The Triumph of Broken Promises
By Fritz Bartel
Harvard University Press, 2022
The Triumph of Broken Promises by Fritz Bartel is a new history of the end of the Cold War. Challenging conventional narratives that focus on Reagan’s military-ideological assertiveness or Gorbachev’s openness to reform, the book gives a material and structural explanation of Western victory and Eastern defeat.1 This makes for fascinating history: finance and energy emerge as silent but vital battlegrounds, unlikely connections—like those between Japanese investors and Hungarian central bankers—come to the fore, and several East-West similarities surprise the reader.
More than just fascinating history, however, the book makes a profound theoretical contribution. It demonstrates the importance of two institutional features of democratic capitalism, which state socialism lacked: the polity-economy distinction and competitive elections. It also highlights the importance of neoliberal ideology, providing certain Western policymakers with a framework to justify and even praise the unraveling of social democratic Keynesianism, while Eastern leaders struggled in vain to legitimize a similar turn to austerity within state socialism.
These features help explain why the West won the Cold War, and why this victory coincided with–and was in part fueled by—the rise of neoliberalism. In tracing their impact, the book also speaks to a set of wider questions: what is the nature of capitalism’s recent crises? What are the implications for progressive politics today? And is capitalism vs. socialism even the most useful framework for discussing these questions?
Promises had to be broken
Why did the Cold War end with the peaceful proliferation of liberal capitalism, and why did it do so in 1989–91, rather than a decade earlier or later? Some historians foreground President’s Reagan’s decision to confront rather than appease the USSR or Mikhail Gorbachev’s “new political thinking.” Others “focus on the rigid economic stagnation of the Eastern Bloc during the 1970s and 1980s,” separate from and in contrast to an unproblematically prosperous, dynamic West.2
Bartel presents a different history, drawing on new archival evidence from West Germany, Britain, and the US on the one hand, and Poland, Hungary, East Germany, and the Soviet Union on the other. His account highlights shared (economic) problems rather than unique (Western) prowess. It stresses structural factors—growth, finance, energy—rather than the contingencies of individual choices.
“Contrary to the confident predictions of both democratic capitalism and state socialism” runs the opening gambit, “economic growth in both systems severely stagnated” in the 1970s and 1980s.3 Indeed, the book reminds us, it was the West that looked weaker to contemporary observers: “Could democratic leaders solve the riddle of stagflation if it meant inflicting pain on those they governed? Smart money said no.”4 In its emphasis on economics, on shared challenges, and on Western trouble, this is a refreshing and new take.
The East and West faced similar challenges, and their respective analyses and responses to it were similar too. Analyzing politburo transcripts and internal memos, Bartel shows how both sides reached the same diagnosis: decades of promises made and delivered had woven a dense tapestry of contracts and expectations, all premised on high future growth rates. Given that those growth rates had declined, leaders on both sides regretfully observed, the promises built on them had become untenable. The upshot: promises had to be broken.
Built on this shared diagnosis, Bartel shows there was also “a fundamental similarity between the quintessential project of neoliberal reform, Thatcherism, and the seminal project of socialist renewal, perestroika.”5 Both aimed at “carrying out painful domestic economic reforms in the hope of relaunching economic growth.”6
That Thatcherism meant a “fall in living standards; yet more unemployment” and a direct confrontation with the trade unions7—in the hope that “10 years of vulgarly pro-business and pro-industry policies” would boost investment and move labor and capital from declining into rising sectors8—is well known. More surprising may be Bartel’s finding that the East was pursuing a similar project: Soviet economists stated bluntly that Perestroika would replace “administrative coercion” with the “economic coercion” of the market9 and “lamented the ‘structural fatigue’ of their industrial economy and the ‘egalitarian mood’ of their population.”1011 To be sure, Gorbachev and other Eastern leaders were looking for a way to relaunch growth without social pain: “As a country where power is in the hands of the workers… it is natural that we should want to have no unemployment.” But unable to find one, Gorbachev himself had to concede that “Unemployment… will inevitably follow in the course of Perestroika.”12
Both Perestroika and Thatcherism, then, meant scaling back economic and social security to drive efficiency gains and shift labor and capital from declining to rising industries. If this similarity between East and West is unsettling to readers today, it is nonetheless one that, as Bartel’s archival work demonstrates, was recognized behind closed doors at the time.13
Easier said than done
Both Perestroika and Thatcherism were easier said than done. While both sides eventually concluded that there was no alternative to breaking promises—reducing wage growth and economic security—only the West could actually do it. Why this is the case is perhaps the book’s central question, especially since strong trade unions, free elections, rising inflation, and a general sense of malaise had all looked like immovable obstacles just years prior.
