. What if anything can be done to assuage this anger and reduce the feelings of resentment and alienation ? Old industries built around relatively labour intensive manufacturing and mining are not coming back ; nor are patriarchal families, or mono-cultural cities. Governments regularly try to establish more apprenticeships, facilitate the building of more houses, and implement some measures of redistribution, trying to raise minimum wages for example. But it is proving very hard in contemporary societies to provide the kind of security and protection which part of the electorate craves. Government achievements will always seem meagre compared to the promises of the populists, and the obstacles to make a real difference to the lives of those who have been left behind are immense. Governments must battle against severe headwinds to make any difference, and even when they have modest successes in improving the economy and raising the level of investment and employment in depressed areas as the Obama administration did, that counts for nothing once a national-populist surge is under way. What the new national-populism has done is force all government to put new emphasis on the national context, the national economy and the nation-state. The election of Donald Trump has now underlined this and many have started to regard it as the new normal. Strong nations, strong nation-states, strong nationalisms, and a new age of bilateral rather than multilateral agreements beckons.

Secular Stagnation

  • 10 Robert Gordon, Is US economic growth over: faltering innovation confronts the six headwinds www.nbe (...)
  • 11 Tylor Cowen, The Great Stagnation (New York, Dutton 2013).
  • 12 Thomas Piketty, Capital in the twenty first century (Cambridge, Harvard University Press 2014).
  • 13 Genevieve Le Baron, The coming crisis: the dangers of indecent work http://speri.dept.shef.ac.uk/20 (...)

11There are three deep structural problems which underlie the recent hard times for governing. They are secular stagnation, international deadlocks, and political legitimacy. The problem of growth is reflected in the weakness of the recovery since the recession of 2008-9 following the financial crash, and the generally clouded prospects for returning to a regime of more rapid growth. The neoliberal growth model appears exhausted. The past foundations of growth in the economy are all much weaker than they were. Technological innovation, rising population, immigration, an inexhaustible natural environment – all have political question marks over them, sometimes technical, but often political as well. The concerns over technological innovation are particularly troublesome. We live in an era of ever-accelerating technological innovation and discovery, and are in the midst of a revolution in information technology which many think will be as profound in shaping the economy and society as the great technological revolutions of the past. But so far this revolution has yielded nothing like the gains in productivity which the previous great revolutions did.10 Instead the western capitalist economies appear gripped by secular stagnation. There has been considerable debate on whether the secular stagnation is caused by supply or demand factors. Is the problem the vanishing of investment opportunities11 or is it rather the growing inequality and the declining labour share in national income ?12 What is clear is the marked slowdown in growth. Investment and productivity are both low and as a result the living standards of the majority have stagnated, even while the rich have become ever richer. Rising inequality is very pronounced within countries as well as between them. 75 per cent of the global workforce is in short-term, temporary, informal or unpaid work, while it is estimated that there are twenty one million workers in forced labour in global supply chains.13

12Government policies to overcome this secular stagnation have not proved very successful. Austerity was intended to rebalance the economy by shrinking public expenditure to adjust to the smaller size of the economy after the recession, but eight years on austerity policies have not worked. Deficits are still high, and debt levels have not been significantly reduced. In many cases they have continued to grow. In the Eurozone where austerity has been applied most rigorously, there has been very little growth and unemployment, particularly youth unemployment, has remained stubbornly high in most member states. Japan which has experienced deflation over two decades has tried to escape from its deflation trap by an aggressive policy of stimulus trying to raise prices, but it has had limited success. The US economy which avoided a severe fiscal adjustment under Obama who instead launched a modest fiscal stimulus has at last begun to approach full employment, with interest rates lifting off the bottom. But it is still precarious.

  • 14 Bob Car, ‘Australia, China and the lunacy of Trump’s talk of a trade war’ https://www.theguardian.c (...)

13The difficulties which all governments have found in returning their economies to normal after the financial crash and countering the strong deflationary tendencies in the economy has been their central governing challenge, and is associated with many of the other problems they have faced, including the surge in support for national-populist parties. If economies had started growing again in 2010 as many expected, the political fallout might have been less. The inability of governments to achieve a breakthrough and a return to normal growth has underlined the exhaustion of the neo-liberal growth model, but no-one is at all sure what to put in its place. The economic policies of the Trump administration are yet to be tested, but they promise to be a radical departure from the policies that have been tried anywhere else so far, involving a huge fiscal stimulus through tax cuts for individuals and companies, and spending on infrastructure and defence, accompanied by loose monetary policies. At the same time the administration wants to impose protectionist taxes and tariffs to close down the international supply chains of US multinationals, forcing them to source all their products within the US itself, and to withdrawing from all multilateral trade deals, and possibly from the WTO itself. This economic nationalism if pursued consistently is likely to produce a sharp short-term acceleration in American growth, but is also likely to unleash inflation, and risks a medium-term collapse in investment and employment. It may also lead to a series of trade wars with other countries, which will put US companies in danger of retaliation.14 The US has a large enough economy to weather that, but the cost could be permanent damage to the rules-based international market order which the US spent seven decades creating and supporting.

