edward luce
ALEXANDER ZEVIN
A CRITICAL CONFORMIST
One sign that the death of neoliberalism was exaggerated when first reported in 2008 could be found in the reactions of the business press. ‘Crisis, What Crisis? Enough Kerfuffle, It’s Just a Slowdown’ was how Bill Emmott, the Economist’s editor, greeted the news in a Guardian op ed. Five months later, ‘I wasn’t right. But that’s ok’. If denial characterized the response to the onset of the Great Recession, the twin political shocks of Brexit and Trump almost a decade later have had the opposite effect—waves of despair and defiance crashing over commentators, stunned by popular anger at globalization, with a flurry of titles now claiming liberalism, the West, or both, are in crisis. The two moments have a certain dialectical unity about them, on display in the marriage of alarmism and complacency that characterizes Emmott’s 2017 book, The Fate of the West: The Battle to Save the World’s Most Successful Idea, in which he doubles down, calling for a dose of ‘neo-neo liberalism’ to ‘restore and nurture equality’, although with the proviso that this should not be ‘redistributive and material’. Above all, we should refrain from criticizing capitalism, which would be ‘rather like attacking “life”.’
Into this field steps the contrasted figure of Edward Luce, a leading Financial Times columnist, whose Retreat of Western Liberalism strikes a somewhat different note. ‘It was remarkably arrogant to believe the rest of the world would passively adopt our script’ after 1989, Luce writes. ‘Those who still believe in the inevitable triumph of the Western model might ask themselves whether it is faith, rather than facts, that fuels their worldview. We must cast a sceptical eye on what we have learned never to question.’ What was more, the roots of Western liberal democracy’s crisis are economic—Trump and company are a symptom, not a cause. The basis for democracy’s flourishing in the Atlantic world after 1945 was not ‘Western values’, but rising living standards and economic growth. Yet unstoppable economic processes—automation; the age of convergence with China and the rest—will put relentless pressure on wage earners in the years ahead. Globally, Washington’s credentials as the world’s sheriff have been badly damaged by Bush’s pre-emptive wars and are now being trashed by Trump; a declining us is at risk of insecure over-reaction to the rise of China. But it would be a mistake to think all would have been well with Clinton in the White House. ‘The West’s crisis is real, structural and likely to persist’, Luce argues. The Retreat of Western Liberalism aims to provide a clear-eyed account of what has gone wrong, in order to help Western establishments to ‘save liberalism from itself.’
Luce himself comes from the heart of one such establishment—the top drawer of the English political class. A grandfather was Governor of Aden and diplomatic midwife to the United Arab Emirates; a great uncle, First Sea Lord of the Admiralty. His father was a Tory mp from 1974 to 1992, a minister in Thatcher’s government, who went on to serve as Governor of Gibraltar and Lord Chamberlain, on the commission to select the Archbishop of Canterbury in 2012—by then, a Knight Companion of the Order of the Garter. Born in 1968, Luce describes himself here as a pure product of the post-Cold War order. In 1989, cutting his ppe tutorials at Oxford, he fêted its arrival on a road trip to Berlin, where he chipped at the Wall as champagne popped and Wordsworth—and Fukuyama—rang in his head. After a traineeship at the eu Commission he plumped for a career in journalism, which promised more excitement, the ‘wind in my hair and an open road’. From the Guardian, reporting from Geneva, he moved onto the ft, first as its man in Manila, then at the capital-markets desk in London. In 1999 Luce took a break to work as a speechwriter for Clinton’s Treasury Secretary, Lawrence Summers—he marvels in retrospect at the ‘unshakeable self-confidence’ of this high noon of the Washington Consensus.
Rejoining the ft in 2001 after Bush’s victory, he was dispatched to India, to which he devoted his first book, In Spite of the Gods (2007)—its title a nod to Nehru’s more secular vision of development as against a Gandhian spiritual one. Here he departed in some respects from the norm of English admiration for the Congress Party, which India’s former rulers liked to see as a mark of their success. He was lucid about the corrupting effects of Nehru-Gandhian dynasticism on the party, as well as its corruption tout court. He also formed a more sceptical view than he had held in London or Washington of the effects of trade liberalization on a large, poor country. In 2006 he returned to dc as the ft’s bureau chief, in time to cover the Democratic primaries, the rise of the Tea Party and the unfolding financial crisis. The fruits of this were evident in his Time to Start Thinking: America in the Age of Descent (2012), which marked Luce out as one of the more critical voices on the Washington press circuit. Writing from the trough of the recession, he was scathing about the us’s mediocre public-school system and second-world infrastructure, the social devastation of its rustbelt—‘How many Flints can America absorb?’ The sub-prime bubble was only a symptom of growing economic insecurity, the shrinking number of secure manufacturing jobs and the growth of casualized service-sector employment.
Luce expressed grave doubts about Obama’s ability to govern, as opposed to campaign: while bankers had been saved, the downward trend in median wages had accelerated under his Administration. The creed of equal opportunity scarcely had a basis in reality. Obama had made ‘profound tactical errors’ on healthcare, conceding half the battle before it had begun by outsourcing the legislation to Senator Max Baucus, who gutted it of a public option or the ability to negotiate lower drug prices. In 2011 he had abandoned his ‘mini-stimulus’, acquiescing to demands he cut the deficit instead. Here were shades of Paul Krugman’s complaint that Obama was insufficiently Keynesian; for Luce, however, that medicine was not strong enough either. ‘Old social-democratic orthodoxies’—still less appeals to ‘injured national superiority that exist in parts of the heartland’—were unlikely to invert the curve of America’s descent. The deep national tradition of pragmatism might still come to its aid, but this required clear thinking, not (in Tocqueville’s words) the perpetual utterance of self-applause. Against Michelle Obama’s bright vacuities Luce mobilized Barbara Ehrenreich’s Bright-Sided: How the Relentless Promotion of Positive Thinking Has Undermined America. Such views might be unpopular with the electorate—Luce would joke that one reviewer thought his book so depressing that it ought to be called Time to Start Drinking—but denial of us malaise was not a strategy.
