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Oct 26, 18

Going Forward: Transnational Capitalism and Populist Nationalist Movements Pt #1

This is the first part in a broad analysis of the international situation from Don Hamerquist, a longtime contributor to Three Way Fight and co-author of Confronting Fascism: Discussion Documents for a Militant Movement. In this essay, Hamerquist addresses the conflict between transnational capitalism and populist nationalist movements, conceptions of fascism, and some pitfalls facing the radical Left.

Part 1 argues that the transnational section of the capitalist ruling class is looking for a new basis of stability. Transnational capitalism is still recovering from the 2008 economic crisis and faces widespread populist oppositional movements (left-wing and right-wing), which are fueled by neoliberalism’s massive increases in inequality and other problems. In this context, restabilization requires transnational capitalists to seek a “renewed foundation of mass legitimacy and popular acquiescence.”

Part 2 critiques various leftist responses to the current situation. In particular, Hamerquist criticizes a widespread leftist tendency to see fascism, right-wing populist movements, and capitalist interests as all aligned together. Often this implies a division of capital into “good” and “bad” sectors (or “authoritarian” versus “democratic”). He argues instead that transnational capitalists are “strategically hostile” to both left-wing and right-wing populisms, that all of capitalism (including its more liberal elements) tends toward repression, and that fascism is best understood as “an array of emerging reactionary anti-capitalisms” – a right-wing revolutionary tendency that is real but distinct from “reformist” right-wing populisms.

Part 3 argues that transnational capitalists are manipulating anti-fascism to help them build a new mass legitimacy. Hamerquist posits a new popular front that conflates right-wing nationalist populist movements with fascism, and that corrals leftists into supporting capitalism in the name of defending “democracy.” If leftists go along with this and fail to offer a radical anti-capitalist response to the real grievances that are fueling populism, they will help restabilize transnational capitalism and may help push right-wing populist movements into genuinely fascist politics.

Three Way Fight hopes that the essay will contribute to constructive discussion and debate about these important issues. Part 1 of the essay is below. Parts 2 and 3 are forthcoming.

Part One

… Yanis Varoufakis, former Greek finance minister and co-founder of the DiEM25 democratic movement, laments the triumph of a Nationalist International – at least stressing that they “sprang out of the cesspool of financialized capitalism.”

— Pepe Escobar, “The West Against The Rest or The West Against Itself?” 9/18/18

Two things appear to be certain. First, at least in the so-called “West” – North America, the European Union and Australia – there is an emerging conflict between emerging populist nationalisms and the economic processes and political institutions that comprise the transnational capitalist system. Second, this transnational system is limping towards another tipping point after an incomplete and distorted recovery from the 2008-2009 global financial crisis.

The combination of these prospects leaves left/liberals and “progressives” stuck between nostalgic visions of a “New New Deal” and an implicit support for a tidied up global status quo. Radicals must do better.

I want to look a bit deeper into the contradictions between globalized capitalism and the populisms of the left and right that are both its effects and its flawed challenges. In the process I indicate a potential scenario for capitalist stabilization that, I’m afraid, is more probability than possibility. This will lead to criticisms of various “common sense” left strategic approaches and will include some aspects of an alternative approach.


The lack of a mass anti-capitalist response to the 2008 global financial crisis has reduced the obstacles to the gradual and distorted recovery of capitalist economic activity. Globally, “recovery” has meant neoliberalism – a more broadly generalized austerity and the increasing privatization of social resources and collective goods. It is a recovery defined by massive increases in economic and social inequality; a recovery that deliberately avoids the issues of capital’s “externalities”: the looming ecological crises and the genocidal implications of the marginalization and increasing precarity of major populations.

For the moment, U.S. capitalism works within a relatively benign economic context, despite its continuing dependence on Ponzi financial manipulations and an expanded militarization that has yet to be balanced out by the economic and political costs of a major war. This context is time-limited. Growing problems from frictions in capital and labor flows, from trade and investment imbalances, and from the gamut of corruptions that rot inside the complexities of rent-seeking financialization are on the horizon.

The transnational segment of the global ruling class is certainly more aware of the fragilities of global capitalism than less strategically placed sectors of the class – more aware of the need to put the capitalist house in order, limiting the potentials for new crises and widespread disruptions. This ruling elite recognizes the need for stronger transnational state and quasi-state formations with a global vision of ruling class interests and the capacity to discipline competitive elements of capital to a coherent strategic perspective. The point is made in this recent (7/18/18) report from the “International Panel on Social Progress”:

Interestingly, the Panel sensed that “globalization and the spiral of inequality and corporate political power have triggered a growing legitimacy crisis in old and new democracies, undermining the nation-state as the basis for democracy and welfare policy.” It sees transnational private actors and international financial institutions as new players in the global governance system.

