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The Anxious Triumph by Donald Sassoon – why capitalism leads to crisis
On 20 January 1981, in his inaugural address as 40th president of the United States, Ronald Reagan declared: “Government is not the solution to our problem, government is the problem.” It was the soundbite that defined the end of the 20th century. “Rolling back the state” became the mission of the “market revolution” spearheaded by Reagan and Margaret Thatcher.
In fact, as Donald Sassoon argues in The Anxious Triumph, the idea that the state and the capitalist economy can thrive apart is nonsense. The modern state and economy are twins born together in the 17th century. Through the age of absolutism and the great 18th-century revolutions, their relationship matured into one of ever-greater interdependence. This was most evident in the newcomer nations of the 19th century, like Meiji Japan or Bismarckian Germany. But it was every bit as true of a “liberal” power like Victorian Britain.
How precisely economic and political interests are articulated varies across the world and depends very much on a nation’s place in the international order. Part of the reason classical liberalism could acquire such a hold on Victorian Britain was that the UK moved first. Having constructed a powerful combination of a centralised fiscal state and a global empire, the UK didn’t flesh out its nation state apparatus or articulate a strong vision of a national economy until the 20th century. But then, as the historian David Edgerton has recently shown, it did so with a vengeance.
When you say that you want to roll back the state, what you really mean is that you want to reconfigure the relationship. Libertarians, down to today’s advocates of cryptocurrency, may dream. But the divorce they fantasise about is not a utopia but a nightmare. Insofar as it has ever existed, anarcho-capitalism is a product of disastrous state failure. Its life is nasty, brutish and short.
Government is not the solution to our problem, government is the problem Ronald Reagan
If the problem of the relationship of government and the economy is nevertheless posed over and over again, it is because on both sides it is fraught with tension. In order to function, as Sassoon stresses, states need politics, and that involves squabbling elites and more or less mobilised masses. Mass politics and modern ideologies, above all nationalism, have explosive potential. Indeed, if taken seriously, the very notion of politics as a process of collective choice and self-empowerment is antithetical to an economic system based on binding contracts between entrenched private interests that have no regard for the political collectivity.
A long line of liberals down to the neoliberals of our own age draw the conclusion that the solution is to tame politics: through law, international treaties, independent central banks and so on. That, not surprisingly, draws political opposition, both from the left and the right. But even more destabilising is the fact that liberals are on the whole hopelessly unrealistic about what actually makes the economy tick.
The arcadia of self-equilibrating markets, falsely attributed to Adam Smith, was one such fantasy. As Sassoon shows, even in the 19th century, not many people really believed in it. The 20th-century version was the macroeconomic idea of the national economy that could be governed like a machine. That, as we now realise, was in large part an artefact of national economic statistics. Numbers like GDP gave us a false sense of common interest in enlarging the collective pie.
Neither the utopian notion of the “invisible hand” nor the Lego-brick conception of the national economy captures the dynamic, disruptive, creative destruction that is the reality of actually existing capitalism. It is a protean force perpetually generating inequality, crises and the all-pervasive anxiety that gives Sassoon’s book its title.
There have been periods in which the tensions in this fraught relationship have been highly contained. The mid-20th century, the moment of the Beveridgean welfare state, was one when the state and economy were held in a fine balance. The periods before 1945 and from the 1970s onwards have been more unstable.
Facebook Twitter Pinterest Margaret Thatcher with Reagan in 1981. Photograph: Bettmann/Bettmann Archive
Sassoon’s book speaks to the present by conjuring up the era between the 1850s and 1914, in which the tensions between global capitalism and modern politics came clearly to the fore. This was the first age of modern politics, if not of democracy – the age of Gladstone, Disraeli, Lincoln and Bismarck. It was the age of imperialism and early experiments in social insurance. It was the age of railways, steamships and the boom and bust of the global cotton industry.
Sassoon offers us a sprawling map, studded with fascinating details. Curious about the urban poor in 19th-century Naples? Want to know why liberalism was stunted in late-19th-century Romania? Sassoon is your man. Ever heard of the city of Elkader, Iowa, founded in 1846? No, neither had I. It was named, it turns out, in honour of the Emir Abd el-Kader, leader of the resistance against the French occupation of Algeria.
As one is thrown from cameo to improbable cameo, reading Sassoon becomes a hallucinatory experience. Insights are proffered and then repeated, sometimes several times. Familiar facts mingle with jaw-dropping novelties. The chronology drifts, at times roaring into the present before retracting not just to the 19th century, but deep into the 18th.
Is there some artful design at work behind the apparent confusion? Is the book’s swirling disorder meant to mirror its subject? If, as Sassoon remarks, capitalism moves “without a goal or a project”, would it be misleading for a historian to impose too much order or narrative coherence? If so, it is a pitfall Sassoon triumphantly avoids. But in a book of 758 pages, the effect is mind-boggling, and not in a good way.