Surveying the wreckage five years later, The Retreat of Western Liberalism aims to extend the story beyond us borders and set the decline of ‘the west’ in a global context. The book has four parts, of unequal length. ‘Fusion’, the opening section, surveys the unintended consequences of globalization, ‘Reaction’, their political outcomes; ‘Fallout’, much shorter, covers international relations; ‘Half-Life’, barely twenty pages, addresses what is to be done. Luce foregrounds the rise of China and gleefully cites Hobson’s prescient prediction in Imperialism (1902) as background to Xi Jinping’s defence of globalization at Davos:
China, passing more quickly than other ‘lower races’ through the period of dependence on Western science and Western capital, and quickly assimilating what they have to give, may re-establish her own economic independence, finding out of her own resources the capital and organizing skill required for the machine industries, and . . . launch herself upon the world market as the biggest and most effective competitor.
Meanwhile, globalization has squeezed ‘middle-class’ earnings throughout the West. Luce mobilizes a bevy of economists and sociologists to fill out the standard picture of income growth: meager since 1973, declining from 2002 to 2007, and sharply falling afterwards. For the us, Robert Frank’s ‘toil index’—measuring the number of working hours it takes a median employee to pay the median rent—has risen from 45 hours per month in 1950 to 101 hours in 2016. Luce suggests that standard economic indicators no longer measure these problems—one reason why elites have been slow to react. Inflation hovers at 1 per cent, and the price of consumer goods has dived since 1985. But over the same period, the cost of health care and education has multiplied 600 times. Unemployment has fallen to low single digits since 2014, but almost one-in-five working-age adults is no longer looking, and thus goes uncounted, to the point that a higher share of French males are in full-time employment than American. This leaves them prey to heroin and painkillers like OxyContin, prescriptions of which have quadrupled since the late 1990s, leading to the type of mortality levels that Durkheim associated with a ‘civilizational break’. Job growth since 2008 has come in the informal sector, sucking retirees into the gig economy, to spend their pensionless golden years driving cabs as so-called private contractors. At the same time—Luce cites Branko Milanovic’s famous ‘elephant graph’—elite incomes have soared. Global cities, sucking in wealth and talent from their impoverished hinterlands, now sit ‘like tropical islands surrounded by a sea of resentment’. New York City, treated more as an asset class than a home by its 116 billionaires, lets 34,000 apartments sit vacant amidst a desperate clamour for housing. The pace of gentrification is so relentless that Richard Florida, who in 2002 famously hymned the urban ‘creative class’ as drivers of the new economy, now sees cities like San Francisco as ‘gated communities’ whose creative sparks will fade.
Globalized pressure on wages is matched, in Luce’s account, with the failure of the third technological revolution to produce sustainable income growth. Robert Gordon and Tyler Cowen supply the overall explanatory model for the resulting economic stagnation, attributed to the absence of productivity gains of the kind that powered the West between 1870 and 1970. Luce combines Gordon’s scepticism that iPhones, driverless cars or 3-D printing can do what internal-combustion engines, electricity or chemicals did for overall growth levels with Cowen’s critique of the risk-averse managerial strata in ageing societies. Yet he also worries that they may underestimate the impact of new technology—its ability to accelerate inequality, rather than kick start a new wave of capital accumulation. ‘Initially, I feared Gordon’s pessimism was correct’, he writes, citing the techno-evangelism out of Silicon Valley. ‘Now my fear is that Gordon is wrong.’ While Time to Start Thinking thought higher education and the valorization of knowledge could offer a possible escape route, today, offshoring, automation and artificial intelligence are coming for the jobs of educated professionals in law, medicine, finance and beyond. Already the median entry-level return on a college degree has fallen from $52,000 in 2000 to $46,000 in 2014, while a third of stem graduates do work that requires no such qualifications. At Facebook, one human employee is sufficient to manage 20,000 computers. The implications for spending power are plain. Luce cites Smith’s view in Theory of Moral Sentiments: the happiest condition for the labouring poor is in the progressive state, when a society is advancing to further acquisition, rather than when it has acquired its full complement of riches.
This is the economic baseline that explains the political outcome of 2016, in which every one of the 493 wealthiest counties voted for Clinton and all 2,623 others voted for Trump. Though Luce’s ft column failed to foresee the latter’s victory, he was sharper on the vulnerabilities of the former, going back to 2014, when he mocked ‘Hillaryland’s’ conviction that all she needed to do was ‘tick the right boxes and let demography fix the rest’. ‘Demography-as-destiny groupthink’ inside the Democratic Party leadership was fatally flawed in two ways: first, because census projections of a white-minority country by 2044 were wrong, insofar as most Hispanics reject this appellation, considering themselves to be white; second, as a damaging confession of ‘intellectual poverty’ from an ‘exhausted technocracy’ with no good reason to govern. (Other signs were the 84 campaign slogans Clinton considered, including ‘It’s about you. It’s about time’, enough to make ‘a second-rate advertiser wince’; or her response to the Sanders campaign, whose free public-college tuition proposals she countered with a convoluted $17,500 of debt forgiveness, if graduates became entrepreneurs in disadvantaged neighbourhoods). Not only did Democrats pursue a failed identitarian electoral strategy in 2016—alienating whites, without enthusing minorities—but they continue to do so, compounding one error in order to explain another.
