Xenophobia in an Era of Economic Expansion: The end of the Left and Right as we knew it

 The following note was written in response to a terrorist incident in New Zealand over 7 years ago but when it delved into the deeper dimensions of the incident, it arrived at broader conclusions that are still relevant today

Abbas Goya - March 19, 2019

The International Monetary Fund reports that the official global rate of capital accumulation in 2018 remained below 4 percent, with a substantial portion of that growth driven by the exceptionally high rates of accumulation in China and India. In the IMF’s rankings, Iran’s economy—with a contraction of 3.6 percent—stood near the very bottom, performing only slightly better than South Sudan and Venezuela. Only ten countries recorded negative growth that year. Capitalism, particularly in the West, is therefore not in a state of collapse or paralysis; rather, it has been experiencing a period of expansion. This expansion, however, remains fragile. The rate of accumulation is not extraordinary, yet the immense concentration of wealth in the hands of a tiny minority has sharpened class divisions between rich and poor to an unprecedented degree.

The current phase of economic growth began barely two years after the 2008 financial crisis—what many refer to as the Great Recession—and after trillions of dollars were injected into the global financial markets. In the aftermath, Western governments resumed a broad assault on workers’ gains and social protections under the pretext of sovereign debt, a process that continues to this day. Although unemployment in countries such as the United States fell from nearly 12 percent in early 2009 to around 4 percent, almost all newly created jobs emerged upon the ruins of previous labor achievements. Wages declined sharply, and most new employment took the form of short-term, precarious, often part-time contracts stripped of union protections. In this sense, the present wave of capital accumulation has been made possible through the intensification of exploitation even within the advanced capitalist countries themselves.

The political consequence of declining living standards for large segments of society—visible in rising housing costs, food prices, transportation expenses, and the overall cost of living—has been the rise of nationalist parties commonly described as right- and left-wing populists. These movements address themselves to the victims of austerity: the working masses upon whose hardship the current expansion of capital has been built. Right-wing populist parties are not necessarily fascist, though they undoubtedly contain the potential for fascistic transformation. Their central argument is that poverty, insecurity, and social decline are caused by “foreigners” and immigrant workers. Both left- and right-wing strands of populism attribute what is commonly called “deindustrialization” to external forces and foreign labor. Both Donald Trump and Bernie Sanders, for instance, have pointed to the transfer of industries to countries such as China as a principal cause of declining living standards for American workers.

Fascism, as a concrete political movement, emerged in the aftermath of the First World War and in direct opposition to the growing appeal of the October Revolution. Benito Mussolini, the principal architect of fascism, rose to prominence in Italy in 1919 as a right-wing reaction to the spread of communism. The first fascist organization, Fasci Italiani di Combattimento, explicitly defined its mission as the persecution and violent suppression of socialists. Fascism, in its classical political sense, has little place in contemporary New Zealand because the threat of communism—unfortunately—does not meaningfully exist there today. While the term “racism” comes closer to describing current realities, even it remains insufficient to fully characterize the ultra-right movements emerging across the West. Historically, racism in Western societies was directed primarily against Black people and, more broadly, against people of color. What we are witnessing today, however, is not merely racism based on skin color, but a broader hostility directed at people born elsewhere—hostility toward immigrants as such.

There is, of course, no rigid dividing line between racism and xenophobia. Contemporary racism increasingly manifests itself through discrimination against immigrants. The fact that migrants from the Middle East have become especially convenient targets for xenophobic politics does not diminish the broader and more universal character of this hostility toward foreigners.

Parallel to these developments in the West, the Middle East has, over nearly the entire three decades following the collapse of the Eastern Bloc, become the central arena of the global political crisis. Political Islam, with the prominent role of the Islamic Republic of Iran; struggles among European, Russian, and American powers over spheres of influence; the Arab Spring; the prolonged wars in Syria and later Yemen; and the brutality of Arab nationalism represented by Saudi Arabia in competition with Iran and Turkey for regional dominance—all these developments pushed older regional conflicts, such as the Arab-Israeli conflict and the Kurdish question, into the background. To these must be added the catastrophic disintegration of Iraq and the persistent political and social instability of Afghanistan.

