Quora discussion; liberalism and Marxism

Had quite an interesting conversation with somebody on Quora a few days ago. I commented on an answer to ‘Why don’t proponents of social democracy ever use Southern or Eastern European countries as an example for the US?’ after which the writer answered, the subject changed quickly and as such our conversation became much more about the world economy as a whole than it was about the pro-Russia, anti-EU governments that prevail in Eastern Europe.

The writer first wrote the following (Note that is an excerpt of his answer):

Calling it “austerity” (for you, not for them), the G20 is not only the cause of the 2008 meltdown, but now it offers the solution. Goodbye healthcare, goodbye pensions, goodbye social services.

And so, when you see mass demonstrations in the streets of some of these southern European cities, you’ll know why.

ADDENDUM: 1 in 5 children living in the G20 now lives in poverty.

My reply:

For one, I’d like to stress that your assertion that the G20 was established in response to the economic crisis is simply a fallacy. It was founded in 1999, where its principles entailed the involvement of less developed countries – such as India and Brazil for example. It was then re-energized as a result of the horrid effects of the economic crisis when Bush called for a leader summit.

Second, your answer does not answer the question, nor do I agree with your second assumption that mass demonstrations in the Southern countries are a result of capitalist deprivation. These mass demonstrations are – as far as they could be considered ‘mass’ demonstrations – a reaction to a failing, corrupt government that can’t control its bank as well as ever-growing migrant inflow from Northern Africa.

And third, your last sentence makes absolutely zero sense considering my first point, namely that the Group was founded with developing countries in mind.

At the time of writing, I was under the assumption that the user meant recent demonstrations in Italy, however, the demonstrations that he referred to took place in 2012, a direct reaction to further cuts as the eurozone seemed destined to enter another recession, as the user kindly pointed out:

They were MASS demonstrations and regardless of the cause of their discontent, the solution was to punish THEM in the guise of “austerity”. They know their government is corrupt. They don’t need G20 to jump on them with a second pair of feet. As for 3rd point, consider the nature of the G20 and how it operates, not what its charter might have said 18 years ago. Any way you spin it, the pain is not being suffered by the world’s giant corporations now is it?

The discussion now quickly became one of great importance as we got onto the subject of globalism and its humanitarian consequences. I followed up:

I’d like to get back on you concerning those demonstrations. If you are referring to anti-austerity demonstrations in Italy, it would be mostly frivolous to blame capitalism, or the G20, for that matter. Southern European financial crises are mostly a result of political instability. With the level of behind-closed-doors state intervention in financial institutions, political instability leads to further economic turmoil.

Getting back on my third point; you note that we must consider how the G20 operates now. I’d agree with you that – whether you support that or not – the core of the G20 is the absolute epitome of neo-liberalism and free-trade. However, to argue that 1 in 5 of the members state children lives in poverty as a result of its current way of acting would imply that poverty rates have only worsened in its member nations, which definitely isn’t the case.

And finally, I agree with you on the last point. Multi-national conglomerates do not feel such pains and its important to note that neo-liberalism has not only had good effects on our lives, because for a large group it hasn’t. Blaming capitalism or the G20 seems – again – frivolous, mainly because globalism has brought such wealth as well as cooperation on climate change and defense, that a large majority has benefited. What I mean to say is that on a netto basis, neo-liberalism has been a win for most of us. It’s incredibly important, however, to acknowledge and try to solve – by means of regulation or less political influence – problems for people who haven’t been as well off.

He quickly responded:

I see your point but I find these “gains” are not to be regarded as substantive as they appear. If you consider that much of this alleged rise in GDP for member nations is actually based on DEBT, that’s somewhat startling to contemplate. In other words, the economy is driven by people spending all right—but spending money they don’t have. Using the U.S. as an example, “real” wages haven’t increased for decades. The average American might say: “But look, I have a house, two nice cars and my kids are in college”.

Yes, but the house is mortgaged for 30 years, the cars for 72 months, and the kids owe $150K apiece in student loans.

It’s not good right now. I am quite concerned that the biggest players within the G20 do not realize that if you take out all your winnings in a poker game, the game stops.

Regarding demonstrations, I think the bottom line, the base cause, is economic—however one wishes to frame it. I tend to be somewhat Marxist in my views (couldn’t you guess—LOL!) and I do see things as a class struggle in those cases.

Corruption in Greece is just awful. They are among the worst.

From his response, the discussion was not only about the faults of neo-liberalism and globalism, it took on the much broader subjects of capitalism and Marxism. However, as I note in my answer below, his proposition that a debt-based economy is only rich in the minds of GDP-figures is rather benighted.

