Economic exceptionalism past and present: or whatever happened to normal?

Exceptionalist policies can play a critical role in changing norms and perceptions of what constitutes the status quo. What role does exceptionalism play within our society today?

Part 2 of Jacqueline’s blog is available here

Whatever happened to normal? You remember: a normal neoliberal political economy in which the democratic process sort of works and we have reasonable growth combined with some wage increases and interest rates around 4-5%. Of course, this “normal” economy excluded a huge number of people from its benefits, depended on lower and middle income earners maxing out their credit cards and lines of credit to keep afloat, relied on using carbon at an unprecedented scale, and produced a massive and unsustainable asset bubble. But it seemed normal (at least when compared with where we are today).

Not long after the 2008 financial crisis blew this system up, there was a lot of talk about returning to normal. But once Trump was elected and the long slow Brexit train wreck began, we seem to have given up on normal altogether.

Scholars have found a number of ways of describing this disruption of “normal” politics and economics. Ian Bruff, Burak Tansel and others have pointed to the rise of authoritarian neoliberalism in many countries. We are also witnessing what Peter Adley, Ben Anderson and Stephen Graham have described as “the proliferation of emergency as a term” and an increasing effort to govern through emergencies.

My work has focused instead on the growing role of economic exceptionalism in recent years. During my time as a Leverhulme visiting professor at SPERI at the University of Sheffield, I examined how useful this concept is for understanding how “the normal” has been suspended or disrupted today—as well as in the past [Spoiler alert]. As it turns out, the usefulness of the term depends a lot on what time frame we are looking at—but more on that later.

I first became interested in understanding this kind of break from the “normal” in the wake of the 2008 global financial crisis. I became increasingly angry at the Canadian Prime Minister, Stephen Harper, for repeatedly making claims along the lines of: “Normally, we wouldn’t be doing this (running a deficit, imposing austerity measures in a counter-productive attempt to reduce said deficit, denying airline workers the right to strike) …but because we are living in exceptional times, these measures are not only legitimate but necessary”. This language of exceptionalism was widespread at the time. In the UK, we saw politicians justifying bailouts, austerity measures and highly exceptional forms of monetary policy as necessary suspensions of normal politics in a time of crisis.

I have a number of colleagues and friends who work on critical security studies, and I kept thinking about their work on securitization and the logic of political exceptionalism in the post-9/11 era. They found that there has been an increased tendency of liberal governments to invoke states of exception in times of crisis. They achieve this by claiming that a given existential threat to the state has made the suspension of normal liberal rights necessary; in order to protect the public.

What if, I asked myself, this logic of exceptionalism is not only political but also economic? Without getting into the theoretical details of why this absolutely the case (which you can read in my Security Dialogue and International Political Sociology articles on the topic), a quick survey of history made it clear that yes, in fact, liberal states have often used emergency powers to address economic crises and have also justified them in exceptionalist terms. This has included the repeated use of martial law in the US and UK to put down strikes in the late 19th and early 20th century as well as President Franklin Roosevelt’s use of the “Trading with the Enemy” Act to put through some of the key measures of the New Deal in the 1930s.

One of the goals of this research project is to understand when and why these kinds of exceptionalist claims are used to justify particular  responses to economic crises. When I defined my initial hypotheses, I expected to find that the early New Right governments of Margaret Thatcher and Ronald Reagan both relied heavily on exceptionalist claims in the early 1980s in arguing for the necessity of their radical and often very painful strategies for reducing inflation. But this is not what I discovered. In fact, I seriously considered titling this blog “A funny thing happened on my way to a conclusion,” because it is in many ways about what happens in research when we start out with one particular hypothesis and end up finding something quite unexpected.

Going back to the 1970s, when both American and British governments first began describing inflation as a major crisis, I found plenty of evidence of exceptionalist language. Nixon declared an emergency in order to address the postal workers’ strike in 1970 and again when he imposed wage and price controls in 1971. In the UK, the Conservative Prime Minister Edward Heath declared a national emergency and imposed a three-day work week in 1973 when striking miners threatened the national energy supply. All of these measures were framed as temporary exceptions to normal politics that were necessary because of the grave threat to the national economy.

In stark contrast, the Reagan and Thatcher governments avoided using exceptionalist language when they first came to power. In the US case, Reagan’s first Budget Director, David Stockman, had written an open letter calling on the government to declare an emergency in order to tackle “an economic Dunkirk,” but his arguments were rejected.

Two very different responses to national strikes, less than a decade apart makes it clear the difference in these two disruptions of normal politics. Nixon called in the National Guard in 1970 when postal workers went on strike but ultimately granted them their demands of a wage increase and a right to bargain over wages. In contrast, when Reagan faced the air traffic controllers’ strike in 1981, he not only declared the strike illegal but then fired all of the striking workers and banned them from public employment for life. If we look at Thatcher’s response to the miners’ strike in 1984-85, we find a similar pattern of using extraordinary measures not to address a temporary crisis, but to permanently reduce the power of the miners in particular, and labour unions more generally. These were extreme actions but they were not justified as temporary or exceptional. Instead, they sought to use emergency powers to establish a new normal.

What do these historical findings tell us the disruption of the “normal” today?

After the 2008 global financial crisis, most political leaders were using a language of exceptionalism, telling us that we just had to suspend normal political and economic rights and processes temporarily to deal with the crisis. Yet, in many cases, that suspension has blurred into a new kind of normal, which has had all sorts of troubling consequences.

Today, it seems like the Trumps and the hard Brexiters of this world have given up even pretending that this is about a temporary suspension of the normal. It looks instead like they’re calling for a more radical disruption and a very different kind of normal. Both kinds of claims are troubling—but it’s the second kind that is truly worrying.

Read Part 1 and Part 2 of Jacqueline’s mini blog series.