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The Crisis of the Left

After a series of electoral losses around the world, the left is in crisis. To restore it to health, some on the left argue for a return to their parties' historical roots. Others argue that the old myths should be abandoned in favor of a bold move forward.

This debate is occurring not only in France after the defeat of the Socialists last April. It also characterizes the political situation in the US after the defeat of the Democrats in last November's mid-term elections. Both parties face the same dilemma, and this is precisely my point: that the crisis confronting the left is a deep, fundamental, one.

In the past, the left was equipped with its own ideology, its own economic theory. The fundamental economic mechanism that determined how the world worked was the struggle for rents between workers and capitalists. With this "us versus them" view of the world, it was not hard to rally voters, from the most disenfranchised all the way up to the salaried middle class--more than enough for the left to secure electoral majorities.

But the world has changed, and the left's old view simply no longer applies. More intense competition, within and across countries, has decreased the available rents. Financial capital can cross borders far more easily, and physical capital can relocate almost as quickly. The limits on redistribution through the market are much tighter: trying to appropriate the rents may lead firms to move to emerging countries, or else to go bankrupt.