Two institutional features of democratic capitalism emerge as central in Bartel’s history: the polity-economy distinction and competitive elections. They are partly what made the system more ideologically flexible. Neoliberal thinkers and policy makers could frame expenditure cuts and reductions in economic security, even if primarily driven by declining growth, as unleashing entrepreneurial energies and vindicating citizens’ economic freedoms. This was a clear break with the social-democratic settlement of the post-war era. But neoliberalism was nonetheless compatible with democratic capitalism. It provided a “sincerity of conviction” that “proved decisive” as Western leaders confronted the politics of breaking promises.14
Elections in turn allowed for the anger of disappointed expectations to flow into system-internal competition, rather than into demands for wholesale regime change. When it came to Thatcherism, “elections allowed her to credibly claim no responsibility for past government policy and instilled in most British people a confidence that their government was legitimate,” even as Thatcher shredded the promise of full employment, passed austerity budgets, and cracked down violently on trade unions.15
In contrast, according to Bartel, “communism… made no sense in an era of breaking promises.”16 Because state socialism integrated the political and economic spheres, governments could not shift responsibility for economic woes. An economic crisis was, by necessity, the fault and responsibility of the political regime. Leaders did of course try to justify the breaking of promises: for example, Károly Grósz, Hungary’s penultimate communist leader, argued that “Marxism has never accepted egalitarianism, but rather the postulate of equal opportunity.” But the argument did not land: in December 1986, he observed that Hungarian society “still barely tolerates” rising inequality.1718
TINA’s foundation: the polity-economy distinction
Perhaps the central feature allowing democratic capitalism to break promises without breaking its regimes was the polity-economy distinction. A defining feature of capitalism, it had two effects. First, it implied that Western governments had only ever promised to influence, but never fully to control, economic outcomes. This meant that Western regimes, even at the height of the mixed economy model, never made the same ambitious commitments as communism, which had pledged planned economies and fully socialized risks. “Democratic capitalist governments made fewer promises to their people, and this meant they had fewer promises to break.”19
Second, the polity-economy distinction created a discursive object—the nonpolitical economy—to which Western elites could point in justification of promise-breaking. When economic reforms were initiated in the West—whether a bout of Keynesian stimulus or austerity, of tax increases or decreases, of deregulation or re-regulation—subsequent movements in inflation, unemployment, strike rates, growth, or currency fluctuation could be read as signals of whether these were succeeding or failing. The signals generated were noisy and imperfect, to be sure, but because under capitalism, so the logic went, “the economic is nonpolitical,” the credibility of these signals was largely independent of the government’s. Margaret Thatcher’s words, for example, might not have convinced majorities of the need for austerity and a confrontation with trade unions; but high inflation, high unemployment, and low growth could.
The workings of this mechanism are best understood by example. Bartel looks to the case of Conservative Prime Minister Ted Heath, who could not muster a majority for the politics of breaking promises. When he confronted trade unions and pushed for lower wage growth to fight inflation in 1974, he lost the next election.20 This confirmed Tory grandees’ beliefs that it was better to accommodate than to confront Britain’s powerful unions. Even after Thatcher won the Conservative leadership election in 1975, “the career Tory politicians who had survived by not provoking conflict with the trade unions slowly buried” her proposed anti-union, monetarist, and austerity agenda “under deafening silence.”21
Had this “burial by deafening silence” continued, even competitive elections would not have helped to bring about the politics of breaking promises in the UK, for neither the Conservatives nor the Labour Party would have offered it as an option. As it was, however, economic signals and “new data” in the years 1976 to 1979—continued stagflation, the 1976 currency crisis and IMF bailout, and the 1978–79 Winter of Discontent—convinced the British public that the old settlement was broken. Following rather than leading this shift in opinion, Thatcher could then convince her grandees to run on a Thatcherite program—“Labour isn’t working” and “There is no alternative”—and win the 1979 election with it.
