The Call for Nationalisation

A number of commentators on the left have recently taken to chiding their comrades for being more concerned about the war of position than the war of manoeuvre. This is obviously a disagreement as old as the hills, and long predates Gramsci on the subject. It is also found across the spectrum, from the incrementalism of the Fabians to Leninist proletarianism. In its contemporary context, it appears to have been stimulated by a recognition both that Labour's energy price-cap proposal is halfway decent (let's forget about the flaws for now - it's better than anything the government has proposed or even mooted) and that there is widespread popular support for union militancy over the cost-of-living crisis. Consequently, in this reading, the political establishment is currently open to pressure. Grace Blakeley spelled this out in abstract terms: "Socialists need to stop going on about how ‘we were right’ and just do the job of organising and advocating for policies that are gonna make things better for people now."

James Meadway made this concrete with regard to energy bills and nationalisation: "Energy crisis has exposed some weak politics. The primary, most important, demand to make right now is for an energy price freeze - immediate assistance for c.22m households in a crisis. It’s crap faux radicalism to try and make that help conditional on nationalising suppliers…" Now James isn't arguing against nationalisation, merely taking the old "The language of priorities is the religion of Socialism" line, and there is unquestionably a good argument for doing so, not least that once you impose a price-cap (which isn't going to be a temporary 6-month measure, whatever the Labour leadership might think) you've taken a big step towards bringing the suppliers into public ownership anyway. However, like Grace, he also considers the focus on theory over practice to be a distraction. In other words, rather than banging on about how the pandemic and the energy crisis have shown Labour's 2019 manifesto to be prescient, the left needs to work with the grain of the moment.

I'm going argue that this is shortsighted, but in order to do so I need to focus on the emerging "common sense" on the subject of energy, which was helpfully outlined by Torsten Bell of the Resolution Foundation in today's Observer. Leaving aside the tedious reference to Churchill in the headline, Bell's argument is best summarised in the lede: "The emergency created by soaring energy prices is so grave that normal politics doesn’t apply. Our leaders must wise up – and fast". Yet despite this call, the article is resolute in its belief that what we need to do is simply a variation on previous policy: specifically that we should give the poor financial support and pay for this by taxing the rich more. It tells you a lot about the current neoliberal hegemony that such a modest prescription can be considered "abnormal". While he identifies that those needing support extends well beyond the traditional "poor" (here people on benefits) to include middle income families, what he doesn't do is explain exactly who the rich are, though it's implicit in his piece that he is thinking of the working rich and his preferred mechanism of redistribution is income tax. This ignores the property-rich. 

Consider this paragraph: "Imposing windfall taxes, including on renewable generators making huge profits where the price they charge for electricity is linked to gas prices, is a no-brainer. But we must be honest: windfall taxes can’t cover this. Too many windfalls accrue outside the UK, beyond our tax grasp. That’s why solidarity taxes on those able to contribute more come into play in situations where geopolitics requires huge sacrifices of ordinary people. Churchill wasn’t a communist but taxes on the top rose a lot during the Second World War." The greatest windfalls in the UK over the last 40 years, and ones that cannot be hidden from HMRC, are in capital gains - both property and shares - not in corporate profits. It is also telling that in his discussion of mechanisms (essentially targeted via benefits versus universal and recouped through tax) there is no mention of the £150 council tax rebate offered to people in bands A to D, which is targeted and administratively simple if inadequate in scale. 

There appears to be a general reluctance on the part of the media to tie the cost of living to property, even though it is clear that much of the current pressure arises from the fact that housing costs are still going up at the same time that food and utility costs are skyrocketing. In the same paper, you will read articles on how difficult it is for young people to rent but no attempt is made to join the dots and suggest that housing costs - which are wholly within our control - should act as an automatic stabiliser when we face sudden spikes in the cost of necessities whose wholesale price is outside our control, such as food and energy imports. Property offers not only an efficient buffer mechanism (e.g. rent controls) and a means of redistribution (e.g. property taxes), but also a way of targeting household support without complicated means-testing of income. It would even allow for differential support for small businesses via the rates, thus plugging an obvious gap in current proposals. 

