About the author Owen Worth is a lecturer in international relations at the University of Limerick, Ireland. He has published widely in the areas of global political economy and in particular in the areas of globalization, hegemony and resistance. He is the author of Hegemony, International Political Economy and Post-Communist Russia (2005), and he co-edited European Regionalism and the Left (with Gerry Strange, 2012), Globlisation and the ‘New’ Semi-Peripheries (with Phoebe Moore, 2009) and Criti- cal Perspectives on International Political Economy (with Jason Abbott, 2002). He has published work on resist- ance and globalization in Global Society, Global izations, Capital and Class and Third World Quarterly, and has also published in International Politics, Review of Inter- national Studies and Journal of International Relations and Development. He is the current managing editor of Capital and Class and is on the executive board of the Conference of Socialist Economics. RESISTANCE IN THE AGE OF AUSTERITY NATIONALISM, THE FAILURE OF THE LEFT AND THE RETURN OF GOD Owen Worth Fernwood Publishing halifax | winnipeg Zed Books london | new York Resistance in the age of austerity: nationalism, the failure of the left and the return of God was first published in 2013 by Zed Books Ltd, 7 Cynthia Street, London n1 9jf, uk and Room 400, 175 Fifth Avenue, New York, ny 10010, usa www.zedbooks.co.uk Copyright © Owen Worth 2013 The right of Owen Worth to be identified as the author of this work has been asserted by him in accordance with the Copyright, Designs and Patents Act, 1988 Set in ffKievit and Monotype Plantin by Ewan Smith, London Index: [email protected] Cover design: www.rawshock.co.uk Cover photo © iStock All rights reserved. No part of this publication may be reproduced, stored in a retrieval system or transmitted in any form or by any means, electronic, mechanical, photocopying or otherwise, without the prior permission of Zed Books Ltd. A catalogue record for this book is available from the British Library Library of Congress Cataloging in Publication Data available IsBn 978 1 78032 337 4 eb CONTENTS Acknowledgements | vi Introduction: in search of a new Prince . 1 1 The end of history? . 9 2 Resistance and counter-hegemony . 32 3 Another world is possible? . 51 4 Nationalist and exceptionalist responses . 72 5 The return of God. 92 6 The age of austerity . 113 7 Neoliberalism and potential transformation . .132 Notes | 15o Bibliography | 154 Index | 164 ACKNOWLEDGEMENTS This book was a number of years in the making, but was largely written in the different locations of west Wales, Limerick and Perth, Australia, at the end of 2011 and beginning of 2012. I am grateful to Maura Adshead, at the time head of the Depart- ment of Politics and Public Administration at the University of Limerick, for giving me teaching relief for study leave at that time. I am also grateful to the faculty of Arts, Humanities and Social Sciences for seed funding in order to attend the World Social Forum in Nairobi in 2007. I would like to thank Gerry and Jackie Strange, Mark Beeson, Bruce Stone and the Politics and International Studies department at the University of Western Australia (UWA). I have benefited from feedback and discussions from several talks that I have given leading up to the writing of this book. I would like to thank Jason Abbott and those at the Center for Asian Democracy at the University of Louisville, Chris Farrands (as ever) and David Bailey for organ- izing an excellent panel at the ECPR conference in Reykjavik in August 2011. I have also benefited from excellent discussions with colleagues and former students and would in particular like to thank Luke Ashworth, Karen Buckley, Matt Merefield, Kyle Murray, Swati Parashar and Andy Shorten. On a personal level I would like to thank Perys, Rosa, Sam, Austen and family and my many colleagues, friends and family on both sides of the Atlantic and the Irish Sea. INTRODUCTION: IN SEARCH OF A NEW PRINCE He who wishes to be obeyed must know how to command (Machiavelli, 1513) The financial crisis that had engulfed the world by 2008 shook a whole genre of company directors, businessmen, economists, financial advisers and investors who believed that the market-generated global economy was structurally in safe hands. The fallout from the credit crisis and the subsequent banking collapses had an even greater knock-on effect on society in general as property mortgages that were encouraged and distributed at high rates became unsustainable. As production faltered and economies, at least in the developed world, began to slide into recession, the general social ills associated with depression economics began to surface. In line with other periods of capitalist crisis in the past, its im- mediate aftermath saw a whole collection of soul-searching and analysis into how and why the system collapsed. This was perhaps demonstrated best when, as