Austerity As Authoritarian Neoliberalism?

If, as we have just seen, scholarship on neoliberal governmentality tends to posit economic discourse in a position of more or less absolute externality to capitalism then, conversely, AN scholarship appears to argue that the causal variables driving austerity are necessarily “internally tied” to the prerogatives of capital (see Bieler and Morton 2018; Tansel 2016b). Thus, those discourses popular in the public sphere that support austerity should be read as the expression of capitalist elite self-interest or, at the very least, the selectively empowering effects of the proximity of procapitalist “organic intellectuals” to powerful capitalist elites who can amplify their voices (Bieler and Morton 2018: 68-71).

The concept of authoritarian neoliberalism, as Bruff notes, has its roots in debates about the role of capitalist power in pushing authoritarian tendencies within the apparatus of the British state, in the late 1970s (Bruff 2014: 115). Crudely summarized, there were optimistic and pessimistic strands in these debates. The arguments of the optimists varied in nature, but one thing that they all appeared to have in common was a certain faith in the political potential of collective human action, and the possibilities of a universal program of democratized decision-making over an increasingly technologically advanced means of production. Aside from their technological optimism, advocates of this position tended also to be intellectually informed by the debates of the Second International, and a commitment to a politics of overcoming capitalism at least partially by means of a parliamentary strategy (Barrow 2008).

This optimistic position was perhaps most famously represented by the sociologist Ralph Miliband. Writing of the “desubordination” of vast swathes of the population of Western capitalist countries by the post-War economic compact, Miliband believed that the capitalist state was becoming the focus of new social demands, and that the political power of the dominant classes was beginning to fracture. These fractures, he contended, could be exploited by progressive movements by means of a relatively integrated and “resolute” mass-movement politics, with the achievement of a parliamentary majority at the center of its focus (Panitch 2019).

Crucially, the AN hypothesis reflects thinking from the more pessimistic strands of those debates. Here, insofar as it advocates government through the application of market-based principles to an everexpanding domain of everyday life, neoliberalism is understood as the principle ideological condition of possibility for a number of disastrous crises which have, together, contrived to undermine the reputation of the postwar compact (Bruff 2014). Neoliberalism may have enjoyed several decades of relative popularity in the West, and was seen by many as the natural model for equitable and democratic government. However, with the 2008 financial crisis, the project seems to have suffered a precipitous loss of prestige, and elites are now struggling to reestablish its legitimacy. For AN scholars, the electoral successes around the world of anti-democratic leaders, from Trump to Erdogan, and from Duterte to Bolsonaro, suggest that capitalist elites may now be giving up on the idea refloating the reputation of neoliberalism at all (Streeck 2020; Tansel 2016b). Indeed, these elites appear now to be turning to nonideological solutions to ensure their purchase on political power.

This pessimistic strain of Marxist thought thus worries that the opportunities for electoral strategy are narrowing. A diversity of states around the world have become relays for austerity, “internalizing the interests of transnational capital at the expense of labor” (Bieler and Morton 2018: 239). Addressing the European context, for example, Bieler and Morton discuss a number of legal mechanisms introduced since the outbreak of the crisis, empowering institutions of the European Union (EU) to impose fines on countries that do not live up to the standards of the EU’s Stability and Growth Pact. Policies such as these are, of course, ratified by national parliaments, ostensibly by democratic means. Once in place, however, they trade-off significant amounts of economic and political sovereignty. The upshot, Bieler and Morton aver, has been a certain generalization of austerity as a crisis recovery model and, thusly, a general “depoliticization” of economic governance. To wit, echoing Brufif, they suggest that we can now observe a degree of such disempowerment among European labor movements that they are no longer capable of leveraging the state in pursuit of their demands; institutions of economic decision-making have been relocated to the supranational level and are, thus, effectively “insulated” from “social and political dissent” (Bieler and Morton 2018: 241).