The centrality of the polity-economy distinction in this shifting of opinion is made clear in a chapter where Bartel compares Poland’s and the UK’s attempts to grapple with the economic and legitimation crises of the 1970s. Senior Polish leaders, too, saw a need to implement austerity, and believed that they had to convince a critical mass of the Polish population before they could do so. But whereas the escalation of economic crisis and the intensification of labor unrest convinced a majority of the British population that there was no alternative to breaking promises—because the signals were read as non-political signs of the exhaustion of the previous economic regime—similar signals were simply read as the failure of the political regime in Poland.
Because of this fundamental difference, when attempts to maintain the Golden Age tapestry of contracts and expectations provoked inflation, strikes, and currency crises in the West, these were read as largely objective signals that provided support for the dismantling of the economic regime of social democratic Keynesianism. By contrast, when attempts to maintain similar promises in the East led to growing indebtedness, shortages, and rising black market prices, these were read as political signals that further eroded support for state socialist regimes as a whole.
Breaking promises at home, building power abroad
Carried by neoliberal ideology, competitive elections, and the polity-economy distinction, Western regimes could break promises, whereas Eastern ones could only buy time.
This flipped the Cold War on its head. After a series of difficult crises in the 1970s, a Capitalist Perestroika—one of Bartel’s many deft phrases—eventually swept the Western world. This consisted of three prongs: breaking promises at home, flipping the balance of payments;,and converting financial interdependence into one-sided Western leverage.
The first prong was central: in the UK, Margaret Thatcher passed the 1981 austerity budget, “the defining landmark in the fiscal history of Thatcherism” and beat the National Union of Mineworkers into submission.22 In the US, Ronald Reagan broke the PATCO Strike, continued Carter’s deregulation of finance, telecommunications, and transport, halved the effective tax rate on capital, and provided the political backing for Paul Volcker to raise interest rates to the “highest levels ‘since the birth of Jesus Christ.’”23
Breaking the Golden Age promises to workers (full employment and the priority of labor over capital investors) “created a perfect storm of attractive conditions for capital.”24 Investors now knew that their claims would be prioritized. Once promises were broken at home in the West, capital that was previously flooding towards the global South and the state socialist countries suddenly came rushing back to the global North, leaving both the South and the East hanging.
This enabled the second and third prong of the Capitalist Perestroika. Whereas previously, public deficits were seen as dangerous capitulations of Western governments before trade union and worker interests, likely entailing inflationary consequences, the same deficits now looked like attractive investment opportunities. This allowed the Reagan administration to have its cake and eat it too: guns and butter, defense spending and tax cuts, could alike be financed without a weaker dollar or inflation.
The international consequences were severe, too. As the US (and, to a lesser extent, the UK) drained capital from the rest of the world, debtor countries had to scramble for dollars, allowing the US government, the Federal Reserve, and the IMF to end the interdependence that previously existed between debtors and creditors. By giving vulnerable US lenders enough time to reduce and hedge their exposure, dependence became one-sided. Leveraging this, “the Reagan administration and the IMF [could] impose their economic vision on the rest of the world.”25
Ending the Cold War
With this, the end of the Cold War was in sight. Thanks to the prior disciplining of the American working class and the Volcker Shock, Reagan’s massive fiscal deficits—a “financial buildup,” in Bartel’s felicitous phrase—achieved what his foreign policy could not: it soaked up global capital and thereby dried up lending to the Eastern Bloc.26
This was unexpectedly devastating for the Eastern Bloc. One of the most fascinating subplots of Bartel’s book is the centrality of international capital markets in the end of the Cold War. When growth dropped in the 1970s, both East and West had first reacted by borrowing: “The impulse to continue making promises was perfectly natural,” and “governments found in finance capital a lifeline that made making promises still possible.”27 This lifeline had become possible because, in the wake of the oil crises, petrostates had accumulated vast export surpluses that were now available for international lending.
Reliance on this lifeline, however, was asymmetric. The West had looked unstable and stagflationary in the early 1970s. Prior to the rise of neoliberalism, widespread support for social democratic Keynesianism undermined the claims of capital. As a result, investors lost patience relatively soon. In the UK, this was as early as in 1976; in the US it was in 1978–79; and in France, the frustrations arrived in 1981–83. When this happened, the West had no choice but to confront the politics of breaking promises.
