Almost suddenly, socialism has come to the forefront of political discourse, on both sides of Atlantic, from the background to which it was relegated as being irrelevant. After the fall of Berlin wall in 1989, or to be more precise, after the dissolution of the biggest and the most powerful socialist state in Soviet Union in 1991. Political historians and ideologues in the capitalist west gloated at the turn of events in those momentous years, declaring the `end of history', meaning the worldwide entrenchment of liberal democracy after the retreat of socialism in its bastion in eastern Europe stretching to Soviet Russia. As a corollary to this, the unchallenged sway of capitalism was also heralded in the celebratory outpouring of the Right. The political economy of capitalist democracy would be so powerful and comprehensive because of the mutual support of the two that no room would be left for any other model as its alternative; it was pointed out by pundits and politicians alike. This narrative, of course, took into account only the capitalist countries in the west, treating socialist regimes in Cuba, Vietnam and China as aberrations, whose days were numbered. In the event, the `aberrations' have been continuing, though with various market-oriented reforms. More surprising, even shocking to some, has been the resurgence of socialism in a more aggressive form than seen in social democracies of Western Europe. That this has taken place in the bastion of capitalism, America, has been of more than academic interest. Politicians, President Donald Trump no less, has taken note of this, losing no time in castigating the ominous advance of the spectre of socialism of the extreme left. In a cover story The Weekly Economist gave the reincarnation a new nomenclature with a demographic twist: `Millennial Socialism' (February 16, 2019). Though the target of the new wave of socialism is the millennials i.e. generation Z, its ardent champions are old warriors in the age-old ideological battle for the ideal political economy model. In America Bernie Sanders, who ran for president in 2016, belong to the far left of the democratic party, spewing socialist slogans and promising programmes that smack of socialist economic dispensation. He is renewing his bid for the White House again upholding the same agenda of political economy underpinned by socialism of the statist variety. In the UK, Jeremy Corbyn, the leader of the Labour Party, made no bones about his leanings to the extreme left, bidding goodbye to Blarite Third Way that emphasised more kinder and gentler political order falling short of a nanny state. Bernie Sanders's declaration of candidacy for the post of president has immediately been picked up and targeted for virulent attack by President Trump as the harbinger of socialist economy in America. The threat of socialism appeared as a `clear and present danger' with the election of Ms. Alexandria Ocasio-Cortez to the Congress who ran on a promise of introducing a Green New Deal (GND), a euphemism for socialist agenda with a more interventionist government at the helm. Both Bernie Sanders and Ms. Ocasio-Cortez have now become the new face of an aggressive variant of socialism, the bugbear and the whipping horse of President Trump. In the UK, Jeremy Corbyn's ideological convictions that may lead him to adopt drastic measures for redistribution of wealth and large-scale provision of public goods at subsidised rates or cost free, have rung alarm bell among the centrist, even the left-of-centre members of his party. The recent resignations of members of parliament belonging to the Labour Party was not so much for his stance on Brexit as it was in reaction to his extreme left policies.
All the three politicians who have appeared on both sides of Atlantic, Bernie Sanders, Ms. Ocasio-Cortez and Jeremy Corbyn have one thing in common in their upholding of socialist ideology. Their variety of democratic socialism goes considerably further than the market-friendly re-distributionalism of the Blairite Third Way. It envisages a level of state intervention in previously private industry either directly or through forced co-operativisation that has not been seen in democracies.
The swing within the traditional left does not guarantee the leftist parties' success in winning elections, particularly in America. Primary voters at the grassroots may be enthusiastic about socialist agenda of some of their leaders but many senior leaders of the party that they support may fear that it will scare away rank and file supporters. This apprehension is present as much in the Democratic Party in America as it is in the Labour Party of UK. The recent desertion of members from parliamentary Labour Party is a proof of that apprehension and reaction resulting from it. President Trump's declaration in the State of the Union address that `America will not be a socialist country' conveyed both his conviction and a warning to the electorate that they faced an impending danger from the `red'. His blistering attack on incipient socialism could not but have alerted the moderates among the Democrats. It is thus seen that the socialist wave in both America and UK will not have a smooth passage.
The resurgence of socialism or Millennial socialism, as termed by The Economist, has been complicated by the rise of right wing populism, particularly in America. Though they also decry and revile the growing economic inequality resulting from globalisation, the solution that appeals to the populist right is not any measure of socialism requiring a greater role of government. Instead, they want termination of free trade and tighter fiscal and monetary policies within the free market model of capitalism. In short, the problems identified by the populist right and the socialist left, though same, their choice of measures to address the same are poles apart. If growing income inequality and concentration of wealth can be offset by government policy instruments including regulations, the populist right will never be convinced of the need for an interventionist state. Much, therefore, depends on what a rightwing government like that in America under President Trump can deliver through their market-friendly measures and policies. If the rightwing parties and the government that they form fail to deliver what they promise by way of reducing unemployment with higher wages and reduction in the impoverishment process affecting the working and the lower middle class, the disenchantment of the rightwing voters may give a new shot in the arm of the socialists of Bernie Sanders and Jeremy Corbyn ilk.
Rarely in the history of political economy, both the extreme right and the left in the spectrum had the same goal but different means to achieve the same. The present is a crucial moment in the evolution of political economy, to say the least. Only time will tell which way the compass in the political economy will sway. But this much is certain that governing a country with a worn-out model of economic development will not have resounding success. It can also be safely assumed that the resurgence of socialism in both America and UK will have a far-reaching impact on the emerging political and economic order in those countries. As a result, it will not be business as usual in the rest of the world.
FOOTNOTE: After writing the above an article written by the Nobel Laureate Angus Deaton came to my notice. I quote an excerpt from the same, being relevant to what I have said in my column:
`Rather suddenly, capitalism is visibly sick. The virus of socialism has reemerged and is infecting the young once more. Wiser heads, who respect capitalism's past achievements, want to save it, and have been proposing diagnoses and remedies. But their proposals sometimes overlap with those who would tear the system down, making nonsense of traditional left-right distinctions.'