The rivalries among ruling powers in the Middle East became at times so tangled and fluid that alliances between hostile and allied factions shifted almost daily. Yet amid this complexity, one reality remained unmistakable: the overwhelming burden of these conflicts fell upon ordinary people. The populations of Iraq, Syria, Yemen, Libya, and Afghanistan became the principal victims of disasters that, over the past three decades, devastated their lives, livelihoods, and futures. One must also take into account the mass exodus from Iran under the rule of the Islamic Republic in order to understand why migration and refuge flows from the Middle East to the West reached such historic levels.

Western governments, however, encouraged a dangerous association between these displaced and victimized populations and the very forces from which they had fled—namely Islamist extremism and the brutality of armed factions throughout the region. In doing so, they cultivated a mentality of “them versus us”: “we, the civilized Westerners,” versus “they, the Muslim immigrants perpetually trapped in religious and ethnic conflict, hostile to women’s rights, indifferent to children, and alien to modern values.” This narrative, combined with large-scale migration from the Middle East to the West, rendered immigrants increasingly vulnerable. Ultra-right populist movements needed little effort to transform “Muslims” into convenient scapegoats.

Fascist, Nazi, and racist organizations have always existed on the margins of Western politics. Yet the ultra-right parties that have entered the political mainstream in recent years are not simply the traditional fringe fascist movements of the past. They are products not of the Cold War, but of the post–Cold War era: new political formations with platforms distinct from classical fascism, though still rooted in nationalism as their essential ideological foundation.

The right wing of the xenophobic movement consists largely of parties that emerged during the confrontation between Western states and political Islam, advancing platforms centered on hostility toward immigrants associated with Islam. These parties did not merely oppose political Islam as an ideology; rather, they targeted Muslims themselves. Drawing upon the framework of identity politics—a discourse widely normalized within liberal Western institutions—they reduced universal human identity to religious identity.

Another section of the populist right has built its social base among those devastated by austerity policies and deindustrialization. Their proposed solution is economic protectionism, a concept that has functioned more effectively as political propaganda than as practical policy. Right-wing populist parties have attained power in major industrial countries such as the United States and Austria, yet none has succeeded in taking any serious step toward genuinely nationalizing the economy or constructing a coherent model of economic protectionism.

Traditional social democratic parties, meanwhile, became increasingly irrelevant during this period. Not only did they lose their association with social welfare, but they themselves implemented austerity policies with remarkable severity. Yet with the rise of the Occupy movement, opposition to austerity once again became a defining feature of contemporary social democracy. Syriza, Podemos, Jeremy Corbyn, and Bernie Sanders became emblematic figures of twenty-first-century social democracy.

The confrontation between the new social democratic currents and traditional parliamentary forces reached its climax in Greece in 2015. European governments, led by Germany and France, subjected the Syriza government to immense pressure and ultimately forced it into complete capitulation. In doing so, they temporarily weakened the momentum of the new social democratic wave, though they never succeeded in extinguishing the broader popular desire for social transformation.

After Syriza’s retreat, Jeremy Corbyn rose to the leadership of the British Labour Party, while Bernie Sanders gained prominence in the 2016 American elections largely through the political energy unleashed by the Occupy movement, which sought institutional representation after the decline of street mobilizations. The tendency toward socialism—however differently interpreted—has continued to grow within the United States.

