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Black Swan Blues

Trump/Brexit weren't really "black swan events". That's what is terrifying.

24/11/2016 05:57 SAST
Vadven
Riot Police make testudo formation (tortoise formation) from riot shields.
I was as surprised by the Brexit vote and the election of Donald Trump as anyone, but neither was, as some suggested, a 'black swan event'. They were rather foreseeable, though apparently low probability, outcomes that many of us failed to anticipate.

It's natural to want to rationalise away our lack of foresight, to blame the inscrutable mysteries of complex systems rather than our own poor political judgement. But what if good explanations exist and we choose not to see them? What does that tell us?

After the Brexit vote, the liberal commentariat threw up its hands and said, ah, well, we just can't trust experts anymore. It was the rhetorical equivalent of ¯\_(ツ)_/¯.

This drive to deny the very possibility of knowledge is not innocent, or at least is no accident. There is plenty of work that both explains and anticipates the general turbulence that is a necessary condition of the current political shock.

Some of this work is firmly by thinkers on the left. Marxists Robert Brenner warning of unsustainable 'asset price Keynesianism' or Neil Davidson on the tendency to crisis built into capitalism. Immanuel Wallerstein has warned for decades that we are transitioning from one world system to another, with uncertain consequences. Sociologist Wolfgang Streeck's forensic analysis of how the neoliberal turn affected state sovereignty relative to global markets is invaluable for understanding the economic crises of the European Union and beyond.

But there is also an abundance of research by respectable economists, working at elite institutions, using the standard techniques of the economics profession, that, had we considered it closely, would have prepared us for the political shockwaves to come. Not least, the investigations into global inequality by scholars such as Dani Rodrik, James Galbraith and Branko Milanovic. Milanovic's 'elephant chart', for example, is a famously lucid illustration of the unequal distribution of globalisation's benefits, and how net gains to a national economy don't necessarily translate into wellbeing for all its citizens.

I don't mean to suggest that the new thinking on inequality is exhaustive or incontrovertible, or even that these economists themselves would accept my interpretation of the political significance of their work. Rather, for those who have taken inequality studies and critical examinations of globalisation's effects on ordinary people, political turbulence as such is expected.

No less important, these economists' technical language speaks back directly to the counterposing suggestions that inequality and precarity just are necessary features of the growth-driven policies that make the world a better place.

When Thomas Piketty suggested, in his 2015 Nelson Mandela Annual Lecture, that chronic inequality may itself be hindering growth, rather than it simply being the case that a lack of growth entrenches poverty, the response of big business was telling. Surveyed by the Financial Mail, South Africa's CEOs rejected Piketty's call for a wealth tax on the question-begging grounds of its obvious wrongness. "The real answer is self-evident," insisted Christo Wiese, "and that's to do everything in our power to create growth in the economy." Never mind that the self-evidence of the proposition is precisely what was being contested.

The confidence of those pronouncements, not all that long after the the 2008 financial crisis, was surprising, but perhaps not as surprising as how how resilient the institutions of economic orthodoxy have proven to be.

The populist energies driving Brexit and the Donald Trump presidency are harder to explain away.

What exactly drove voters in Britain and the United States? To what extent were they driven by economic insecurity or by racism or xenophobia or, in choosing to vote against Hillary Clinton, misogyny? What, precisely, underlies the surging popularity of Marine Le Pen in France or Geert Wilders in the Netherlands?

What exactly drove voters in Britain and the United States? To what extent were they driven by economic insecurity or by racism or xenophobia or, in choosing to vote against Hillary Clinton, misogyny? What, precisely, underlies the surging popularity of Marine Le Pen in France or Geert Wilders in the Netherlands? The answers are contestable, just as the specific outcomes are surprising. But if we look at the present conjunction as a conjunction, rather than as a series of disparate phenomena, it becomes clear that we possess a rich body of theoretical and empirical scholarship that renders the present turmoil neither inexplicable nor surprising.

The case that there is no alternative to pro-growth liberalised market-orientated economic policies used to rest on denying respectability to heterodox economic ideas.

However, we now find ourselves in a reality that, given the neoliberal hypothesis, shouldn't be happening. It is also one that is entirely unsurprising given any number of heterodox hypotheses about crisis, inequality and economic instability. Given the choice between denying orthodoxy or denying a reality that contradicts that hypothesis, apologists for the status quo have chosen the latter option. The real world, the one we can see outside our windows, of sweatshops and deindustrialisation and chronic precarity, the world in which political norms and social restraints break down, and we might not be so surprised after all when ordinary people vote for demagogues and fascists, that world doesn't exist. Instead, all we have is mystery and confusion. How strange that it's now easier to imagine that the world has already ended than to imagine the end of neoliberalism.

The lesson for South Africans should be clear. Complacently, we lurch from crisis to crisis, satisfied to stem the tide rather than seriously address the conditions that give rise to crises. You may not accept our choice is between socialism or barbarism, but be warned that our options are economic reform or an uncontainable populism you probably won't like.