First of all, yes, corruption in Greece is awful, just as corruption in many other Southern European countries is awful. This is part – if not the biggest part – of the problem. In a country where banks and governments go hand in hand – which is quit logical considering Europe’s long tradition of state-meddling in financial institutions – economical stability goes hand in hand with political stability. It adds up; think about Italy’s history of countless different governments and coalitions or Greece’s aforementioned levels of corruption.

Your second point is a very interesting one. Although I may not be as well-versed in the subject as you might be, we both look at this in different ways, I guess. Loans are easy and cheap, for people as well as corporations. Let me also note that if people are able to pay off their loans, no problems arise, the money is not somehow gone or ‘taken out’, as you assert. The essence is that debt is absolutely no problem, provided that the economy grows, which it not always does.

Possible solutions include changes to the tax code, although huge tax code changes are out of the question for most if not all developed countries.Safe to say, it seems that a Keynesian style monetary policy is a temporary solution to this growth-based economy problem, and sometimes a temporary solution is more than sufficient.

After all, it was agreed upon that the economy as it is now is unstable and not as future- and fool-proof as some bureaucrats might hope. However much our views differed or however little we actually agreed upon, it’s delightful to find someone who is open to opposing views, quite a rarity in between the dogmatic, pseudo-intellectual, keyboard-warrior crowd that I usually find on Quora.

G20 Aftermath: New Global Leadership

The tides have indeed turned; the US’s position has weakened as the Trump administration seems to have no interest in global leadership, while China’s domestic problems negate its interest in a similar leadership role. All the while Europe has shrugged off its recent wave of right-wing populism. Economic stability followed political stability as the Union self-handedly recovered from its lows, rewinding the economy to pre-crisis levels. From the start it would be clear that the EU would now set the tone.

G20

Before attending the G7 summit on his previous foreign trip, Trump took the time to increase tensions in the Middle East by sympathizing with Saudi-Arabia and affronting Iran, after which Trump seemed perfectly content with letting Palestine and Israel find a way of solving their increasingly complex conflict. Safe to say, Trump was more of a crowd-pleaser than he was a problem solver, visiting only the countries he knew welcomed his electoral college victory.

Similarly, preceding the G20 summit, Trump took to the stage in Poland, a country that shares with Hungary its illiberal, right-wing government. PiS, the Law and Justice party, strongly opposes immigration and espouses values of Euro-skepticism unseen elsewhere in the union. Its party leader, Jaroslaw Kaczynski, unsurprisingly hailed Trump’s visit as a “new success.” The underlying strategy seemingly entails first to do something that can’t possibly go wrong and can only be touted as a ‘success’ by his base, only after these successes come the summits. Besides cozying up to his supporters at home and in Poland, commentators swiftly described his visit as an attempt to deepen divisions within the European Union, hoping to spur the populists who only reached second place in many of Europe’s elections.

On the other side of the aisle, a new trade deal between the EU and Japan was ratified. This deal not only establishes an economic relationship between the two countries, it entails further cooperation with regard to defense and cyber-security. Less evident than these obvious benefits involved for the two power blocs, however, is the political statement that it symbolizes. Hastily finished before the gathering, it sounds a strong voice against protectionism and isolationist economic policy, showing that Japan and the EU hold hands whilst Trump is letting them go.

Trump and Putin might have been the center of attention during this summit, it was Angela Merkel, German chancellor, whose job it was to channel the summit and make sure that its result – a communique – was of any significance. With her reelection at stake, Merkel had presented herself as the front woman of the liberal west and free trade, with ‘difficult tasks’ ahead, she had to be careful not to give away too much of these values in negotiations with Trump, Putin and Erdogan: The Terrible Trio – as the Economist once named them

After all, however, it wasn’t Merkel, who assiduously persevered and dabbled between the G20 and fierce protests in her own country, who will be remembered. It isn’t for the meager fifteen page communique, full of boilerplate and cliche statements either, which will be largely forgotten by the time of the next summit. Quite frankly, it will be remembered for its stark contrast with previous international gatherings, when a respected US president helped lay the foundation for the Paris accord.

New roles

Let us return to the aforementioned terrible trio; Trump, Putin and Erdogan. The three will set the stage for global relationships in the upcoming decade.

For one, many leaders question Trump’s unpredictability. On the one hand, Trump’s disdain for international cooperation seems clear; on the other hand, this message seems to show only in general diplomatic incompetence, not in actions.