The East, in contrast, had “energy, authoritarianism, and no inflation.”28 This allowed Eastern Bloc governments to borrow extensively on international capital markets.29It was only once the West was breaking promises at home that the East could borrow no longer—throwing it into crisis and forcing Eastern Bloc governments to finally break promises.
This became their undoing. Persuasion was tried and failed, ruling out peaceful austerity. Violence, in turn, was hard to justify, given the ideological exhaustion of state socialism. It had become ineffective in any case: crackdowns scared away Western creditors, as Poland painfully found out after 1981. Even existing loans could then not be rolled over, falling due in their entirety instead, so that violence ended up leading to even heavier austerity.
With neither austerity nor violence viable, Eastern leaders opted for exit instead. In Eastern Europe, “they gave up their power… in order to gain the political legitimacy they believed was necessary to implement the politics of breaking promises within their own countries,” writes Bartel.30 The Soviet Union adopted the Sinatra Doctrine and let its client regimes collapse. Even with respect to East Germany, the jewel in the Soviet Union’s crown, Gorbachev preferred the “riches of retreat”31—over twenty billion Deutsche Mark in West German grants and subsidized loans tied to a peaceful withdrawal of the Red Army from East Germany—to violence abroad or discipline at home.32
Thus the Eastern European revolutions in 1989–1990 “had not originated in the socialist world with perestroika,” as is commonly held.33 Nor had they originated in doux commerce or in the softer, cultural components of Ostpolitik. Instead, Bartel shows, they were driven by a whiplash effect of energy, finance, and politics interacting in unexpected ways: In the early seventies, the East’s new energy supplies, (outwardly) stable politics, and good credit allowed for ample borrowing. The West’s energy import dependence, weak investor trust, and (apparent) inability to break promises meant buying time was hard, so that decisive confrontations between finance and Western governments took place comparatively early. But when, due to the polity-economy distinction, economic crises helped persuade majorities in the West that promises must indeed be broken, the tables suddenly turned. With labor disciplined, capital came rushing back in. Precisely because it had borrowed so much before, the East was now exposed. Unable to break promises at home without sparking major backlash, and no longer convinced that repression was the answer, Eastern elites gave way in the face of the revolutionary wave. Deep down, then, the end of the Cold War was an “economic adjustment”—failed in the East, painfully pushed through in the West—“masked as political revolution.”34
Buying time or breaking promises? Implications for crisis theory
The implications of Bartel’s account are striking. They undermine any notion of Western triumphalism. For Bartel, “democratic capitalism prevailed in the Cold War because it proved capable of breaking promises and imposing economic discipline. Communism collapsed because it could not.” Moreover, by illustrating what “breaking promises” looked like in practice, the book leads one to ask who precisely won the Cold War: some general entity called the “West,” or a specific subgroup therein? Excellence in promise-breaking and winning on the back of others, the book makes clear, is not conducive to triumphalism.
Bartel is similarly disparaging about the results of Eastern Europe’s peaceful revolutions: when electoral democracy and neoliberal markets arrived in Eastern Europe, he writes, “the seat of government was returned to the people only so that their power to resist the government could be transcended.”35 Popular power in Eastern Europe was not a means of resisting TINA-economics, but of implementing it.
But the framework of buying time and breaking promises speaks to questions that go beyond the Cold War and its aftermath. Concerning the dynamics of democratic capitalism, The Triumph of Broken Promises challenges recent crisis theories which predict an inevitable collapse. Advocates of this view emphasize the tendency and inadequacy of “buying time” in the face of stagnant economic growth. Public debt, inflation, and other mechanisms might paper over the cracks for a while, but either voters or investors will be disappointed eventually. When this day comes, democratic capitalism will collapse.
Challenging these theories, The Triumph of Broken Promises shows that it was the Eastern Bloc, not the West, that relied on buying time. By effectively navigating the polity-economy distinction, democratic capitalism broke promises.