Those craving order may do better to approach Sassoon’s book chapter by chapter. Skip over the preface in which he impatiently refuses to define capitalism and the first chapters in which he meanders through the history of 19th-century state formation. Home in, instead, on his detailed discussion of the role of the Japanese elite in industrialisation, or savour his classically Gramscian reading of the failure of the Italian bourgeoisie. Even better is Sassoon’s discussion of the global spread of democratic political practice before 1914. Skip the chapter that narrates the history of colonialism as a rather moth-eaten house of horrors. Others do anti-imperialism more convincingly. Instead, enjoy Sassoon’s opinionated treatment of French and British parliamentary debates about the rationale of empire.
Or, you could start near the end, where one of Sassoon’s best chapters describes how the great recession of 1873 sparked an awareness of globalisation and triggered a wave of protectionism. He surveys the French debate with real flair but is far too dismissive of protectionism in Britain. It was never “fashionable” he blithely tells us, waving Joe Chamberlain aside.
But read on from there and you are in for a final surprise. Suddenly and without warning, just short of 1914 Sassoon calls a halt. From the trade wars of the early 20th century he jumps into the future. Vaulting over the first and second world wars, he takes us on a sweeping overview of pro- and anti-capitalist politics, complete with nods to Venezuela’s die-hard Chavistas, and Hyman Minsky, the prophet of the 2008 crisis. It is quirkily brilliant. But it is also a diversion. A history of gilded-age capitalism that rightly insists on the inextricable entanglement of the economy and state power, but which does not address the first world war, lapses into nostalgia. It is a puzzling end to a puzzling book.
Adm. Michael Gilday, chief of Naval Operations, rebuffed pointed interrogations by GOP lawmakers who grilled him over his decision to recommend sailors read a book deemed by some conservatives as anti-American.
The U.S. Navy’s top admiral also defended moves to address and root out racism and extremism in the forces as well as its efforts to bolster inclusion and diversity, which have prompted criticism from some conservatives and Republican lawmakers.
“Do you personally consider advocating for the destruction of American capitalism to be extremist?” Rep. Jim Banks, R-Ind., asked Gilday during a House Armed Services Committee hearing Tuesday, referring to a passage from Ibram X. Kendi’s book “How to Be an Antiracist,” which argues capitalism and racism are interlinked.
Banks continued to interrogate the admiral over specific quotes from Kendi’s book, which was a No. 1 New York Times best seller in 2020, and statements he had made elsewhere in the past.
Visibly distraught, Gilday fired back:
“I am not going to sit here and defend cherry-picked quotes from somebody’s book,” he said. “This is a bigger issue than Kendi’s book. What this is really about is trying to paint the United States military, and the United States Navy, as weak, as woke.”
He added that sailors had spent 341 days at sea last year with minimal port visits — the longest deployments the Navy has done, he said.
“We are not weak. We are strong,” Gilday said.
Rep. Doug Lamborn, R-Colo., also challenged the admiral by citing specific quotes from the book and asked him how those ideas laid out by Kendi would further advance or improve the Navy’s power.
Gilday responded by arguing the importance of transparency and open dialogue about racism.
“There is racism in the Navy just as there is racism in our country, and the way we are going to get out of it is by being honest and not to sweep it under the rug,” he expounded, adding that he does not agree with everything the author says in the book.
The key point however, he said, is for sailors “to be able to think critically.”
The exchange was the latest in vociferous complaints from some conservative leaders and lawmakers who suggest the armed forces are becoming a pawn for the country’s culture wars and “wokeness” ideology, as the military takes steps to address issues of racial inclusion, extremism, racism and white supremacy.
And only last week, Sen. Tom Cotton, R-Ark., accosted Secretary of Defense Lloyd Austin about Kendi’s book, which Cotton said promoted “critical race theories” at a different Senate Armed Services Committee hearing where Austin was testifying.
Days earlier, Cotton and Rep. Dan Crenshaw, R-Texas — two combat veterans — launched a “whistleblowers” online platform to report examples of “woke ideology” in the military.
“Enough is enough. We won’t let our military fall to woke ideology,” Crenshaw, a former Navy SEAL, said in a tweet.
Also in February, Austin instructed a one-day stand-down across the Defense Department pausing regular activities to address extremism and white nationalism in the ranks — an issue Austin declared as a priority after a number of rioters at the U.S. Capitol in January were found to have military backgrounds.
The stand down completed in April was an effort to better understand the scope of the problem of extremism in the ranks, Pentagon press secretary John F. Kirby said in a briefing then.
Earlier, Austin had revoked a ban on diversity training for the military.
More recently, in May, a U.S. Army animated ad focused on soldier diversity — featuring the real story of a soldier who enlisted after being raised by two mothers in California — drew criticism and political backlash from some conservative lawmakers.
“Holy crap,” Sen. Ted Cruz, R-Texas, said in a tweet. “Perhaps a woke, emasculated military is not the best idea. . . .”
