Welcome to 2025

Welcome to 2025

from Peter Radford
[This article posted on January 13, 2025 is available on the Internet, https://rwer.wordpress.com/2025/01/13/welcome-to-2025/.]

Welcome to 2025. The first year of Trump 2.0. It promises to be fun — as long as by “fun” we mean chaotic or unpredictable. The dilemma is clear from the torrent of material flooding our various commentariat avenues.

Take Janan Ganesh in Thursday’s Financial Times. He has written one of his usual deliberately provocative articles with the portentous title “Things have to get worse to get better”. Really? Oddly, he uses the arrival of Reagan in power as the most recent example of a corrective beneficial turn in history. According to Ganesh things improved after Reagan’s election.

Which is strange because things didn’t get better. The American fiscal position began its long descent — even the short term revival under Clinton couldn’t reverse the decline. The American trade position suddenly fell into free fall. The phrase “rust belt” emerged as a legitimate description of swathes of the American heartland. Loss of manufacturing became a major topic of conversation. Interest rates soared to crush inflation. Unemployment responded by rising to much higher levels than the public was used to in those “glorious” but all too ephemeral postwar years — unemployment was still very high in Reagan’s re-election year. And wage stagnation had set in for a large chunk of the workforce. Reagan’s economic legacy is not very good at all.

His socio-political legacy is even worse.

Tax breaks for the wealthy created a flood of cash that flowed into elections and lobbying to corrupt decision making and ensure elite interests took precedence in legislation. Inequality began its ascent back to gilded age levels. Racism became an overt part of the electoral college landscape with the confirmation of Republican dominance of the old Confederate states. Above all, the constant denial of the existence of “society” — to borrow Margaret Thatcher’s thoroughly extreme and deliberately anti-democratic phrase — allowed the concomitant existence of citizenry to be undermined. Citizens are entitled to participation in society. And entitlements cost the oligarchs money. So the concept of citizenry must be reduced if not eliminated. It was Reagan who launched America towards de-socializing the New Deal contract. That he never fully succeeded is testament both to its enduring popularity and to the repeated failure of the oligarchy to seize enough power to pull it off. Nonetheless he opened the door to socio-political reaction. He set in motion the recently bemoaned decline in democracy.

Quite why anyone would characterize this dismal performance as “getting better” is difficult to explain. Except, perhaps, in the context of a very clever public relations effort. Reagan never delivered on most of his election claims, but he is looked at, still, in glowing and wholly undeserved terms. His years in power are when America fell into a deep self-indulgent illusion. Pretense rather than reality took hold of the imagination. Fukuyama summed it up nicely: history had ended. Not quite in the way that he meant, but it ended. America slipped slowly into the malaise that all imperial winners suffer from. It began to believe its own hype. Its politics became monotonous — both its political parties fell into the neoliberal trap. The middle class became complacent and incapable of seeing its demise being orchestrated by the resurgence of a rent-seeking oligarchic elite whose status and power had been briefly disrupted by the strictures of the New Deal.

Reagan’s arrival was decidedly not a “getting better” moment for the masses. It was a moment of reaction and, thus, the moment that things started getting worse. It is no accident that the post-Reagan years have seen a return to levels of wealth and income inequality that are both historic and totally incompatible with healthy democratic self-governance. Then again, that was the intention of the neoliberals who had, and still have, an extraordinary disdain for democracy and the desires of the average citizen.

And, of course the collapse of the Soviet Union and the end of the Cold War gave Reagan something to mask all this. America could gloat in self-satisfaction as it bestrode the world as the undisputed superpower. The arrogance of that moment was the beginning of the long term rot that ended up producing Trump and his nativist populist revolt. A whole generation of Americans began to ignore their lived experience and started to revel in the warm glow of fiction. The hollowing out of the concept of citizenship — so essential to the re-establishment of plutocracy and the deprivation of service and rising standards of living for the middle class took hold. Flag waving replaced patriotism. Outward looking militaristic adventure replaced inward looking public investment. Global rather than domestic requirements came to dominate government priorities. Difficult decisions were avoided. Anodyne rather than dynamic proposals became preferred. Meanwhile American leadership took pride in buttressing the illusion. After all it was closely aligned with the corporate and wealthy folk who had initiated the neoliberal takeover fronted by Reagan.

