The Great Interregnum

The road to the future, to a new expansion as is always close to the heart of capital, led outwards, to the still pleasantly unregulated world of a borderless global economy in which markets would no longer be locked into nation-states, but nation-states locked into markets. (1)

The golden age of post-war capitalism which lasted from the Bretton Woods arrangements of 1944 ended definitively with the great 1971 counter-revolution; a process which began with the removal of the US$ from the gold standard. Since the rest of the world’s currencies were fixed to the dollar these currencies were automatically detached from gold. What emerged, whether by accident or, more likely by design, has defined the contours of the 21st century and this has borne witness to the emergence of a New World Order (NWO) of a neo-liberal, globalization settlement and conjointly the collapse of actually existing socialism. This realignment was by no means accidental and represented fundamental policy changes rather than unconnected random events.


This NWO has been established on the basis of deep structural changes in the nature of actually existing capitalism and qualitatively different to the welfare, inclusive capitalism of the immediate post-war period. However the counter-revolution caught the left unprepared and who have seemingly been unable to grasp this fact. Moreover the collapse of actually existing socialism ended the historical period of political ascendency of the left – a process which dated back to the Russian revolution of 1917 – and transmuted into the great neo-liberal counter-revolution which began in 1971.

This eclipse of socialism – or anything resembling socialism – has been the feature of the late 20th and early 21st centuries. Both social-democratic and even communist parties have been politically marginalised by their theoretical inability to discern the deficiencies in their political agendas. The counter-revolutionary wave of the late 20th century began in stages to sweep all before it. The decline of a moribund social-democracy and even eurocommunism with their entrenched and seemingly immovable policies of an earlier period – Progress through Parliamentary Reform – were found to be wanting, out of date and out of time, running out of steam with their economies plagued by stagflation and declining growth. By the late 60s early 70s Le Trente Glorieuses were no more and this gave rise to the surge of counter-revolution initially led by the Reagan-Thatcher axis. This move into the future was – if anybody noticed – a backward movement. Winners included the then Head of Siemens, Heinrich Von Pierer, to triumphantly proclaim: ‘’The wind of competition has become a storm, and the real hurricanes still lies ahead of us.’’(2)


To think that the Left which had once occupied and dominated Western Europe and consisted of mass parties of social-democrats and communists, and moreover, even in 1945 there were armed communist partisans operating in Albania, Greece, Yugoslavia, Italy, and France, including a large Parliamentary representation.

But the Left capitulated and adapted to the new order and for better or worse – actually worse – and was to imbibe the fashionable doctrines of neo-liberalism.

I vividly remember being a student delegate at Labour Party Annual Conference in the seaside town of Blackpool in 1976. Conference was always a rather tedious and dispiriting affair but this time it was historic. James Callaghan the then Prime Minister gave the following address. The key passage was as follows:

‘’We used to think that you could spend your way out of a recession and increase employ­ment by cutting taxes and boosting Government spending. I tell you in all candour that that option no longer exists, and that in so far as it ever did exist, it only worked on each occasion since the war by injecting a bigger dose of infla­tion into the economy, followed by a higher level of unemployment as the next step. Higher inflation followed by higher unemployment. We have just escaped from the highest rate of inflation this country has known; we have not yet escaped from the consequences: high unemployment.’’ Apparently, Keynes was now passe and Von Hayek was flavour of the month.

What Callaghan was in fact articulating was the demise of social-democracy in the UK, and for that matter everywhere else; it was over, finished, and now a complete political racket infested with careerists and parvenus on the make. So Orwell was right even before then to describe the Labour Party as being ‘pale pink humbug’(The Road to Wigan Pier 1937). The neo-liberals had won, and it was an Atlantic-wide victory. Be advised that a party which calls itself a party of the Left, but which adheres to the neo-liberal orthodoxy is simply a fraud. Ex-centre-left parties have simply moved over to the centre-right en bloc. This project was definitively operationalised with considerable success by Blair (New Labour) and Clinton (political centrism) in the 90s.