Cruz was referring to a TikTok video that compared the U.S. Army ad with a Russia campaign that showed buff soldiers doing push-ups and leaping out of airplanes, adding that the contrast made the American soldiers “into pansies.”
The confrontation Tuesday is also the latest in reproaches by Rep. Banks, who is a Naval Reserve officer, and other GOP members over Gilday’s recommendation to include Kendi’s book in the Chief of Naval Operations Professional Reading Program.
In February, Banks sent a letter to Gilday arguing that the views promoted in the book are “explicitly anti-American” and demanded Gilday explain the Navy’s decision to include it on the reading list or remove it.
Gilday responded to Banks in a letter obtained by Fox News saying that the book was included on the list because “it evokes the author’s own personal journey in understanding barriers to true inclusion, the deep nuances of racism and racial inequalities.”
Lamborn and Rep. Vicky Hartzler, D-Mo., also wrote a letter to the admiral to convey their concern about the inclusion of Kendi’s book as well as Michelle Alexander’s “The New Jim Crow” and Jason Pierceson’s “Sexual Minorities and Politics.”
The GOP lawmakers argued the books “reinforce a view that America is a confederation of identity categories of the oppressed and their oppressors rather than a common homeland of individual citizens who are united by common purposes,“ Lamborn and Hartzler wrote, according to Fox News.
Our understanding of events refines with time. New developments reframe the issues, and prompt reassessment of the solutions applied, their design and outcomes. What does looking back on the 1991 reforms in 2021 tell us?
For three decades, India celebrated and criticised the 1991 reforms. The reformers of 1991 say that the idea wasn’t only to tide over a Balance of Payments (BOP) crisis; the changes they brought in went beyond the International Monetary Fund’s (IMF) conditionalities for the bailout. The reforms, they insist, were ‘home-grown’. In the years leading up to 1991, technocrats in government had been thinking and writing about how India’s economic policies had been blocking the country’s rise to potential and the structural changes needed. If the broad range of reforms—including tearing down the industrial license permit raj, an exchange rate correction, and liberalising foreign direct investment and trade policies—could be launched within a matter of days of a new government joining office, they argue, it is because the blueprints were ready, waiting for the go-ahead from the political leadership.
The reformers of 1991 say that the idea wasn’t only to tide over a Balance of Payments (BOP) crisis; the changes they brought in went beyond the International Monetary Fund’s (IMF) conditionalities for the bailout.
At least two well-regarded technocrats that were important in the 1991 reforms disagree—publicly and in off-the-record conversations. In a media interview last month, one of them, the economic adviser in the reforms team, Dr Ashok Desai, suggested that if there were any reformers in government before the IMF “forced” India to liberalise in 1991, “they hid themselves very well”. According to him, after the BOP crisis was resolved, finance minister Dr Manmohan Singh turned “dead against reforms”.
The multiple versions of the reforms story make it difficult to separate fact from romance. It cannot be disputed, though, that the 1991 BOP crisis was a turning point for the economy. India had tided over BOP crises earlier with loans from the IMF, repaid them prematurely, and avoided going through with the bailout’s conditionalities. 1991 was singularly different because India was on the brink of default, which is likely to have forced politicians to set politics aside and listen to technocrats. Any default on external obligations would have meant hurting India’s credibility grievously and an inescapable sense of national shame. The government probably took the view that there was no choice other than to take corrective steps. Prime Minister PV Narasimha Rao named Dr Manmohan Singh, who had been a technocrat in government and was well regarded in global policy circles, as his finance minister. Dr Singh clearly had the Prime Minister’s, his party’s and the IMF’s trust. Records irrefutably show that the Congress party’s acceptance of the reversals in the interventionist economic policies of the first four post-Independence decades was not secured by the Prime Minister. He had delegated the task of tackling doubts and resistance within the party to his ministers, in particular, the finance minister and the commerce minister, and an aide in his office. The finance minister defended the reforms on the floor of the house in Parliament.
National Public Radio (NPR) ignited a social media firestorm Thursday night over a tweet that appears to mock capitalism, despite taxpayer dollars accounting for much of the organization’s annual budget.
The outlet posted a story titled “And Now, Crocs With Stiletto Heels” that explores a curious new collaboration between luxury fashion brand Balenciaga and Crocs, the rubber slipper company responsible for fashion faux pas among the millions of comfort-clinging owners nationwide.
The caption accompanying the article, which was written in both uppercase and lowercase letters, appears to mock the collaboration: “CaPitAliSm bReEds InNovAtiOn,” it reads.
The tweet’s language sparked outrage on social media, with figures like conservative Tim Young calling out the irony in NPR’s three-word post.
“You wouldn’t exist without capitalism, clown who is tweeting on behalf of NPR,” he wrote.
“Job at public news station wouldn’t exist wo capitalism,” another user echoed. “Are you guys ok?”
“Our tax money shouldn’t pay for this,” one person expressed.
“It’s still a hell of a lot better than communism at breeding innovation, even if some of the products are silly,” one woman fired back.
