Generations are caused by events, or, put more accurately, events set the conditions from which distinct political generations can emerge. That must mean that events leave marks on the resulting generations. If we can understand the compositional effects of the event of 2008, then we can identify, in subsequent chapters, the scars it has left on the politics that are emerging. It seems straightforward to say that the financial crisis of 2008 is the generational event of our time, but what sort of event was it and what were its effects? This isn’t easy to answer because the meaning of an event, and, indeed, whether something counts as a significant event at all, is not determined at the time. It depends on what happens afterwards, how it goes down in history. In that regard 2008 has had a complicated and contested afterlife.
Events always contain a moment after which things aren’t the same again. In 2008 that moment came with the bankruptcy of Lehman Brothers investment bank on 15 September. The next day this caused the insolvency of AIG, the largest insurance company in the world. The resulting cascade of uncertainty over the solvency of other financial institutions caused interbank lending to seize up and the cost of borrowing to rocket. It was this that spread the crisis to the ‘real’ economy, causing global production to shrink by 13 per cent and global trade to reduce by 20 per cent.1 From the autobiographies of Ben Bernanke, the Chair of the US Federal Reserve, and Alistair Darling, the UK Chancellor of the Exchequer, we now know that by October 2008 the ATMs came within hours of closing.2 Only massive intervention from the State prevented the complete collapse of the financial sector.
The day after AIG declared bankruptcy, Bernanke and US Treasury Secretary Hank Paulson went to Congress with a three-page bill. It amounted to a $750 billion blank cheque, which they could spend without review ‘by any court of law or any administrative agency’. Congress had been promised that $700 billion of mortgages would be bought to enable modification in favour of mortgage holders. A key section of the bill authorized the Treasury Secretary to ‘facilitate loan modifications to prevent avoidable foreclosures’. He quickly changed his mind. Not only were existing debt obligations enforced, but the money was, in effect, given straight to the banks to prop up their balance sheets.3 The direction set then is ongoing still. States have taken on the bad debts of the financial sector, providing them with favourable loans and, through quantitative easing programmes, huge amounts of free money. The bailouts are one of the greatest non-wartime mobilizations of resources in human history. Their sole aim was preventing a technical financial event from turning into a political event, a political turning point. This allowed reform of the financial sector to be limited and neoliberal ideology to escape reassessment.
One of the most peculiar aspects of the last decade was the disappearance of the 2008 financial crisis. In the immediate aftermath of the Lehman collapse discussion focused on the causes of the crisis and the measures needed to prevent its re-occurrence. ‘Free market’ ideology came under serious pressure. Former Federal Reserve Chairman Alan Greenspan famously told Congress he had found a flaw in his thinking, and systemic reform of the financial sector seemed inevitable. Yet within six months the event of 2008 had disappeared behind the spectre of deficits in government budgets. These deficits, in which a country’s expenses exceed its revenue, were primarily caused by the reduced tax take from a shrinking economy and increased spending to pay for the bailouts. Yet these effects of the financial crisis were suddenly treated as though they were its cause.4 By 2010 austerity had become enshrined as the primary policy response and talk of reforming finance was sidelined. Instead the financial sector was lavished with an ocean of free money paid for by public spending cuts and wage restraints.
In this way a technical crisis in a sector of capital was turned into a moment of decomposition for the working class. It would be farcical to blame the financial crisis on Muslims, immigrants or the unemployed, but once that event was out of view resentments could breed over access to a shrinking pot of resources. The event of 2008 changed the technical composition of society, new class fractures opened up and points of non-communication solidified as immediate interests diverged. The real story of the past decade has been an acceleration in the obscene concentration of wealth. In 2018 82 per cent of new global wealth went to the top 1 per cent,5 while in 2017 Oxfam reported that just eight men owned the same amount of wealth as the bottom 50 per cent of the global population, 3.7 billion individuals.6 The bailouts and the post-crisis economy might well entail the biggest transfer of wealth to a tiny elite in human history. It has taken a concerted political effort to stop this fact being the central political issue of our time. But that effort is facilitated by the rarefied lives of the global elite. They simply don’t figure in our day-to-day existence. Political divisions arise, therefore, through proxy effects on the general population.
