The rise of the reactionary, nationalist petty-bourgeoisie, and the inability of conservative social-democracy to produce growth are inextricably linked. The model of conservative social-democracy since the 1980's, has been an illusion based on the idea that wealth can be created out of thin air, simply as paper wealth arising from rising asset prices. Its no wonder it has developed that illusion, given that the global ruling-class is a class of owners of fictitious-capital, i.e. of those paper assets. It also finds its reflection in the idiotic ideas of Modern Monetary Theory, which confuses money with currency, and thinks you can produce more money by simply printing more currency, as though you can produce more cows, by endlessly photocopying pictures of cows.
Conservative social-democracy could not increase growth, because doing so, in current conditions, means a rise in interest rates, and a rise in interest rates causes a crash in asset prices, as seen in 2008. That is because, a rise in growth, i.e. real capital accumulation, means an additional demand for loanable money-capital, whether that demand is met by firms borrowing in the money markets, or by retaining a larger part of their realised profits for such investment. At the same time, having used up large amounts of the relative surplus labour created during the 1980's/90's, a rise in growth/employment, means rising wages. So, a relative increase in demand for loanable capital, at a time when the supply of that capital is constrained, means higher interest rates, and so, falling asset prices. Within the confines of capitalism that is what must happen, short of some new technological revolution, which even AI does not currently offer. Indeed, globalisation, which, year after year, reduced costs and frictions, and raised productivity, has been stopped in its tracks, as the wave of petty-bourgeois nationalism has risen. And, as the growth of large-scale, capital was, thereby, curtailed, so the petty-bourgeoisie grew to fill the gap, both absolutely and relatively.
But, just as for the last 30 years, the ruling class, as owners of those financial assets is not of a mind to save capitalism by accepting a severe drop in its own paper wealth. If conservative social-democracy was forced to give way to progressive social-democracy, even such as that which ruled over the period of post-war growth, it can only succeed on the basis of a much greater development of social-democracy than that which thrived in the post-war period. It requires as Verhofstad et al note, a much larger single market, and political union. And that is true in the Americas, Asia and Africa too. Any attempt to raise taxes, on highly movable wealth, for example, as now being proposed in sections of the Left in Britain and France, will just lead to that movable wealth moving, and that is the reality of the global ruling class owners of fictitious capital, as mentioned earlier.
However, if an EU state were to harmonise its taxes, it becomes difficult for that ruling class to simply sell its shares, bonds and so on, in European companies, or government securities. The same with all of the other politico-economic blocs, and were those blocs to return to the ideas that dominated after WWII, and were to establish, new, global institutions and cooperation, the ability of speculators to simply play one off against another would be severely curtailed. That is what the interests of real industrial capital, as opposed to the interests of the ruling-class/fictitious capital dictate is required.
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