The Optimistic Leftist: The Future Belongs to the Left

The odds are long that Financial Times columnist Wolfgang Munchau has read or even heard of my book, The Optimistic Leftist. But there are some interesting overlaps in his latest column with arguments I developed in the book and have elaborated since.

Munchau's critique of contemporary (neo)liberalism is spot on:

"Liberal democracy is in decline for a reason. Liberal regimes have proved incapable of solving problems that arose directly from liberal policies like tax cuts, fiscal consolidation and deregulation: persistent financial instability and its economic consequences; a rise in insecurity among lower income earners, aggravated by technological change and open immigration policies; and policy co-ordination failures, for example in the crackdown on global tax avoidance.

When the financial crisis struck, continental European governments did not take full control of their banking systems, crack down hard enough on bonuses, or impose financial transaction taxes. They did not raise income and corporate taxes to counter-balance cuts in public sector spending. They did not tighten immigration policies."

He sees European and Trump-style right wing populism not as the beginning of the end but rather a transitional stage:

"I expect the pushback against liberalism to come in stages. We are in stage one — the Trumpian anti-immigration phase. Immigration carries net economic benefits, especially over the long term. But there are losers from it, too, both actual and imagined.....Liberal democracy has been successful at breaking down trade barriers, protecting human rights and fostering open societies. But the inability to manage the social and economic consequences of such policies has rendered liberal regimes inherently unstable."

And here we get to the crux of it:

"For now, the right is thriving on the anti-immigration backlash. But its rise is self-limiting for two reasons. First, rightwing policies are not succeeding even on their own narrow terms. A wall along the border with Mexico will not stem US immigration flows any more than the re-nationalisation of immigration policies would in Europe. And second, I suspect that immigration will soon be superseded by other issues — such as the impact of artificial intelligence on middle-class livelihoods; rising levels of poverty; and economic dislocation stemming from climate change.

This is a political environment that favours the radical left over the radical right. The right is not interested in poverty and its parties are full of climate-change deniers. Some of the rightwing populists may speak the language of the working classes, but the left is more likely to deliver.

The killer policy of the left will be the 70 per cent tax rate proposed by freshman US congresswoman Alexandria Ocasio-Cortez. It is not the number that matters, but the determination to reverse a 30-year trend towards lower taxation of very high incomes and profits. There would be collateral damage from such a policy for sure. But from the perspective of the radical left, collateral damage is a promise, not a threat.....

We have entered an age that will favour radicalism over moderation, and the left over the right. It is not going to be the age of Donald Trump."

I agree, however scary Trump and his ilk look at the present time. The left should have the courage of their convictions that they have a better way that that way is salable in a rapidly changing environment. Trump certainly exploited voter anger and, yes, racism to get elected. But he also promised to solve people’s problems — with their health care, with their jobs, with their living standards, with their communities, with their children’s prospects. He won’t succeed. That’s a huge opening for the left, including among white non-college voters.

Nowhere is that opening greater than on the issue of growth that leads to better jobs and higher living standards. The Democratic Party is more or less united around a programmatic approach to the economy that could actually produce such growth — an approach some of us call “equitable growth.” It pushes back on inequality, seeing current high levels as an active detriment to growth, and seeks to combine support and opportunity for the broad middle class with investments to make the economy more productive.

This includes truly universal health care, universal pre-K, free access to two years and some four-year colleges, paid family leave, subsidized child care, higher minimum wages, a commitment to full employment, and robust investments in infrastructure and scientific research, especially around clean energy. In one form or another, all of this is working its way into the policy discourse of Democrats, especially candidates for the Democratic Presidential nomination.

The GOP, in contrast, now harbors a cacophony of different economic approaches, from pure libertarianism to Trump’s incoherent economic nationalism. Astonishingly, the one point of agreement of these approaches appears to be that inequality should be pushed even higher by increasing the flow of benefits to the rich. The idea that ratcheting up inequality will somehow lead to strong growth, better jobs, and higher living standards is substantively ludicrous — and not at all what Trump’s working-class supporters had in mind. When it doesn’t work, they will be upset.

In sum, the left can deliver and the Trumpian populists can't. In the end, that will matter.