This political about-face where the ashes of the left and the emergence of the neoliberal right was presided over by a new goddess known as TINA—There Is No Alternative. The long list of her high priests and priestesses extends from Margaret Thatcher via Tony Blair down to Angela Merkel and Bill Clinton. Anyone who wished to serve TINA, to the accompaniment of the solemn chorus of the united economists of the world, had to recognize the escape of capital from its national cages as both inevitable and beneficial, and would have to commit themselves to help clear all obstacles from its path. Heathen practices such as controls on the movement of capital, state aid and others were to be tracked down and eradicated; no one must be allowed to escape from ‘global competition’ and sink back into the cushioned comfort of national protections of whatever kind. Free-trade agreements were to open up markets and protect them from state interference, global governance was to replace national governments, protection from commodification was to be replaced by enabling commodification, and the welfare state was to give way to the competition state of a new era of capitalist rationalization. By the end of the 1980s at the latest, neoliberalism had become the de rigeuer for both the centre left and the centre right—with haemorrhaging membership and a declining electoral participation, disproportionately so at the lower end of the social scale. Additionally, a beginning in the 1980s this was accompanied by a meltdown of trade-union organization, together with a dramatic decline in strike activity worldwide—altogether, in other words, a demobilization along the broadest possible front of the entire post-war machinery of democratic participation and redistribution The old political controversies were now regarded as being obsolete by the PTB.(3)


But history is full of surprises. In their hubris the new ruling elites were to become victims of their own propaganda, a customary and predictable human failing. Cracks were beginning to show in the neo-liberal paradigm during the holding period of 2008-2020 and the model was, whether they liked it or not, beginning to show deep structural fault-lines. The new economic system was becoming increasingly obsolete and unstable, the elephant in the room is now beginning to make its presence felt. This has been the result in the build-up of problems which were occasioned by the 2008 blow-out.

At the present time, however, the cracks which had papered over the post 2008 bodge and the distribution of national income was increasingly tilted away from the 99% to the 1%. Such a polarization of wealth and income cannot possibly endure without economic and political chaos. The process is in its early stages and represents the most severe trial of the new order since the 1971 establishment. In effect democracy is being sacrificed by the requirements of capitalism. This Great Reset is the Hayekian wonderland of a 21st century slave state.

‘’If capitalism of the consolidation state can no longer produce even the illusion of equitable growth, the time will come when the paths of capitalism and democracy must part. The likeliest outcome would be the completion of a Hayekian social dictatorship in which the capitalist market economy was protected from democratic correction. Its legitimacy would depend upon whether those who once were its citizens would have learned to equate market justice with social justice and to think of themselves as members of a unified marktvolk. Its stability would further require instruments for the ideological marginalization, political disorganization, and physical restraint of anyone unwilling to accept this lesson. Those who refused to bow to market justice, in a situation where political institutions economically, would then be left with what used to be described in the 1970s as extra-parliamentary protest: emotional, irrational, fragmented, and irresponsible. And this is what we would precisely expect if the democratic channels for the articulation of interests and the formation of preferences are blocked, only because the same outcomes can never emerge or because what emerges no longer makes any difference to the markets … The alternative to capitalism without democracy is democracy without capitalism. (4)

So now we are living in a period of what Antonio Gramsci described as the interregnum. “The crisis consists precisely in the fact that the old is dying and the new cannot be born; in this interregnum a great variety of morbid symptoms appear.”(5) Its outcome can only be guessed at.

La Lotte Continua.


(1) Wolfgang Streeck – New Left Review – 104

(2) Der Spiegel 1996

(3)Wolfgang Streeck – New Left Review 104

(4) Grace Blakeley – Stolen: How to Save the World from Financialization -pp.172/73.

(5) Prison Notebooks – Antonio Gramsci.