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IS IT possible to recognise in the present what historians will later declare to be a moment of transition from one historical period — defined according to prevailing features in politics, economics and society — to another? Are we in such a moment now?
Periodisation of historical epochs is controversial and inexact, and traditional historians have frowned upon it. Yet economists and historians have attempted to delineate distinct periods of history.
These include Eric Hobsbawm, who wrote of the long 19th century (1789-1914), and the short 20th century (1914-1989) and economist Joseph Schumpeter, who defined the “creative destruction” theory of technological change.
The originator of long-wave theory was Soviet economist Nicolai Kondratiev who used periodisation to postulate long arcs of economic development, marked by bursts of innovation, followed by stagnation and crisis. Such waves lasted 40 to 60 years, he said.
Hobsbawm wrote of Kondratiev’s theory: “That good predictions have proved possible on the basis of Kondratiev long waves — this is not very common in economics — has convinced many historians and even some economists that there is something in them, even if we don’t know what.”
Such a model can have merits in terms of understanding the way history unfolds not in a linear fashion, but in epochs marked by periods of upheaval and discontinuity.
I would argue that we can see 2020 as a possible endpoint to the era that began in 1975-1980, known variously as globalisation, or neoliberalism.
This neoliberal era saw the collapse of communism in the east, the end of Keynesian economic management in the West, and the spread of financialisation and expanded production chains across the planet.
It also saw a massive expansion of debt and credit, shadow banking and the removal of national controls over capital movement.
On the technological front, digitalisation and computerisation revolutionised the economy, causing the collapse of some sectors and the birth of new ones — from video games to internet commerce.
The economic model has been fraying since 2008, with waves of political nationalism and populism increasingly undermining support for ever-more opening up of economies to global finance, with increased protectionism and trade barriers emerging, as seen with Brexit, failed TPP negotiations and Donald Trump’s trade wars.
Indeed, for anti-capitalists and non-orthodox economists, there was a tendency to believe that the neoliberal era would rapidly come to an end after the 2008 financial crash.
Instead, it has had a very drawn-out death, partly because the response of major countries was once again to turn on the spigots of credit in an unprecedented fashion to shore up markets — helicopter money for the rich.
Interestingly, in 2020, for the first time since the neoliberal era began with the elections of Margaret Thatcher and Ronald Reagan, vast amounts of state money was created in response to the pandemic-induced crash, targeted at both business and workers — the magic money tree that Theresa May and Conservatives had denied the existence of for decades.
Unlike quantitative easing which favoured financial markets, this was direct corporate welfare.
For the first time, governments of all political stripes in the West decided to use “helicopter money” to replace lost wages, to put money directly into the pockets of employers and workers without adding conditionality.
This is a major break with traditional neoliberalism, which has always favoured austerity, privatisation and suppression of welfare costs in response to major crises — as seen in 1979-81, 1990-92 and 2008.
Of course, neoliberalism was perfectly happy with welfare for capitalists, as long as it came in the form of cheap credit, loan guarantees and underpriced state-asset sales and outsourcing, all dressed up in the language of efficiency and marketisation.
It is too early to say that we are at the end of the neoliberal era, with a possible return to austerity, and privatisation, if in a more crony capitalist fashion than in the past.
With thousands losing their jobs worldwide, a renewed class war against workers and the poor could be upon us.
Yet despite these caveats, there are novelties afoot that suggest a transition is under way.
Possibly never before — except in wartime — have capitalist elites thrown out so many orthodoxies of market economics so readily.
Chancellor Rishi Sunak proudly stated that he had put ideology aside to protect people’s livelihoods by paying millions of workers’ wages (the shadow of defeated Labour leader Jeremy Corbyn loomed large in this remarkable clothes-stealing exercise).
Such a trashing of orthodoxies — even if temporary — foretells some kind of underlying recalibration of the rules of the game, and the growing perception that the rules are in fact simply choices made by elites.
If homeless people can be put in hotels during a pandemic, for example, why not eliminate homelessness permanently?
The last decade has also seen a re-emergence of left-wing political forces in Europe and the US, following a similar resurgence in Latin America, but these movements have suffered setbacks, and have failed to win or hold onto power.
Yet the ideological currents they represent, a fundamental discrediting of neoliberal certainties, appear to have achieved a kind of backdoor hegemony — a de facto socialism (even if mostly for the rich and middle class) that dare not speak its name.
Italian Marxist Antonio Gramsci wrote in 1930 that the crisis at the time precisely consisted of the fact that “the old is dying and the new cannot be born; in this interregnum, a great variety of morbid symptoms appear.”
It is an observation we could make of our own time, with our current morbidities including huge inequality, growing authoritarianism, a nationalist backlash, mass displacement of people by war and climate change and ecological collapse.
There is also a plethora of ideas abroad for a new green economy based on more care-oriented forms of work, universal income and the end of traditional capitalist growth.
Coronavirus has catapulted us into a possible future of remote working for millions, and the end of the office — good for some (white-collar jobs for those with nice houses), not so good for others (the young, renters, the precariously employed).
The distinctive features of the new period can already be seen: the permeation of the economy by artificial intelligence, remote working (a return to 18th-century domestic labour, plus Zoom), and the transition from fossil fuels (which, terrifyingly, are projected to peak in 2030) to renewable energy systems.
What has yet to emerge is a new political settlement to match the fundamental economic and social changes taking place.
When it does, or when the old order implodes, the new era will have definitively begun.
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