My dad likes to tell a Flemish folk tale. It goes like this:
One autumn, a farmer has a killer harvest — but he doesn’t have a barn to store it in. “If only I had the money, or enough able hands, to build a new barn,” he says to himself. Then, out of nowhere, a man with a hat and petticoat — and a funny smell — appears, and tells him, “I can build you a barn overnight. I have the money and the labor power.”
“How? And what will it cost me?”
“It won’t cost you a thing: I just need you to sign right here in blood. And by the time the rooster crows, your barn will be ready.”
That night, the farmer can’t sleep. There’s constant clanging and banging coming from the yard, and he’s worried that it will wake up his wife. “If she finds out,” he frets, “there’ll be hell to pay.” Sure enough, at around 4 am, she sits up. “What the hell was that?”
“You’ve been rolling around all night. What’s is going on?”
The man, unable to contain his anxiety, tells her all. “You idiot!” she says. “You made a deal with the Devil!” She jumps out of bed, grabs a lantern, lights it and runs outside. The rooster, shocked by the light, starts crowing. With the lantern, she sees dozens of small devils scurry away, and in front of her stands a whole barn — almost finished, with just a single hole in the roof. The smell of sulfur permeates the air.
Yes, they now had a barn, but try as they might, they could never fix the hole in the roof — and it would always rain on their harvest. In any case, the farmer had his wife to thank for her intervention; without her, he would’ve spent eternity in hell.
Three Bad Deals
Forty years ago, the rulers of the West made not one, but several Devil’s bargains. Despite the suspicious smell of sulfur in the air, they thought they would get away with them.
The oil-to-arms deal. In the 1970s, the United States’ domestic oil extraction started declining — a source of energy that had given it global powers. It needed to find a new, stable source of cheap oil, and fast. What followed was a two-pronged strategy: to initiate a series of interventions to destabilize oil-producing democracies, and to ally with dictatorships and guarantee a monopoly over their oil exports. In return, Western nations would flood these dictatorships with cheap weapons.
The credit-for-resources deal. Just when Western countries stopped being able to rely on their colonies to repay their debts, they made a deal with the banks: You can create as much money as you want, and we’ll make sure that other countries pay back their debts. They offered struggling nations — many of whom were led by authoritarian regimes — low-interest loans to build their economies and send all their resources to the West. The West became the global debt collector, working for the banks. In return, Western corporations got first access to the world’s natural resources, at bargain basement prices.
Cheap goods for cheap labor. Then there was a third bargain, this time with Western consumers. Rising living expectations, better rights for workers and stronger welfare systems meant that Westerners no longer wanted to deal with the side effects of their wealth. When possible, low-skilled labor and environmental pollution were exported. Thankless work like cleaning, childcare and fruit-picking was imported. This way, Western governments could satiate their middle class with high living standards, with none of the bad stuff.
The Rising Costs of Bottom-Shelf Deals
For a while, the side effects of those bottom-shelf bargains could be kept at arm’s length. Growth was great. But the party couldn’t last. Decades of military intervention in the Middle East — necessary to guarantee the West’s monopoly agreements with the Gulf States — led to antagonism and an anti-imperialist backlash. This was funded in large part by the very same dictatorships that depended on the West’s cheap weapon supply and thirst for oil.
At the same time, economic refugees from around the world sought a better life in Western countries. These economic migrants quickly learned that, try as they might, they would never be accepted in their new home; the odds would always be stacked against them. The promise of open borders and economic freedom had been a lie.
In Europe, ghettos of economic migrants turned into war zones — police repression became a daily reality. In the United States, politics became dominated by the problem of “illegal” immigrants and Islamic fundamentalist terrorism. All was not well.
Outsourcing cheap labor also turned out to have long-term consequences. The middle class started shrinking, families started taking on more and more debt, and welfare became a political liability. The result: disenchantment with politics-as-usual, and resentment from those who used to have it better.