According to Luce, race is less important here than it seems. The success of far-right parties and candidates across the West can be dated to their embrace of the social-safety net, abandoned by the old parties of the centre left, as third-way politicians carried out welfare cuts in the name of modernizing the state and employment. A rise in ‘welfare chauvinism’, not racism per se, was the result. While ukip provides the prime example of how this played out politically, ‘blue-collar whites on both sides of the Atlantic are speaking in the same idiom’. In the 1990s, ukip’s founders explicitly rejected using the word British—tainted by association with the bnp, while Leavers’ claim that leaving the eu would free up £350 million a week for the nhs ‘may have proved critical in tipping the referendum’ for Brexit. In Luce’s telling, multiculturalism was not just a cynical substitute for fraying safety nets, but insult added to injury: ‘established parties were likely to pay a price for writing off whole chunks of their electorates as bigoted’—and self-defeating, with ‘awakened whites’ now revealed as the ‘largest minority’ of all. Their anger, however, expresses something more profound than the rise of a few right-wing populists and will not be satisfied by tightened border controls or other anti-immigrant measures. Rather, they express a disenchantment with democracy, which is the real threat to American hegemony—Luce here inverting Tocqueville, who saw the tendency towards equality of conditions in the us as inevitable, if also prone to a tyrannous conformity. Now, elites whisper about educational tests to limit the influence of the poor and uneducated, who in turn seethe with anger at their rulers. Elites have helped to provoke what they most feared: a popular uprising against globalization.
The Retreat of Western Liberalism sides with Dani Rodrik’s argument: ultimately, economic globalization is incompatible with national democracy. Either democracy must be globalized—but the insulated chambers of the eu show what that can look like in practice—or a degree of national determination must be restored. Luce sides with his former mentor Summers’ call for political elites to adopt a policy of ‘responsible nationalism’, rather than a deeper globalization. Against Thomas Friedman’s image in The Lexus and the Olive Tree, likening the nostrums of the Washington Consensus to a ‘golden straitjacket’—within which ‘your economy grows and your politics shrink’—Luce notes that straitjackets are for lunatics: no wonder Western democracies ‘have begun to lose their minds.’ And while the rise of ‘illiberal democracy’ in Russia, Hungary or the Philippines is troubling, its arrival in the us is different, because of its role ‘as a beacon to the world’ since 1945. Geopolitically, this is all the more dangerous since the rise of China inevitably creates a destabilizing, Thucydidean moment. In ‘Fallout’, the book’s third section, Luce sets out an imaginary scenario for a 2020 Sino-American war, as trade conflicts combine with a flare-up over Taiwan and Chinese challenges to the us’s Asia Pacific primacy. Though Trump’s hubris plays a major role here, the scene was also set by Obama’s ‘pivot to Asia’, based on a ‘fundamentally neoconservative worldview’ and a pessimistic sense that China was showing no signs of democratizing. Now, ‘populist nationalism is staging a comeback just as global cooperation is most desperately needed’.
So searing is the earlier indictment of contemporary America—and of the Davos mindset of ‘global governance’ and ‘multi-stakeholder collaboration’—that one might expect a climactic call to rethink liberalism from bottom up. Instead, Luce rallies to it. The entirely conventional capstone to the book sets out the reforms that will restore us politics as ‘the envy of the world’. In a book that takes elites to task for their complacency towards the lower orders, it is striking that Luce never sees fit to define the words western or liberalism, alone or together, or to tell us why they are superior to the alternatives—actual or potential. The ‘retreat’ of the title turns out to be unimaginable. All that is needed to reverse it are the standard vacuous fixes: vocational upgrades, no offshore tax havens, campaign-finance reform, carbon taxes, healthcare, if certainly no universal basic income; above all a ‘massive Marshall Plan to retrain the middle class’ for skills in a post-automated age. As Luce has explained elsewhere, this could be easily brought off on the model of Denmark, with high job turnover and two weeks’ free training a year for every adult.
The path to these banal, uncritical conclusions is paved by Luce’s perpetual use of euphemisms—‘great leap forward’, ‘economic growth’—to avoid any discussion of capitalism as a system or analysis of its dynamics. Why should rising inequality necessarily go hand in hand with lower growth? Intellectually, no dissenting voice is heard, certainly none to cause ‘Davos man’ discomfort. Summers (‘the smartest guy in the room’) and Fukuyama (‘one of the most subtle, knowledgeable and reflective thinkers alive today’) supply the summit of wisdom—although, as in Time to Start Thinking, many are the inventor, investor, university president or five-star general who sigh in private agreement with the author about the state of things. Politically, the sample set is just as narrow. Despite side glances at Britain, Germany, France and a few other eu members, the us is the part that stands for the whole. ‘Without the us, there is no West’, Luce states in the Afterword, notwithstanding the Atlanticist pleading of Henry Kissinger with which he sets off, that the us, if detached from Europe, would be a lonely ‘island off the coast of Eurasia’. Set against Luce’s breezily simple fixes, Emmott, former Economist editor, is more upfront: the Fate of the West is to remain the West, defined by ‘openness’ and ‘civic equality’, whose real virtues he goes on to name and extol—capitalism, and a mission to keep ‘the barbarians [Russia, China, Iran, North Korea] at the gate’, as noble as any against the Evil Empire of yore.
