By Francis Lee for the Saker Blog

Historically speaking “left” ‘’right,” and ‘centre” has been the political configuration dating from the French Revolution. In the 1789 French National Assembly, the nobility and high clergy sat to the right of the chair, while the third estate and lower-status clergy sat on the left. The benches in the middle became associated with political moderation.

Over the next century-plus, most European polities allowed for a “centrist” presence. Even the design of the European parliaments where the seating arrangements were horseshoe shaped and still are, except that is for the British parliament where the contending parties sit directly facing each other; initially Tories and Whigs but from the 20th century onwards Labour and Conservative. There were the cross-benches where the minor and generally ineffective parties sat. But Centrism will likely be distressed to learn that the first recorded appearance of the word “centrist,” according to the Oxford English Dictionary, was an 1872 insult from London’s Daily News correspondent in France, who assailed “that weak-kneed congregation who sit in the middle of the House, and call themselves centrists.’’

In the UK the centre was traditionally moderate, providing a seating space for a small Liberal party, until that is, the late Celtic arrivals of Irish, Welsh and Scottish militant nationalists – Sinn Fein, Plaid Cymru and the Scottish National Party who began to make their presence felt.

But it was the European party structures and their Parliamentary expression that led invariably to coalition governments; this was the case even in Nazi Germany where Hitler had to form an alliance with the Zentrum Liberal party to get an absolute majority in the Reichstag. This was quite different from the Anglo-American two party systems where the Government could de facto be elected on a one-party vote.

Nonetheless, centrism had its more forthright defenders. In the US at the dawn of the Cold War, liberal historian Arthur Schlesinger celebrated political moderation as a vigorous “Third Force” in his 1949 book The Vital Centre. Rather than left or right, he wrote, the real conflict was “freedom vs. totalitarianism.” The United States’ goal presidential election — which saw the resounding defeat of George McGovern in 1972 — occasioned a rightward shift in centre-left parties. Smarting from defeat and the Nixon triumph Democratic elites moved to retake control for a new direction for the party. And it was this that set the tone, not merely for the United States but also in Europe. In 1992 the man of the moment William Jefferson Clinton had arrived. But there was much work to be done. The sabotage of the tools that had underpinned the prosperity of the Golden Age of Capitalism (1945-75) also created unprecedented challenges for the political parties of the ‘soft’ left. Infused with what were thought to be new ideas they now began to look for new paths forward less hostile to finance and big business.

‘’We have moved past the sterile debates between those who say that government is the enemy, and those who say that government is the answer, said Clinton who, along with his wife Hilary had studied at Yale school during the 1970s, and Bill had an unfinished stint at Oxford as a Rhodes scholar in the late 60s (1) ‘My fellow Americans we have found a ‘Third Way’

THE INSTITUTIONALIZATION OF THE THIRD WAY

The ‘Third Way’ was a rather slippery and nebulous concept. In purely policy terms, however, the Clinton reforms were a mixed bag and differed from the postulates laid down by the former Reagan administration. In his 1992 presidential campaign Clinton promised that, if elected, he would bring about the “end of welfare as we know it.” This catchy election pledge aimed to address middle class concerns about so–called welfare dependency while also arguing that the government had an important role to play in fighting poverty and unemployment. Clinton’s Third Way position, at best, offered a way out of the liberal/conservative impasse on how to effectively reform America’s welfare system. At worst, Clinton’s position undermined the concept of welfare entitlements that the Democratic Party had established in America at an earlier period. In 1996 during the lead up to that year’s presidential election, President Clinton signed into law the most significant federal welfare Act since the 1960s. However, the Personal Responsibility and Work Opportunity Reconciliation Act of 1996 (PRWORA) that Clinton signed had largely been drafted by congressional Republicans. Then came NAFTA, the bitterly contested policy which still rankles.