The post-crisis world economy has become addicted to quantitative easing and low interest rates. It is proving near impossible to remove these supports without causing the whole edifice to collapse. This produces an economy in which saving is disincentivized, financial markets are awash with cash but demand for business investment is tepid – the perfect environment for asset price bubbles. Stock markets have quickly recovered to record highs, while property prices have remained high in most countries. As older generations are more likely to own assets, usually property, then intergenerational injustice has become supercharged. The young, on the other hand, are dependent on wages, which have been flat in the US while in the UK the 2010s will be ‘the weakest decade for pay growth since the Napoleonic wars’.7
Many of the trends towards intergenerational injustice go back several decades, but the emergence of age as a significant political divide has only taken off in the last few years.8 The acceleration in injustice helps explain the timing but it doesn’t fully explain why what was previously tolerable has suddenly became intolerable. Neoliberalism is not just a way of ordering the economy; it is also a model for governing our lives that constricts what appears socially and politically possible. This dramatically alters how changes in material circumstances play out politically. Actually existing neoliberalism has been through several changes during the 40 years of its existence. It has therefore interacted differently with different generations. Any assessment of the generational impact of 2008 must take this into account.
In a 2016 article called ‘The New Neoliberalism’ Will Davies usefully divides the history of actually existing neoliberalism into three distinct periods based on the motivating ethic holding it together at that time.9 The years 1979–89, he argues, were dominated by a combative ethic, while the years 1989–2008 saw attempts to re-orient around a normative ethic. I disagree with his characterization of the third period, post-2008, as punitive, but the periodization is still useful. It helps reveal how neoliberal logics and practices developed in one context survive, in reworked form, in subsequent ones. In a world in which many neoliberal practices no longer make sense this helps explain their persistence. Yet if we’re to understand the compositional effects of 2008, we need more than an understanding of neoliberalism’s internal logic. We also need to reverse our perspective and grasp neoliberalism from the point of view of working-class autonomy. What political composition did neoliberalism set out to decompose, and what potential recomposition is it trying to ward off now?
Davies argues that during its combative stage neoliberalism was held together by its mission to defeat socialism. He dates this period from 1979, the year of Margaret Thatcher’s election, but neoliberalism was established as an intellectual and political project well before this.10 Davies locates the birth of neoliberalism as a distinctive project in Ludwig von Mises’ 1922 contribution to the Socialist Calculation debate. The absolutist, combative style of neoliberal critique was established by Mises’ argument that the only rational way to organize society is to use price signals to coordinate activity through market structures. Dismissing all other modes of thought as irrational creates an intellectual isolationism that helps explain the post-2008 inability of neoliberalism to reform itself.
For Mark Fisher one result of neoliberalism’s combative drive is what he calls capitalist realism, where the only conceivable reality is one dominated by ever-intensifying capitalist social relations.11 Yet in the last few years before his tragic and untimely death Fisher had increasingly adopted a reversal of perspective, understanding capitalism as a machine for warding off the recurring, though often fugitive, potential for a society of common wealth and nondomination. He became interested, in particular, in the social and political potential of the 1970s that neoliberalism prevented. The Left was undergoing its own generational battle in the run-up to the neoliberal era. The official Left of the time was set on protecting the gains the working class received in a post-war settlement between capital and labour, which linked rising wages to rising productivity as a means of maintaining profitability. In the UK this deal was explicit. The head of the employers and the leader of the unions would meet at the Prime Minister’s house to hammer out a deal over ‘beer and sandwiches’. As part of this settlement the State became the guarantor of the population’s social reproduction through state pensions, unemployment insurance and, in most countries, health care free at the point of delivery. This deal went into crisis in the 1970s owing in part to attempts by young workers and Left movements to push beyond its limits and constraints.