‘Whatever your remedy to the crisis of liberal democracy’, Luce writes, ‘nothing much is likely to happen unless the West’s elites understand the enormity of what they face’ and ‘emerge from their postmodern Versailles’. Luce never asks the obvious: with elites like these, who needs elites? In his collective portrait, they are venal, selfish, short-sighted and incompetent—flawed enough to merit their postmodern pitchforks. In the end, why should we want to save the West they lead, insofar as that is possible, or mourn its decline, if it is not? Luce himself seems unconcerned that China—the great success of his globalization story, having raised living standards in the world’s most populous state faster than anyone could have predicted—is no democracy. For worried westerners, the issue can be relevant only in terms of its behaviour abroad. On this point, Luce is unequivocal: ‘China has rarely sought to export its model by force or colonize other lands.’ It does not share ‘the West’s missionary impulse’, ‘no longer seeks to export revolution’, and does not attach the same political strings to loans as ‘Bretton Woods competitors’. The record of the pla is likewise more restrained than that of us armed forces: ‘a swift withdrawal’ from Vietnam in 1979; before that, ‘Chinese forces overran Indian resistance’ in 1962 but ‘halted once they reached the line Beijing claimed was the correct border’, adjusted by the colonial power a century earlier. It is hypocritical to attack China for undermining democracy in Hong Kong, when Britain only introduced a dollop of it in the 1990s. Meanwhile, in Luce’s preferred scenario of peaceful Sino-American accommodation, the us would even ‘encourage Taiwan to open its own one-country, two-systems negotiations’ with the mainland, (while staying on in Asia as the ‘swing vote’ for the sake of ‘a regional balance of power’); to grasp what is at stake for China in the Taiwan Straits, just think of Kennedy’s understandable alarm in 1962 at Soviet missiles in Cuba. And yet—he repeats it—‘chaos, not China, is likelier to take America’s place’.
The two halves of this question—why save the west, or fear for the survival of its way of life on account of China—thus become even more difficult to answer. Luce’s citation of Hobson gives us a clue. In his account, Imperialism ‘anticipated the day when a resurgent China would turn the tables’ on the West. In fact, the section Luce draws on says something quite different, with important implications for Luce’s argument. Hobson called this turning-the-table scenario ‘least likely’, since China would need to be roused from ‘the sleep of centuries of peace’ in time to ‘beat back the power of Western civilization’. It was ‘far more reasonable to suppose’ that western capitals would ‘learn the art of combination’ to carve up China, with international finance acting as federative agent. For Hobson, it was naive to imagine that—absent ‘industrial democracy’ or ‘equitable distribution’ of ‘world-wealth’—‘the liberation of these productive forces’ in China would benefit any but a handful of investors, seeking ‘markets for investment, not for trade’, using ‘economies of cheap foreign production to supercede the industries of their own nation, and to maintain the political and economic domination of a class.’
Hobson is therefore at least as relevant for what he had to say about Britain, the leading imperial power of the day, where he posited a theory of under-consumption, in which the maldistribution of wealth at home, seeking outlets for investment abroad, undermined democracy and turned finance into the ‘governor of the imperial engine’. Luce accumulates ample evidence of such tendencies in his own weary titan—the baleful grip of Wall Street on Washington, the overreach of American empire—but declines to follow Hobson in drawing systemic conclusions from their coincidence. The crisis of the ‘middle class’ and ‘our democracies’ is one of economic growth, pur et dur, as if its social distribution were immutable, or without consequence for the rate of growth itself. The effect is to take both the mode and relations of production off the table: here everyone is middle class, even as more and more Americans see themselves as lower or working class; capitalism as such never appears once in the book. In contrast to Hobson, who saw socialism as one way to cut off fuel to the imperial engine and create a workers democracy, Luce disdains the political forces that have made rising inequality their battle cry. Corbyn is dismissed as ‘standing as much for unblinking nostalgia as Trump’, and his supporters are ‘as historically illiterate’ as ‘Trump’s army of “deplorables”’, if ‘less racist’. Luce is scandalized by Corbyn’s call to renationalize the railways, with overwhelming popular support—a measure ‘no sane cost-benefit analysis of Britain’s fiscal outlook’ would recommend. For Luce, the best result in 2017 was Emmanuel Macron’s ‘thumping victory’, a quinquennat that kicked off by slashing taxes on capital gains, cutting student benefits, reducing retirees’ pensions, and attacking railway unions.
In the twentieth century, the most influential narrative of decline belonged to Oswald Spengler, whose title Luce and Emmott reference, while moving in the opposite direction from it. Spengler, of course, scorned liberal intellectuals, advising young Germans ‘to turn from poetry to technology, from painting to the merchant marine, from epistemology to politics’. But in 1918 Spengler was at least clear on what he meant by the downfall of the occident, which is in part why Adorno called his reactionary critique of liberalism ‘superior in many respects to the progressive one’, since it saw in liberal ideals not a false promise, but a fraud. Luce never returns to the Berlin Wall to ask if it was ‘democracy’ that triumphed the day he scrambled atop it. In our age of decline, alas, even the books on decline are in decline.
