- Europe's World
Europe remains in the crisis part of the ‘Global Transformation’, the painful construction of the global economy. The neo-liberal phase that began in the 1980s, with Mont Pelerin Society economics put into effect by Margaret Thatcher and Ronald Reagan, has bred rentier capitalism. Under this system, the returns to the ownership of physical, financial and intellectual property have outstripped the returns to labour and productive investment.
The result has been a second Gilded Age, in which a plutocracy is forging a manipulative populist politics. At the heart of the fallout of the 2008 financial crisis is an accelerated growth of many forms of inequality, due partly to the austerity policies chosen by neo-liberal governments and international institutions.
Governments have cut taxes on capital and the rich while public spending has been slashed in order to pursue public ‘debt’ reduction. This was a choice. If public debt was the real problem, it could have been reduced by raising public revenue through higher taxes.
The chosen strategy has accentuated the new global class structure and the politics that flow from it. That structure is topped by a plutocracy of billionaires, receiving vast rentier income from various forms of property that gives them the wealth with which to manipulate politics in a populist right-wing direction. Below them in the income hierarchy is an elite serving the plutocrats’ interests, also making huge rentier incomes.
Below them is a shrinking salariat, with income and employment security, often with a share of rentier income as well, including in the form of a growing array of non-wage benefits. Alongside them in terms of average income are proficians, affluent own-account workers at risk of burn-out due to a frenzied work-style.
The precariat … is wanted by global capitalism and the neo-liberal project because it provides flexible labour
What makes the salariat and proficians politically interesting is that, while detached from old-style social democracy and the welfare state, they feel uncomfortable with the inequities of rentier capitalism and the populist disrespect for traditions, norms and compromises.
Below them in the income spectrum is the crumbling proletariat – the old ‘working class’ with expectations of stable full-time labour, non-wage benefits and access to good state benefits and services. This class forged the welfare states, but has lost the capacity to be a political vanguard.
Underneath them is the rapidly growing precariat, and below them is a lumpen-precariat. The latter is an under-class of socially wounded outcasts eking out an existence in the streets, politically, economically and socially detached. The precariat, by contrast, is not an under-class: it is wanted by global capitalism and the neo-liberal project because it provides flexible labour.
It consists of millions of people with bits-and-pieces lives, without occupational narrative or identity, without employment or job security and without income security. It is losing entitlement to non-wage benefits and losing rights-based state benefits. It has also been losing the commons that historically have provided the working classes with ‘the poor’s overcoat’ – roughly speaking, access to common resources to ensure subsistence and common decency.
The precariat must do a lot of work that is not labour, and much work off workplaces and outside labour time. This extracurricular labour includes work for the state, in queuing, form filling and doing unwanted chores under duress. Most importantly, the precariat are supplicants, losing rights of citizenship and reliant on favours, charity and discretionary judgments from bureaucrats, employers, charities, friends and relatives.
The key to understanding today’s political knife-edge is the split character of the emerging mass class
This combination of characteristics is politically alienating, leading the precariat to feel detached from old-style social democracy and Christian Democracy. However, the key to understanding today’s political knife-edge is the split character of the emerging mass class, analogous to what happened during the formation of the proletariat in the 19th and early 20th centuries.
The precariat can be divided into three groups. These are the Atavists – those looking back to a real or imagined lost past, who have fallen out of working-class families and communities, without much formal schooling. There are also the Nostalgics, those who have no present, no home anywhere, mainly migrants and minorities. Third, there are the Progressives, mainly young, who feel they bought a lottery ticket in pursuing education and who realise they do not have the future they were told to expect.
Politically, the Atavists tend to support right-wing populists who promise to bring back yesterday and a mythical ‘greatness’ and ‘control’. They support the likes of Donald Trump, Boris Johnson, Matteo Salvini, Marine le Pen, Victor Orban and Thierry Baudet. For those supporting Enlightenment values, this part of the precariat is pernicious.
The Nostalgics are disenfranchised and tend to stay out of politics, except on occasional days of rage. They will not vote for neo-fascist populism, but are dangerous because a mass of disenfranchised people is unhealthy for democracy and could drift into bitterness.
Those who identify with the precariat must realise that a progressive response to neo-fascist populism will continue to be disjointed and imperfect
The Progressives also will not vote for neo-fascists, but do not want to return to old-style social democracy either. It is wrong to see them as solely victims of insecurity. They typically want a new politics of paradise, one built on a strong ecological orientation that is also committed to Enlightenment values. They also want a revived commons. This group is dangerous too, because they will refuse to put up with the status quo. And for good reason.
At the moment, the Atavists are in ascendancy. But there is hope. They have reached their peak size; their numbers will soon shrink as they age. And while the Nostalgics are growing, the political moment could shift to the Progressives, whose agenda is likely to appeal to the Nostalgics.
Yet it takes time for a progressive political vision and agenda to crystallise. And there is not much time, since Donald Trump and his European admirers are leading the world into something resembling the 1930s, when ‘trade wars’ and insular nationalism arose in reaction to the shift of economic dynamism from Europe to the US.
This time the US is lashing out at the new centre of economic gravity, China. And as in the 1930s, politicians like Trump are abandoning all norms of civilised democratic behaviour and rhetoric, including the ability to respect others and make compromises.
Those who identify with the precariat must realise that a progressive response to neo-fascist populism will continue to be disjointed and imperfect. But it is essential to back those offering a new progressive politics and not be cynical about their shortcomings. Above all, society must combat the causes of the onrushing ecological catastrophe with more radical measures than timid politicians have been offering and build a new income distribution system in which basic income security for all is the anchor. Without the latter, it is not possible to achieve the former.
- Europe's World
- By Cristina Pozzi
- Europe's World
- By Sieglinde Gstöhl
- Area of Expertise
- Peace, Security & Defence
Happening now online
- Area of Expertise