The key social movements of the time, secondwave feminism, gay liberation and the anti-racist and anti-colonial movements, were revolts by those sectors that got dealt a bad hand in the post-war deal. As an accompaniment, the youth movement, the counterculture and the rising militancy of young workers can be seen as attempts to exceed the deal while rejecting the boredom and conformity of the ‘Fordist’ world that went with it. The unprecedented material security that post-war social democracy gave to working-class youth bred rising confidence and assertiveness. The young Left increasingly saw the post-war deal as a staging post on the road to more democratic and participative forms of socialism.12 Full employment, high wages and a safety net provided by the State allowed new sectors of society the time and space to explore what freedom meant from their perspective. The results are visible in cultural production. The 1970s and 1980s are still regarded as the highpoint of pop cultural innovation and experimentation. As working- and middle-class youth exercised unprecedented control over the direction of culture, they pioneered new ways of living and began to produce desires that could not be met under Fordist capitalism, or perhaps under capitalism of any sort. A generation gap opened on the Left between those wishing to recompose Left politics around these new desires and an older Left who feared the disintegration of the discipline needed to maintain their post-war gains.13
For capital the crises of the 1970s manifested as inflationary spirals that undermined profitability. Sections of capital found neoliberal theories attractive because they had a story to explain the situation. Inflation was high, they argued, because wages and social spending were too high. There was too much money in the system chasing too few goods and services. The problem was, as Samuel Huntington and his colleagues famously put it, ‘an excess of democracy’.14 Wages were rising owing to workers’ increased willingness and ability to assert their interests through industrial struggle. Social spending was increasing because previously unorganized segments of society were able to exert democratic pressure on elected politicians. More than this, sections of the Left were producing proposals for democratic control in workplaces and the extension of more participatory forms of democracy across society.15 In some ways the neoliberal analysis was right. The crisis of the 1970s produced a decision point. We could either pursue a radical extension of democracy that pushed beyond the constraints of capital or start a radical rollback of democracy to reassert capitalist control. It’s for this reason that Mark Fisher argues:
[N]eoliberalism’s real target was not its official enemies – the decadent monolith of the Soviet bloc, and the crumbling compacts of social democracy and the New Deal, which were collapsing under the weight of their own contradictions. Instead, neoliberalism is best understood as a project aimed at destroying – to the point of making them unthinkable – the experiments in democratic socialism and libertarian communism that were efflorescing at the end of the 60s and the beginning of the 70s.16
In his work towards an unfinished book called Acid Communism Fisher began using the prism of consciousness inflation to reinterpret the practices of the 1970s Left. The concept comes from the consciousness-raising groups that were the organizational bedrock of the 1970s feminist movement. These were small groups of women who met regularly to discuss their lives and link their problems to structural causes.17 Alongside this example Fisher examined the heightened class consciousness of the period as well as the consciousness-expanding impact of psychedelic culture on the youth movement. Consciousness raising, then, encompasses a series of functions. It involves identifying the structural causes of the social constraints that are placed on your life. It includes the increased confidence and capacity that comes with seeing yourself as part of a powerful collective actor rather than an isolated individual. And it also includes that expansion of social and political possibility that comes when what is presented as necessary and inevitable is revealed as merely contingent and therefore, in principle, changeable. As a corollary to this Fisher began to conceive of neoliberalism as a project of consciousness deflation. Positioning this analysis within the combative phase of neoliberalism helps explain why attacks on the material security and institutions of the working class took precedence over all other concerns.
The initial neoliberal route to consciousness deflation lay through economic deflation. The dramatic rises in interest rates in the late 1970s and early 1980s brought inflation under control but only by provoking a recession. The resulting unemployment disciplined workers and pinned back their hopes and expectations. A combination of militarized policing and legal and financial strangulation then defeated the union movement. In the UK real wages have stagnated since this point; in the US they have declined. It was only later, as the recession lifted, that financial inducements were added to the consciousness deflation armoury. Rising house prices were the main tool for this seduction as the sale of public housing and the deregulation of finance began the financialization of everyday life. Combative neoliberalism placed violent impediments in the path of a viable Left future and provided financial inducements towards individualized (or family-based) models of the neoliberal good life.
In the generational blame game genre there are a set of conservative narratives that blame the current state of crisis not on the Millennials but on the Baby Boomers. Books such as A Generation of Sociopaths by Bruce Gibney18 and films such as Generation Zero by Steve Bannon present a story that rolls seamlessly from the perceived self-indulgence of the counterculture to the greedy selfishness of the early 2000s. They suggest familiar causes for this generational flaw: lax parenting and the affordances of then dominant media technologies; Boomers were after all the first generation native to TV. Seeing neoliberalism as consciousness deflation suggests a different story. The Baby Boomers are a defeated generation. The Left generational project that looked so strong in the 1960s and 1970s was defeated in the 1980s and 1990s. Accusations of sociopathic selfishness elide that defeat and treat its symptoms as a cause.
Neoliberalism’s second stage began with the ‘Fall of the Berlin Wall’ in 1989. It’s a phrase that stands in for a wider process of global realignment as the Soviet bloc countries underwent a sudden and harsh transition to a neoliberal version of capitalism. Around the same time the Chinese Communist Party suppressed the Tiananmen Square rebellion and opened up parts of its economy to foreign investment. Taken together, these had two profound effects. Firstly, the disappearance of an economic bloc that was, at least in some sense, non-capitalist had a dramatic impact on dominant political imaginaries. ‘There is No Alternative’ came to seem a statement of fact. Secondly, over just a couple of years the global labour force available for exploitation by a newly mobile capital doubled in size.19 This unprecedented event significantly reduced the bargaining power of labour. As workers around the world were less able to assert their interests, hopes for improving life through socialist means were severely curtailed. Social democratic parties around the world accepted some form of neoliberalism as the horizon of political possibility.
