Relay race for the west

Wealth inequality in our countries is on the rise, and population’s discontent is generating populism, which ultimately poses a threat to the very existence of our democracies.

Right wing populists so far took political advantage of this situation: it seems incredible that they understood and reacted first to what was happening… neoliberalism was their creature after all, but it’s about to die.

While the reputation of long forbidden words such as Socialism gets slowly repolished and readied to return in fashion, it’s becoming clear that right wing parties cannot take us to the next phase of our history alone: leftists must be onboard too.

I explained in a previous post why Neoliberalism is in our past: in-country wealth inequality needs to be lowered steeply if we don’t want to risk civil wars in the coming decade.
Civil unrests are already on the rise today: think of Gillet Janues in France, separatists in Spain, Extinction Rebellion in UK.
And if that wasn’t enough, fears for a steep increase in disoccupation and a coming financial crisis’, are looking more and more justified too.

The only way to lower wealth inequality is -tautologically- redistribute wealth more equally, and in the context of a capitalist economy wealth redistribution is the exact opposite of neoliberalism; hence the demise.

So far we are only at the preliminary phase of a post-neoliberalist era.
We saw the beginning of trade wars and countries building new walls, physical and economical, to protect themselves from intruders.
I saw in this phase the beginning of deglobalization: it’s a clear inversion from the previous globalist approach. This is under everyone’s eyes: it already started, and it will continue to evolve for a few decades.

What we haven’t seen much of yet, is the inversion of another trend: countries have done nothing to change the liberalist approach to commerce.
This is the second phase, and make no mistake, it is something that won’t begin until the leftists are ready to do their part.

Raising taxes for large companies and capitals is not a job that reflects credo and traditions of the right wing: the best we can expect from there is some sort of nationalist approach to protect the country’s economy: import taxes (or “trade war”) are exactly that, but they ultimately impact the cost of goods -and therefore the consumers- more than they impact companies.

To fully embrace the second phase we need the leftists ready to take advantage of the shield offered by import taxes and protectionism.
To be fair they are doing more than just that: they are making a plan of their own to continue strengthen that shield: a Green New Deal!

A Green New Deal -for the purpose of this article- is an organic set of environmentally friendly policies carrying the side effect of strengthening protectionism. For example taxes on transportation facilitate local producers, and coincidentally those are the first rules that are being discussed.

When that shield will be strong enough, finally we’ll be able to redistribute wealth in pretty much the only way we know how to: raising taxes for the rich to pay services for the poor. This is Keynes economics baby, and it worked like a charm already after WW2, until the 70s or so.

The idea for this post came in January while writing Thanking Neoliberalism, I knew a Neo-Keynesian period was coming, but I also knew the right wing alone could not deliver it. Now that the whole political spectrum seems onboard, a new wave of keynesian politics seems inescapably part of our future.

As I wrote back then, while there is a lot to rejoice about -I am thinking to our in-country wealth inequality for example-, we should not forget that the last 4 decades of globalization lowered enormously a different type of wealth inequality: cross-border.
That is: the working class in the first world countries is -yes- a little worse off, but conditions in the rest of the world improved in the meanwhile.

Going back to a logic of trade wars and protectionism is surely not going to do much to improve our global relationships, and sadly we can expect the term cold war to go back in fashion in many different variants.

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