A CRITICAL CONFORMIST
One sign that the death of neoliberalism was exaggerated when first reported in 2008 could be found in the reactions of the business press. ‘Crisis, What Crisis? Enough Kerfuffle, It’s Just a Slowdown’ was how Bill Emmott, the Economist’s editor, greeted the news in a Guardian op ed. Five months later, ‘I wasn’t right. But that’s ok’. If denial characterized the response to the onset of the Great Recession, the twin political shocks of Brexit and Trump almost a decade later have had the opposite effect—waves of despair and defiance crashing over commentators, stunned by popular anger at globalization, with a flurry of titles now claiming liberalism, the West, or both, are in crisis. The two moments have a certain dialectical unity about them, on display in the marriage of alarmism and complacency that characterizes Emmott’s 2017 book, The Fate of the West: The Battle to Save the World’s Most Successful Idea, in which he doubles down, calling for a dose of ‘neo-neo liberalism’ to ‘restore and nurture equality’, although with the proviso that this should not be ‘redistributive and material’. Above all, we should refrain from criticizing capitalism, which would be ‘rather like attacking “life”.’
Into this field steps the contrasted figure of Edward Luce, a leading Financial Times columnist, whose Retreat of Western Liberalism strikes a somewhat different note. ‘It was remarkably arrogant to believe the rest of the world would passively adopt our script’ after 1989, Luce writes. ‘Those who still believe in the inevitable triumph of the Western model might ask themselves whether it is faith, rather than facts, that fuels their worldview. We must cast a sceptical eye on what we have learned never to question.’ What was more, the roots of Western liberal democracy’s crisis are economic—Trump and company are a symptom, not a cause. The basis for democracy’s flourishing in the Atlantic world after 1945 was not ‘Western values’, but rising living standards and economic growth. Yet unstoppable economic processes—automation; the age of convergence with China and the rest—will put relentless pressure on wage earners in the years ahead. Globally, Washington’s credentials as the world’s sheriff have been badly damaged by Bush’s pre-emptive wars and are now being trashed by Trump; a declining us is at risk of insecure over-reaction to the rise of China. But it would be a mistake to think all would have been well with Clinton in the White House. ‘The West’s crisis is real, structural and likely to persist’, Luce argues. The Retreat of Western Liberalism aims to provide a clear-eyed account of what has gone wrong, in order to help Western establishments to ‘save liberalism from itself.’
Luce himself comes from the heart of one such establishment—the top drawer of the English political class. A grandfather was Governor of Aden and diplomatic midwife to the United Arab Emirates; a great uncle, First Sea Lord of the Admiralty. His father was a Tory mp from 1974 to 1992, a minister in Thatcher’s government, who went on to serve as Governor of Gibraltar and Lord Chamberlain, on the commission to select the Archbishop of Canterbury in 2012—by then, a Knight Companion of the Order of the Garter. Born in 1968, Luce describes himself here as a pure product of the post-Cold War order. In 1989, cutting his ppe tutorials at Oxford, he fêted its arrival on a road trip to Berlin, where he chipped at the Wall as champagne popped and Wordsworth—and Fukuyama—rang in his head. After a traineeship at the eu Commission he plumped for a career in journalism, which promised more excitement, the ‘wind in my hair and an open road’. From the Guardian, reporting from Geneva, he moved onto the ft, first as its man in Manila, then at the capital-markets desk in London. In 1999 Luce took a break to work as a speechwriter for Clinton’s Treasury Secretary, Lawrence Summers—he marvels in retrospect at the ‘unshakeable self-confidence’ of this high noon of the Washington Consensus.
Rejoining the ft in 2001 after Bush’s victory, he was dispatched to India, to which he devoted his first book, In Spite of the Gods (2007)—its title a nod to Nehru’s more secular vision of development as against a Gandhian spiritual one. Here he departed in some respects from the norm of English admiration for the Congress Party, which India’s former rulers liked to see as a mark of their success. He was lucid about the corrupting effects of Nehru-Gandhian dynasticism on the party, as well as its corruption tout court. He also formed a more sceptical view than he had held in London or Washington of the effects of trade liberalization on a large, poor country. In 2006 he returned to dc as the ft’s bureau chief, in time to cover the Democratic primaries, the rise of the Tea Party and the unfolding financial crisis. The fruits of this were evident in his Time to Start Thinking: America in the Age of Descent (2012), which marked Luce out as one of the more critical voices on the Washington press circuit. Writing from the trough of the recession, he was scathing about the us’s mediocre public-school system and second-world infrastructure, the social devastation of its rustbelt—‘How many Flints can America absorb?’ The sub-prime bubble was only a symptom of growing economic insecurity, the shrinking number of secure manufacturing jobs and the growth of casualized service-sector employment.
Luce expressed grave doubts about Obama’s ability to govern, as opposed to campaign: while bankers had been saved, the downward trend in median wages had accelerated under his Administration. The creed of equal opportunity scarcely had a basis in reality. Obama had made ‘profound tactical errors’ on healthcare, conceding half the battle before it had begun by outsourcing the legislation to Senator Max Baucus, who gutted it of a public option or the ability to negotiate lower drug prices. In 2011 he had abandoned his ‘mini-stimulus’, acquiescing to demands he cut the deficit instead. Here were shades of Paul Krugman’s complaint that Obama was insufficiently Keynesian; for Luce, however, that medicine was not strong enough either. ‘Old social-democratic orthodoxies’—still less appeals to ‘injured national superiority that exist in parts of the heartland’—were unlikely to invert the curve of America’s descent. The deep national tradition of pragmatism might still come to its aid, but this required clear thinking, not (in Tocqueville’s words) the perpetual utterance of self-applause. Against Michelle Obama’s bright vacuities Luce mobilized Barbara Ehrenreich’s Bright-Sided: How the Relentless Promotion of Positive Thinking Has Undermined America. Such views might be unpopular with the electorate—Luce would joke that one reviewer thought his book so depressing that it ought to be called Time to Start Drinking—but denial of us malaise was not a strategy.
