Some stream of consciousness ranting about liberal ‘elites’ stumbling like a baby giraffe when it comes to blue collar workers shooting themselves in the foot.

So Brexit happened. It was traumatic for anybody who both accepts the inevitably of globalisation and also wants to help the disadvantaged. Then Australia elected Pauline Hanson. Dear God.

The reaction of liberals (in both the American and British sense) has mostly fallen into two camps depending on whether they are a smug liberal or an earnest liberal:

1.       Geeze these unemployed blue-collar types are retarded. Don’t they know what’s good for them? We are so holy even though we aren’t actually doing anything for poor people except gentrifying their neighbourhoods and erecting anti-homeless infrastructure.

2.       We must be trapped in an ‘elite’ bubble. We need to go and talk to poor people and listen to their concerns!

The first attitude is obviously just pathetic and is brilliantly lampooned by edgy white liberal on facebook. The second is a nicer sentiment (overlooking the fact that these people are invariably not elite) but overlooks what I think is the biggest problem at the heart of Brexit. Actual ‘Liberal Elites’ have been speaking to the disadvantaged formerly middle-class manufacturing now lower-class dying in droves from crack and ice class for decades (at least since the time of Thatcher’s reforms in the UK). The anthropology, sociology and economics volumes could fill a bookstore. Bowling Alone was published in 2000! Liberal Elites understand the feelings. The problem, and this is the big problem, is that they don’t know what to do about it.

NOBODY DOES.

The great conceit of the further left at the moment is this attitude that they are deeply in touch with those of the blue collar and know what to do, which invariably involves some return to the kind of 19^th century thinking about tariffs, public ownership and industrial policy that is working so catastrophically in France right now and which has kept India a backwater even has China lifted a billion people out of poverty using markets. What I call 19^th century socialism is a terrible idea and should have died with the Soviet Union.  

On the right they don’t even bother having a narrative. That’s the terrifying beauty of Trump. He just talks garbage. As Davies described it: ‘he invites people to participate in a collective hallucination’.

More reasonable right-wingers’ solution is what it has always been: you just need to make markets even more efficient, maybe sprinkle in a bit more community if necessary. The fact that markets do not result in equitable distributions doesn’t even seem to register as a consideration despite inequality being an undeniable driver of the contemporary chaos.  

But of course people say to me: ‘how can you say that free markets have been good right as Brexit blows up and the working class has so evidently given up on the future that they don’t even care that they just cut off their nose to spit their face?’

I can say it because in Scandinavia, Canada and Australia we’ve got an approach that I like to call post-socialist progressivism in public policy that is mature and accepting of the overwhelming empirical evidence when it comes to the sense of markets but has also  figured out ways retain redistribution and mobility. In the US and UK, Reagan and Thatcher executed a right-wing, libertarian agenda to massively open up and extend markets. They did a lot of good. But because they didn’t give a rat’s arse about people’s ability to weather bumps in market activity they also traumatised the working class. Canada, Scandinavia and Australia effected similar structural adjustments but under more compassionate administrations that ensured the primary value guiding structural adjustment was helping everyone. If you want an example have a Google of Denmark’s flexicurity approach to the labour market. Sublime stuff.

The reason why you don’t hear more about this hybrid market-government approach to maintaining efficiency and equity is that this approach is very much in its paradigmatic infancy and even the brightest minds on the planet have trouble articulating it, to each other no less. So of course there is a failure to communicate with the public. Politicians are also much better served by appealing to people’s moral intuitionist biases than trying to articulate a notion that takes a professor a page just to sketch, so why would they bother.  

The failure to communicate is compounded by the fact that globalisation and technological change is so fast that by the time we’ve got a handle on a phenomenon the ground of the entire planet has shifted under us. An example:  we are just now starting to understand production fragmentation (the industrial revolution that lies behind the offshoring of jobs). We can’t respond to the general equilibrium effects of offshoring if we don’t understand the causal mechanisms in offshoring itself. We’re starting to get there now (see here for example), but things are still so opaque it makes systemic reform of a tax code look like an afternoon’s work. What’s worse, there’s no telling whether we will solve things before someone worse than trump starts WWIII. The pace of change in comparative advantage is ridiculously fast right now. Less than a generation ago people could reasonably expect to do the same job for a lifetime. Now a generation would be insane to expect less than three instances of re-training, especially if they aren’t members of the knowledge class. The entire education infrastructure needs to change to handle this new environment. Even if our intellectual classes can roll with these punches, well-meaning politicians absolutely can’t, and this leaves the breach open for demagogue idiots who don’t care about facts, logical consistency or having actual policy ideas to charge through.  

