To the left: what if there actually is less wealth?

stromae

Stromae and his bowtie

Qui dit études dit travail
Qui dit taf te dit les thunes
Qui dit argent dit dépenses
Qui dit crédit dit créances

(When we say study, it means work,
When we say work, it means money,
When we say money, it means spending
When we say credit, it means debt…)

So sings Stromae in one of the most surprising hits of the past year. If you’ve heard it, you know it by the title: Alors on danse (and so we dance). But if you know a bit of French, you know Stromae is really singing about something else: the crisis.

For the past several years, Europeans have been saying things like, “since the crisis”, countless opinion pieces start with the words “even though we’re in a crisis”, and Europe’s cultural production seems to be always oriented towards the crisis: the advertising, movies, and music all reflect it.

Americans, for their part, love talking about the European crisis. If you’re in America, you get the sense that the whole European Union is going to collapse any day now, and that the economy is in total freefall.

Meanwhile, the U.S. has been in a crisis for the past 30 years, and they haven’t really acknowledged it. Decades of neoliberal policies have left the country in an unequal sprawl. Social housing, infrastructure, education, all of these are all seeing the slow creep toward further privatization. The collapse of the housing bubble of 2008 was just an inflection in the long decline of an empire, where the government is forced to outsource and externalize all costs.

Now, as U.S. debt and deficit is ballooning, so has its fantastic cultural production. Hollywood has become a fast-paced apocalyptic spectacle-factory–releasing blockbuster after blockbuster of heroism, nationalism, destruction of worlds, defeat of aliens and invading zombie hordes. Celebrity actors are cast in roles that require little more than a green-screen and armies of animators–outsourced to off-shore labour, destroying the special effects industry that has made Hollywood famous.

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Pharrell Williams and his hat

More with less is the motto of the day, and musicians have followed suit. One of the most surprising musical stunts of the year was “Happy” by Pharrell Williams, a catchy sing-a-long, where the music video features ‘normal’ well-dressed people, happily shopping, happily in the subway, happily, happily, happily.

In fact, Williams’s smash hit is the complete opposite of that of Stromae. Stromae sings of dancing in times of hardship. Williams sings of being happy, as if there’s nothing really wrong. Stromae sings like a captain who just woke up and sees the iceberg ahead. Williams sings like the captain of an old barge held afloat only by rusting optimism and a layer of fresh paint.

What explains the difference in the cultural output of the two superpowers? Well, walk through each continent and you’ll know soon enough. Europeans are shocked. Shocked. They just don’t know what hit them. They didn’t see it coming. And now, after decades of wealth, there’s cuts and slashing left and right, public companies are privatizing, and the political discourse has started to focus on ‘managing the crisis’ and demonizing those using welfare. Those on the left are scrambling to prop up the welfare state that they have so long championed, and are feeling a popular backlash.

Meanwhile, Americans have been fed the discourse of cuts for the past several decades already, and they’ve become so malnourished that they’ve forgotten what being in good health looked like. Wave after wave of cuts, from Democrats and Republicans alike, have left a devastated population, while unions and social welfare programs are nothing but debris floating out to sea. They’ve been fed the neoliberal spoon for so long that even the poorest agree that welfare is a bad thing and healthcare should be privatized.

The left’s response to this, in both continents, has largely been dismissal, saying that the real problem is the neoliberal ideology, and we just need to reinstate the welfare system. Outrage when the banks are bailed out, and outrage when welfare is further cut. Demands for health care programs, demands for stronger labour laws. Brushing off any argument from the right when they say that there is just not enough money out there.

From the left’s point of view, neoliberalism has always been a choice. It’s a choice to make cuts to welfare, and it’s a choice to privatize the state’s resources. There isn’t actually an absence of money, according to the left: this is just a façade to justify neoliberal ideology. Even radical leftists like David Harvey to Naomi Klein support this view. In their work, they deftly show how neoliberal ideology has influenced politics globally, where it started and how it has come to dominate discourse. But they assume that the driving factor was ideology, rather than a serious shift in economic and material wealth that left politicians no choice but to start privatizing the state.

Now assertions like those of Klein and Harvey are totally valid, and in some sense, necessary. Of course neoliberalism is part ideology, and there is a strong cadre of intellectuals that have worked hard over the past decades to bring that ideology into prominence.

But this doesn’t really explain how entrenched neoliberalism really is. I’m thinking of how local neighbourhood councils are now forced to hire consultants and private companies to do development for them, how the new US Affordable Care Act (ObamaCare) paid a private company to create their website for them, or how universities are slashing worker benefits left and right while increasing tuition.

And why does it seem to be happening, not only from the top-down, but from the bottom-up? For example, I was on the board of directors of a radical university newspaper for three years. In those three years, we decided to cut down on our printed issues while limiting the amount of financial aid we provided to student editors. We stepped out of the national student newspaper union. We also created a permanent and paid director’s position. This was all incredibly neo-liberal of us.

Looking back on it, I’m asking, why did we do it? It’s not because we all had read Milton Friedman. The answer is obvious: we literally had no money because advertisements were down, and the administrative tasks kept ballooning out of our control.

In one recent Jacobin article, Gerard di Trolio discusses Canada’s formerly social democratic party and how they have steadily moved further and further to the right, shedding their socialist past. What could explain the fact that Saskatchewan’s NDP, originally pro-labour and pro-public management of resources, fired nurses and closed hospitals in the wake of a mass deficit? According to di Trolio, the shift stems from the NDP’s inability to identify with today’s popular radical movements, and the inherent problems with social democracy. But another explanation makes just as much sense, if not more: even the left makes neoliberal choices when the state has no more money.

