The Future Nation State

This is a follow-up post to my earlier review of David Edgerton's The Rise and Fall of the British Nation: A Twentieth Century History, looking at the contemporary political situation in light of the postwar "national economy".

Edgerton's focus on the social democratic era and the 1945 government's pivotal role in shifting towards a national economy will obviously be of interest to the modern Labour Party. If the current division between the left and right has meaning beyond factional antipathy, it is over the degree to which the party should become more national in its thinking on both the economy and welfare: a move towards more planning and more social investment and away from the free movement of capital and an austerity justified by the demands of the global bond market. That the right of the party have steered well clear of this topic, preferring to focus on the unifying emotionalism of their defiance of Jeremy Corbyn, suggests a desire to avoid addressing the fundamental differences that exist between the sovereigntist "old right" (Blue Labour, various Northern MPs) and the Blairite globalists. That defiance has now extended to the suggestion that Corbyn's internationalism is problematic for Labour, essentially because it distracts from the party's domestic programme.

This strikes me as wrong and ahistorical, being an example of the media's obsession with propriety and the political caste's assumption that foreign policy is of little interest to "civilian" voters. In fact, internationalism has always been a strong feature of the Labour Party, even during the height of the national economy years. For example, in 1960, Hugh Gaitskell, the then Labour Leader and very much on the right of the party ideologically, addressed the inaugural rally in Trafalgar Square of the South Africa Boycott Movement, which would shortly afterwards be renamed the Anti-Apartheid Movement. To put this in perspective, Corbyn is a patron and former chair of the Palestine Solidarity Campaign but has given only qualified backing to the boycott, divestment and sanctions campaign (BDS) against Israel that the PSC supports. Another example is the way that Harold Wilson - a man whose image as a national technocrat who preferred to holiday in the Scilly Isles suggested a pronounced insularity - was acutely sensitive (if not always sympathetic) to the party membership's internationalism in his handling of South Africa, Rhodesia and Vietnam.

The commitment to international solidarity began to decline during the 1970s as the British state turned away from the national economy towards greater integration in the global economy, leading it to adopt a more pragmatic (or unprincipled) attitude towards foreign relations. For example, though the wider labour movement was strongly supportive of the Chile Solidarity Campaign following the 1973 coup, the Labour government of 1974-79 was gesturally sympathetic but reluctant to impose sanctions for fear of damaging trade, and only withdrew the British ambassador after the torture of Dr Sheila Cassidy, a UK citizen, in 1976. This history is significant on two counts: first, as an example of the growing friction between the left and the right of the party that would reach a crescendo in the early-80s; and second, because it provided a precedent for Thatcher's foreign policy towards South Africa, notably her opposition to sanctions. That antagonism within Labour was not simply a left-right issue, though it aligned that way at the time, but a fundamental disagreement over sovereignty. The left saw sanctions as a tool of government policy, while the right (like the Conservatives) saw government interference in the operation of the market as illegitimate both at home and abroad. For the left, internationalism was the logical corollary of a national economy. For the right, internationalism was made redundant by globalisation.

Labour's internationalism bifurcated in the 1980s between traditional concerns over human rights and the UK state's complicity in their abuse and the new cosmopolitanism of the EU. The locus of the former shifted to the unions and local government (where it was held up by the Tories as evidence of "loony leftism"), while the latter became the focus for the PLP and the party apparatus, leading some to imagine that taking a holiday in Umbria was a form of solidarity. This highlights a key point that is ignored in current debates: that the internationalism of the Labour leadership tends to positively correlate with the strength of the "national economy". That Tony Blair's rejection of the party's concerns over Iraq came at the peak of neoliberalism is no more a coincidence than Gaitskell's support for the Anti-Apartheid Movement. Jeremy Corbyn's "obsessions" are both more reflective of the wider party membership and the broad labour movement than his critics allow, and there is nothing inherently antagonistic between them and domestic policy. In fact, there is an argument to be made that Labour will only feel comfortable pursuing a more nationalistic economic programme if it can integrate it into a more internationalist worldview, much as the civic nationalism of the likes of the SNP requires a strong rejection of xenophobia and an emphasis on sovereignty in terms of self-determination rather than exclusion.