But possibly the most politically significant piece of legislation authorised by the Clinton administration was the repeal of the Glass-Steagall Act of 1933. This Act had prevented ordinary commercial banks owning excess of certain types of dubious and dangerous financial companies, which had been considered so useful that it had survived until it was repealed in 1999 under Clinton and his Treasury Secretary Robert Rubin, the former Goldman Sachs banker.

Of course this was manna from Heaven for the banking and financial fraternity, and it indicated the President’s choice of policies which had little in common with his professed ‘Third Way’ beliefs. In conclusion the failure of Clinton’s Third Way welfare agenda opened the way for more conservative reforms. This experience is illustrative of the pitfalls of Third Way politics with its mix of post–entitlement welfare policies and hard–nosed electoral positioning.

That being said the US economy began to move into high-gear during the 1990s and even managed a budgetary surplus. Alas, however, as with all upturns comes the downturns and the long-run, dot.com blow-out of 1999/2000, the US boom of the roaring 90s turned into a secular decline, and this was followed by even deeper economic crises in 2008 and now in 2020.

It could be argued in terms of cyclical political movements that there exists a rough correspondence between political and economic phases. In political terms this is usually a cyclical period between progress and reaction, movement, and order, conservative or radical, revolution and restoration. The great German social and political theorist, Max Weber, (1864-1920) would have argued that the Clinton restoration being based upon the Reagan/Thatcher ascendency was an example of charismatic authority that was superseded by legal-rational authority. In broad illustrative terms the MaoZedong period in China was followed by Chou En Lai, Trotsky was followed by Stalin, Napoleon by Louis XVIII, Cromwell was followed by the reinstallation of Charles II. As day follows night Revolution is followed by Restoration. But the restoration is never complete, and there can be no turning back to the status quo ante. But the strange thing was that during the second half of the 20th century a reactionary right-wing movement, best illustrated by Reagan and Thatcher was replaced by a milder ‘Third Way’ version of the same theory. The ‘Third-Way’ was beginning to take on rather familiar social and political forms, although its proponents would argue otherwise.

THE THIRD WAY CROSSES THE BIG POND

By 1997 the Clinton ascendancy – the Third-Way – had come to the attention of an ambitious young man who was trying to find an occupational niche for himself in the London milieu. Anthony Charles Lynton Blair, who preferred to be called ‘Tony’ (of course) and described himself as a ‘regular kind of guy’ (goes without saying) was the son of a barrister, Blair attended Fettes College in Edinburgh (a school often viewed as ‘‘Scotland’s Eton’’) and Saint John’s College of the University of Oxford, where he combined the study of law with interest in religious ideas and popular music. But he displayed little enthusiasm for politics until he met his future wife, Cherie Booth. He graduated from Oxford in 1975 and was called to the bar* the following year. While specializing in employment and commercial law, he became increasingly involved in Labour Party politics and in 1983 was elected to the House of Commons to the safe Labour parliamentary seat of Sedgefield, a tight-knit former mining district in north-eastern England. His entry into politics coincided with a long political ascendancy of the Conservative Party (from 1979) and Labour’s loss of four consecutive general elections (from 1979 through 1992). He stood as leader of the Labour party and won an overwhelming victory (1997) over a divided, dispirited and out-of-ideas, Conservative party.

Blair was one of those archetypal politicians – unfortunately one of many – who didn’t have a political notion in their heads; and as a complete opportunist he was, as was the case with Clinton, able to latch on to some of the fashionable threadbare and dubious political and economic ideas current at that time. One of those fashionable notions was the ‘Third Way’ in politics.

In fact the ‘Third Way’ was a pretty simple idea.

‘’It was an attempt by the parties of the left to stake out a new middle-ground in politics. Fuddy-duddy socialist ideas were considered distinctly de trop. Globalization as its proponents would argue, was considered inevitable, so countries should embrace it and adapt to it, hitching a ride on the growth of global financial markets, then shaving off globalizations rough edges with progressive social policies and dollops of good old-fashioned redistribution. As Blair and Germany’s Gerhard Schröder summarised it in a joint declaration in 1998, the Third Way stands out not only for social justice but also for economic dynamism and the unleashing of creativity and innovation.