Admittedly, the conditions for promise breaking have changed. The ideological resources of neoliberalism have weakened, particularly since 2008; insecurity and inequality have risen significantly across the West, and spectacularly so in the Anglophone world; trust in the fairness of elections has declined and the democratic nature of Western governments is in doubt, questioning the extent to which elections can still provide legitimacy for painful policy changes.
Further, the substance of a “politics of breaking promises” may look quite different today, and potentially more challenging for democratic capitalism. Whereas the post-1979 stabilization regime broke promises to workers, the crises faced since 2008 revolve around financialization, inequality, insufficient aggregate demand, and environmental breakdown. This suggests that, this time around, promises to carbon billionaires and millionaires are what must be broken—potentially a taller order.
Nevertheless, the polity-economy distinction may still facilitate adaptation. Neoliberalism is, after all, just one version of democratic capitalism. Other models like technocratic Keynesianism, full employment democratic Keynesianism, or a big green state, are waiting in the wings. The distinction may permit the same feedback cycle of problem, policy response, and data generation (be it with regard to unemployment, strikes, or inflation) as it did in the 1970s and 1980s—once again bypassing the collapse predicted by crisis theorists.
Arguably, this is what has happened over the last fifteen years in the US, from the Great Financial Crisis to the Inflation Reduction Act, and in the EU, from the first Greek bailout to the NextGenEU program. An exhausted policy paradigm was pushed beyond its limit; economic signals (in this case, low growth, low inflation, and low interest rates) indicated its failure; popular beliefs about feasible alternatives shifted; and politics followed opinion and shifted policy. As in the Cold War, this cycle was slow and painful. It was a contingent process that could have gone otherwise.36 Nevertheless, after well over a decade of crisis, democratic capitalism may be moving towards adaptation rather than self-destruction. Even if the durability of democratic capitalism remains an open question, the preponderance of evidence suggests that breaking promises has not been a one-time trick.
Utopias past and present
Beyond challenging recent crisis theory, Bartel’s book carries powerful implications for progressive politics: what could an end to capitalism look like? If utopia has become exhausted (Habermas), history has ended (Fukuyama), capitalism stands alone (Milanovic), and capitalist realism prevails (Fisher), what sort of alternative future can we credibly envision? For those of us who bring progressive political commitments to historical research on the 1970s and 1980s, this translates into the question: What was the road not taken? If there was truly no alternative back then, is there one today?
By detailing how socialist leaders exhausted all the alternatives at their disposal—from buying time to reaching for growth, from disarmament to dismantling empire—Bartel urges us to let go of the producerist utopias underpinning the state socialist project and some of its Western cousins. Given their politics, the communist leaderships were highly motivated in their search for alternatives to neoliberalism and austerity. And, at the time, they were well positioned to do so—they were a large, geopolitically independent, and energy-self-sufficient bloc. If they could not find an alternative, if they themselves declared “There is no alternative to perestroika!” and if they faced the same problem as the West—then perhaps the model indeed could not survive.37 That this rhymes with the experience of the UK Labour Party as it tried to avoid an IMF bailout in 1976, with French President Mitterrand’s turbulent first two years in office in 1981–83, as well as with the evolution of US energy policy over the course of the 1970s is powerful evidence for TINA.38
Of course, as 1989–91 showed, a lack of alternatives to economic discipline does not mean there were no meaningful political alternatives. To the contrary, there were world-historical choices to be made about what politics and what economics could coordinate and legitimize deindustrialization and economic discipline. Getting those wrong meant regime collapse. Getting them right meant successful adaptation.
Moreover, in light of both Bartel’s and Isabella Weber’s recent book, one cannot help but wonder whether targeted reforms in agriculture and energy, instead of economy-wide perestroika, would have been a more rational approach for the Eastern Bloc. Here, as with the recycling of petrodollars, Bartel’s book may leave certain contingencies underexplored.39
Political and sector-specific alternatives notwithstanding, there seems to have been no alternative to breaking the mid-century promises of ever growing prosperity and economic security.40 If there had been, one can presume that such an alternative would likely have been found—by Eastern leaders desperate to stay in power, by French Socialists trying to deliver on their election promises, by the British Labour Party maximally eager to avoid the IMF, or by US politicians seeking to manage the 1970s energy crisis in line with voters’ egalitarian preferences.
