Rage against the Elites

Running through the recent British referendum to quit the European Union was a conscious rebellion against the ‘experts.’ Although expert opinion, particularly that of economists, was overwhelmingly arrayed against Brexit, time and again Leave campaigners made this into a virtue. And, having showed that this kind of politics can work, the referendum has emboldened populists elsewhere, most notably America’s Donald Trump. Despite a dubious grasp of facts and reason, they are building large followings nonetheless, especially among the working class.

A generation ago, Christopher Lasch argued in The Revolt of the Elites — a play on the title of Ortega Y Gasset’s 1930 Revolt of the Masses — that the professional, managerial class of modern capitalism had turned its back on the public it was meant to serve. Social service had given way to self-interest, fragmenting society and threatening the future stability of democracy. As if history has come full circle, the masses now are in open revolt. Lasch and Ortega portray flip sides of the same coin: after the elites turn their back on the masses, the masses rise up and turn democracy against itself.

When industrial society first developed in the nineteenth century, its sharp polarisation between owners and workers threatened to undermine the whole system. The need to mollify restive workers drove even conservative politicians to offer welfare programmes and workplace legislation, the modern world’s first public pension system having been crafted in Bismarck’s Germany. Yet the tensions remained, becoming more acute after the world had its first socialist country in Russia (following its 1917 Bolshevik Revolution). When, after the 1929 Crash, the Western economy sank into the Great Depression, capitalism confronted an existential threat.

The Cambridge economist John Maynard Keynes ran to the rescue, producing a model in which the state not only managed the economy towards growth, but ensured the working class would not get lured by the siren-songs of socialism. Keynes left no doubt as to his intentions, writing after his 1925 visit to the Soviet Union ‘How can I accept a creed which, preferring the mud to the fish, exalts the boorish proletariat above the bourgeois and the intelligentsia who, with whatever faults, are the quality in life and surely carry the seeds of all human achievement?’ Nevertheless, because both conservative and socialist/liberal parties bought into it, the post-war ‘Keynesian compact’ created a remarkable degree of cross-class solidarity around the shared objective of growth with widespread and relatively distribution. This was an age of 4-6% growth, rising incomes and benefits for all. Elites and masses appeared for a while to share a common interest.

When productivity growth began slowing in the 1970s, conservative politicians sought to revivify growth by breaking the compact. Marrying neoclassical economics to a conservative social politics, they produced the Thatcherism and Reaganomics that would define the next generation. In theory, withdrawing the state from the economy would lift the lid on entrepreneurial energy and unleash a new capitalist revolution. In practice, it led to wage-repression, which however led to an increase in corporate profits. Rising profits created a ‘wealth effect,’ which in turn created an economic boom that would last through the end of the century.

Yet the marriage of neoclassical economics and social conservatism was rocky from the start, its authoritarian social morality clashing with its economic libertarianism. It would await a new generation of politicians to resolve this contradiction with a new brand of liberalism, a sort of High Neoliberalism. The baby-boom generation, sexual rebels in the 1960s, had become economically comfortable. Their progressive politics eschewed class consciousness to focus on individual liberation, and proved the perfect partner for neoliberal economics. By turning progressive politics away from its concern with economic justice, and towards individual freedom — gay rights, feminism, sexual liberation — this High Neoliberalism celebrated individual achievement and down-played collective economic purpose. It also legitimised assaults on working-class culture, and in particular its social conservatism. Ever since, as David Freedman argued in a recent Atlantic essay, the professional classes have felt free to wage war on ‘stupid people.’

The justification for the rule of experts is that they’d deliver the goods. For a time, they seemed to do just that. But as I argue in my upcoming book Twilight of the Money Gods (Simon & Schuster, 2017), most of the growth in incomes was really just a sleight of hand that ultimately redistributed expenditure forward from the future: we took advances on credit. Underlying productivity didn’t actually improve. Instead, the falling cost of credit (a byproduct of wage-repression), combined with financial deregulation and an unofficial policy of governments to encourage speculative bubbles, encouraged people to buy and invest on credit and make up their wage-losses with capital gains. This was the ‘new economy’ so lionised by Bill Clinton and Tony Blair, to which a generation of neoliberal politicians said they’d delivered us.

It was an illusion. I take some grim satisfaction that in 2004, at a time when the Western economy was booming and Alan Greenspan was reassuring Americans their home-values would keep rising forever, I wrote that recurrent crises and chronic stagnation awaited the West. Once the 2008 financial crisis exposed  the illusion, we were stuck with the debts. We’ve been paying them since, and this ‘deleveraging’ accounts for the perpetual slow growth to which we feel condemned.

Derided, misled and exploited by the experts — whose average incomes have risen as those of the working class have fallen — the masses are now rising up against the elites. The right-wing populists appealing to them may champion economic policies that would hurt the working class, but they do so in a language that elevates their culture, so long despised. Until the experts learn to gain a new regard for those left behind, they will have to contend with their rage.

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