The left has gone along with a shift of power to boardrooms and bureaucracies, undermining policy ambition and public confidence.
The European Parliament elections in June look set to see right-wing parties consolidate their hold on power, reinforcing the more general decline, over several decades, of European social democracy. While the vector of retreat no doubt bears national characteristics, there are common factors across countries.
In Ruling the Void, the late political scientist Peter Mair discussed the widening gap between citizens and political parties in European democracies, registered in declining electoral turnout and shrinking party membership. A coterie of professional managers dedicated to the single purpose of defeating electoral opponents has filled this ‘void’ but at the expense of a weakened party presence in conventional community activities and social networks. This has hit left parties particularly hard.
Social-democratic parties have also gone along with the relinquishing of decision-making powers to market actors, technocratic institutions and supranational organisations which have, in turn, become less subject to political oversight and accountability. This delegation of responsibility has, inevitably—and again with palpable consequences for the left—been accompanied by a narrowing in the scope of political programmes.
The process of detachment has been nominally democratic, in the sense of being overseen by elected politicians, but they have rarely or explicitly campaigned on the changes it entails. Rather, they have exploited an implicit consensus. Yet while the number of issues on which citizens feel their votes matter has shrunk—their voices replaced by ‘independent’ experts, lobbyists and public-relations gurus—the concerns themselves have not gone away. As a consequence, a deepening anxiety among a growing part of the electorate has seen detachment turn into discontent, fuelling populist movements promising to break with the status quo and provide voice for ‘the people’.
Political choices
The void is not, however, simply the outcome of professionalised parties stepping away from their traditional constituencies. It is also the result of political choices they have made.
Their erstwhile (and more earnest) predecessors saw markets as inherently political spaces prone to polarising pressures and destructive impulses. But contemporary left parties have accepted the neoliberal idea that the market order, as the paramount source of wealth creation, must be inoculated against undue political interference.
Inevitably, left parties—inexorably linked with (and judged upon) the fight for social justice—have struggled to respond to the unprecedented rise in inequality accompanying these trends, ending up in an awkward embrace of ‘there is no alternative’ rhetoric. Ironically, the political handmaidens of today’s hyper-globalised and highly financialised market order, built around the expanding reach of footloose capital and the growing concentration of corporate power, have included many from the left.
Sticking with the existing rules of the economic game, left parties have ignored how contemporary corporate actors, the big winners from hyper-globalised markets, have actively distorted economic outcomes in pursuit of higher profits. Instead, they have offered anodyne talk of ‘public-private partnerships’ and information-brokering to a world of systematic underinvestment in public goods, in which swaths of society have been left to sink or swim in turbulent economic seas.
This approach is all the more surprising considering the weight of evidence tracking the rise of a predatory, rent-seeking capitalism. Rents represent income captured independently of any contribution to output and their adverse impact on innovation, investment and inequality has been extensively researched.
All forms of rent-seeking depend, through privileged access to political leverage and legal protections, on a symbiotic relationship to state institutions. They perpetuate what has been described—with reference to the banking family which held sway in 15th-century Florence—as a ‘Medici vicious circle’, in which economic gains and political power are mutually reinforcing. The rise of populist currents stems, in part, from their success in tapping into the discontent generated by this vicious circle, even though their own vacuous policies would do little to break it.
Ground zero
The European left is now at ground zero, in terms of building a broad coalition of citizens convinced they can envisage a better future. A new narrative is needed to counter the deep asymmetries of power that have built around rentier capitalism. An animating vision is required to guide policies that speak to the anxieties of those fragmented constituencies in need of a stronger and more collective voice—as well as to an increasingly alienated youth, fearful of a future of unfulfilling jobs and climate catastrophe.
Doing so will mean putting labour back at the centre of progressive politics, abandoning the idea that wages are simply a cost of production whose price should be left to ‘flexible’ labour markets. Not only are wages a critical source of demand: rising wages can also stimulate productivity, as firms are forced to invest their profits to compete rather than doing so through sweating labour.
But good wages ultimately depend on good jobs and therefore on the dissemination of productive opportunities across all segments of the labour force. This hinges on targeted and selective industrial policies that seek to shift the production structure towards employment generation and new sources of growth.
Reining in the rentier must be a second building-block of a renewed progressive agenda. Taming financial institutions—including through stronger regulation at national and international levels—and reinvigorating public banks can boost investment and ‘crowd in’ less speculative private capital. Restrictive business practices should also be curtailed, including via competition policy, which should be designed with explicit distributional objectives.
Finally, beyond the rebuilding of a strong domestic social contract, international alliances must be galvanised to challenge the powerful coalition, built around footloose finance, rent-seeking corporations and carbonised interests, which has over the past four decades rewritten the rules of the international economy in support of a relentless drive for profits and power. In today’s globally interconnected and increasingly multipolar world, many more countries and communities are recovering the agency to reshape reality and regain legitimacy around different goals.
New coalitions are emerging that link concerns over equality and rights with green structural transformation. City and regional governments have moved in innovative, often bold, directions. Labour organisations have begun to acknowledge the opportunities green jobs could provide and to link these to progressive possibilities in the care economy. Much of this remains inchoate and below scale but the shared narrative and many of the policy details can prefigure the ‘Bretton Woods’ moment needed to align national goals and transnational coalitions—albeit such a moment can no longer be dominated by western voices but must involve a global conversation.
This is part of our series on a progressive ‘manifesto’ for the European elections. The views expressed are those of the authors and do not necessarily reflect the views of the United Nations.
Richard Kozul-Wright is director of the division of globalisation and development strategy at UNCTAD, the United Nations agency which promotes the interests of developing countries in world trade.
Piergiuseppe Fortunato is an economist at the United Nations Conference on Trade and Development, where he leads projects on global value chains and economic integration, and an external professor of political economics at the Université de Neuchâtel.