Recognizing this is painful, but potentially liberating. For in demonstrating that producerist ideals of abundance were very likely beyond reach, that there simply was no alternative back then—“TWNA”—The Triumph of Broken Promises may open new horizons today. Alluring utopias like fully automated luxury communism easily steal the limelight. Bartel’s book tells us to look to other utopias, less shiny, less techy, and more political. Two such alternatives are in the air already: a hard-nosed Kaleckian one, in which running the economy hot is used to provoke the political contradictions identified in his famous 1943 paper on full employment;41 as well as a deeper, more hopeful, historically more ambitious project to reformulate abundance as a social rather than material-technical project.42
Decarbonizing industrial society
Beyond its rich implications for reflecting on capitalism, crisis, and utopia, Bartel’s book stirs a third great theme: in highlighting that East and West faced similar challenges, and played with much the same toolkit of responses, The Triumph of Broken Promises raises afresh the question as to whether the binary of capitalism versus socialism is the best lens for studying twentieth century political economy. Perhaps, it subtly suggests, “the debate which confronted capitalism and socialism as mutually exclusive and polar opposites will be seen by future generations as a relic of the twentieth-century ideological Cold Wars of Religion,” as Eric Hobsbawm wrote in 1994.43 Maybe “industrial society” offers a firmer analytical grip.44
Implicit in the book is a Latourian point: what industrial societies, in both their colorations, encountered was the great difficulty of governing always imperfectly understood modern economies. If their “true state” is always contested because industrial societies are bustling with different modes of existence and because our knowledge about them is always socially constructed, in politically contestable ways, then managing significant economic disappointment is fantastically difficult. Who would accept the need to retrench their particular prosperity because of some nebulous necessity that can never be proven? TINA is never obvious—even when actually true!
This brings us, like Latour’s later work, to the politics of decarbonization. It is obvious that there is no alternative to a green transition. But if decarbonization involves significant economic disappointment—not a given, but a definite possibility—we may face difficulties that echo those recounted by Bartel.
As a final reflection, then, it is worth pondering the two very different mechanisms that successfully broke promises in Bartel’s telling, and how they might fare when confronted with climate politics. In the “Western” mechanism, majorities accepted economic pain because they came to believe there is no alternative to it. In the “Eastern” mechanism, majorities accepted economic pain once it was a legitimate, i.e. their, government that imposed it.
The first mechanism relied on creating a sense of necessity. Applied to climate change, this would involve demonstrating that green growth is impossible, before and as a means for legitimizing degrowth measures. The gambit would be that, just as the UK had to go through an IMF bailout and the Winter of Discontent before majorities could be found for deindustrialization, so fossil fuel societies would have to see the failure of green growth before majorities could contemplate degrowth measures.
It is unclear if this would work. What generated beliefs of necessity around deindustrialization were phenomena like inflation, unemployment, fiscal deficits, currency crises, GDP stagnation, and empty shelves, visible on time scales from months to a few years. With climate, the relevant feedback loops may take decades. By the time beliefs of necessity are established, it may be too late.
The second, Eastern mechanism followed a radically different logic. Here, the acceptance of economic pain went via viewing the painful reforms as self-imposed. There may be different ways to create the salient feelings of agency and self-determination around decarbonization, but a prima facie plausible way may be to pull more decision-making into democratic politics, to lean more on planning and less on markets in coordinating the transition.
Could this work? Here, too, the answer is unclear. Much turns on whether it was self-determination per se that enabled the politics of breaking promises in the former Eastern Bloc, or whether it was the shift to self-determination that did it. “Tough decisions, freely taken,” or a one-off sugar coating—“trading factories for freedom,” to echo Judith Stein? The first would be promising for a specifically democratic climate politics. The second would be problematic, for although the countries of the Global North have considerable democratic deficits, they remain more democratic than the Eastern bloc countries were. Boosting democracy today would provide for a thinner sugar coating. There would be less freedom to win in exchange for trading away further factories.
Bartel’s book does not provide answers to these questions. But its framework proves fertile indeed for contemporary analysis. Perhaps producerist utopias of abundance should be jettisoned, together with hopes for capitalism’s demise. Perhaps the social construction of scarcity, and how to undo it, should move to center-stage. And perhaps the hardest challenge before us, as decarbonization becomes ever more urgent, may not be escaping TINA when there are real alternatives; but how to act, when there are none.