The years of illusion blew apart in the debacle of 2008 when the full impact of the destruction of social coherence and the unleashing of corporate aggrandizement led to one of those moments of self-destruction that critics of capitalism seem to predict with a mix of enthusiasm and foreboding on a regular basis. Our problem has been, since then, that no one has any credible alternative ideas for the management of our overall socio-economic system. We are stuck in a fog knowing that our leadership is bereft of novel approaches, that it is old and backward looking, and that it cannot change because its allegiance is not to the average person but to those with the money to buy influence. We have slid backwards into a second gilded age.

Which ought, per Ganesh, be an opportunity for a re-start.

Fukuyama’s commentary about the end of history has been mocked since the day he launched it. Yet it resonates if we change perspective. History did indeed end. The question is which history?

Looking back at the error of 1980 we can understand more clearly which: it was the history of the emergence of a more socially equable and democratic America. Nurtured by the New Deal and the postwar economic take-off, America started to move itself towards becoming a more inclusive and tolerant society with a burgeoning middle class. It began, in short, to close the gap between its mythology and its reality.

Nowadays, oligarchs like Marc Andreessen repeatedly look at economic history perversely. They see the years between 1870 and 1914 as being the iconic decades to emulate. Those years, however, were well eclipsed by the thirty postwar years that ended in the mid-1970s. Both the economy and wages grew more rapidly in that second period. Why then, do oligarchs prefer the previous one? Simple. By being both prior to the progressive era and pre-New Deal, those years saw the prominence of the original industrial era oligarchy. It was a period of inequality, egregious profit, and dominance by a gilded elite. It was a history only interrupted by the social and economic upheavals of the 1930s and 1940s, both of which saw the middling sort in America start to assert its political influence as a return on its effort in industrialization and war. Modern democracy was forged in the struggles of early mid-century America. A fact that oligarchs have noted well.

So it was the trajectory of the postwar years — the emerging history of a more socially equable America that had to be brought to an end. The oligarchs had seen their status and power slip. They had to recover their position. In order to accomplish this they orchestrated an intellectual counter-movement which we now know as neoliberalism. They couched their attack on democracy in terms of “individualism” to tap into America’s historic delusions about the rugged independence of its early settlers. They denigrated the state which became known as the enemy of a freedom which, in turn, was re-styled in an 1800s pre-industrial gloss. They denied the efficacy of anything social or collective, using as their counterpoint the example of America’s hegemonic rival during the Cold War. Above all they exploited the complacency engendered by the success of the postwar years — the self-satisfaction of a middle class that mistakenly believed that it was responsible for its own success and not dependent on the existence of a supportive state.

So Ganesh has his history backwards. The true narrative is that because things became better for the masses between 1945 and 1973/74 the groundwork for reaction and for things becoming worse was set in motion. Class wars are a forbidden topic in American civil discourse because the commentariat likes to propagate the illusion of American mythology. It is inconvenient to realize that the land of the free was built upon slavery. Or that the land of opportunity has been foreclosed by the impenetrable barrier of inequality. Or that the global aspirations of its oligarchs take preference over the more domestic considerations of the majority of voters. So the overt class war that began with Reagan’s ascent to power had to be couched in mystery and the vague self-serving verbiage of empire. The middle class was made to feel better even as its reality became worse.

In this light, Reagan was not the solution, but the problem. Things started to get worse, not better. Ganesh’s history is upside down.

The irony being that Reagan’s legacy is now being questioned and undone by his own party. Trump represents, perhaps, the beginning of a very long ending to the Reagan era. His rise to power is simply the open revelation of the corruption of the Reagan effort to suppress the middle class and to undermine democracy. It is the overt public admission of oligarchic desire wrapped as populist uprising. It is the logical end of a period of decline for middling America, and the logical apogee of the reactionary seizure of power by the wealthy to end that history of opportunity for average Americans.