noted recently by David Harvey, Britain’s Queen Elizabeth II questioned economists at the LSE as to why no one had seen the crisis coming. The response from economists was that they underestimated the importance of systemic risk within the workings of market economics as a whole (Harvey 2010: 235). Yet, for those who have located themselves outside the circle that worked, functioned and believed in the sustainability of the global economy, the crisis was not a surprise. For long, students of International Political Economy (IPE) have pointed to the unsustainability of the global economy. At the same time those who have been involved within, or have studied, the resurgence in protest movements that have emerged from civil society have aired their discontent at the ideological under- pinnings of the global economy. The neoliberal principles that the global economy has been founded upon since the Thatcher–Reagan era of the 1980s have been much maligned by such criticisms, and it is these principles which have come under even greater scrutiny since the economic crisis. 2 | introduCtion Despite the underlying problems with neoliberalism being aired more freely since the financial crisis, there has been a reluctance to break away from its overall rhetoric and logic. One of the striking features of this crisis has been that an alternative form of economic governance has not been forthcoming. While the crash in 1929 paved the way for an era of Keynesian economics and the stagflation in the 1970s saw the emergence of neoliberal free market ideas, the current crisis has not really led to any fresh alternatives to neoliberalism. While there have been discussions on the reform of the economic system in the immediate aftermath of the crisis, a radical ideological overhaul of the way the global political economy is managed has never been seriously considered. Instead, there has been a commitment to ride out the crisis through the reduction of sovereign debt that increased in countries where banking bailouts have occurred, by reducing public funds to welfare. As a result the welfare state is being rolled back even more by the realities – if not the genuine ideologies – of neoliberalism. The main purpose of this book is to look at whether or not, in light of the financial crisis, neoliberalism can sustain itself as the hegemonic ideology behind the governance of the global political economy. In particular it looks at potential challengers to the neoliberal system and questions whether such positions can muster a viable or coherent alternative project capable of altering the nature of the current world economic order. The decline of the USA, the rise of China and the more structured form of state capitalism that has been favoured by their stark economic growth might be one that could replace the neoliberal model, which has often been associated with American power (Beeson 2010). However, the realities of neoliberalism have seen multinational firms move their interests away from developed states to ones that offer cheaper labour costs, which have allowed for increased profitability for the larger multinational corporations. As a result, while the crisis has seen economies falter in the developed world, productivity and economic growth on a global level have continued to rise, with countries such as China and India, areas such as South America, the Middle East and Central Asia, all enjoying significant increases in economic growth in the last couple of years. Countries on the fringes of the European core, such as Turkey and the Baltic states, have benefited from the fallout in the financial heartland. These circumstances all remind us of the observations made by Karl Marx when he looked at the processes and realities of free market introduCtion | 3 capitalism in the nineteenth century. In his classic analysis of capital accumulation, Marx demonstrated that the capitalist system rested upon the acquisition of surplus value and the reliance on expanded profits through the reinvestment of this surplus (Marx 1976: 725–870). The international expansion of capital thus relies upon the contin- ued pursuit by companies (or the class of the bourgeoisie) of profit maximization and new markets. As this allows for the globalization of free market capitalism, then during times of economic crisis in the heartland, greater productivity will emerge elsewhere. The twentieth century saw a reaction against this process as the prominence of both Keynes’s work in criticizing the chaotic nature of free market capital- ism (Keynes 2004), and the respective socialist projects (through both ‘social democracy’ and through state socialism or communism), put an end to the era of liberal capitalism. But the end of the Cold War and the effective ideological defeat of state socialism brought a new meaning to the idea of a global economy, as the effective opposition to unfettered capitalism appeared to have subsided.