Guy Rundle
Socialism’s newfound popularity

They raised the roof in Queens, New York, a few Tuesdays ago, when Alexandria Ocasio-Cortez won. Not an election, simply a primary for the candidacy. But the seat’s safe, the opponent was an establishment Democrat heavy, and Ocasio-Cortez is a socialist – a member of the rising Democratic Socialists of America, capable of using the “s word” and breaking into the mainstream. In Britain, Jeremy Corbyn successfully reined in a recalcitrant party and smashed a Tory majority in 2017 – part of a European wave of socialist renewal from Syriza in Greece to the near-victory of Jean-Luc Mélenchon in France. In Mexico, Andrés Manuel López Obrador – who’s been described as Corbyn’s “ideological twin” – was just elected in a landslide victory. Will the United States midterm elections see a revival of the left produced by the mix of absurdity and chaos of the Trump administration? And how on earth did socialism, of all things, return to the public realm?

The political right has all sorts of answers to that question, usually of a distinctly paranoid tone. Last month, the right-leaning Australian think tank Centre for Independent Studies (CIS) released a study that found 63 per cent of university-educated millennials view socialism favourably. The ensuing reaction by conservative media seemed to suggest they believe, or at least pretend to, that when young people have an affirmative response to the idea of socialism, what they want is the demented ancestral Stalinism of North Korea. They moaned that kids today have pictures of Che Guevara not Robert Menzies on their walls, only to then claim millennials are socialists because they’ve never heard of Mao or Lenin, due to those evil universities, who… well, the usual claim is that universities teach nothing but Mao or Lenin, so it’s all a little confused.

The real answer is much simpler. And it’s right there in the CIS findings – the thing that’s proved the most effective recruiting sergeant for socialism is capitalism itself. In fact, nearly 60 per cent agreed with the statement “capitalism has failed”. But when a majority of young people say they think “socialism would be a good idea”, what they are actually talking about is the mixed economic system under which many of today’s ageing Thatcher–Reagan fanboys grew up. That is, a planned, concerted approach to the distribution of capital, rather than the debt-laden, short-term contract present in which our Hunger Games-style system has landed us.

Of course, there’s more to it than that. But if you ignore the right’s fantasy about what self-described socialists want, it comes down to this. From the end of World War II in Australia, and Britain, much of the system was socialist, or semi-socialist, and as such, it steadily advanced human equality, welfare and freedom decade on decade. The waging of war following a capitalist depression made it clear that large-scale social and economic planning worked; laws protecting union organising made it possible to shift more of the social bounty to wages and not profits, even as the system remained profitable as a whole; and universal health, education and good urban design came to be seen as necessary “positive freedoms” for human flourishing. A more sceptical view would be that such semi-socialist systems were a way of preserving capitalism, not superseding it. But in order to do so, the social character of large-scale economic life had to be conceded.

This epoch came to grief not only because of the macroeconomic crash of the 1970s – a product of deficit financing of unproductive wars and the developing world ending the ripoff by quadrupling oil prices, among other things – but also because social democracy/democratic socialism had never evolved beyond the bureaucratic form it had taken during the war. By the ’70s, the last vestiges of common purpose had dwindled and many state enterprises became self-perpetuating machines isolated from consumer pressure and the common good. The received atmosphere of the 1970s – a somewhat historically confected one, though not untrue – of a grim state/society setting, unresponsive to growing demands for choice and autonomy, is the background from which “the right” was revived.

They had waited long enough. In the 1940s, Friedrich Hayek – Charles Koch’s favourite economist – had said it would take a generation or more for their ideas to return. By the 1970s, so much had become rusted and counterproductive that his simple formula – that there are no abstract entities such as “society”, only contracting individuals who express their freedom through choices from available offers – seemed like common sense. The prosperity that social democracy had developed aided them. Privatisation initially shook up service delivery, widened shareholding, and right-wing governments deregulated things that left-wing governments should have loosened up years earlier – broadcasting, hospitality, import and export – and reaped the rewards. When, in parallel, China turned to a mixed economy – still authoritarian socialist, but it didn’t look like it – and the Soviet bloc collapsed, it did indeed appear to many that human history had found a final form in what was now being called neoliberalism.