Throughout this review, I use “the East” or “the Eastern bloc” and “the West” or “Western states” etc. to denote, respectively, the seven European COMECON members (the USSR, Poland, Romania, East Germany, Czechoslovakia, Hungary, and Bulgaria) and the G7 (the seven largest market economies of the 1970s and 1980s, the United States, Japan, West Germany, the United Kingdom, France, Italy, and Canada) and the smaller democratic capitalist states such as Australia or the Benelux states.↩
Bartel, Fritz. 2022. The Triumph of Broken Promises : The End of the Cold War and the Rise of Neoliberalism. Cambridge, Massachusetts: Harvard University Press, 11.↩
Bartel, 10, italics original.↩
Hungarian state socialist economists found equally plain words: “If the country was to recover, the party and government would have to close inefficient enterprises, make the forint convertible, liberalize imports, cut corporate taxes and subsidies, adopt a restrictive monetary policy, and allow for a greater degree of wage inequality between workers based on their productivity.” (p. 237)↩
“They too are carrying out a perestroika,” Gorbachev said about Thatcher at a politburo meeting in 1987. At a bilateral meeting in 1989, the Iron Lady in turn expressed her empathy “with the immensity of [Gorbachev’s] challenge,” because having launched “an analogous perestroika” at home, she knew how difficult his task was (p.13).↩
Gorbachev, too, “tried to reform communist ideology to account for a more coercive social contract.” But his attempt also remained unsuccessful: he “found himself unable to transgress the… ideological legacy of Marxism-Leninism.” (p. 170)↩
Similar election defeats struck other Western leaders who first attempted to implement a politics of breaking promises, e.g. US President Gerald Ford in the midterms 1974 and the Presidential elections in 1976, or French President Valéry Giscard d’Estaing in 1981.↩
When he came to power, Ronald Reagan sought to squeeze the Eastern Bloc with traditional foreign policy means: sanctions on Soviet energy exports and Eastern governments’ financial market access. This attempt failed: a major Soviet-German pipeline project he attempted to block went ahead anyway. Similar efforts to sanction the access of Eastern governments to international capital markets remained incomplete.↩
Bartel, Figure 1.2, 46.↩
The near-catastrophic behavior of the US Republican Party in Congress in 2008, as highlighted by Adam Tooze’s Crashed, immediately springs to mind.↩
On this, see Meg Jacobs, Panic at the Pump.↩
Had the recycling of petrodollars occurred via the IMF, less hard currency borrowing might have been available for Eastern Europe, or it might have come with harder political conditionalities earlier on. In the West, the transition from the social-democratic settlement to the neoliberal disposition might have taken a different shape, with private financial markets less influential as arbiters of national economic policy. To this episode, however, the book dedicates only two paragraphs.↩
See also the contributions of Robert Brenner, The Economics of Global Turbulence, and Robert Gordon, The Rise and Fall of American Growth, on this.↩
Incidentally, this strategy resembles Hoskyn’s and Thatcher’s method for building majority support for their program (see ch. 3 of Triumph): there, too, the idea was to provoke a confrontation in order to bring a latent conflict to the surface, in the expectation of winning it on that more exposed battlefield. In the Kaleckian case, the hope is to use expansive fiscal and monetary policy to tighten the labor market, build bargaining power, achieve a more equal pre-distribution, and thereby effect positive change deep in the capillaries of societies, without relying on micro-managing state institutions. Once existing macroeconomic slack is exhausted, this will trigger a confrontation with investors, the resolution of which is the lynchpin of this project.↩
This project draws on a long tradition, from Thomas More’s 1516 Utopia via Edward Bellamy’s 1888 Looking Backward to contemporary contributions. Recent proponents who argue that “abundance is a social relationship”, so that “scarcity and its accompanying mentality” can be overcome through the reorganization of property, production, and exchange relations, include Aaron Benanav (p. 89) as well as Drew Pendergrass and Troy Vettese.↩
Hobsbawm, Eric. 1994. The Age of Extremes : The Short Twentieth Century, 1914-1991. London Abacus. 564.↩
See also Gellner (1983) on this.↩