The Democratic primaries in the shadow of neoliberalism | SPERI
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The Democratic primaries in the shadow of neoliberalism

The Clinton/Sanders battle exposes the challenge of the centre-left to overcome its pre-crisis accommodation with neoliberalism

David Coates, Professor of Anglo-American Studies, Wake Forest University, North Carolina

David CoatesOne way of grasping what is now at stake in the on-going battle between Hillary Clinton and Bernie Sanders is to set that clash in the shadow of the Reagan/Thatcher neoliberal revolution of the 1980s.

That revolution kept Democrats out of the White House, and kept the Labour Party out of power at Westminster, for three whole electoral cycles; and by the end of the third of those, leading politicians in both parties had decided their only way back to power was to meet Reagan- and Thatcher-shaped electorates on neoliberal terms. Under Bill Clinton and Tony Blair’s leadership, both centre-left parties abandoned their earlier and more progressive sets of policies in favour of an explicit accommodation with the major tenets of the new conservative orthodoxy.  For Clinton and Blair, being a progressive in the 1990s meant being a more civilized and kind-hearted Reaganite or Thatcherite.  It meant taking for granted, and never challenging, very central neoliberal principles and practices.  Their policy programme, which we will call List A, included:

  • Lower corporate and personal taxation to encourage innovation, enterprise and job creation;
  • A thinning of the welfare net to avoid welfare dependency and to increase the incentive to work;
  • The deregulation of labour markets through the weakening of trade unions;
  • The parallel deregulation of the business community, and the celebration of income inequality;
  • The privatization of publicly-owned industries and companies, and the exposure of public bodies to market forces.

The ‘third way’ acceptance of Reaganite and Thatcherite policies worked for a while. There was great job growth in the US in the 1990s, and New Labour grew the economy without a recession between 1997-2007.  But then the wheels really came off the neoliberal bus.  Lightly regulated financial institutions triggered first a major credit crisis, and then the deepest recession either economy had known since the 1930s.  In late 2008 and early 2009, no one was a passionate neoliberal anymore.  Keynesian demand management, big injections of public spending, and the tight direction of the banking system all came briefly back in vogue.

But only briefly. Conservatives in both countries quickly found other explanations for the crisis, and told their electorates that it was high government spending that caused the crisis (and not, as in reality was the case, the other way round).  Even moderate Democrats like Barack Obama found themselves unable to govern across the aisle as Republicans went in full retreat to more extreme neoliberal positions again.

Two things then happened that frame the choices being debated now. On the Democratic side of the aisle in the United States, both a moderate and a more radical challenge to the earlier neoliberal orthodoxy began to crystallize. Hillary Clinton and Bernie Sanders may now personify those different challenges, but they are not their sole architects.  On the contrary, across the Democratic coalition as a whole, the last seven years have witnessed the increasing presence in progressive policy debates of two linked but competing lists of policy preferences.  The moderate policy list (List B) includes

  • The maintenance of demand through public spending and the toleration of public debt;
  • The avoidance of further financial crisis by tighter financial oversight;
  • The infrastructure route to growth (public spending to modernize roads, bridges, rail and internet provision);
  • Progressive taxation to reduce excessive inequality and to spread the cost of welfare provision to those best able to bear it;
  • Greater rights for women and minorities at work, more childcare and paid parental leave;
  • Moves towards a carbon-free energy policy.

The more radical list (List C) includes the moderate agenda, but adds some or all of the following:

  • Greater rights for trade unions, and a major hike in both the minimum wage and the federal pension;
  • Systematic attack on the sources of poverty, with affirmative action while poverty persists;
  • The deconstruction of the system of mass incarceration and the ending of the war on drugs;
  • New trade policy to reverse the outsourcing of well-paying jobs;
  • The breaking up of banks that are too big to fail;
  • Less spending on the military and foreign wars: more nation-building at home, less abroad.

Those lists contain very specific American dimensions (not least the ending of mass incarceration and winding down foreign wars). But they are not, in all their essentials, American lists alone.  Parallel changes in understanding and policy are in debate and dispute in many western European centre-left parties.  This is certainly true in the British Labour Party but also in centre-left parties in France, Spain and Germany.  In advanced capitalist economies, the post-2008 struggle to return to prosperity and job security is obliging the centre-left to re-examine the wisdom of its earlier enthusiastic accommodation to neoliberalism.  It is that re-examination that lies at the heart of the current clash in the on-going Democratic presidential primaries between Clinton and Sanders.

Each of the three policy lists I have set out has a different centre of gravity because the analyses underpinning them also differ. And because they are different, and because of the history in which they sit, Hillary Clinton in particular has a double problem with her potential electoral base.

Her first problem is this. When she was the politically active first lady to her husband’s presidency, economic policy operated on List A.  So one question that Hillary Clinton has to answer now is whether economic policy under a second Clinton presidency (namely hers) will be similar or different?  Her Republican opponents will attempt to tar her with the Bill Clinton brush, pointing to sexual infidelity and possibly financial corruption or worse.  Her progressive critics should worry more about the extent to which the current global activities of the Clinton Foundation point to her husband’s on-going commitment to neoliberal principles.  Because if he hasn’t made the break, and she is on record as intending to look to him for advice on economic policy, how much of a break has she really made, or how much of a break will she be able to sustain?

Then there’s the second problem, the really big one: if the answer to the first question is that yes, under her presidency, policy would be very different, will it be different by operating on List B (essentially the blocked economic policy of the Obama presidency), or will it stretch out to encompass some dimensions, or the totality, of List C, that so many radical supporters of Bernie Sanders now believe to be essential? This then raises the further questions: how radical has Hillary Clinton become?  How much is show, and how much is real?

The great fear, on the left of the Democratic coalition, is that the rupture with the original Clinton list (List A) is still paper thin and that Hillary Clinton will endorse more radical policies (from the other two lists, including List C) simply to win office. Then, when in office, she will go back to List A, triangulating with neoliberal Republicans in the manner of the first Clinton presidency.  Reassuring her progressive supporters that she will not do any of this is therefore a vital task for her between now and November, because only if that reassurance is forthcoming – only if the depth of her rupture with her own past is unambiguously clear – will the vast majority of those mobilized by Bernie Sanders act as willing foot-soldiers in the electoral battle to save America from a Trump presidency.  And she will need those foot-soldiers.

A fuller version of this article was first posted at www.davidcoates.net.

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