Surveying the wreckage five years later, The Retreat of Western Liberalism aims to extend the story beyond us borders and set the decline of ‘the west’ in a global context. The book has four parts, of unequal length. ‘Fusion’, the opening section, surveys the unintended consequences of globalization, ‘Reaction’, their political outcomes; ‘Fallout’, much shorter, covers international relations; ‘Half-Life’, barely twenty pages, addresses what is to be done. Luce foregrounds the rise of China and gleefully cites Hobson’s prescient prediction in Imperialism (1902) as background to Xi Jinping’s defence of globalization at Davos:
China, passing more quickly than other ‘lower races’ through the period of dependence on Western science and Western capital, and quickly assimilating what they have to give, may re-establish her own economic independence, finding out of her own resources the capital and organizing skill required for the machine industries, and . . . launch herself upon the world market as the biggest and most effective competitor.
Meanwhile, globalization has squeezed ‘middle-class’ earnings throughout the West. Luce mobilizes a bevy of economists and sociologists to fill out the standard picture of income growth: meager since 1973, declining from 2002 to 2007, and sharply falling afterwards. For the us, Robert Frank’s ‘toil index’—measuring the number of working hours it takes a median employee to pay the median rent—has risen from 45 hours per month in 1950 to 101 hours in 2016. Luce suggests that standard economic indicators no longer measure these problems—one reason why elites have been slow to react. Inflation hovers at 1 per cent, and the price of consumer goods has dived since 1985. But over the same period, the cost of health care and education has multiplied 600 times. Unemployment has fallen to low single digits since 2014, but almost one-in-five working-age adults is no longer looking, and thus goes uncounted, to the point that a higher share of French males are in full-time employment than American. This leaves them prey to heroin and painkillers like OxyContin, prescriptions of which have quadrupled since the late 1990s, leading to the type of mortality levels that Durkheim associated with a ‘civilizational break’. Job growth since 2008 has come in the informal sector, sucking retirees into the gig economy, to spend their pensionless golden years driving cabs as so-called private contractors. At the same time—Luce cites Branko Milanovic’s famous ‘elephant graph’—elite incomes have soared. Global cities, sucking in wealth and talent from their impoverished hinterlands, now sit ‘like tropical islands surrounded by a sea of resentment’. New York City, treated more as an asset class than a home by its 116 billionaires, lets 34,000 apartments sit vacant amidst a desperate clamour for housing. The pace of gentrification is so relentless that Richard Florida, who in 2002 famously hymned the urban ‘creative class’ as drivers of the new economy, now sees cities like San Francisco as ‘gated communities’ whose creative sparks will fade.
Globalized pressure on wages is matched, in Luce’s account, with the failure of the third technological revolution to produce sustainable income growth. Robert Gordon and Tyler Cowen supply the overall explanatory model for the resulting economic stagnation, attributed to the absence of productivity gains of the kind that powered the West between 1870 and 1970. Luce combines Gordon’s scepticism that iPhones, driverless cars or 3-D printing can do what internal-combustion engines, electricity or chemicals did for overall growth levels with Cowen’s critique of the risk-averse managerial strata in ageing societies. Yet he also worries that they may underestimate the impact of new technology—its ability to accelerate inequality, rather than kick start a new wave of capital accumulation. ‘Initially, I feared Gordon’s pessimism was correct’, he writes, citing the techno-evangelism out of Silicon Valley. ‘Now my fear is that Gordon is wrong.’ While Time to Start Thinking thought higher education and the valorization of knowledge could offer a possible escape route, today, offshoring, automation and artificial intelligence are coming for the jobs of educated professionals in law, medicine, finance and beyond. Already the median entry-level return on a college degree has fallen from $52,000 in 2000 to $46,000 in 2014, while a third of stem graduates do work that requires no such qualifications. At Facebook, one human employee is sufficient to manage 20,000 computers. The implications for spending power are plain. Luce cites Smith’s view in Theory of Moral Sentiments: the happiest condition for the labouring poor is in the progressive state, when a society is advancing to further acquisition, rather than when it has acquired its full complement of riches.
This is the economic baseline that explains the political outcome of 2016, in which every one of the 493 wealthiest counties voted for Clinton and all 2,623 others voted for Trump. Though Luce’s ft column failed to foresee the latter’s victory, he was sharper on the vulnerabilities of the former, going back to 2014, when he mocked ‘Hillaryland’s’ conviction that all she needed to do was ‘tick the right boxes and let demography fix the rest’. ‘Demography-as-destiny groupthink’ inside the Democratic Party leadership was fatally flawed in two ways: first, because census projections of a white-minority country by 2044 were wrong, insofar as most Hispanics reject this appellation, considering themselves to be white; second, as a damaging confession of ‘intellectual poverty’ from an ‘exhausted technocracy’ with no good reason to govern. (Other signs were the 84 campaign slogans Clinton considered, including ‘It’s about you. It’s about time’, enough to make ‘a second-rate advertiser wince’; or her response to the Sanders campaign, whose free public-college tuition proposals she countered with a convoluted $17,500 of debt forgiveness, if graduates became entrepreneurs in disadvantaged neighbourhoods). Not only did Democrats pursue a failed identitarian electoral strategy in 2016—alienating whites, without enthusing minorities—but they continue to do so, compounding one error in order to explain another.