It also doubts that the present international financial system based on “flexible exchange rates and footloose capital mobility, low barriers to trade and high barriers to low-skilled migration” can be sustained into the future.

Review comment on International Panel on Social Progress Report, Naked Capitalism Links (8/15/18)

However each tentative step towards stronger transnational governance encounters powerful and diverse segments of capital with material interests in thwarting the process. Beyond the direct resistance from the dynamics of the pursuit of private profit, capitalist nation states that see themselves as actually (or even potentially) losing in global competition typically oppose such transnational projects.

Perhaps more important, is the likely opposition from the more or less spontaneous, more or less popular, countervailing movements that are reacting to the current impacts of transnational capital. They include both struggles against austerity that are fueled by the increasingly obvious linkages and contrasts between austerity and corruption, and challenges to the lack of representative legitimacy and accountability. There will be no support here for efforts to streamline and strengthen transnational governance in the interests of elites that are already benefiting grotesquely from capitalist globalization.

Even if capital’s general ideological hegemony continues to be more or less unchallenged, this array of social forces against globalization ensures that technocratic adjustments and minor reforms won’t be enough to produce more effective structures of governance for transnational capital. To reach that objective, the institutional changes and new structures must be accompanied by a renewed foundation of mass legitimacy and popular acquiescence. This objective, if it is even possible, is certainly not easily attained – not even in the core territories of capital. However, without an expanded legitimacy, transnational capitalism will increasingly be forced to prioritize command over consent, and an extended period of “flailing and churning” in which no protracted social equilibrium will be possible is the likely outcome for the transnational capitalist system.

Is there any capitalist adaptive scenario that can address this dilemma for capital and improve the possibilities for an extended period of transnational capitalist stability? Unfortunately, I think there are such possibilities that can develop from the working out of nationalism/globalism’s contradictions. The revolutionary left should take care to avoid incorporation into such stabilizing scenarios.

The initial elements of one such scenario are apparent in this recent observation by a well-known neocon theorist, Robert Kagan (husband to Victoria Neuland of “fuck the E.U.” note):

The peaceful, democratic Europe we had come to take for granted in recent decades has been rocked to the core by populist nationalist movements responding to the massive flow of refugees from the Middle East and Africa. For the first time since World War II, a right-wing party holds a substantial share of seats in the German Bundestag. Authoritarianism has replaced democracy, or threatens to, in such major European states as Hungary and Poland, and democratic practices and liberal values are under attack in the Czech Republic and Slovakia. France remains one election away from a right-wing nationalist leadership, and Italy has already taken a big step in that direction.

— Robert Kagan, Washington Post, 7/14/18

There are many such pessimistic statements from transnational capitalist elites of varying political hues. They may disagree about many other matters, but they agree that nationalist/populist responses to transnational capital are on the ascendency… that they are a real danger to global stability…and that the transnational ruling elites are poorly prepared to counter them.

These claims have some basis, but they are often overstated and this is the case here. The imminent and overwhelming lurch towards right wing populist nationalism is not so self-evident. There are important limitations on supposedly ascendant nativist populisms: visible ceilings on their accomplishments (Trump?); likely instances of setbacks or stalemates (Brexit, Trump?) and their substantial, if temporary, reverses (Macron vs. LePen?).

Political/economic reality dictates that no revival of mercantilism and tariff wars will negate global supply chains; the centrality of transnational financial capital won’t be reversed with MAGA rhetoric; nativist protectionist and anti-immigrant politics will ultimately lose any contest with the geo-political and market factors that determine labor and capital flows. All of this will hold in the absence of a serious rupture of the overall global capitalist framework, and such a rupture is currently beyond either the reach or the intent of nativist populisms – certainly of the right-wing variants. (I’ll raise some important complications on this question later.)

Here is an academic perspective on the problems that confront any populist nationalism, right or left…and the obstacles for left populisms will be greater since they are more dependent on their ability to secure substantial economic concessions for their constituencies than their right wing cousins:

In a globalized economy, it may be extremely difficult for any country to implement policies that protect the bargaining power of workers, that reverse income inequality, that raise minimum wages, that improve the social safety net, or that otherwise make households better off relative to businesses and governments. Implementing any of these policies causes a country’s international competitiveness to deteriorate. Consequently, rather than achieving the desired result, these policies cause the trade balance to go into deficit, and either unemployment will rise or debt must rise.

— Michael Pettis, Carnegie Endowment for International Peace 7/10/18

Despite these limitations, recent right wing populist successes have blocked and perhaps even reversed the momentum towards stronger transnational capitalist institutions. This has happened even when these limited and ambiguous successes look very reversible.