‘What is neoliberalism in the absence of socialism – what provides its orientation or ethical coherence?’20 Will Davies answers his own question by suggesting that neoliberalism moves from its destructive emphasis to become a constructive project based on a normative ethic. This period saw the extension of (pseudo-)competitive market relations into more areas of life. The process was given a normative sheen by using competitiveness as the measure of ‘fairness’. ‘The task of government was now to ensure that “winners” were clearly distinguishable from “losers”, and that the contest was perceived as fair.’21 This normative ethic deflated consciousness by limiting what seemed politically and socially possible but it also occupied the space of the Left. It was the ‘Third Way’ centre Left that drank most deeply of the neoliberal Kool-Aid and became its fiercest advocates. They shifted neoliberalism away from the social conservatism of its combative era towards those elements of the feminist, anti-racist and gay liberation movements which could be aligned with consumerism and competitive labour markets.
Mark Fisher captures the prevailing attitude as ‘a pragmatic adjustment’. ‘Capitalist realism’, he goes on to say, ‘isn’t the direct endorsement of neoliberal doctrine; it’s the idea that, whether we like it or not, the world is governed by neoliberal ideas, and that won’t change. There’s no point fighting the inevitable.’22 To understand how competitive markets construct this sense of inevitability we can look at the format of reality TV, the key cultural genre of the 2000s. Early reality shows produced a constructed ‘realism’ that leant heavily on the tradition of documentary. The usual format brought a group of strangers together in an unusual environment; the results were then filmed and edited into a dramatic narrative. In the early 2000s the genre was reinvented, with shows such as Big Brother and The Apprentice formed around the principle of competition. A competitive ‘voting out’ element was added in order to stimulate anti-social, backstabbing, competitive behaviour. Producers continually tweak the formats to ensure this behaviour dominates. As contestants grasp the institutional logic of the situation, they alter their behaviour to conform to these expectations.23
Neoliberal institutional reforms, and the managerial practices that accompany them, follow a similar model. Neoliberalism is different from classical liberalism, and indeed other iterations of capitalism, owing to its drive to re-found the whole of society around an ethos of competition. Neoliberal theorists recognize that competitive markets are not ‘naturally’ occurring. They must be constructed by an active, interventionist State.24 Extending them beyond the ‘economic’ sphere requires dramatic institutional reform and intrusive management practices to assess behaviour. When we interact with competitive market structures we must conform to their logic or we will lose out. Our forced engagement with these ‘markets’ acts as a kind of training. It trains us to adopt a particular subjectivity, a particular mode of thinking and acting. The institutions we interact with on a daily basis are continually tweaked to ensure they reward ruthlessly competitive, selfish and self-promoting behaviour while penalizing those who behave in other ways. Through repetition we internalize this institutional logic, come to anticipate it and act accordingly. It eventually becomes the common-sense view of what human beings are ‘really’ like.25 This is consciousness deflation writ large. The complex potential of humanity becomes reduced to a single model of life, but it’s a model we can’t live in. The epidemics of depression, insomnia and mental distress are testament to that. What a lot of planning, effort and resources it’s taken to put that feeling of anxiety into your stomach.
So what’s changed since 2008? For Will Davies neoliberalism has taken a turn towards the punitive. He argues, for instance, that the morality tied up with debt has predisposed us to accept austerity as punishment for unearned debt-fuelled growth. There is something to this, but I think it’s more useful to understand neoliberalism as entering its zombie stage: it is ‘dead yet still dominant’.26 The key characteristic of zombies is brain death. Their bodies keep operating but without conscious thought. Zombies can only act habitually, pursuing a monomaniacal hunger to consume the living even though their bodies gain no benefit. The zombie is a body stripped of its ability to alter course and decide on a different future. Zombies represent violent stasis. They don’t change, they don’t adapt, they just persist. Similarly, the distinguishing characteristic of post-crisis neoliberalism is its inability to reform itself, despite a decade-long stagnation. Neoliberalism has stopped making sense, even on its own terms, yet the project hasn’t stopped. Neoliberal ideology has lost its coherence, yet its policies roll out unabated. This makes the situation strange and contradictory. We’re placed in an ideological double bind. We are still trained to adopt a neoliberal world-view by the institutional logic of the organizations we engage with and the debt-based relations within which we are trapped, but for most it’s impossible to believe this will lead to a better life. The organs of the neoliberal body keep churning out neoliberal subjects, but we are now robbed of the teleology that would make sense of our suffering. Zombie neoliberalism doesn’t offer us anything; it just persists.