Things are poised to change.

Perhaps.

The problem being that deficiency of alternatives I mentioned earlier. The surrender by the middle class to the false allure of neoliberalism will take a while to correct. We already know that a swathe of voters are rejecting the status quo — they voted for Trump. Our problem is that the Democrats have become the party of the establishment — they are no longer progressive, but are exclusionary and protective of the economic status quo even while they profess opposition to the social status quo. Until that contradiction is resolved by a reversion to a broader appeal to class rather than identity, our oligarchs will revel in their ability to divide and rule.

To resolve that contradiction we need to uncouple democracy from capitalism. By which I mean that we need to stop using the Cold War conflation of the two into one harmonious whole. It has become a lazy commonplace for our commentariat to slide with ease from “the market” to “democracy” as if the two were comfortable together. Trevor Jackson, in his review of Martin Wolf’s book “The Crisis of Democratic Capitalism” in the latest edition of The New York review of Books, draws our attention to this sleight of hand. Proponents of capitalism like Wolf prefer to avoid the prospect of the conflict that it has with modern democracy. So Wolf can say with equanimity “market capitalism demanded a more egalitarian politics” thereby suggesting that it was capitalism that opened a benign door to the rise of democracy. After all apparently it “demanded” egalitarian politics. This is absurd. It is revisionist history. It is ignorant. And it is a deliberate attempt at sabotage. Modern democracy emerged despite, not because of, encouragement from capitalism. It was carved out from the grip of privilege and fierce opposition. Democracy is the antidote to capitalism. It is an attempt by the masses to seize a place at the table of wealth generation. It is an overt effort to correct the flaws in distribution that are the inherent in any market activity. Which is why people like Wolf, who conflate the two into a happy but unholy bundle, like to avoid ugly conversations about disagreements over distribution being a root cause of democracy. They prefer the more acceptable patrician view that the elites and oligarchs generously opened the doors to power sharing out of the moral goodness of their hearts.

This inability to understand history is also why people like both Ganesh and Wolf cannot contribute to resolving contemporary problems. They are blind to their root causes. The Reagan reaction was an attempt to undo democracy in order to set capitalism free from the constraints that the democratically elected state had placed on it. Make that clear, and the corrective action also becomes clear: re-establish democracy as the necessary balance to unfettered market activity with its inevitable concentration of power of corruption of civil society. That, in turn, implies re-equipping the state to do battle with the oligarchs. This restoration of democracy will be a long term and difficult project. It will have to include changes in the elite and commentariat. Only then, to update Fukuyama, can history begin again.

Which is why 2025 should be such an interesting year. Is it a beginning or an end? Will the oligarchs lord it over us more overtly? Will their aspirations run into the far-right nativism that provides such energy to the Trump coalition?

There is an odd feeling in the air. The illusion is deflating. But elements still exist — the stock market pretends not to see or hear the potential contradictions in Trump’s economic policies. Complacency lurks to overturn everything. And abroad America is in retreat, but it is a retreat dressed as an assertive “America First”. The naivety of several decades of illusion have bred a blindness to the reality that non-American nations possess power and influence too. American foreign policy leadership is as deluded as its economic leadership.

In the run-up to this recent election many of my friends were concerned about the imminent loss of democracy. Trump, they feared, has autocratic tendencies. I was never that concerned. Democracy, I tried to explain, had long been diminished in America. The oligarchs and big business ran the show. The only difference that Trump might make, I said, was that he would be overt about it. So it has turned out: his administration is littered with billionaires who donated generously to his election. The assemblage is riven through with historic levels of conflicts of interest and potential opportunities for corruption. Our oligarchs are now shameless because we have been reduced to ineffective spectators by decades of illusion and self-delusion.

So.

Yes, it will be an. Interesting year.