American blue collar workers are angry (The Times); Martin Wolf adds a growing and widespread sense that ‘elites are corrupt, complacent and incompetent’
Today the Times interprets unusual polling results in the United States. Like many American media commentators, it predicts that “blue-collar workers who are worried about the effects of globalisation on American jobs promise to shape the November election”.
In the Financial Times, analyst/economist Martin Wolf expresses a belief that the ‘native working class’ are seduced by the siren song of politicians who combine the nativism of the hard right, the statism of the hard left and the authoritarianism of both.
’A plague on both your houses’?
He writes: “The projects of the rightwing elite have long been low marginal tax rates, liberal immigration, globalisation, curbs on costly “entitlement programmes”, deregulated labour markets and maximisation of shareholder value. The projects of the leftwing elite have been liberal immigration (again), multiculturalism, secularism, diversity, choice on abortion, and racial and gender equality . . . As a recent OECD note points out, inequality has risen substantially in most of its members in recent decades. The top 1% have enjoyed particularly large increases in shares of total pre-tax income”.
David Cameron responds to church leaders’ attacks by saying that the reforms are part of a moral mission
Wolf continues: “In the process, elites have become detached from domestic loyalties and concerns, forming instead a global super-elite. It is not hard to see why ordinary people, notably native-born men, are alienated. They are losers, at least relatively; they do not share equally in the gains. They feel used and abused. After the financial crisis and slow recovery in standards of living, they see elites as incompetent and predatory. The surprise is not that many are angry but that so many are not”.
Wolf sees the electorate turning to ‘outsiders’ to clean up the system in Britain, the US and many European countries and advises ‘the centre’ how to respond:
- People need to feel their concerns will be taken into account, that they and their children enjoy the prospect of a better life and that they will continue to have a measure of economic security.
- They need once again to trust the competence and decency of economic and political elites.
- Disruptive mass immigration needs to be brought under control; refugees must now be the priority.
- There must be a fundamental questioning of its austerity-oriented macroeconomic doctrines: real aggregate demand is substantially lower than in early 2008.
- The financial sector needs to be curbed. It is ever clearer that the vast expansion of financial activity has not brought commensurate improvements in economic performance. But it has facilitated an immense transfer of wealth.
- Taxation must be made fairer. Owners of capital, the most successful managers of capital and some dominant companies enjoy remarkably lightly taxed gains.
- The doctrine of shareholder primacy needs to be challenged. With their risks capped, their control rights should be practically curbed in favour of those more exposed to the risks in the company, such as long-serving employees.
- And, finally, the role of money in politics needs to be securely contained.
Wolf concludes pragmatically: “western polities are subject to increasing stresses. Large numbers of the people feel disrespected and dispossessed. This can no longer be ignored”.
Self interest rules OK! The threat to the status quo is paramount – the ethical dimension totally ignored.