As multiple globalized crises simultaneously crash in on each other, does dystopia become inevitable? In his new book, Escaping Dystopia: Rebuilding a Public Domain, McMaster University Professor Stephen McBride argues that we can escape dystopia by pointing to the contemporary relevance of democratic socialism, embedded in a close analysis of the multiple overlapping crises of neoliberalism. A radical transformation of these institutions is needed to stop multiple crises from sending us to complete disaster.

McBride's starting point is to argue that the simultaneous crises we face today, from rising inequality to the climate crisis, to COVID and economic instability, are rooted in and exacerbated by neoliberal ideology and institutions. Neoliberalism cannot simply be solved through reformist measures. Escaping Dystopia documents the rise of populist and anti-system politics in the advanced capitalist economies, and the serious threats they pose to the norms of liberal democracy. McBride judges that traditional social democracy is also complicit in weakening democracy, thanks to its reformist embrace of neoliberal policies since the 1980s and growing disconnection from the working-class.

The nation-state, however, remains absolutely central to politics. McBride argues that the neoliberal state constructed an international order to protect capital against democracy, but also this cannot be reformed without a major progressive political shift within nation-states. 

Rather than dreaming of a global alternative, the left must take a leaf from the populist right (while rejecting cultural nationalism) in calling for the restoration and exercise of political power at the level of the nation-state. One way to push back against neoliberal decay, for example, is to limit the constraints on national economic policy imposed by corporate interests through international trade and investment agreements. 

McBride argues forcefully that the solidly entrenched neoliberal order has manifestly failed to live up to its promises of shared prosperity and has lost legitimacy after the global financial crisis. It has failed to deal with rising inequality, increasing insecurity, and the climate crisis after decades of stagnation. While we have seen some well-intentioned, modest proposals for reform, such as subsidies to green industries and calls for a stakeholder format of capitalism, the fact is that fiscal austerity, low taxes, and weak regulations remain in the current paradigm.

After imposing neoliberal reform to national economic and political institutions, no government was prepared to seriously redress the imbalance of power between labour and capital, or challenge control of investment by banks and private finance. States could not seriously equalize income and wealth inequality through major tax reforms while serving the interests of capital.

Ultimately, reforms flounder because of the entrenched political and economic power of capital combined with the weakness of serious alternatives. The capitulation of the traditional left to neoliberal ideas is seen a serious barrier to systemic change.

In the most important chapter entitled “Radical Transformation,” McBride argues for control of capital while expanding the public domain and related policies which he embeds squarely in the democratic socialist tradition. To escape dystopia, he calls for stronger controls on international flows of capital, controls on private investment through public ownership of banks, democratic control over the “commanding heights of the economy” such as public utilities, natural resources, and manufacturing industries, and serious redistribution of wealth.

Massive state intervention is needed to shape investment that can meet human needs, rather than maximize profits and returns to capital. Economic planning and socialized investment are necessary to address the climate crisis, economic instability, and to close huge gaps in wealth that currently exist between the richest and the poorest.

Escaping Dystopia can and should be seen as a major re-statement of the case for democratic socialism today, drawing heavily on the state socialism model of the 1930s and 1940s which inspired the post-War Labour government in the United Kingdom, and the Co-operative Commonwealth Federation in Canada. However, McBride advances some proposals to make the expanded public sector accountable to the wider society, including labour and communities. He also specifies some needed reforms to democratize political institutions.

As an aside, McBride suggests that Keynes worked to save capitalism from itself, prolonging its life through modest reform. Yet Keynes himself (see James Crotty, Keynes Against Capitalism) called for massive socialization of the investment process, the euthanasia of the rentier class, and capital controls at the international level sufficient to give national governments control of their economic destiny. Whether or not Keynes’ intentions were to prolong or end capitalism, what is demonstrated is that institutional change is necessary for a radical Great Transformation.

McBride's book is much richer than this brief summary suggests, but his argument is underdeveloped when it comes to agency. The author certainly recognizes the important linkages between the labour movement and democratic socialism in the past, and the political consequences of the decline of unions since the 1970s and 80s. However, McBride has had little to say on how to build a new labour movement committed to a democratic workplace and socialist politics, or on how to change existing social democratic parties from within.

That said, this book needs to be read and debated by anyone interested in how to move beyond neoliberal dystopia.

Stephen McBride is Professor and Canada Research Chair in Public Policy and Globalization at McMaster University. His research deals with issues of comparative public policy, globalization and political economy.

Escaping Dystopia: Rebuilding a Public Domain by Stephen McBride is now available from Bristol University Press.

The borders of history as an academic discipline have broadened to include the very recent past. Drawing upon the insights of political economy and critical theory, contemporary historians such as Gary Gerstle are well equipped to provide us with a narrative and analytical framework that helps make sense of the current crisis of neoliberalism in the United States. 

The broad themes in Gerstle's book are quite familiar. He draws on the concept of a political order in which a particular set of ideas, institutions and partisan alignments become hegemonic until supplanted by an alternative.

The quasi-social democratic, “embedded liberalism” of the New Deal era was built on a mass labour movement, regulation of corporate power and finance, full employment policies, the welfare state and, at the global level, managed national capitalisms. 

Built by FDR and the Democrats in the 1930s,  the fundamentals of this order mapping a third way between socialism and classical small government, pro-market liberalism were watered-down but largely accepted by post-war Republicans including Presidents Eisenhower and Nixon.

The New Deal order gradually gave way from the 1970s to a new liberal or neoliberal order. This was built on an assault on unions and labour standards, deregulation, privatization, “free trade,” “globalization”, fiscal austerity and much enhanced corporate power. 