In the case of Putin and Erdogan, it’s not so much a case of questioning, it’s a case of fear. Putin leaves Russia with severe domestic problems, however, his presence on the world stage is prominent as ever. Leaders fear his ever growing sphere of influence in the Eastern parts of Europe, where Putin supports the pro-Russia, illiberal and isolationist countries, one of which is the aforementioned Poland. More worrying is his relationship with Erdogan, the self-made autocrat whose one-man control in Turkey abolished the once secular NATO member. With Turkey moving to Russia, the recent refugee treaties with the EU aren’t as sure a case as they seemed; furthermore Turkey is a key NATO-member as a result of its location and a possible EU-member – although accession talks have stalled – making further cooperation with Russia a frightening development.

It’s these factors combined that divide the world into a small number of huge power-blocs, competing in the arena that Trump’s economic- and national security adviser argue for. Many acclaim that this terrible trio casts a looming shadow over Europe, one that may break apart the Union. If anything, however, it seems to make the EU stronger, as a result of blocs such as Russia, China and the US isolating themselves, it has to take matters into her own hands, leading the way to closer cooperation within the Union and a possible pan-EU defense initiative.

Now, I’d not argue that the world will be at war within the foreseeable future, nor that the world will return to a competition of Western civilizations much akin to the world before the first World War. These dynamics do make for a worrying – albeit interesting – future that, however speculative, shouldn’t be ignored.

Left, right and Macron

Macron, as many other centrists, has campaigned on the promise of being neither left nor right, hoping to resemble unification as well as distancing himself from the diluted left, right playing field. However, now that he is the president, Macron will have to wage a different battle to make sure that populists won’t hit back twice as hard.

Economic growth is pushing through, unemployment rates are back at their pre-crisis levels and democrats are gaining momentum against their incumbent right-wing opponents. People have grown tired of Manichean politics, the politics of leaving the EU versus further cooperation with the EU, of close borders versus open borders, these choices often portrayed as a choice between intellectual progressive leftism versus bigoted right-wing extremism. Rita Verdonk, a Dutch politician, once campaigned on the motto that she was ‘Neither left nor right but straightforward’, her message was unmistakably right-wing, but her slogan does catch the wrongs of the terminology, people are done with these ever-changing, over-simplifying terms. Centrist parties, much like Macron and his movement campaign on being neither left nor right as well, and win. Do left and right still mean something?

The T-junction

The left and right terminology finds its origin in, ironically, the French National Assembly in 1789. Those opposed to the revolution, evidently proponents of the old monarchy, sat on the right in the recently found parlement they so loathed, proponents of the revolution sat on the left. The divisions continued and later on, in a time where there were still no parties in the French political landscape, leftists came to be regarded as innovators, rightists often as defenders of the constitution. Only in the beginning of the nineteenth century did the terms gain popularity as they began to be used informally to describe one’s political ideology. One can conclude that in these times, right-wing parties protected the interests of the upper-classes, leftists tailored to the people of lower social-economic class. It is at this time, the time of industrialization and worker suppression, that the left adopted the role of protecting workers from the aristocratic upper-class, a feat of democracy if you will.

The left, in the late nineteenth century and beginning of the twentieth century associated with Marxism and later on social democracy, gained popularity quickly. However, income differences and worker suppression became less of an issue as left-wingers began to lose their prevalence in Europe. Optimism quickly transcended pessimism in the time after the Great Wars, it was a time of secularization and the civil rights movement. Leftists swiftly abandoned their traditional working-class voter base, rather representing intellectual, minority voters. Quickly, right-wingers managed to pick up this left-behind group and sound the voice of these socially conservative voters.

Skip ahead three decades and one finds itself in the time of pro-business conservatives such as Reagan and Thatcher, who made the best of the economic prosperity of their years. Social democrats, who embraced multiculturalism, often formed coalitions with such mildly conservative, pro-business parties, forming the basis for Tony Blair and Wim Kok in building their ‘purple’, third way cabinets. Fueled by the fall of the Soviet empire, their centrist, neo-liberal ideology caught on.

One can see that the definitions of left and right have long correlated and moved, the political spectrum is not what it used to be. The fact that the definitions of these terms are as ever-changing as political ideologies themselves is two-fisted. However, as with anything, people tend to cling to such terms, bringing themselves to the almost binary choice as described in the first paragraph, an even worse trait of these one-sided designations.

Left and right and the french elections

Besides these obvious shortcomings, globalization has rendered parties on the left and the right useless. Social democracy, which is losing its influence swiftly, was – and still is – the foundation of European politics. No longer is it possible to impose radical protectionism or drastically change foreign policy. Countries will be rapped over the knuckles by the European Union, Wall Street or any other influential institution. Ideology is compromised to the furthest extent. Macron, as well as other moderates, seems to have gained immensely from campaigning on a message that is independent of political direction. He understood that people grew tired of this diluted playing field. He also understood that, as a result, many Europeans tended to more extreme parties to break the politics of this loving consensus.

