Warning: Amateur political analysis ahead. I posted this on Crooked Timber a few days ago. It isn’t as applicable to Australia. In part, I think, this is because Rudd (along with Henry and Swan) saved us from the GFC with Keynesian policies, but then failed to defend them, leaving the advocates of market liberal reform largely unchallenged.
Looking at the way politics has evolved over the past 25 years or so, in the English-speaking world and beyond, I have developed an analysis which is certainly not original, but which I haven’t seen set down in exactly the way I would like. Here’s the shorter version:
There are three major political forces in contemporary politics in developed countries: tribalism, neoliberalism and leftism (defined in more detail below). Until recently, the party system involved competition between different versions of neoliberalism. Since the Global Financial Crisis, neoliberals have remained in power almost everywhere, but can no longer command the electoral support needed to marginalise both tribalists and leftists at the same time. So, we are seeing the emergence of a three-party system, which is inherently unstable because of the Condorcet problem and for other reasons.
Now the longer version
First some definitions. Taking the three groups in reverse order, I’m using leftism as broadly as possible to encompass greens, feminist, social democrats, old-style US liberals, as well as those who would consciously embrace the label “Left”. Broadly speaking, this encompasses anyone critical of the current economic and social order on the grounds that is unfair, unequal and environmentally destructive.
Neoliberalism is mostly used to mean one thing in the US (former liberals who have embraced some version of Third Way politics, most notably Bill Clinton) and something related, but different, everywhere else (market liberals dedicated to dismantling the social democratic welfare state, most notably Margaret Thatcher). Here I’m using it to cover both versions, which I’ll call soft and hard. The central theme is the inevitability and desirability of a globalised capitalism, dominated by the financial sector. The difference between the two versions turns essentially on whether this requires destruction of the welfare state or merely “reform”, along the lines undertaken by the Clinton Administration.
Finally, tribalism is politics based on affirmation of some group identity against others. While there are as many tribalisms as there are tribes, the most politically potent form, and the relevant one here is that of a formerly unchallenged dominant group facing the real or perceived prospect of becoming a politically weak minority, as with white Christians in the US.
Roughly speaking, until the Global Financial Crisis, neoliberalism was the only force that mattered. The typical setup in English-speaking countries was alternation between two neoliberal parties corresponding to the two versions of neoliberalism I mentioned above. The hard neoliberal (in the US, the Republicans) relied on the votes of (white Christian) tribalists and made symbolic gestures in their direction, but largely ignored them, particularly if their interests came into conflict with those of big business. The soft neoliberals (in the US, the New Democrats) relied on the willingness of leftists to support them as “the lesser evil”.
The GFC discredited neoliberalism in both its forms, but still left neoliberals holding all the positions of power in the political and economic system. But the erosion of support for both hard and soft neoliberalism has made the maintenance of the neoliberal duopoly more difficult. On the right, Trump has shown that the tribalist vote can be mobilised more successfully if it is unmoored from the Wall Street agenda of orthodox rightwing Republicans like Cruz. On the left, Sanders has not done quite so well, but has certainly forced Hillary Clinton to distance herself from her Wall Street backers.
Internationally, tribalism has gained ground nearly everywhere, mostly at the expense of the soft neoliberalism represented most notably by Blair. Soft neoliberals have also lost ground to the left, most obviously with the election of Jeremy Corbyn in Britain and the rise of left parties like Syriza and Podemos at the expense of PASOK and PSOE.
The ultimate outcome remains unclear. In part this reflects the Condorcet problem: with three alternatives, that can’t be neatly arrayed on a right-left spectrum, there is no stable outcome.
But the more fundamental problem is that none of the competing forces has an obviously compelling solution to the problems we face. Neoliberalism has manifestly failed to deliver the prosperity promised by triumphalists like Thomas Friedman in the 1990s. Tribalism is already a lost cause, given the massive migrations that have already taken place, and can at most be slowed in the future. The left needs to rebuild institutions and policies that have been in retreat for decades.