The new social democratic parties, along with previously marginal figures within traditional parties—such as Corbyn in Britain and Sanders in the United States—were elevated largely by younger generations increasingly drawn toward socialist ideas. These figures became known as “left-wing populists.” Yet they do not represent a continuation of postwar social democracy. Social democracy after the Second World War was integrated into the structures of Western political power primarily because of the existence of the Eastern Bloc and the perceived threat of socialism. Following the collapse of that bloc, Western social democracy itself entered a profound identity crisis. These parties abandoned socialist principles and shifted so far to the right that they often became indistinguishable from conservative forces. One example was the New Zealand Labour Party, which itself adopted xenophobic rhetoric during the 2017 parliamentary elections.

Traditional social democratic parties cannot genuinely represent the new wave of socialist aspirations emerging in the West, nor can they embody the hopes of younger generations who themselves became victims of the very policies these parties implemented while in power. New left-wing movements and personalities, much like their right-wing populist counterparts, remain fundamentally nationalist in orientation. They profess loyalty to protectionist economic policies that themselves contain elements of xenophobia. The principal distinction between left- and right-wing populism lies in the left’s rhetorical commitment to the welfare state. Yet this commitment has, thus far, remained largely unrealized. Indeed, the clearest example of such a movement—Syriza in Greece—ultimately capitulated to the right and continued implementing austerity policies without meaningful resistance.

In conclusion, the political and economic characteristics of the present era differ profoundly from those of the 1930s, when communism and fascism confronted one another as two openly antagonistic historical forces. Socialism remains relevant today, and support for it continues to grow in the West, yet it has not become a serious threat to the capitalist order. Moreover, the dominant contemporary interpretation of socialism in the West is reformist rather than revolutionary.

Unlike the capitalism of the 1930s, contemporary capitalism is not trapped in deep economic stagnation or systemic collapse; rather, it is passing through a period of relative expansion. Consequently, capitalism today faces neither a powerful revolutionary workers’ movement nor an Eastern Bloc capable of challenging it geopolitically. Instead, the political landscape of Western capitalism is increasingly shaped by two powerful nationalist tendencies: a reformist current and a xenophobic, racist current.

At the same time, capitalism has managed to raise the rate of exploitation by rolling back workers’ achievements and social protections, thereby temporarily slowing the tendency of the rate of profit to decline. By its very nature, however, such a period cannot endure indefinitely. Nevertheless, what confronts us today is not capitalism in systemic crisis. Traditionally, it was believed that barbaric political tendencies such as fascism and racism emerge as dominant forces primarily during periods of capitalist collapse. Yet the rise of extremist nationalism in the present period stems not from a direct crisis of capital itself, but from the crisis of everyday life experienced by wage earners.

In my view, the current era marks the conclusion of the historical period that began with the capitalist crisis of the mid-1970s. Over the past four decades, the dismantling of workers’ gains has unfolded through several distinct phases. Industrial capital migrated from the West to regions regarded as reservoirs of cheap labor, and, combined with the assault on labor rights during the 1980s, temporarily slowed the decline in profitability through intensified exploitation. The collapse of the Eastern Bloc then opened the way for a new phase of attacks on workers’ achievements. Furthermore, every regional or global economic crisis—from the dot-com collapse of 2000 to the financial crisis of 2008—provided new opportunities to deepen those attacks.

Today, whether or not this marks the beginning of the end of that historical trajectory, it certainly signifies the end of the era associated with the welfare state. The political expression of these immense global transformations has been the collapse of traditional political alignments and ideologies. Parties that once dominated political life in the previous era have exhausted their historical usefulness. Both the left and right wings of political power in the West are now engaged in redefining themselves.

The ultra-right forces of today do not represent fascism in its classical form; there is no immediate necessity for them to do so. Historically, fascism derived its meaning from direct confrontation with communism. What contemporary right-wing forces require instead is a scapegoat onto whom they can project the causes of declining living standards and growing job insecurity among workers. Tragically, that scapegoat is no longer the communist—it is the immigrant worker.

The defining feature of the contemporary right, therefore, is xenophobia: hostility toward migrant workers who have arrived in the West for a variety of reasons, including the catastrophic upheavals created in the Middle East—catastrophes in whose creation Western powers themselves played a decisive role.