Will Davies argues that the current political deadlock shows the slow implosion of neoliberalism, and the need for real political choices.

Some people doubt the capacity of parliamentary democracy to tell any kind of truth. There is a Hayekian worldview, in which betting and markets represent a better aggregation of opinion and knowledge than elections and representation. But maybe democratic representation is capable of conveying some slightly deeper truths, which aren’t just matters of fact.

For example, the truth of the ‘Third Way’ is now on glorious display: mediocre politicians struggling to wrestle some form of authority from a situation of aggressive ambivalence, one of the loudest ‘don’t knows’ that the British public has ever expressed. The consequence of reducing politics to bland ritualised mantras of ‘hard-working families’ and cutting ‘waste’ is now being performed before our eyes. Did it not occur to any of the parties to put some new, distinctive policies into their manifestos? Did none of them think of imagining society differently, not only from the present, but also from rival visions?

It strikes me that, if there is to be an election again later this year, that we might benefit from scrapping the (now evidently meaningless) leaders debate, parking the lame attempts at reducing elections to American-style talent shows, and seeking some form of political differentiation. If that doesn’t work, throw another election. And another one. Send the Manifestos back covered in red ink and ‘must try harder’. Wait until there are no ‘win-win’ outcomes left, and the ‘hard-working families’ have left the building. Threaten to shut down entire government departments at random, until each political party has explained what they will tax, where they intend to cut and how they intend to break the stranglehold that the financial sector has over the British taxpayer. If that fails, kid-nap the leaders’ wives/campaigning devices. Real political economy has returned and it needs acknowledging.

But as we all know, none of this matters in comparison to what the bond markets think. Bond markets hate ambivalence, we’re told (couldn’t someone explain to the bond markets that the British electorate has simply performed one gigantic hedge?). This is one of the interesting paradoxes of neo-liberalism. While governments are not permitted to ‘pick winners’, or disupt market mechanisms, or perform industrial policy, nor can they be ambivalent. They must be strong and absent all at the same time. Jamie Peck argues in this paper that the paradox of neo-liberalism “is that it can live neither with nor without the state”. Or as David Harvey puts it “neo-liberalism needs a certain sort of nationalism to survive”. The state’s authority is therefore strictly Schmittian, residing not in any goals or values, but purely in its strength. From the neo-liberal perspective, a state that lacks strength is almost as bad as one with a normative agenda.

What Britain is witnessing right now is this paradox imploding. For the past thirty years, British political parties have gradually converged on the perfect neo-liberal model. Their policies have moved gradually closer to the prescriptions of The World Economic Forum, starting with guaranteeing adequate security and policing, then stabilising the macro-economy, then turning to market competition and regulation, and finally nurturing the right sorts of social ‘externalities’ and ‘public goods’ in the areas of education, infrastructure and culture. The problem is that this neutering of political difference ultimately leads to the very ambivalence that the markets so hate. They want someone to be in control, they just don’t want that someone to have any clear political identity.

One solution, that competitiveness experts regularly propose, is to hand more and more policies over to permanent ‘competitiveness councils’ that are not affected by democracy. Independent central banks might be considered a good example of this in action. But fiscal policy is not monetary policy. Fiscal policy is at the epicentre of modern democracy (I’m not sure the American revolution would have got off the ground with the slogan “no inflation without representation”, for example). A fiscal crisis, as we now face, represents a political choice inviting political answers. It cannot be met simply with strength, and the promise of a ‘robust regulatory environment’ or strong property rights. But until the options are properly laid out, any democratic choice is arbitrary, and ambivalence – of the kind expressed last night – is the most honest answer.

From Will Davies site