It seems that now everyone is a neoliberal, from storekeepers to mayors. But unlike Pinochet or Thatcher, we’re not neo-liberal because we are fans of Milton Friedman, as Naomi Klein would have you believe in her best-seller The Shock Doctrine. It’s because there is literally no more money.

This is an important question that people in the left rarely consider: What if it’s true? What if there is actually less money? What if there simply just isn’t enough wealth to go around any more? What if the state’s finances are so dried up that a new health care program is really just bailing water from a sinking ship?

The standard answer to this is that there is enough wealth, it just hasn’t been divided up equally. Hence the success of Thomas Piketty’s work, hence calls to tax the rich, hence the new forms of class struggle that are taking place in the Global North. But I don’t think this is a sufficient response. It assumes that neoliberalism was a choice that could’ve been prevented, and all we have to do is re-divide the money. I think this not only a false assumption, but a very dangerous one.

The following are some ruminantions on why neoliberalism wasn’t simply an ideological choice and in fact is a direct result of economic and extractivist forces. I’ll argue that neoliberalism is very much a result of a financial crisis that started in the 1970s with the first oil shocks, and is now seeing an uptake in Europe and the rest of the world as oil becomes more and more scarce. Yes, I’m actually suggesting that neoliberalism is as much a byproduct of peak oil as it is an ideology. This is nothing more than a sketch of an argument, but look at the facts:

Oil and GDP are clearly linked.

Oil and GDP are clearly linked.

Oil consumption perfectly matches both energy consumption and monetary wealth. In our current economic system, as oil consumption goes down, so will monetary wealth.

This is where peak oil comes in: as the rate of discovery of oil goes down, the economy will be directly affected.

aspousoil

This graph shows how predictions in oil production perfectly match on to actual historical data.

In the US, peak oil already happened in the 1970s. This perfectly coincides with the beginning of welfare cuts and the onset of neoliberalism. What happened then?

As US oil production went down, imports went up.

As US oil production went down, imports went up.

You can imagine the effect this might have on US foreign policy. No wonder things are so tough in the Middle East right now, and relations with Russia are so tense. This would also explain the untrammeled investment by US banks in foreign economies and real estate. But what about the rest of the world?

Oil is pretty much on its way down.

Oil is pretty much on its way down.

Global peak oil already happened! But peak oil doesn’t necessarily mean an immediate stop to all oil production. It means that the rate of exploration and extraction is decreasing. In an economy so closely tied to oil, the decrease in rate of extraction has a direct impact on the speculation of the financial sector, the search for new markets, and consequently, the attempt to manage these oil crises by the elite for their own profit.

What happens when the speculation comes crashing down?

What happens when the speculation comes crashing down? When there’s no new markets to speculate on? What will capitalism have to destroy to guarantee its profits?

And what about all the alternative sources of fuel we’re finding like tar sands and shale gas? I remember well the elated cry that appeared in the Atlantic last year as a response to the projections of oil reserves. Sadly, more and more reports are telling us that this is wrong. There is no more gas, no more oil, no more coal. The coffers are running dry. Welfare cuts are indirectly affected by this trend, since the elite were able to take advantage of oil crises and cite the poor economy as cause to privatize the state.

Thus, the main issue of contemporary politics is first and foremost tied to energy. Where do we get it? Whose backyard do we plunder? Who will shout the loudest if we pollute their rivers?

The secondary issue is how to manage austerity for the middle class, which remains the most powerful group of voters. In rich countries, the most popular way to do this is to cut welfare for the poorest.

Take Flanders, for example. There,  the N-VA rode to power this year advocating both welfare cuts and at the same time national sovereignty. Flanders is a rich area, consisting mostly of well-to-do middle class.These are people who have benefitted directly from the spoils of a booming economy, and they will do whatever they can to hold onto that wealth. The N-VA understood this very well, and their party’s prominence stands as proof that an anti-intellectual, anti-foreigner, anti-welfare party will succeed where other parties will fail.

Similarly, Rob Ford, the mayor in Toronto, became popular because he directly challenged the intellectual elite of the inner city by advocating for cars, small businesses, charities, and against welfare programs and taxes. Far from a trained neo-liberal (he doesn’t have many Conservative Party friends), he is harping on the common sentiments that everyone is feeling except for the intellectual middle class: there is no more money, and we need to make cuts somewhere.

So what starts appearing is that neoliberalism isn’t just an ideology. It sprung from diminishing wealth and diminishing returns on extractivism, starting in the 1970s. It is also an extremely popular practice, since everyone’s feeling the slow burn of the decline of a carbon economy.

It’s important to mention that of course I wouldn’t deny the influence of the neoliberalists such as the work of Milton Friedman on public and private policy. It has been huge. I’m also not saying that peak oil is the only and direct cause for cuts in welfare and state resources; there are plenty of other drivers. I’m just saying that we haven’t looked enough at the connections that exist, and how the one led to the exploitation by the rich and the privatization of state programs. But in only blaming politicians for “choosing” neoliberalism, we miss a chance to confront a common sentiment held by lower-and middle-classes alike: that the economy is tanking, and we can’t afford to fix it with another layer of welfare paint.

The leftist response remains insufficient. We have not, so far, grappled with the fact that this economy rides on the back of cheap fuels, and that economic crises and welfare cuts are, directly or indirectly, caused by oil shocks. Up to now, we’ve blamed most of our troubles on the ideology of neoliberalism. But it’s oil shocks that allowed this ideology to take root. Rather than blaming everything on neoliberal economists, we need to start looking at how neoliberalism has appeared from the ground up, why the the middle classes would rather vote for welfare cuts, and why there is no more money, anywhere. And when the left finally realizes its pockets are empty, it’ll be a lot harder to happily dance its way out.

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