Newspaper article International New York Times

Where Does Capitalism Go Now?

Newspaper article International New York Times

Where Does Capitalism Go Now?

Article excerpt

The "Brexit" vote was driven by a sense among older white workers that they have been passed over. The same frustration fuels the candidacy of Donald Trump.

Donald J. Trump and Boris Johnson: Is this how the era ushered in by Ronald Reagan and Margaret Thatcher finally ends?

It once looked as though the financial crisis of 2008 might even bring about the end of laissez-faire economics. "The idea of an all- powerful market which is always right is finished," declared Nicolas Sarkozy, then the president of France. And Peer Steinbruck, Germany's finance minister at the time, predicted that "the U.S. will lose its status as the superpower of the world financial system."

Even Alan Greenspan, the former Fed chairman once known as the maestro of capitalism, declared himself "in a state of shocked disbelief" at the collapse wrought by the unfettered markets he had championed throughout his life. "I've found a flaw," he said. "I've been very distressed by that fact."

But I suspect few would have guessed that the economic order built upon Mr. Reagan's and Mrs. Thatcher's common faith in unfettered global markets (and largely accepted by their more liberal successors, Bill Clinton and Tony Blair) would be brought down by right-wing populists riding the anger of a working class that has been cast aside in the globalized economy that the two leaders trumpeted 40 years ago.

Britons' vote last week to exit the European Union was not simply about their idiosyncratic distaste for all things European -- an aversion shared by Mrs. Thatcher, who saw Brussels as the kind of meddlesome big government she loathed. Brussels was merely a stand- in for something deeper: the very globalization that Mrs. Thatcher promoted so enthusiastically as Britain's prime minister.

The so-called Brexit vote was driven by an inchoate sense among older white workers with modest education that they have been passed over, condemned by forces beyond their control to an uncertain job for little pay in a world where their livelihoods are challenged not just by cheap Asian workers halfway around the world, but closer to home by waves of immigrants of different faiths and skin tones.

It is the same frustration that has buoyed proto-fascist political parties across Europe. It is the same anger fueling the candidacy of Mr. Trump in the United States.

Across Europe -- in struggling Spain and affluent Sweden, and even in Europe's champion competitor, Germany -- more citizens would like to see powers returned from Brussels to their national governments than would like to see more powers go the other way, according to a poll conducted last spring by the Pew Research Center.

Older people throughout the European Union express nearly as much dissatisfaction as those in Britain's aging industrial heartland who defied the will of the young and voted to leave by a wide margin. Even at the very center of the European project, only 31 percent of the French age 50 and older have a favorable view of the European Union.

Their frustration is turning traditional ideological labels on their heads. Mr. Trump, the bombastic businessman who has never held office, and Mr. Johnson, the former journalist turned mayor of London, might not put it this way, since they continue to cling to a conservative mantle. But they are riding a revolt of the working class against a 40-year project of the political right and its corporate backers that has dominated policy making in the English- speaking world for a generation.

As the conservative National Review gleefully noted, the big "Leave" victories came "deep in the Labour heartland."

So where does capitalism go now? What can replace a consensus built by a charismatic American president and a bull-in-a-china- shop British prime minister in favor of small governments and unrestrained markets around the world? …

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