While the stars appear to be aligning for Labour, imagining that it will form the next government is a lot easier than imagining a national economic programme on a par with the Attlee years or even the Wilson administration. Labour cannot go backwards, not least because the limit of its ambition, given the weight of legislation required to undo decades of neoliberalism, would be to wind the clock back to somewhere around the late-80s (which the media, with no trace of irony, would present as a return to the 70s). In reality, Labour must develop a new conception of the national economy that addresses contemporary concerns about wages and housing in a very different environment to that of the postwar era. For all the popular festishisation of manufacturing, productionism isn't going to make a come-back, so John McDonnell and his advisers need to come up with a strategy for the low-pay, insecure services sector that isn't a race to the bottom while promoting higher-value services in a globalised market. While housing supply is short of demand, price is a bigger problem than capacity and mass-housebuilding is a long-term strategy rather than a short-term fix. A Labour government would do better to focus on property taxes and rent controls as ways to free-up underutilised capacity and restrain housing cost inflation.

The problem for the Conservative Party is that while the delusion of a return to an Edwardian-style economy based on deferential trade networks is limited to the Brexit ultras, the bulk of its MPs would be reluctant to embrace economic nationalism beyond the purely cosmetic, hence the failure of George Osborne's "march of the makers" to turn up and the damp squib of Theresa May's industrial strategy. They are essentially free-trading liberals, albeit of a more pragmatic bent than the Britannia Unhinged crowd. However, many (and perhaps a majority) of its party members and voters would be happy to commit to an approach that was more nationalist and protectionist (in the sense of pro-social protection as much as pro-tariffs), but with top notes of xenophobia. Though this might suggest that there are voters that Labour could peel off, a more likely scenario is that the next Conservative Party leadership contest will feature a strong nationalist (and chauvinist) candidate. Boris Johnson burbling about burkas and channelling Churchill is still the likely choice of party members if he can make it to the final vote. The advantage of this for Labour is that it shifts political debate to favourable ground: how the state can be used to fashion the economy in the interests of the people.

A reprise of the national economy years isn't on the cards, but a shift back towards emblematic nationalisation is, for example in the case of the railways. However, the more significant impact of the past will be in the revival of the idea that a nationalised service should serve the nation as a whole, rather than just privileged groups like metropolitan commuters, so we can expect to see more interest in a cross-Pennine route than HS2 and more investment in areas like South Wales. A return to the public provision of buses, and the transfer of social care to an integrated NHS, is likely to transform the role and esteem of local government. Though Brexit might appear to open up the twin vistas of Singapore and Salazar, i.e. laissez-faire free-trade or an autarkic nationalism, the reality is likely to be more continuity than change, at least as far as the economy and daily life is concerned. The more fundamental shift will be in the reconceptualization of government as an actor within the economy, which arguably has been underway since 2008. In many ways, the defining feature of conventional politics is the refusal to acknowledge that the role of the state has changed.

The tragedy of Greece was not just about protecting French and German banks but refusing to accept that a nation state could exert any meaningful control over its own economy outside of restraining public expenditure. That centrists appear terrified of a Labour Party promoting mild social democracy is merely a continuation of this. Edgerton's books reminds us that not only is a different approach possible, but that it was one that was pursued by both the Labour and Conservative parties, albeit with substantive policy differences. It was also successful and popular, even beyond the point at which competitor economies such as Germany and Japan recovered and declinism infected the political imagination. Perhaps the biggest difference between the postwar years and the post-Brexit future will be the end of the warfare state, particularly if a Labour government has the courage to cancel the Trident programme and forswear any delusions of being a global player in areas such as the Middle East. A policy of economic nationalism articulated in traditional Labour Party terms - i.e. socially liberal and with a side-order of international solidarity - is likely to prove popular, not just on the grounds of nostalgia but as a rational response to Brexit. Ironically, this will also owe something to a common perception of reduced circumstances, showing that the myth of decline remains a powerful factor.