His recently established cabinet of ‘left and right’ is an excellent first step towards a new type of government that does not comply with terminology but tailors to the ballots the French have cast. Le Pen’s talking points will remain talking points. Macron and his cabinet should seek to acknowledge those and offer viable solutions, contrary to bleak rhetoric, and renew the sense of democracy that once originated in that same France. If his administration won’t, right-wing populist will be back, and win.

The fate of the Union and the safe center

The French election seems torn – almost binary – between progress and backwardness. Le Pen or Mélenchon would both mean a severe and possibly catastrophic blow to the European Union as well as a conflict-ridden French government. Voters, disregarding populism from both flanks of the political spectrum, search for the middle ground; En Marche!

If one were to use sporting terms, 2016/2017 has been an immensely worrying – albeit interesting – season of politics. All suggested that it would be the season of the ‘people’, of the left-behind working man, that at its center would be the battle between the forgotten and the global elite. The next domino stone of this nationalist insurgent seemed destined to fall as Donald Trump climbed the stairs of the White House and the United Kingdom took a header down the steps of the European Parliament. However, as the Netherlands has acted a little more ‘normal’ and rejected the ‘wrong kind of populism’, in the words of Prime-Minister Rutte, Western political development saw a rejection of the nationalist incumbents and with that a safe escape to more centrist and conventional parties. Now, as France’s election is coming up with two anti-EU and market-skeptical candidates – Jean Luc Mélenchon is downright anti-market – are estimated to lose, as well as a general election in the United Kingdom, many hope that this trend can continue and Western democracies can once again rely on moderates to run the country.

Today (April 23), three days after another IS-claimed terrorist attack, is the day that the French will take to the polls. Under a loud a voté, as is tradition under de Gaulle’s Fifth Republic, their vote will be cast and their most important civic duty satisfied. Contrary to convention in the Fifth Republic, however, an independent candidate is leading the polls, with the runner-up and the number three being independents as well. As already stated in the previous paragraph, the election seems torn between populists and more conventional candidates. Torn – almost binary – between progress and backwardness. France, as one of the three main founding countries of the European Union, still is one of the driving forces behind the Union. Now, with Brexit, Trump, Erdogan and Putin already threatening the connecting element of the continent, the people of France have the power to bring the final catastrophic blow to the project. One that was created not only to further trade and commerce, but to work together on projects that take decades to accomplish, to fight climate change as well as create a powerful bond to protect its people from a repeat of the great wars at the beginning of the Twentieth century. 

Bluntly, a victory by either Le Pen or Jean-Luc Mélenchon – both independents – would be an outright disaster. Both take anti-EU and anti-immigration stands and as such pose immediate threats to the European Union as well as create nothing but conflict within the French government itself. Mélenchon, who is a traditional Trotskyist, does add some of his own hard-left ingredients, 100 billion in social spending in an already in-debt country for example, all in all, however, their would-be presidency reflects rather the same type of EU-loathing and anti-elite sentiment. That leaves two candidates who have an actual chance of winning the election: Macron, the Socialist economy minister turned liberal internationalist and the scandal-scarred Thatcherite conservative Fillon.

Mr Fillon, the Republican candidate, is a well-known figure in the French establishment – a true ‘swamp habitant’ if you will. In a country that has long been a staple of big government and strong, charismatic presidents, the hard-right Fillon dares to campaign with pro-market ideas that include deregulation, a higher pensioning age and drastic cuts in social spending. However, as he has taken 900.000 euros of state money to pay family members for ‘work’ – doing nothing – he turns his powerful claims of change in mere hypocrisy. We then find Macron, the political newcomer.  He started his movement En Marche! only yesteryear. As of yet, his only government experience is as economy minister under François Hollande, whom he frequently opposed with more liberal-oriented views. His plans include drastic cuts in social spending, progressive social policy and more collaboration with the European Union. The social-liberal candidate rejects the traditionalist views of his Republican opponent and does not care for deep relationships with Russia.

Many disregard him for his centrist views with Le Pen noting that he ‘can’t decide’. Those who support the idea that one has to hold a dogmatic position that can be easily categorized and sorted on the political spectrum frankly does not understand democracy. As with any democracy, what matters is the will of the people, whether that’s a little leftist in terms of social ideas and a little right-wing in terms of economy does not matter the slightest bit. After all, we can conclude that the French elections show, as with the Dutch elections – note this article – an escape to a safe center. Disregarding the hard-right under Le pen, the hard-left under Mélenchon and the Catholic conservative Fillon leaves a void for just one pro-EU, pro-market, Russian-skeptic, non-stealing, social-liberal candidate: Emmanuel Macron. En Marche!