But this third way was always an offshore model, a recipe for countries effectively to turn themselves into tax havens in order to prosper in rough, globalizing seas. The model was, in turn, driven by the competitiveness agenda, the notion or ideology, that states must be ‘open for business’ constantly dangling enticements to large multinationals and banks and to rootless global money – for fear that they will decamp to more hospitable or ‘competitive’ places like Dubai, Singapore or Geneva. (2)

THE IDEOLOGICAL ASSIMILATION OF THE OLD LEFT

But behind the rhetoric of a new golden age which awaited the electorates on both sides of the pond was the familiar sound of disappointment among the loyal supporters and believers who were somewhat sceptical about the new order – with good reason. The newly entrenched and consolidated Third-Way involved strict de-regulation of labour markets and only light-touch regulation – if at all – of financial markets. In the meantime financiers, were still relatively untouched by the pseudo-rhetoric of globalization. The whole dreary neo-classical credo was trotted out namely that that if left alone, financial markets would reward efficient firms and punish inefficient ones which would go out of business. Meanwhile financiers could help with mergers and transfers of ownership of the more efficient. This reasoning also bolstered demand for the privatisation of state enterprises, which was soon embraced with almost as much enthusiasm by social democratic parties as by their right-wing opponents – witness the French socialist government of Lionel Jospin and the renamed ‘New Labour’ government of Tony Blair.

The period of debt-financed growth got into gear in the early 80s during which it was sustained up until the start of the 21st century. That time bore witness not only to economic issues but also to political and ideological questions and concepts; a reactionary milieu established itself where decadence had become de rigueur. The presence of rampant individualism, obsession with self, contempt for failure was contained in Ayn Rand’s view of life. Doyenne of the new age Ms Rand’s rise in popularity coincided with the widest gap between rich and poor in the history of the US. Her books are today actually more popular than when she lived, and attempts are being made by very wealthy parties to sell her ideology as the philosophy of our era.

Ms Rand has been accused of Vulcanism, that is of exhibiting an attitude of pure logic unbalanced by empathy and humanity like the character Spock from Star Trek, who is from planet Vulcan. When people of high intelligence lack human empathy, they can be intellectually arrogant, even narcissistic.

One of the major criticisms of Ayn Rand is that all her heroes are self-centred sociopaths, as she is: they are concerned only with themselves, with their own purpose and ambition, and they are entirely unconcerned with others.

Rand also ignores context in her assessment of reality: the persistence of her logic leads to places where philosophy gets utterly divorced from common sense and reality. Philosophical materialists must contend with the facticity that we are woven into in its entirety, even with those aspects of our facticity that are what she would view as not heroic, like the hunger of the masses.

Okay it can be generally agreed that the idiosyncratic Ms Rand is a little bit over the top, but her generalisations roughly ring true with today’s ailing social and moral societal collapse.

But as Emile Durkheim (1858-1917) once noted:

‘If, in activities that almost completely fill all of our days, we follow no rule save that of our own self-interest, as we understand it, how then can we acquire a taste for altruism, for forgetfulness of self and sacrifice? Thus the lack of any economic discipline cannot fail to produce damaging social effects that spill over beyond the economic sphere, bringing with it a decline in morality.’’(3)

One wonders whether or not Ms Rand actually believes in her virulent anti-social messages, or, what I rather suspect, she is simply out to shock the more gullible by voicing what are in essence simply crackpot outpourings.

That being said she certainly has a following particularly among those well-heeled denizens who seem intoxicated with these rantings.

