Ytali Topic: Europe’s new conflicts. A conversation with Mark Blyth

Excerpts:


Inequality is an issue everywhere. Corporate profits have never been higher, labor’s share of national income has almost never been lower, and inflation has been replaced by deflation. Is there a set of economic ideas, a new economic paradigm that can help to reverse this situation?

I do not think that it is helpful to think in terms of paradigms. Paradigms imply giant interconnected sets of ideas where everything presents itself neatly, and you choose between clear options. Think about neo-nationalism. We’ve just mentioned that there are two strains. According to the country you look at, you may find even more strains. Let’s take the case of Sweden. Why are the Swedish extreme right doing so well? To me the most convincing explanation is not immigration, because that does not really move that much in the polls. And it is certainly not inequality because Sweden is still one of the most equal societies on the planet.

The answer has to do with the fact that for many years the elites, the governing classes and economic classes of that society, have decided that they will decide what everyone else should want. And if those elites want a multicultural multiethnic society, then Sweden will have that. They will enforce those policies. And if anyone disagrees with them, he or she will immediately be called a racist. When you have a conflict between the preferences of the governing elite and the preferences of the public, this can also lead to some kind of nationalist reaction.

I mention this because when we talk of economic ideas there is a tendency to think that there was this wonderful thing called Keynesianism and the whole world had it. This is not really true. If you really want to understand neoliberalism, it is less a series of ideas and more a series of things you do. You integrate, you privatise, you liberalise, you globalise, and that has particular consequences for the distribution of income and wealth. Once those institutional links have been forged or broken, your trade unions are afraid to ask for a pay rise because if they do, the plant will move to Romania, which is the case for German trade unions. If you live in a society that simply does not have a viable economic growth model because the demography is wrong and because your companies are far too small to compete globally – which is very much the Italian case -, then there is no one set of economic ideas which is going to make this magically better.

It is not just about ideas, it is about the institutions, the practices, the social capacities and the ambitions of political parties. And what we have at this moment is a series of political parties, particularly the centre-left, that have absolutely no ambition and that is the main problem. It is not the lack of alternative economic ideas. There are lots of alternative economic ideas. But no centre-left political party has the courage to even talk about them. They simply do not have the courage to address alternative ideas.

Think about the Democrats in Italy and their attitude towards Cinque Stelle’s proposal for a universal basic income. I do not think that the universal basic income is a good idea, but in a society like Italy with stagnant wages for a whole decade, plus terrible demographic growth and high debt, the centre-left might want to say “We disagree with that, but here is an alternative”. But there is no alternative. The alternative is “we will get a little bit more from Europe”. This lack of ambition is more of a problem than a lack of ideas.

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The fight to climate change finds the opposition of large strains of the population. In France, the so-called yellow vests started their revolt because of the increase in the price of diesel…

This is less about the poor rejecting climate change than the fact that it costs the poor more to mitigate climate change, which is well known. And it also reflects upon that technocratic deafness I was talking about in Sweden. Think about the following. The French government decides that diesel is bad. We all know that diesel is bad, and we also know that car companies have been lying to us for 20 years. The government wants to get diesel off the streets and wants to meet climate change targets, so it passes a tax on diesel. Of course, national politicians do not drive very much themselves and they live inside rich cities. They are more likely to get on a jet plane and fly off than to drive a truck.

So the diesel tax is a tax which is always paid by other people, and they are not the people that a member of the elite ever meets. So politicians do not really pay attention to the fact that people already pay a huge amount of tax on diesel.

Instead, they are about to fly business class to some meeting on the other side of the world and they can afford to pay a special tax for that. They are about to meet some millionaire on his yacht while switching on his yacht for 20 seconds puts more than a car does in a whole year. But we are not talking about these things as being a problem.

At the end of the day the little people have to pay for this. This is just another example of what the populace correctly characterises as an elite that likes to tell people what to do without actually listening to what people need. I do not blame them and I do not think that the poor reject climate change. I think that in some cases they understand it far better than those at the top, because they live in neighborhoods which are vulnerable to it. But if governing classes are going to expect them to pay for it while they continue to fly around the world in business class without it costing a lot more than it does just now, then it’s not going to work.

So what would the right way be to fight climate change?

There was a study that said that there are basically 120 corporations worldwide that cause 90 percent of carbon emissions. We know who these people are. We know who these governments are. We know the processes that do this. It goes back to the one thing we spoke about at the start. It is the lack of political courage. That is all.

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