Then, another bargain turned out to be the Devil’s work. The lifeblood of the economy, fossil fuels, was actually toxic when consumed in high doses. Oil and coal — that magic substance of almost free energy — became an invisible curse. If we keep burning them, scientists found out, our coastlands would flood, hurricanes would destroy cities and grain belts would lose their harvests. With more likelihood of drought and famine, and with the aid of cheap weapons, the West would be faced with a growing tide of refugees.
Add to that the fact that conventional oil reserves are, as of 2010, on the decline. That means that it will cost more and more to inject oil into the economy — and as a result, oil companies are taking on more and more debt. We’re in a situation where the economy will either run out of its lifeblood, or it will drown in its own waste. Right now, it’s looking like we’ll drown first.
Finally, the financial system started becoming unwieldy. The creation of cheap credit, which had seemed like easy money at the start, led to ballooning, and unpayable debts, both for Western middle classes and whole countries. Defaults, bailouts, and quantitative easing became household words.
What had seemed like some bottom-shelf bargains in the 1970s — cheap oil for cheap weapons, cheap resources for cheap credit, cheap labor to fuel high living standards — were not worth their money. They folded like a cheap suitcase.
You Can’t Mortgage Your Way Out of a Bad Deal
Today, the West can respond in four ways. The first is to increase the conflict, continue borrowing, increase weapons production, cut government expenditure, continue receiving migrants, increase surveillance. That is, burn the candle at both ends, and hope that the rich will bail everyone else out when the time comes. This is conservative neoliberalism: Sarkozy, Bush, Cameron, Harper.
The second is to promise a slow shift to a better world while not challenging anything. Tax the rich, improve welfare, better health care, take better care of migrants, rights for the disenfranchised, roll out renewables even as you subsidize the fossil fuel economy. The hope is that taking out more loans will pay the rising costs. Just to be sure, find new sources of oil, continue the war, continue to sell weapons — but discreetly. Emancipation, financialization, imperialism. This is progressive neoliberalism, the status quo with a kinder face: Obama, Clinton, Hollande, Trudeau.
The third is to seal the gates, militarize the borders, increase public spending, kick-start the national economy and pump as much oil as we can — all the while ramping up the war and making a killing off of the weapons industry. This is conservative nationalism: Trump, Putin, Erdoğan, Le Pen.
For option #3 to be a really convincing strategy, you’d need to make sure you do several things.
First, you need to pretend that climate change is not a problem, or at least, not as big of a problem as people make it out to be.
Second, in order to drive down business costs within your borders, you need to destroy labor rights and environmental protections of your own people, as well as limit access to welfare and health care.
Third, you need to make it easier for your local ruling class to rule — sell state assets and big infrastructure projects to the powerful, step up the security state.
Fourth, you need to stoke hate amongst a large demographic of your population, pitting them against minorities and women, in order to draw attention away from the new oligarchy and get a broad base of support (think of them as the farmer’s wife).
Fifth, you need to cast doubt on reality, making it more difficult for people to know what is real and what is fake — further stoking division amongst your population.
Sixth, continuously test and shave away any checks and balances that exist, eroding people’s confidence in the government and instilling fear in your opponents.
These six strategies have been followed to the letter in Trump’s new presidency, and have been refined by Putin, Erdoğan and other autocrats for the past decade.
Trump’s policies are actually very coherent — they acknowledge that business-as-usual is not an option. Unlike neoliberals on both side of the political spectrum, he knows the white middle and working classes aren’t fools: they realize they’ve been shortchanged by the bottom-shelf bargains. And they know that options #1 and #2 won’t improve their lot.
The incredible thing is that, in the short term, the plan could work. Close the borders and fire up the oil flares, build up infrastructure, cut protections for workers and nature, and mobilize the nation. All of these have a history of being very good for GDP.
In the long term, they’re a dead end: They try to solve the labor crisis by dividing its population. They try to pay debts to the Devil by protecting the rich and dividing the poor. They will speed up catastrophic climate change. In that context, trying to burn as much oil as possible is like a captain throwing one last orgy with his closest mates below decks while the ship is heading for iceberg collision.