It is worth noting at this point the rather different emphasis on the role of ideas in the AN hypothesis, compared to that discussed in the preceding section. In Bieler and Morton’s framing, for example, while ideas are said to “establish the wider framework” within which political outcomes are generated, we are encouraged to remember that they are also part of the material world, and so cannot be abstracted “from the prevailing social order” (2018: 72). Ideas thus become hegemonic only when they can connect with the organized social forces operating on the terrain of already-ongoing social production. A key figure here is the organic intellectual. Unlike traditional intellectuals (ascetic philosophers, “ivory tower” intellectuals, and the like), organic intellectuals play a direct, instrumental role in social production, insofar as they are engaged in the world and seek, via argument and persuasion, to “organize the hegemony of social class forces” (2018: 71).

For Bieler and Morton then, the material structure of ideology must be understood as the unfolding of a historically enduring ensemble of “class conflict and struggles over hegemony” (2018: 73). Critically, they are conscious that such an account might be read as economically reductionist. By way of a preemptory response to this accusation, however, they suggest that their arguments be construed not as an attempt to defend an economistic perspective, but rather to posit a theory that is open to contingency. For them, political outcomes should never be read as the unilinear determinations of the logic of capital. To the contrary, as they put it, “integration into forms of transnational capital does not imply the absence of conflicts or contradictions”

Explaining austerity 133 (2018: 175). The upshot, they say, is that while state geopolitics and capital are internally related, there is need for specificity in understanding the struggle among the intra-class fractions who wield state power.

Thus, in a manner consistent with this approach, their analysis of the European financial crisis starts with the premise that the imposition of austerity should be read as but a chapter in an ongoing history of class struggle, and a mark of the success of European capital in its ongoing strategy of “dispossessive” accumulation (2018: 218). Paraphrasing Ellen Wood, however, and in tension with the trajectory of desubordination laid out by Miliband above, they caution us to consider the fact that the state itself retains a considerable autonomous capacity to manage problems for capitalism, and is thus capable of “offsetting crisis conditions in the accumulation of capital by providing a temporary spatial fix for surplus value extraction” (2018: 122). The point, for Bieler and Morton, is not to insist that the spatial scale of the interstate system is somehow obdurate in the face of forces of globalized capital but, rather, to sidestep what they believe to be a tired debate, and focus instead on “the manner in which capital operates through nodal rather than dominant points” (2018: 119).

These tenets inform Bieler and Morton’s approach to the study of austerity in interesting and provocative ways. For example, they contend that an appropriate periodization of the crisis cannot begin simply with the introduction of the Euro currency in 1999. Rather, it should begin with the accession to the EU in the 1970s, of less-developed, peripheral countries, like Ireland, Greece, and Portugal. Now, economic asymmetry is by no means solely a Marxist concept, and a number of Keynesian scholars, like Lapavitsas (2013) and Patomaki (2013) are also sensitive to the role of the Stability and Growth Pact. Introduced in the late 1990s, the Pact restricted the latitude of states to pursue competitiveness to tight wages and restrictive labor conditions, thus contributing to the generation of indebtedness on the periphery. Yet, for Bieler and Morton, what these scholars tend to miss is the “geopolitical dynamic” of the uneven development of capitalism, which was a pillar of the EU from its very foundation, with the Customs Union of 1968, and entrenched subsequently with the introduction in the 1980s of the Internal Market (2018: 224-227). Thus, given capitalism’s intrinsic tendency towards crisis, one should not be surprised to see the unevenness of the EU reproduced, as indeed it must be, in the shift towards austerity.

All considered, Bieler and Morton go some lengths to identify the hidden stakes of what we might term, with Cahill (2014) and Ryan (2018), “actually existing neoliberalism.” Yet, as we will explore in the next section, a question remains. That is, despite the margin that they claim exists within their theory for emergence of debate and fractionated interests among the capitalist class, they do not specify the mechanism by which those interests remain nevertheless capitalist, in their nature. All they mention, as we noted, is the role of organic intellectuals. But this is a problem because, to borrow from Beggs (2013), while capitalism is surely predicated on the extraction of surplus valuefrom commodified labor, it does not necessarily follow that the ideas in the heads of capitalist elites and planners represent a perfect roadmap of “the preconceived needs of the economic system,” or that those ideas should be so intuitively popular among ordinary people.