Contemporary Changes in Political Identity

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As an exercise in Zeitgeschichte (recent history), I am trying to understand the changes in the political identity of the Left.

The below excerpt is helpful in pinpointing one of the chief reasons for the astonishing turnaround of the Left, which has become part of the neoliberal phalanx, as their economic arguments and preferred policies attest to (— consider the adamant support for the EU, for instance, which is a purebred monetarist construction counting on monetary policy to manage the welfare of the EMU to the exclusion of effective fiscal policy).

The left no longer understands the nature of what used to be its most powerful instrument: government spending put to use by judicious fiscal policy. In fact, one might argue that the social democratic Left was able to displace, complement, extend and renew the classically liberal basis of the West's political order precisely because it did understand the benign social powers inherent in the resourceful modern state.

The ironic fate of the classical liberals is that they forgot their pro-state roots — originally understanding that a state that ties itself to rules becomes a more powerful and more socially effective state —, instead becoming a dogmatically anti-state force. 

The ironic fate of the modern Left is that it too has come to forget an integral part of its pro-state roots over the past 30 years or so.

After repeating his sense of urgency on how bad unemployment was (in 2009), President Obma then made this most extraordinary comment:

But I want to be clear — while I believe that government has a critical role in creating the conditions for economic growth, ultimately true economic recovery is only going to come from the private sector. We don’t have enough public dollars to fill the hole of private dollars that was created as a consequence of the crisis. It is only when the private sector starts to reinvest again, only when our businesses start hiring again and people start spending again and families start seeing improvement in their own lives again that we’re going to have the kind of economy that we want. That’s the measure of a real economic recovery.

We don’t have enough public dollars … when ‘we’ being the government (central bank and treasury) has all the dollars one would need to buy all the real resources available for sale, including labour that cannot find another buyer (the unemployed and underemployed).

And the government is the only buyer in the economy that has that capacity. The private sector certainly doesn’t have that capacity and that is why recessions occur.

The statement “We don’t have enough public dollars to fill the hole of private dollars that was created as a consequence of the crisis” was preposterous.

The speech writer should have been dismissed and Obama signalled his lack of fitness for office by repeating the comments.

Keyboard operators within the US Government could type 1,000,000 billion or 1,000,000,000 billion into their computer when making one of the electronic transactions we call government spending and the funds would show up as increased reserves in the banking system.

It might be undesirable that the higher amount actually was injected into the spending stream (depending on the available real capacity of the economy) but that is a separate issue.

The point is that the US Government can spend as much as it likes as long as there are goods and services available for sale.

The source. 

(Fazit, deutsch: Liberale Denker verstanden einst, dass ein sozial wirkungsvoller Staat ein starker Staat sein muss, und dass ein starker Staat einer ist, der sich (liberalen) Regeln unterwirft. Diese Einsichten hat der Liberalismus aus den Augen verloren. 

Es entbehrt nicht einer gewissen Ironie, dass auch die Linke inzwischen zu vergessen scheint, warum sie früher für einen sozial wirkungsvollen und deshalb für einen starken (National-)Staat eingetreten ist.

Gerade die Erkenntnis der Möglichkeiten des Staats machte die sozialdemokratische Linke zur historisch erfolgreichen Kraft. Mit ihren zeitgemäßeren Überzeugungen und ihrer Forderung, die fundamentalen liberalen Prinzipien der Freiheitlichkeit um neue Verantwortungsbereiche des Staats zu erweitern, war die Linke in der Lage, die Massen (der arbeitenden Bevölkerung) auf ihre Seite zu bringen und das liberale Paradigma abzulösen.

Entscheidend dabei war die Erkenntnis, dass der moderne Staat — um ein Vielfaches (ressourcen-)reicher als staatliche Gebilde der Vergangenheit — über die Fähigkeit verfügt und die Pflicht besitzt, durch seine Ausgaben für dauerhaften Wohlstand und stark verbesserte soziale Verhältnisse zu sorgen.

Mit dem Verlust des Glaubens an die fiskalpolitischen Pflichten und Möglichkeiten des Staats ist die Linke in den vergangenen 30 Jahren Teil der neoliberalen Phalanx geworden, wie etwa ersichtlich an ihrem Bekenntnis zum rein monetaristischen Konstrukt der EU-(Währung).]