Since the mid-2000s, the hegemonic neoliberal order has itself entered crisis, driven above all as a political reaction to soaring income and wealth inequality, economic instability, the stagnation or decline of working-class living standards, the marginalization of the poor and racialized minorities, and growing insecurity. 

Politics in both political orders has also been driven by the culture wars pitting nativism, racism, religion and social conservatism on the one hand, against cosmopolitan social liberalism championing individual human rights and a pluralist society on the other. Indeed, identity politics and sharp partisan divisions over issues such as immigration, racial segregation and crime have become even more salient in the neoliberal order due to the convergence of the two major parties on political economic issues. 

Gerstle does, however, note that New Deal liberalism failed to confront racism and segregation until at least the 1960s through LBJ's Great Society program, and that the loyalty of Black people to the Democratic Party has not been reciprocated. Clinton was complicit in the war on crime which led to the mass incarceration of Black men in the 1990s and the attack on welfare which destroyed Black families.

The result of the crisis of the neoliberal political economy has been a major challenge to neoliberalism amidst the rise of authoritarian populism and the ascendancy of Trump as the first post neoliberal President. Trump has put “America First” in rejecting liberal globalization, and has attacked liberal democratic norms and institutions once largely accepted by the Republican Party.

Gerstle argues that the well-worn narrative of neoliberalism being the product of a resurgence of right-wing think tanks and ideology, the take-over of the Republican Party by the radical right and the insidious political influence of the top 1% is somewhat misleading. He also questions the idea that US politics are characterized by deep partisan polarization.

He argues that there was, in fact, a near-consensus from the 1980s between the two major parties when it came to neoliberalism as a political economy framework and policy agenda. Indeed, he judges that Clinton was at least as much the architect of American neoliberalism as Reagan, just as Tony Blair in the UK embraced the agenda of Margaret Thatcher, emphasizing that there was no alternative.

The Democratic Leadership Council and the self-styled Atari Democrats avidly embraced the emerging high tech so-called knowledge-based economy, building close links to Silicon Valley, Wall Street and thriving metropolitan centres. They called for “expanding opportunity” rather than “big government” which, they argued, should play only a modest supporting role to the “wealth creators.”

 “The Democrats were more interested in building America's high-tech prowess than in saving declining industries. They talked about the importance of innovation and international trade and were impatient with labour unions insisting on protectionism and job security.” Defence of union and labour rights fell by the wayside as far back as the Carter Presidency which also championed deregulation and smaller government before the election of Ronald Reagan.

Clinton's economic team included leading Wall Street figures such as Robert Rubin and neoliberal economists such as Larry Summers who espoused fiscal austerity and, most fatefully, financial deregulation. The Clinton government set the stage for the rise and collapse of a housing bubble which almost sank global finance and pushed millions of Americans out of their homes. 

Similarly beholden to Wall Street, the Obama Administration, led by the former Clinton team, stepped in to save the banks but failed to secure a real recovery for ordinary working families, once the key constituency of the  Democratic Party.

Clinton also embraced deregulated global capitalism through trade and investment deals like NAFTA; pulled the plug on welfare mainly at the expanse of Black families; supported the mass incarceration of Black men; and promoted mere band-aids such as charter schools and school vouchers to deal with the exclusion of many working Americans from prosperity while stigmatizing the underclass. 

In doing so, the neoliberal Democrats paved the way for the rise of Trump who cracked open the New Deal electoral coalition, denounced corporate elites (while still serving up rich tax cuts); blamed America's woes on globalization and immigrants, frontally attacked the liberal-democratic consensus, and managed to retain the support of mainstream Republican social conservatives. 

Gerstle also argues that the stage was set for neoliberal dominance by the collapse of Communism. This view is probably exaggerated. Communism had long ceased to be a political force in American life by the 1980s, and the New Left of the 1960s and 1970s was not much of an influence in the labour movement or in working class communities. It lacked a coherent economic program and bears some blame for the focus of the neoliberal Democrats on the culture wars, individualism and identity politics.  

Thus there was a “decline in the very ability to imagine organizing a world on something other than capitalist principles.” 

Gerstle does note the return of democratic socialism to American political life in the Sanders campaign, and the limited influence the left has on the Biden administration. But he seems to fear that Trumpism may become entrenched as we are condemned to live amidst the ruins of neoliberalism.

This book should certainly be read by those interested in American politics. Canadians might also well reflect on to what extent our dominant centre party, the Liberals, has embraced the neoliberal creed and set itself up for a major challenge from the authoritarian right. 

Andrew Jackson is senior policy adviser at the Broadbent Institute.

On July 13^th, the Bank of Canada began to tighten monetary policy, arguing that the economy would be operating at full capacity by the end of this year. This action was guided more by the economic dogma of a “natural” unemployment rate crafted by Milton Friedman back in the 1970s than by hard evidence of a looming increase in inflation. 

Donald Trump’s ascension to the US presidency is being hailed by some as the end of globalization as we have come to know it in the last four decades. Others see in Trump’s electoral victory the end of neoliberal economic policy, which promoted free trade and free markets, and limited the scope of government. But German sociologist Wolfgang Streeck discerns in the demise both of globalization and neoliberalism the end of capitalism itself, at least the variety of capitalism that exists in North America and Western Europe.

After enduring well over a decade of broken promises, the prospects for publicly-funded child care in Canada looked good in the autumn of 2005.

The Paul Martin government proposed to create thousands of new day-care spaces and had also negotiated deals with most provinces and territories to turn a patch-work of often poor-quality services into a system of early learning and child care with national standards.