The real heart of Bell's argument isn't about the most appropriate mechanism to offer financial support through the cost-of-living crisis but an insistence that nationalisation is a distraction, which is where he overlaps with Blakeley and Meadway, though unlike them, he is clearly ruling it out tomorrow as well as today: "It’s crucial that we avoid distractions from working through these hard policy choices and putting in place the longer-term answers to today’s nightmare: accelerating new renewable and nuclear generation capacity, reforming our energy market and making energy efficiency (especially of our leaky housing stock) a policy priority. So, ignore the debate about nationalising energy suppliers (which is irrelevant to the costs of delivering below-market prices) or calls from those same suppliers for expensive and complex government guarantees." The disconnect is obvious: nationalisation is likely to be the only way of accelerating renewable or nuclear capacity, given the all-too-obvious failures of the private sector. There was a brief period, after the 2017 general election, when the threat of UBI caused liberals to promote a means-tested quasi-nationalisation in the form of universal basic services, but since 2019 they have felt emboldened to reject the n-word altogether (witness Starmer and Reeves' evident distaste when it is mentioned).

The observation that energy suppliers don't control wholesale costs (as if the public is stupid enough to believe otherwise) isn't quite the argument against nationalisation that Bell supposes. A middle-man can act both as an amplifier (e.g. profiteering) and as a dampener (e.g. buffering). The private sector naturally inclines to the former, but the public sector can (and should) just as easily incline to the latter. In practical terms, the state can borrow cheaply to subsidise consumer bills today and recoup that expense through higher retail prices in the future when wholesale prices have returned to "normal".  In other words, we need to think of nationalisation as a form of social insurance: not only redistributing costs between income groups in the present but redistributing over time. Such intertemporal distribution is hardly radical, and it can be argued that none of this actually requires nationalisation - for example, free bus passes coexist with private sector buses and energy bills already bear green levies. But what nationalisation does is provide the largest possible insurance pool, and thus economies of scale, plus the guarantee of a state backstop.

This was always implicit in the concept of "common ownership", but it's something that has been lost over the last 40 years as the argument for nationalisation has centred on investment in the public fabric, the security of strategic resources, or a way of repatriating profits and maximising tax revenues. The unpopularity of the bank bailouts after the 2008 crash has clearly been one driver in the renewed public appetite for nationalisation, but so too has the obvious failure of an energy market built on a long tail of under-capitalised suppliers whose only interest was profit-taking in what they (wrongly) assumed was a low-risk industry. The role of nationalisation in providing that social buffer is something that even the arch-neoliberal Emmanuel Macron has appreciated, hence the French are set to fully renationalise EDF and impose a 4% cap on wholesale price increases. You can argue that this simply reflects EDF's role as a nuclear generator, already majority-owned by the state and accounting for over 70% of the country's energy use, but just as important is the signal the government is sending: energy is a matter of social protection as much as national security. In this context, it's worth remembering that nationalisation is actually an effective counter to populist nationalism.

Likewise, making energy efficiency a "political priority", as Bell suggests, is meaningless unless it translates into state intervention at scale. Market-based incentives for homeowners (which have been tried repeatedly, if half-heartedly) simply aren't enough, while tighter regulation on new builds (though  necessary) simply nibbles at the edges of the problem. What we need is a massive programme to make existing properties, most of which are privately-owned, energy efficient. The cost of this would best be recouped over time from the beneficiaries (i.e. householders paying lower energy bills) through council tax, which would also be progressive (tied to the property value rather than the work needed). However you dress it up, the energy transition will require more state and the sooner we recognise that the better. It is for this reason that I think it "weak politics" to propose that we concentrate on an achievable price-freeze and don't attempt to lever nationalisation into the argument, either as a condition or a signpost to the near future. 

Unless the principle of social insurance is foregrounded then all ameliorative proposals will inevitably lead either to austerity (increased government borrowing will be paid back through public service cuts and regressive taxation) or further attempts to make the market work (another cycle through regulation and then deregulation that simply introduces more systemic risk). The energy crisis should not be reduced to an argument over price controls, which is what the opposition's proposals do (the similarity between those of Labour and the Liberal Democrats is telling). It's also about property wealth, which has distorted housing costs thus reducing the scope for a consumption buffer at the level of the household, and it's further about the reduction in social protection caused by the decline of common ownership. If the one thing that liberals really do want to protect (whether through conviction or electoral calculation) is the private housing market, then they would be wise to consider the nationalisation of energy supply as a way of heading off more radical proposals to cap rents and impose greater property taxes.