In other words, another Devil’s bargain, taking out another loan to pay for the bad deals of the past. Not really worth signing off your soul.
What’s the fourth option? Many are calling for a renewed, leftist nationalism. These same people are also sympathetic to some form of control over immigration, and an end to free trade agreements and international organizations like the International Monetary Fund (IMF), the World Bank and the North Atlantic Treaty Organization. But progressive nationalism represents a flight from the world — while it may offer a short reprieve from today’s crises, it does not actively address their roots.
No. Option #4 will need to go much further. It will require undoing the three Devil’s bargains: oil, credit and labor.
Stop the oil-to-arms trade. We can do this by switching from a carbon economy to a renewable one; reducing energy expenditure and material consumption; stop flooding the global market with weapons; and actively supporting democratic social movements and human rights.
Put a stop to credit-based finance. We’d need to end the “free trade” agreements that benefit the large corporations and exploit the poor; cancel odious debts of sovereign nations — allowing them to choose their own paths to development; and dissolve predatory lending organizations like the World Bank and IMF. We’ll have to overhaul the banking sector, turn creditor banks into savings banks, rein in speculation, cap wealth and crack down on tax havens. As part of this, we’ll have to support other countries who want to shift to a more just economic system, by refusing to cooperate with oppressive regimes and funding human, labor and Indigenous rights abroad. It also means increasing local democracy. By guaranteeing every community’s rights to have control over their own resources, we’d make sure that everyone can have a say in their government, instead of forcing governments to sell off all their assets. Democratic initiatives in cities, towns and rural areas will need to be supported, making it easier for everyone to hold the state accountable.
End the cheap labor economy. While we’ll need to protect people from predatory banks, we’ll also need to make it easier for people to support themselves. This will involve building up a healthy system of savings, loosening regulations that kill small businesses and giving people dignified work that they can be proud of instead of trapping them in unpayable debts. We’ll need to end a monopoly on business by big corporations and support a moral economy owned and run by everyone, with plenty of space for migrants and refugees.
But we’d also need to make sure that, in the new economy where many factory jobs are becoming either outsourced or automated, people can keep surviving — that’s what a basic income, health care and other social safety nets are for.
For lack of a better word, let’s call this progressive internationalism. It is refuses to play off of people’s divisions, deny climate science and place its bets on a sinking ship. It also avoids the too-easy retreat to isolationism, acknowledging a globalized world and taking an active role in changing it.
The bottom line is, if we want to come close to undoing the bad deals made by governments decades ago, we have to unravel the whole system that forces politicians to keep making the same deals over and over. And what’s more, we’ll have to pay the costs of their side-effects — climate change, racism, the power of the banks. And ultimately, it will mean uprooting centuries of colonialism. To be honest, it’s going to be hard work. Maybe we can’t do it in time.
By the Ballot or Any Other Means
And yet many already know that all of this is necessary. We see fragments of option #4 in the platforms of Sanders, Corbyn, Podemos and in the slogans of social movements riding them to the ballot. The only problem is that the ballot is dead against it. Politicians wait to see which way the wind blows, and they won’t put their foot down until we force them to.
They’re like the farmer: signing another doomed bargain, not telling his wife what he’s actually up to, too timid to get out of bed and do what needs to be done. And so the economic system — with cheap oil, cheap labor and heavy debts coursing through its veins — is constantly put on life support. It is self-correcting, locked in. But the sun will rise soon, and we can’t snap out of it, we’re still sleeping.
This is certain: if we want to cut business ties with the Devil, if we want an alternative to decades of conservative nationalism — a world of inevitable environmental catastrophe, racial and gendered hatred, gaping inequality — we need to light a lantern, and fast. But if the ballot won’t get us there, then what?
On the one hand, we must forcefully shut down option #3; today, that means #ResistTrump, throwing sand in the gears of their war machine. On the other hand, we have to foster option #4. This is our struggle.