International Deadlocks

14The Trump administration pledges to put America first, to make US prosperity and security its overriding policy priorities. If carried through this would mark a major shift from the grand strategy which has dominated US foreign policy thinking for the last seventy years. It is true that during this time the US did not fail to make US prosperity and security a priority, but it was never an exclusive priority, and the US had longer strategic aims in view in building its leadership of the international system. The framework which emerged was based on national sovereignty but encouraged multilateral cooperation both in trade and security. US leadership and occasional magnanimity, as with the Marshall Plan, was essential to making this work and encouraging other countries to co-operate. The rapid growth of international networks and international organisations and international institutions was a testimony to its success. The formation of the EU with strong US support was one of its great achievements. With the end of the cold war and the collapse of the Soviet Union it seemed for a time that this rules-based order could now expand to incorporate the whole world.

  • 15 Stuart Mackintosh, The redesign of the global financial architecture: the return of state authority (...)

15In the last eight years since the financial crash all this has come into question. Many of the international institutions have been deadlocked, and multilateral cooperation has been threatened. Immediately after the crisis the G20 was given a much higher profile, and for a time it seemed that this might become a new and more representative forum for discussing the governance of the international market order. A Financial Stability Board was established which allowed central banks to draw up new rules for international finance and to coordinate their responses to future episodes of financial instability and crisis.15But there was little progress elsewhere, and the early promise of an enhanced role for the G20 was not fulfilled. Similarly plans to change the voting weights in the IMF to reflect more accurately the shift in the balance of economic power towards rising powers such as China were blocked in the US Senate. The WTO remained deadlocked, and instead the US pursued regional multilateral trade deals, TTIP and TPP, which excluded key countries, such as China. A partial success was the climate negotiations which in Paris in 2015 yielded an agreement. Although short of what most climate scientists thought necessary, this was a step forward, and provided a framework on which to build.

16Establishing new rules for governing the international market order in the context of a weak recovery and austerity programmes was challenging. Yet it was clear that without such new rules and new forms of cooperation, one of the key requirements for lifting the western economies out of recession and stagnation and maintaining the progress of the emerging economies would be lacking. All the major periods of prosperity in the international market order in the last two hundred years have relied on an open trading system and reasonable security. This has always required multilateral cooperation and leadership of one or more of the great powers. In the last seventy years the United States has played this role. Part of the hard times since 2008 has been the difficulty of sustaining the openness of the international system because of domestic economic problems in so many states, and the national-populist challenge to globalism and the ‘Davos elite’.

17Such pressures could be contained when they arose in peripheral states, but it is a different matter now that national-populism has triumphed in the hegemonic power, the United States. The new vision of the United States as set out in President Trump’s inaugural address sees the world in zero sum terms : ‘For many decades we’ve enriched foreign industry at the expense of American industry ; subsidized the armies of other countries while depleting our own…the wealth of our middle class has been ripped from their homes and then redistributed all across the world.’16 This implies a protectionist America, an isolationist America. The logic of this view of the world is that the US should abandon its leadership role and the maintenance of its network of alliances around the world, and even its membership of many international institutions. In their place would be a realpolitik of national advantage, aimed at maximizing US interests, and indifferent to what was happening in parts of the world which the US did not define as part of its core national interests. Trump is abandoning not just neo-liberalism but also neo-conservatism. The neo-conservative doctrine of American primacy which was influential in the Bush administration, particularly after 9/11, also stressed the needed to prioritise US interests, but also reasserted the importance of the US encouraging the spread of democracy and free markets to all parts of the world, by force if necessary. The new Trump doctrine of America First is a foreign policy which puts interests before principles and is indifferent to the nature of regimes around the world. It is only concerned as to whether they serve or can be made to serve US interests.17 Trump’s equivalence between Putin and Merkel in an interview he gave just before his inauguration and his treatment in his first weeks in office of long-standing allies and partners like Mexico and Australia is a telling indication of that approach.

Political Legitimacy

  • 18 Yanis Varoufakis, And the weak suffer what they must? Europe, austerity and the threat to global st (...)
  • 19 Scott Lavery, New Labour, the Coalition and Post-Crisis British Capitalism, unpublished Ph.D thesis (...)