Beyond the Pale

Foreign policy enjoys an unusual role in the process of political legitimation in the UK. This is quite unlike other Western countries where it tends to be much more marginal in the discourse and its electoral impact is often negligible. We're all familiar with the risks that a British politician takes when they criticise Israel's behaviour in the West Bank or Gaza, or the difficulty in addressing the reality of the United States' sprawling empire of military outposts and wholly-owned subsidiary governments. In contrast, consider how inconsequential the charges laid against both Jean-Luc Mélenchon and Marine Le Pen over their supposed support of Russia were in the recent French elections. You could put this down to the prominence of domestic concerns, or even the longstanding tendency of the French to see Russia as a necessary alternative pole to the US, but in either case what it highlights is the mistake of Macron and his advisers in imagining that fealty to NATO would be a vote-winner. It's almost as if they adopted a British script and were nonplussed when it bombed. 

The British centrist turn against Mick Lynch for having an opinion on Ukraine is the most recent example of this process in action, but it's also one that suggests that the manoeuvre may be losing its power, despite the best efforts of the media to smear him as a Putin apologist, an idiot Lexiteer and even the sort of guy who would share a platform with Gerry Adams. It has certainly been amusing to see centrists tell him to "stay in your lane" while also insisting that his (from their perspective) eccentric views are why we shouldn't take him seriously in any context, as if having a nuanced take on recent Ukrainian history was a disqualification for leading a nationwide strike over pay and jobs in the UK rail industry. The glee with which certain centrist commentators fastened onto his words ("I just knew he would turn out to be dodgy" etc) isn't remotely surprising, but it is still worth noting their assumption that not being "sound" on foreign policy is enough to make you a political pariah.

This is odd because historically foreign policy was always highly contested in British politics, most obviously during the nineteenth century when it was central to public debate and even dominated general elections. Gladstone's famous "Midlothian campaign", which led up to the 1880 defeat of Disraeli's Conservative government, ranged over the Eastern Question (notably the "Bulgarian Horrors" ), the Second Anglo-Afghan War and the Zulu War. What was notable about this was that the Liberals considered foreign policy a legitimate point of difference and the electorate sufficiently sophisticated to care enough about it to vote accordingly. This was a period of restricted franchise (only 3 million voters in 1880), but it was also a period when the urban working class (or at least the older, male members of it who were householders) were increasingly pivotal to election outcomes following the 1867 Reform Act. While much of the debate can be seen in hindsight as the clash of interests that profited in different ways from empire, it was also very much concerned with what we would today call humanitarian issues, even wokeness.

The idea that major differences over foreign policy were legitimate continued into the twentieth century, first and foremost over the vexed issue of Ireland. The interwar period saw major differences of opinion over Europe (notably appeasement) and empire (notably Indian independence), not all of which neatly cleaved to party political lines. The change in attitude to one in which deviation from an official, monolithic orthodoxy was considered unacceptable could arguably be attributed to the post-1945 Atlanticist hegemony, except that this ignores the bitter salience of Suez in 1956, the Vietnam War in the 1960s (consider Harold Wilson's delicate manoeuvring to avoid entanglement), and the coup in Chile in 1973 (which led to strikes in solidarity in the UK). The idea that anything less than full-throated support for NATO, the US and Israel puts you beyond the pale (a phrase with its own imperial resonance) is a relatively recent development whose roots probably lie in the mid-1980s. 

It is forgotten now but Michael Foot's thunderous denunciation of the Argentine invasion of the Falklands in 1982 was consistent with the Labour left's opposition to Pinochet. But the point was quickly lost in the jingoistic clamour that equated the "enemy without" with the "enemy within". This reached a crescendo during the miners' strike two years later, but it's also worth recalling how this frame was extended by the media to the idea that scepticism about the value of nuclear weapons - and specifically Labour's commitment to unilateral disarmament - was tantamount to treason. The "Would you push the button?" question had been a staple press gotcha throughout the Cold War, but after 1989, once the probability that a politician would ever face the dilemma receded, it became less an agonising question of existential responsibility and more the table-stakes of "responsible" politics. No "serious" politician in the 1990s would suggest that pushing the button was an admission of insanity, and likewise no serious politician questioned the Washington Consensus.