The debt-based financialization of everyday life is structured by Gary Becker’s concept of human capital. Debt encourages us to adopt the perspective of capital. We are encouraged to interpret our activity as investments in ourselves that must be judged on the metrics of a return on investment. It produces a subjectivity which, as Wendy Brown nicely summarizes,
is concerned with enhancing its portfolio values in all domains of its life, an activity undertaken through practices of self-investment and attracting investors. Whether through social media ‘followers’, ‘likes’ and ‘retweets’, through rankings and ratings for every activity and domain, or through more directly monetized practices, the pursuit of education, training, leisure, reproduction, consumption, and more are increasingly configured as strategic decisions and practices related to enhancing the self’s future value.27
For older generations, who are more likely to own property, the human capital metaphor might still make sense. But for younger cohorts the collapse in prospects has made further self-investment irrational. Over the last decade, for instance, the returns on education have lowered dramatically. The chances that graduates will get graduate-level jobs have massively reduced, so why haven’t student numbers dropped? In times of stagnation the human capital metaphor breaks down, but without alternative modes of living we are still forced to engage with institutions based on its logic. As Maurizio Lazzarato writes:
The current crisis stems from the fact that … this subjective figure has failed … the promise that ‘work on the self’ was supposed to offer ‘labor’ in terms of emancipation (pleasure, a sense of accomplishment, recognition, experimentation with new forms of life, upward mobility, etc.) has been transformed into the imperative to take upon oneself the risks and costs for which neither business nor the State are willing to pay… . In the current crisis, for the majority of the population ‘work on the self’ means no more than the ‘entrepreneurial’ management of unemployment, debt, wage and revenue cuts, reductions in social services and rising taxes.28
The intrusive evaluation linked to debt and managerialism was once attached to a story of aspiration; now it is felt as an imposition without consent, a constraint on freedom. For the young in particular there are few financial inducements to align their hopes with finance capital. Debt requires a subject who can keep a promise into the future.29 It requires a zombie subject who can’t change direction or risk a rupture with their present selves. That’s why student debt is so pernicious and onerous. The responsibilities of future adulthood are imposed upon the young before they have a chance to set their own goals. It robs young people of their youth, of their chance to reinvent themselves.
When the common sense of a society stops making sense but change through collective action seems out of reach, people must create ad hoc subjectivities from the material to hand. One solution for the more affluent young is to double down on ‘self-investment’ in the hope that it will pay off. The accusations of narcissism levelled at Millennials should be seen in this light. Young people with fewer resources, on the other hand, must find narratives that make sense of their ‘entrepreneurial management’ of debt, low wages and precarious work.
We can see evidence of this in the work of Jennifer Silva. Her interviews with 100 young working-class Americans found a subjectivity ‘characterized by low expectations of work, wariness towards romantic commitment, widespread distrust of social institutions, profound isolation from others, and an overriding focus on their emotions and psychic health’.30 The dominant narrative through which these youths understand their lives is a therapeutic one which works as follows:
first, it compels one to identify pathological thoughts and behaviors; second, to locate the hidden source of these pathologies within one’s past; third, to give voice to one’s story of suffering in communication with others; and finally, to triumph over one’s past by bringing into being an emancipated and independent self.31
It’s a narrative structure that produces a ‘sense of forward-moving progress’,32 but it has severe political limitations. Silva compares it unfavourably to ‘social movements like feminism’ in which
self-awareness, or naming one’s problems, was the first step to radical collective awareness. For this generation, it is the only step, completely detached from any kind of solidarity; while they struggle with similar, and structurally rooted, problems, there is no sense of ‘we’… . [W]ithout a collective sense of structural inequalities, the suffering and betrayal born of de-industrialization, inequality, and risk is interpreted as individual failure.33
The bailouts were an attempt to displace the event of 2008 temporally by kicking its economic impacts further down the road. Austerity was an attempt to displace the event of 2008 politically by obscuring who was to blame. The result was a slow-motion crisis in which age came to be a key point of fracture. At first this was hard to see as active consent turned into passive consent and then fell into resentment. Generational inequalities which were previously tolerable suddenly became intolerable. The combined but uneven collapse of neoliberal aspiration has led to a crisis in the way young people make sense of the world. As a result, the nascent generation of 2008 is large and disgruntled but it is also politically ambiguous. The crisis of neoliberalism has not been resolved. The direction this generation takes will decide how that crisis ends.