18The third area which has made these hard times for governing are the austerity programmes which so many countries have followed since 2008. The original meaning of austerity is harshness to the taste, and astringent sourness, and from that it has acquired the meaning of severe self-discipline and abstinence. It is often said that austerity was a political choice, but that is only partly true. Given the severity of the recession after the financial crash with output dropping by up to 9 per cent in most western economies, some fiscal adjustment was necessary. The political choice was who should bear the burden of that adjustment.18 Who should pay higher taxes, where should spending cuts fall ? At such a time there are always sharpened distributional struggles over the budget. The outcomes of these struggles mean that austerity is always selective. Certain services and groups are targeted, others are left untouched. The slogan ‘We are all in this together’ used by some UK Ministers obscures the fact that the income of some groups in the UK, such as pensioners, have been protected, while others were targeted for disproportionate cuts. These fell particularly on the disabled, on welfare recipients of income support, and on local governments grants and services. There was a big contraction in employment in the public sector, which had been one of the main counterbalancing policies to the decline of employment in the old industrial regions.19

19When they embarked on programmes of austerity, governments imagined that it would involve a short period of pain and potential unpopularity, followed by a quick rebound into growth and rising income and living standards. What has made this such a difficult period in which to govern is that in many countries the austerity has become permanent stretching into the future with no prospect of any end to it. This is so both in extreme cases like Greece but also more generally. Managing permanent austerity is very difficult, because there are few additional resources to distribute to defuse protests or protect the groups worst affected by cuts. It has been the helplessness of governments to bring an end to austerity and a return to growth which has helped create the soil in which the new national-populism has flourished. Legitimacy has drained away from the political class. There is dissatisfaction with how politics works and a loss of trust in elites and experts. The failure to overcome the economic malaise has connected with the deeper cultural malaise, the feeling that the global cosmopolitan elite has prioritized is own interests and those of the wider international order over the interests of its own people. Immigration and the failure to control it has become the touchstone of this indifference of the global political elite to national electorates. Virulent strands of ethno-nationalism are still in most democracies a minority position, but they have won elections in Russia and Turkey leading to the installation of authoritarian regimes, and within the EU have reshaped the politics of Hungary and Poland. Ethno-nationalism was a significant component of the BREXIT vote in the UK although not the only one. But its most significant victory is undoubtedly in the United States, since it creates the possibility that the United States may be about to end its support for the liberal international market order, and return to its isolationist, nativist roots.

Imagining Less Hard Times

20In the immediate future the times look like getting harder for governing and even dangerous. Protectionism and trade wars could plunge the world into a new great depression, as Larry Summers and Noriel Roubini have warned.20 If the global Tea Party which Steve Bannon wants to see starts winning elections in core EU states, the euro will collapse, and the EU may disintegrate. The Trump administration wishes to help the process along because it wants to deal with nation states rather than multilateral associations. It is the EU’s inability to act as a state or command the loyalty which nation-states enjoy which makes the ethno-nationalists want to destroy it. If they succeed, then cosmopolitan liberals and socialists will be increasingly marginalised in this new world order.

21Are there ways out of this impasse ? A necessary if not sufficient condition for rebuilding trust both domestically between governments and electorates and internationally between states is the discovery of a new growth model which can move beyond the failed recipes of neo-liberalism and ordo-liberalism and help to underpin a new era of openness, expanding trade and rising prosperity. Up to now no government has been prepared to break decisively with the neo-liberal growth model. The Eurozone has moderated its tough stance a little, but it is still pursuing a deflationary policy. Trumponomics will probably inject a large stimulus into the US economy, but because this will be combined with an aggressive protectionist trade policy it is unlikely to boost the international economy. Other countries including the UK, Japan and China are prepared to consider stimulus, but without the United States none of this is likely to be coordinated or sufficient.

22What will be needed are more radical policies, involving new forms of interventions, such as a reconfiguration of finance, measures to increase wages directly through direct state credits, basic income pilots, and the reform of labour markets to give workers more protections. There is no blueprint but what might emerge over time is a new investment state, which might for example require banks to fund public investment projects in return for state guarantees of their liquidity and solvency. National economies have to be rebuilt in ways which work for the majority of citizens, but which at the same time preserve openness within a context of international cooperation and shared international rules. This was the combination which proved so successful in the 1940s and 1950s. The political will to create a new political settlement does not currently exist in either the US or the EU, both of which are increasingly inward-looking. But without it, the drift to protectionism and trade wars will be hard to resist. Trump in particular looks certain to test the resilience of international cooperation through his policies and provocations. His election makes fragmentation of the international market order a serious possibility, with a return to great power politics and spheres of interest. A new era of prosperity and peace which would leave the hard times behind is possible, the conditions for it exist, but whether it can be realised depends on whether a multilateral order can be preserved and extended. If it crashes in ruins it will have to be rebuilt before lasting prosperity can return, and that could take a long time. The hope has to be that a strengthening of nation-states, involving a temporary retreat from deepening multilateral cooperation may provide the basis for renewed international cooperation in the future.