In fact, the whole thing was a long con. Thatcherism was paid for by North Sea oil, which kicked in as Labour was chucked out in 1979. The Reagan revolution was funded by a decades-long deficit-and-debt superbubble, which the current-day Republicans have renewed. This easy money – recently augmented by $US12 trillion of “quantitative easing”, that is, printing money in roundabout ways – allowed governments to neglect demand and distribution management. Wages fell, inequality soared, profits were sequestered in ever-higher paper towers of finance capital, and Western urban infrastructure fell years and then decades behind. In 2008 the system crashed – it has never really recovered. To millions, capitalism revealed itself. It’s no wonder a generation who came of age during the global financial crisis believe a system in which the production of the necessities of life is subject to public ownership and democratic control is the only one in which real human freedom can be achieved – and the only way in which the planet can be managed to avoid species catastrophe.

This simple enthusiasm for socialism – by which people mean a mixed economy with rational feedback loops, in place of the liquid nitrogen-filled Mack truck careening towards the freeway fire that is capitalism – has panicked the right into a spiral towards authoritarianism. That’s why the movement that purports to stand for free minds and free markets fantasises about compulsory purchases of coal-fired power stations too valueless to sell, charges whistleblowers for espionage without a peep, and wants to use the state to crack down on universities offering the “wrong” lessons.

What the right really fears though is not that a rigid bureaucratic socialism will return, but that a genuinely agile, decentred, ultra-responsive post-capitalist system will. Around the world, candidates are campaigning on the promise of categorically changing the economic system. If they were to win, and then simply reproduce bureaucracies hostile to individual initiative and enterprise, they would deservingly fail. Any socialist revival in the 21st century must use the agility of new technologies – networking innovative production – to enable a layer of free activity more efficient than the market to emerge. It must enable “subsidiarity” – the devolution of production and governance to community level – by, for example, making possible the dethroning of the privately controlled power grid with neighbourhood-networked renewable power. It must co-exist with money, markets and property. They pre-existed capitalism – one of Marx’s less-helpful contributions was the secular millennial fantasy that such social institutions could simply disappear into a mystical state of “communism”.

Many people looking at the towering monoliths Google, Amazon and Facebook may wonder at the possibility that politics could turn in such a way. But what are these megaliths but networks of activity, constituted by people? What are their absurd valuations – which many on the left foolishly use in their rhetoric – but the fantasy figures that abstracted markets place on them for their own purposes? As the Austrian socialist Rudolf Hilferding pointed out in 1910, integrated corporations are socialism, developing in alienated form; crash or no crash in the future, their social character eventually becomes too obvious to ignore, and too important to not act on.

Before that, the fight will get tougher. Neoliberalism began not in Britain in 1979 but in Chile in 1973, with the lethal dictatorship of Pinochet, enthusiastically supported by Hayek and others. The right seems junta-ready, filled with fantasies of violence and retribution. In the US, one-year-olds are being called to testify on their immigration status, like mediaeval courts putting geese on trial; in Britain, right-wing Brexiters, who had the misfortune to win the referendum, are now pursuing a strategy less Salisburyan than Sex Pistols; in Australia, we’ve got Tony Abbott. The absurdity disguises an intent that would easily become lethal in the right conditions. Such a formation excludes itself from the consideration of serious people, but in the years to come many liberal-minded people in Australia – including liberal capitalists – will have to decide whether they are going to stand with barbarism or humanity, and what sort of revision of their basic economic views such a shift necessarily entails.

This article was first published in the print edition of The Saturday Paper on July 21, 2018 as "The ballad of Hayek noon".

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Guy Rundle is an author and commentator. His most recent book is Trumped! Election ’16 and the Progressive Collapse.

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