The contemporary tragedy-in-the-making is the blithe assurance of British commentators, like Simon Tisdall (writing in a newspaper that once took a principled stand over Suez), that NATO would wipe the floor with Russia in a conventional war ("A convincing display of Pentagon-style “shock and awe”, just as Putin was anticipating quick, easy victory, could have stopped the entire invasion in its tracks"). Even worse is the belief that if Putin resorted to battlefield nuclear weapons he would be boosting the West ("Might such a taboo-breaking atrocity result in Ukraine joining Nato"), as if the loss in life were merely a matter of geopolitical calculation to be milked for all its worth (echoes here of the "Bulgarian Horrors", which only goes to show that liberals remain among the most blood-thirsty of political "realists"). Tisdall's contentions might well be true, but is the liberation of Crimea really worth the risk of finding out? Clearly, no Western political leaders actually think so or they would have acted on it before now, even if they are prepared to rattle sabres for domestic consumption or indulge in nuclear threat theatre (with Donald Trump a useful proxy). 

This last point - the gap between actual foreign policy and the hyperbole of the press - provides an explanation for how the change in attitude came about. The Overton Window on foreign policy hasn't shifted all that much over the last 40 years, and where it has shifted it has generally done so in a progressive direction: that Israel can be labelled an Apartheid state is not insignificant, despite the attempts to demonise those who use the term. But the window has also noticeably narrowed. For example, there is no non-aligned movement any more - you are either lined up with the West or you are being seduced by China - and the idea that there are varieties of capitalism has gone the way of the idea that there are varieties of socialism. Meanwhile, we have grown used to the idea that there are certain states, like Cuba and Iran, whose natural condition is to be under punitive economic sanctions: that entire generations have been born and come to maturity knowing no other circumstances.

In this context, I was interested to read the latest William Davies piece in the Guardian. His topic is the lack of ideas in British politics. This isn't a particularly novel observation, though he does the useful service of noting that the similarities between Starmer, Sunak and Truss go well beyond an uncomfortable presentation style to a deeper anti-intellectualism. Where I think he is wrong (or has bent too far to meet editorial prejudice) is in the suggestion that this is a very recent development, tracing the inflexion point to the EU referendum in 2016. Thus he can claim that "As leaders, David Cameron and Ed Miliband both sought to revive their parties’ credibility by seeking the advice and endorsement of policy gurus", as if Cameron's revival of 1930s economic husbandry and Miliband's tentative steps towards 1950s-style social democracy ("predistribution") were evidence of a healthy intellectual climate pre-Brexit.

The key passage, which surveys the intellectual currents from the prewar years to the 90s, is this: "For Keynes, the purpose was to overturn the outdated shibboleths of laissez-faire economics, which had led to the disaster of the 1930s; for Thatcherites, it was specifically to replace the Keynesian regime that was put in place after 1945. But even in the absence of such policy radicalism, ideas have been important. New Labour was awash with often nerdish narratives about the “knowledge economy”, “globalisation” and “the network society”." You'll notice that the passage moves from serious intellectual traditions to what amounts to little more than a set of buzzwords. For a sociologist, it is notable that Davies ignores the then-voguish communitarianism of the 90s and the ultimately fruitless attempts at a more serious philosophical engagement by the likes of Giddens and Habermas. The truth is that British politics was denuded of ideas in the mid-90s, not six years ago, and one result of that is the delusion among centrists that Tony Blair is still at the cutting-edge of political thought.

Blair's legacy was always going to be contested, despite the fact that so little of it tangibly remains, not so much because of disputes over what did or did not work but because of its relentless focus on closing down the possibility of alternatives, to the point of revelling in powerlessness ("You might as well debate whether autumn should follow summer"). It was a deeply ideological project and central to it was the belief that there should be little latitude in opinion. The Blairite antipathy towards Ed Miliband as much as Jeremy Corbyn is evidence of this deep hatred of deviation. The extreme message-management of the era was the essence of Blairism, not simply a by-product of Alastair Campbell's personality. This was more pronounced in foreign than domestic policy. The latter was always going to be subject to inconvenient facts (the "lifeworld"), but the former would be helpfully reduced to a binary division of the world into friend and foe by the media. The consequence is today's contempt for independent thought and the insistence that foreign policy should be a catechism rather than a contest.