23The period between 2008 and 2016 may come to seem an interregnum, a phony war. We may be entering a much more dangerous period. Hard times could become desperate times. There are obvious risks in the unleashing of nationalism and the return to great power politics. But an even greater existential crisis is already upon us, the impact of climate change. If there is to be a more optimistic future, the first task for governments and political movement is to experiment with a new political economy that can restore prosperity, international cooperation and legitimacy. But any solutions for dealing with debt, inequality, growth and the cultural and economic resentment of those marginalized and left behind must also be solutions that address the issue of climate change. That will not be easy, especially now that the United States has elected a President who claims global warming is a Chinese hoax.

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Trump, D., Inaugural Address January 20th 2017, https://www.washingtonpost.com/news/the-fix/wp/2017/01/20/donald-trumps-full-inauguration-speech-transcript-annotated/?utm_term=.d8bd5c5f478e.

Varoufakis, Y., And the weak suffer what they must ? Europe, austerity and the threat to global stability, London, Bodley Head, 2016.

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Notes

1 Gamble, A., The Spectre at the Feast: capitalist crisis and the politics of recession, London, Palgrave-Macmillan, 2009.

2 Blyth, M., Austerity: the history of a dangerous idea, London, Oxford University Press 2013.

3 Streeck, W., Buying Time: the delayed crisis of democratic capitalism, London: Verso, 2014.

4 Papaconstantinou, G., Game Over: the inside story of the Greek crisis, Amazon, Createspace, 2016.

5 Jan-Werner Muller, What is Populism?, Philadelphia, University of Pennsylvania Press 2016.

6 Charlie Laderman & Brendan Simms, Donald Trump: The making of a world view (Endeavour Press, 2017).

7 https://www.buzzfeed.com/lesterfeder/this-is-how-steve-bannon-sees-the-entire-world?utm_term=.yhaZ58dR3#.ny4vQR5kY

8 Colin Crouch, Making Capitlaism Fit for Society, Cambridge, Polity 2013; Guy Standing, The Precariat: the new dangerous class, London: Bloomsbury 2011.

9 Robert Ford & Matthew Goodwin, Revolt on the Right: explaining support for the radical right in Britain, London: Routledge 2014.

10 Robert Gordon, Is US economic growth over: faltering innovation confronts the six headwinds www.nber.org 2012

11 Tylor Cowen, The Great Stagnation (New York, Dutton 2013).

12 Thomas Piketty, Capital in the twenty first century (Cambridge, Harvard University Press 2014).

13 Genevieve Le Baron, The coming crisis: the dangers of indecent work http://speri.dept.shef.ac.uk/2016/06/22/the-coming-crisis-the-dangers-of-indecent-work/

14 Bob Car, ‘Australia, China and the lunacy of Trump’s talk of a trade war’ https://www.theguardian.com/commentisfree/2016/nov/12/australia-china-and-the-lunacy-of-trumps-talk-of-a-trade-war

15 Stuart Mackintosh, The redesign of the global financial architecture: the return of state authority, London, Routledge 2015.

16 Donald Trump, Inaugural Address January 20th 2017, https://www.washingtonpost.com/news/the-fix/wp/2017/01/20/donald-trumps-full-inauguration-speech-transcript-annotated/?utm_term=.d8bd5c5f478e;

Charles Krauthammer, ‘Trump’s foreign policy revolution’ https://www.washingtonpost.com/opinions/global-opinions/trumps-foreign-policy-revolution/2017/01/26/c69268a6-e402-11e6-ba11-63c4b4fb5a63_story.html?utm_term=.cf224fab47a1

17 Francis Fukuyama, ‘US against the world? Trump’s America and the new global order’ https://www.ft.com/content/6a43cf54-a75d-11e6-8b69-02899e8bd9d1

18 Yanis Varoufakis, And the weak suffer what they must? Europe, austerity and the threat to global stability (London, Bodley Head 2016).

19 Scott Lavery, New Labour, the Coalition and Post-Crisis British Capitalism, unpublished Ph.D thesis, University of Sheffield, December 2016.

20 Larry Summers, http://fortune.com/2016/06/06/larry-summers-trump-buffett/ ; Nouriel Roubini, https://www.theguardian.com/business/2017/feb/02/trump-honeymoon-stock-market-dow-jones

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Pour citer cet article

Référence papier

Andrew Gamble, « Governing in the New Hard Times », Observatoire de la société britannique, 19 | 2017, 31-47.

Référence électronique

Andrew Gamble, « Governing in the New Hard Times », Observatoire de la société britannique [En ligne], 19 | 2017, mis en ligne le 01 juin 2018, consulté le 23 juin 2018. URL : http://journals.openedition.org/osb/1894 ; DOI : 10.4000/osb.1894

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Auteur

Andrew Gamble

Professor of politics à l'Université de Sheffield et emeritus professor of politics à l'Université de Cambridge

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