The transnationalist sectors of the capitalist ruling class are able to understand and respond to an unfavorable alignment of forces. Their response is apparent in largely successful attempts to infiltrate and co-opt nativist oppositions and deflect the political trajectory of their populist elements. The grotesquely pro-capitalist policy content of Trump’s millionaire-stacked entourage is an obvious example here. However, the left should be alert for ruling class tactics that are less overt but possibly more important. Transnational capital may only mobilize a half-hearted and diluted resistance to some populist insurgencies, not so much from weakness or confusion, but because there are reasons to concede nativist populism some victories. It’s a way to shift political responsibility for the economic reversals, trade wars, environmental crises, and nasty military conflicts that continue to infect global capital – even at the apex of the current recovery. Similar tactics might also pass off responsibility for expanding authoritarianism – which will be an essential feature of all regimes of mature capital – by subcontracting it to local jurisdictions under circumstances that maximize illusions that repression is essentially accidental, contingent and easily reversible through popular pressure.

I believe that this tactic is currently in play in this country, as well as in the U.K. and Greece, and probably Italy and Spain. When successful, such gambits help expose the essential hollowness of the populist promises of material advantages and more responsive governance in situations where they have some measure of (parliamentary) success. The collapse of its promises exposes populism’s strategic weakness and exacerbates its internal contradictions. This increases cynicism and internal polarizations that demobilize and demoralize the actual and potential mass constituencies of populist movements and cripple potentials for future organizing initiatives.

Currently, with Greece as the possible exception, such tactical responses from transnational capital are directed towards populisms of the right wing nativist variant. However, the same political forces using much the same tactics will undoubtedly confront potentially “left” variations of populism (e.g., possibly Imran Khan in Pakistan?). (I will have to think a bit more about how to relate this argument to situations in this hemisphere – the reversals of the “Pink Tide” in Brazil and Ecuador [Venezuela? Bolivia?], and what to make of AMLO in Mexico.)

However, although they may be tactical successes, such maneuvers don’t confront transnational capital’s basic problems and can even exacerbate them. The tools and methods that effectively undermine and discredit populist governance will not create the base of legitimacy and popular acquiescence that transnational capital urgently needs for longer-term stability. No discrediting of populism gains an affirmative popular ‘consent’ to transnational capital.

If the conflicts between nativist populisms on the “right” and reformist social democratic populisms on the “left” develop without a clear liberatory internationalist anti-capitalist alternative to both, possibilities for a longer-term stabilization of global capitalism can emerge. This can happen, even in the absence of a comprehensive ruling class strategic project. My fear is that these possibilities are more likely probabilities and I’d like to spend some time on how they might emerge.

This comment expresses a common left/liberal approach to current politics:

The key question for the immediate future is whether those populist revolts will tack left or tack right, and in which countries. The most important, of course, being the USA. If the USA tacks right, with appeals to jingoistic white identity nationalism as the primary motivation for sustaining political support, then the gloom and doom will come to pass.

If the populist revolts tack left, with appeals to the better angels of our nature coupled with appeals for a classical republican (not “R”epublican) mobilization of civic virtue for selfish interests to yield to the interest of the General Welfare in building a new world economy free of dependence on burning fossil fuels, the likely result will be a new “golden age of capitalism.”

— Anthony Wikrent, Naked Capitalism, 7/19/18

Leaving aside the “better angels” and “new golden age,” there is some value in Wikrent’s recognition of the internally contradictory elements of the populist/nationalist response to the impacts of transnational capital. Roughly speaking, these impacts have a right and a left, each of which contain potentials to morph into the other, as well as to fork in a multiplicity of ways. Wikrent, along with many others on the left, is fixed on hopes that this develops into a populist “left” fork that can resurrect and institutionalize the mass reformist constituency that provided some relative stability for capital in a previous period.

Whether or not it would be desirable, it’s not possible to replicate the “successes” and “victories” of the past in our present not-so “golden age.” The material benefits of those arrangements, which have been termed “Fordism,” were always restricted to strategic minorities of the working class in the “First World” – class segments that are no longer so strategic. The potential political and economic returns for transnational capital from such reformist national class compacts are much more limited than they were historically.

No “New New Deal” is in the cards for the same reasons that the promises of right wing nationalism will not be fulfilled. If left populist movements gain any victories, they are overwhelmingly likely to be “victories” within a parliamentary/electoral context where they will have even less potential to provide tangible benefits for their core constituencies than the similarly questionable victories of their right wing nativist cousins. The characteristics of global capitalism that limit the current prospects for right wing nativist populism; the globalized supply chains and the transnational financial structures, present similar limits for all reformist left variants of populism and they will be particularly effective against those versions of populism that are inclined to follow the social democratic electoral/parliamentary model.

To be continued

Photo credits:
1. Picture by M0tty [CC BY-SA 3.0], via Wikimedia Commons.
2. Photo by Natalie Behring/copyright World Economic Forum ( [CC BY-SA 2.0], via Wikimedia Commons.

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Three Way Fight is a blog that promotes revolutionary anti-fascist analysis, strategy, and activism.

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