IT’S THE ECONOMY STUPID

Turning to economics the situation goes from bad to worse. This is hardly surprising since the attempt to abolish the trade cycle, a rather eccentric and fashionable notion since the early 1980s, was bound to result in an economic nemesis. It has been argued that:

‘’Whilst all capitalist systems are premised on the monopolisation on the gains of growth by the people who own the assets, under finance led growth these dynamics become more extreme. Rising private debt might conceal this fact during the upswing of the economic cycle, but when the downturn hits it becomes clear that finance-led growth is based upon trickle-up economics, in which the gains of the wealthy come directly at the expense of ordinary people. This is because financialization involves the extraction of economic rents from the production process – income derived from the ownership of existing assets that does not create any new value. (4)

Paper currency is not value, it is a claim on value, a promissory note. Value is produced in the production process, whereas economic rent – rent on land, titles of future ownership claims (stocks, shares, bonds) monopolistic pricing, patents – is produced in the extractive process. It is fictitious capital. The financial economy is essentially parasitic on the productive economy.

When corporations generate ‘growth’ it should be understood that the Central Bank enables this ‘growth’ when it showers the same corporations with QE monies who simply buy-back their own shares/stocks and become richer! In the same manner when large corporations buy other smaller businesses – through mergers and acquisitions M&A, they also become ‘richer’ but in fact no new wealth has been created, what has occurred is a shift of wealth from one sector of the economy to another, this is a zero-sum game where the central bank determines the winners and losers in this rigged fixture: the rich get richer and the poor get poorer. Another side of this process is the increasing market concentration with the growth of monopolies/oligopolies and the monopoly rents that go with it.

Having painted itself into a corner the economics institutions, both public and private, seem unable to extricate themselves from an ever-tightening process of slow economic and political strangulation.

In summation we may say without reservation that the ‘Third-Way’ was a rather transparent con-trick reminiscent of the second-rate magician in Thomas Mann’s allegorical novel Mario and the Magician. In this particular work the sorcerer, Cipolla, is analogous to the fascist dictators of the era with their fiery speeches and rhetoric designed to hoodwink his political audience into believing that what appears to be real is in fact not real. In our own time this simulacrum is the product of modern advertising techniques designed to mask the reality behind a stream of psychological manipulation and conditioning of the audience. How long this process and phenomenon will last is problematic. Western civilization seems standing at the crossroads without a plan B.

It’s rather like Gerald Celente always says: ‘‘When everything else fails, they take you to war.’’

NOTES

(1) As the 2016 presidential campaign closed in on the finish line, the Washington Post published  an eleven-year-old tape of Republican nominee Donald Trump’s making controversial remarks about women. The inevitable partisan rancour that ensued largely targeted the behaviour Bill Clinton, husband of Democratic candidate Hillary Clinton, including the repetition of rumours that he had been expelled from Oxford University in 1969 for raping English classmate Eileen Wellstone.

The allegations weren’t new — Republican opposition research strategist Roger Stone had tweeted about them a year earlier:

The backdrop for these rumours was that just prior to his graduation from Georgetown University, Bill Clinton won a prestigious Rhodes Scholarship to study at University College, Oxford, for two years and headed off to England for the 1968-69 academic term — but he returned to the United States (under a pall?) before finishing out the full two-year course of study.

There was additionally the Lewinsky affair. Yes, Mr Clinton certainly had a penchant for the ladies.

(2) Nicholas Shaxson – The Finance Curse – Chapter 5 fn 10 – p.97) In the words of Peter Mandelson, Blair’s Svengali and his co-author Roger Liddle in their book – The Blair Revolution – the main aim of the Third Way project was to ‘… overcome Britain’s continued slide into international competitiveness … based upon partnership or private and public sectors and create a more equal and cohesive society.

(3) Emile Durkheim – The Division of Labour in Society – p.xxxiv.

(4) Grace Blakeley – Stolen – p.14.

* ‘Called to the Bar’ This has nothing to do with going for a drink in a licensed establishment! It is a term used by the legal profession signifiying the entrance of the candidate into the legal profession and practising of law thereof.

 

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