I’m just going to start acting like I'm summing up because the way I’m ranting this will take at least another page.

1.       This isn’t a failure of elites to understand poor people or to design policies with them in mind. The academy is positively boiling with that sort of stuff at the moment. It’s a failure of politicians to campaign on policies instead of ideology, pork and lies. Many would say that this is because people only respond to ideology, pork and lies. Bullshit. That might be true in America and the UK but it ain’t true here. The proof is in the success of the Hawke and Keating governments and the staggering popularity of Turnbull in the first weeks following the coup. All he said was ‘things are complex but I have a plan. It involves balance between markets and governments to ensure jobs and a welfare system’ (the last two Quarterly Essays by Tingle and Megalogenis are both on this issue). Trudeau is rocking the same approach. Most politicians can’t do policy because politics is not the same skill set as government, and because ideologues are attracted to politics not governors. Scandinavia has weathered the transition to more technocracy better than anywhere else because multi-party coalition obviates against the ability of party B to get into power simply because people hate party A. In the two-party system, neither party really needs to change its ways because they will get in eventually.

2.       The reality of modern policy is that it can only be understood by very smart people willing to admit that their preconceptions were wrong and good policy comes not from the application of ideology but the suspension of ideology. Every time I hear a social democrat say that ‘we need to think deeply about what social democracy means’ I want to strangle them. We’re not moving towards an idealised society—we’re taking one problem at a time, one policy at a time. You don’t need to articulate values: ‘as much efficiency as possible so we can have as much equity as possible’ will do. You need to learn all the mind-numbing technical skills required to derive efficiency and equity from policy design. Slavoj Zizek’s values are honed like a Japanese sushi knife but he wouldn’t know where to start designing a carbon trading platform so that it not only reduces carbon but also costs as little as possible so there is money left over to house the homeless.

3.       Lots of very smart people feel like neoliberalism (i.e. structural reform towards markets) has run its course and now we’re at a cross-roads. I hate the term neoliberalism because what Reagan and Thatcher did is so different from what Australia/Canada/Scandinavia did, despite some similarities, that lumping them all in to neoliberalism just confuses everyone. In any case, we certainly need a new paradigm to guide thinking. But most people are looking in all the wrong places, perhaps because they lack the knowledge, skills and grit to look in the right place. The left needs to stop excavating Marx and embrace all the new information coming out of Hawke-Keating and the Scandoes because that’s where the answer lies. Historically, ideology has always preceded policy. Now the world moves so fast that policy is preceding ideology. The policies of these progressive market economies provide the fruit from which to drain the juice of a new paradigm for what ‘progressive’ means. Hint: markets will be a huge part of it—maximum efficiency so that we can have maximum equity.  

4.       Globalisation is happening and it can’t be stopped. People can’t deal with globalisation. Even technocrats can’t deal with it. The day after Brexit the thought I couldn’t get out of my head was a quote from the end of the original Deus Ex. The protagonist (you) is confronted with a choice. You can merge with an AI that is plugged in to everything on the planet. It is implied that you will be a benevolent dictator, but anyone with an education should doubt that. You can blow up the AI. Or you can blow up the AI and the entire internet. A rebel leader who favours option © says: ‘government on a level comprehensible to its people’. That’s obviously ideal, but in the presence of globalisation, that sort of government is impossible, and power will either have to be given to international bodies or to massive international corporations. Again, elites get this. This isn’t about talking more to poor people or being more sympathetic. Unlike left-wing comedians, policymakers are as sympathetic as fuck. The world’s intellectual circles are in a feverish panic about automation and the like. This isn’t about values, or respecting all of humanity, or right-wing people being idiots.

It’s about the world moving faster than our ability to even understand it, let alone steer it. That’s why it’s so terrifying.