According to Luce, race is less important here than it seems. The success of far-right parties and candidates across the West can be dated to their embrace of the social-safety net, abandoned by the old parties of the centre left, as third-way politicians carried out welfare cuts in the name of modernizing the state and employment. A rise in ‘welfare chauvinism’, not racism per se, was the result. While ukip provides the prime example of how this played out politically, ‘blue-collar whites on both sides of the Atlantic are speaking in the same idiom’. In the 1990s, ukip’s founders explicitly rejected using the word British—tainted by association with the bnp, while Leavers’ claim that leaving the eu would free up £350 million a week for the nhs ‘may have proved critical in tipping the referendum’ for Brexit. In Luce’s telling, multiculturalism was not just a cynical substitute for fraying safety nets, but insult added to injury: ‘established parties were likely to pay a price for writing off whole chunks of their electorates as bigoted’—and self-defeating, with ‘awakened whites’ now revealed as the ‘largest minority’ of all. Their anger, however, expresses something more profound than the rise of a few right-wing populists and will not be satisfied by tightened border controls or other anti-immigrant measures. Rather, they express a disenchantment with democracy, which is the real threat to American hegemony—Luce here inverting Tocqueville, who saw the tendency towards equality of conditions in the us as inevitable, if also prone to a tyrannous conformity. Now, elites whisper about educational tests to limit the influence of the poor and uneducated, who in turn seethe with anger at their rulers. Elites have helped to provoke what they most feared: a popular uprising against globalization.
The Retreat of Western Liberalism sides with Dani Rodrik’s argument: ultimately, economic globalization is incompatible with national democracy. Either democracy must be globalized—but the insulated chambers of the eu show what that can look like in practice—or a degree of national determination must be restored. Luce sides with his former mentor Summers’ call for political elites to adopt a policy of ‘responsible nationalism’, rather than a deeper globalization. Against Thomas Friedman’s image in The Lexus and the Olive Tree, likening the nostrums of the Washington Consensus to a ‘golden straitjacket’—within which ‘your economy grows and your politics shrink’—Luce notes that straitjackets are for lunatics: no wonder Western democracies ‘have begun to lose their minds.’ And while the rise of ‘illiberal democracy’ in Russia, Hungary or the Philippines is troubling, its arrival in the us is different, because of its role ‘as a beacon to the world’ since 1945. Geopolitically, this is all the more dangerous since the rise of China inevitably creates a destabilizing, Thucydidean moment. In ‘Fallout’, the book’s third section, Luce sets out an imaginary scenario for a 2020 Sino-American war, as trade conflicts combine with a flare-up over Taiwan and Chinese challenges to the us’s Asia Pacific primacy. Though Trump’s hubris plays a major role here, the scene was also set by Obama’s ‘pivot to Asia’, based on a ‘fundamentally neoconservative worldview’ and a pessimistic sense that China was showing no signs of democratizing. Now, ‘populist nationalism is staging a comeback just as global cooperation is most desperately needed’.
So searing is the earlier indictment of contemporary America—and of the Davos mindset of ‘global governance’ and ‘multi-stakeholder collaboration’—that one might expect a climactic call to rethink liberalism from bottom up. Instead, Luce rallies to it. The entirely conventional capstone to the book sets out the reforms that will restore us politics as ‘the envy of the world’. In a book that takes elites to task for their complacency towards the lower orders, it is striking that Luce never sees fit to define the words western or liberalism, alone or together, or to tell us why they are superior to the alternatives—actual or potential. The ‘retreat’ of the title turns out to be unimaginable. All that is needed to reverse it are the standard vacuous fixes: vocational upgrades, no offshore tax havens, campaign-finance reform, carbon taxes, healthcare, if certainly no universal basic income; above all a ‘massive Marshall Plan to retrain the middle class’ for skills in a post-automated age. As Luce has explained elsewhere, this could be easily brought off on the model of Denmark, with high job turnover and two weeks’ free training a year for every adult.
The path to these banal, uncritical conclusions is paved by Luce’s perpetual use of euphemisms—‘great leap forward’, ‘economic growth’—to avoid any discussion of capitalism as a system or analysis of its dynamics. Why should rising inequality necessarily go hand in hand with lower growth? Intellectually, no dissenting voice is heard, certainly none to cause ‘Davos man’ discomfort. Summers (‘the smartest guy in the room’) and Fukuyama (‘one of the most subtle, knowledgeable and reflective thinkers alive today’) supply the summit of wisdom—although, as in Time to Start Thinking, many are the inventor, investor, university president or five-star general who sigh in private agreement with the author about the state of things. Politically, the sample set is just as narrow. Despite side glances at Britain, Germany, France and a few other eu members, the us is the part that stands for the whole. ‘Without the us, there is no West’, Luce states in the Afterword, notwithstanding the Atlanticist pleading of Henry Kissinger with which he sets off, that the us, if detached from Europe, would be a lonely ‘island off the coast of Eurasia’. Set against Luce’s breezily simple fixes, Emmott, former Economist editor, is more upfront: the Fate of the West is to remain the West, defined by ‘openness’ and ‘civic equality’, whose real virtues he goes on to name and extol—capitalism, and a mission to keep ‘the barbarians [Russia, China, Iran, North Korea] at the gate’, as noble as any against the Evil Empire of yore.
‘Whatever your remedy to the crisis of liberal democracy’, Luce writes, ‘nothing much is likely to happen unless the West’s elites understand the enormity of what they face’ and ‘emerge from their postmodern Versailles’. Luce never asks the obvious: with elites like these, who needs elites? In his collective portrait, they are venal, selfish, short-sighted and incompetent—flawed enough to merit their postmodern pitchforks. In the end, why should we want to save the West they lead, insofar as that is possible, or mourn its decline, if it is not? Luce himself seems unconcerned that China—the great success of his globalization story, having raised living standards in the world’s most populous state faster than anyone could have predicted—is no democracy. For worried westerners, the issue can be relevant only in terms of its behaviour abroad. On this point, Luce is unequivocal: ‘China has rarely sought to export its model by force or colonize other lands.’ It does not share ‘the West’s missionary impulse’, ‘no longer seeks to export revolution’, and does not attach the same political strings to loans as ‘Bretton Woods competitors’. The record of the pla is likewise more restrained than that of us armed forces: ‘a swift withdrawal’ from Vietnam in 1979; before that, ‘Chinese forces overran Indian resistance’ in 1962 but ‘halted once they reached the line Beijing claimed was the correct border’, adjusted by the colonial power a century earlier. It is hypocritical to attack China for undermining democracy in Hong Kong, when Britain only introduced a dollop of it in the 1990s. Meanwhile, in Luce’s preferred scenario of peaceful Sino-American accommodation, the us would even ‘encourage Taiwan to open its own one-country, two-systems negotiations’ with the mainland, (while staying on in Asia as the ‘swing vote’ for the sake of ‘a regional balance of power’); to grasp what is at stake for China in the Taiwan Straits, just think of Kennedy’s understandable alarm in 1962 at Soviet missiles in Cuba. And yet—he repeats it—‘chaos, not China, is likelier to take America’s place’.
The two halves of this question—why save the west, or fear for the survival of its way of life on account of China—thus become even more difficult to answer. Luce’s citation of Hobson gives us a clue. In his account, Imperialism ‘anticipated the day when a resurgent China would turn the tables’ on the West. In fact, the section Luce draws on says something quite different, with important implications for Luce’s argument. Hobson called this turning-the-table scenario ‘least likely’, since China would need to be roused from ‘the sleep of centuries of peace’ in time to ‘beat back the power of Western civilization’. It was ‘far more reasonable to suppose’ that western capitals would ‘learn the art of combination’ to carve up China, with international finance acting as federative agent. For Hobson, it was naive to imagine that—absent ‘industrial democracy’ or ‘equitable distribution’ of ‘world-wealth’—‘the liberation of these productive forces’ in China would benefit any but a handful of investors, seeking ‘markets for investment, not for trade’, using ‘economies of cheap foreign production to supercede the industries of their own nation, and to maintain the political and economic domination of a class.’
Hobson is therefore at least as relevant for what he had to say about Britain, the leading imperial power of the day, where he posited a theory of under-consumption, in which the maldistribution of wealth at home, seeking outlets for investment abroad, undermined democracy and turned finance into the ‘governor of the imperial engine’. Luce accumulates ample evidence of such tendencies in his own weary titan—the baleful grip of Wall Street on Washington, the overreach of American empire—but declines to follow Hobson in drawing systemic conclusions from their coincidence. The crisis of the ‘middle class’ and ‘our democracies’ is one of economic growth, pur et dur, as if its social distribution were immutable, or without consequence for the rate of growth itself. The effect is to take both the mode and relations of production off the table: here everyone is middle class, even as more and more Americans see themselves as lower or working class; capitalism as such never appears once in the book. In contrast to Hobson, who saw socialism as one way to cut off fuel to the imperial engine and create a workers democracy, Luce disdains the political forces that have made rising inequality their battle cry. Corbyn is dismissed as ‘standing as much for unblinking nostalgia as Trump’, and his supporters are ‘as historically illiterate’ as ‘Trump’s army of “deplorables”’, if ‘less racist’. Luce is scandalized by Corbyn’s call to renationalize the railways, with overwhelming popular support—a measure ‘no sane cost-benefit analysis of Britain’s fiscal outlook’ would recommend. For Luce, the best result in 2017 was Emmanuel Macron’s ‘thumping victory’, a quinquennat that kicked off by slashing taxes on capital gains, cutting student benefits, reducing retirees’ pensions, and attacking railway unions.
In the twentieth century, the most influential narrative of decline belonged to Oswald Spengler, whose title Luce and Emmott reference, while moving in the opposite direction from it. Spengler, of course, scorned liberal intellectuals, advising young Germans ‘to turn from poetry to technology, from painting to the merchant marine, from epistemology to politics’. But in 1918 Spengler was at least clear on what he meant by the downfall of the occident, which is in part why Adorno called his reactionary critique of liberalism ‘superior in many respects to the progressive one’, since it saw in liberal ideals not a false promise, but a fraud. Luce never returns to the Berlin Wall to ask if it was ‘democracy’ that triumphed the day he scrambled atop it. In our age of decline, alas, even the books on decline are in decline.
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