The rolling crisis at Westminster since 2008 centres on the failure of our political parties to move on from neoliberalism. This is not simply a case of an interregnum birthing morbid symptoms, but more fundamentally a refusal to countenance change. That might appear paradoxical given the disruption of Brexit and the recent, quickly-aborted experiment in "trickle-down economics", but at heart these were exercises in nostalgia, not fresh departures, and just as fixated on the past as the recurrent anxiety over the diminution of the welfare state (an ever-present theme in the postwar era) and the vogue for a "levelling-up" that gestures towards the social destruction of the past forty years without the need for any redress beyond some ill-defined "infrastructure". This has produced what Colin Crouch describes as "a democratic politics that finds it increasingly difficult to address voters as adults who must think about their collective as well as their individual selves". But I think Crouch underplays the extent to which the parties are casting about for the language of communal interest, whether that be Blue Labour's mawkishness or the Tory right seeking to defend the nation against the "invasion" of Albanian migrants.
Tariq Ali has a not dissimilar analysis but he correctly, in my view, notes how this has given the times a distinctly regressive air. Commenting on the defenestration of Liz Truss he noted: "The outgoing PM is herself a symptom of this social crisis, shaped by Britain’s exhausted financialized economy, bankrupt post-imperial foreign policy, exclusionary parliamentary system and creaking multinational state. What the British ruling class needs is a real conservative government – with or without the capital C – to protect and stabilize this political order. In this sense Starmer would be more sellable than Sunak, since he can be framed as something new rather than something borrowed and something blue. Yet mimicking Thatcher has so far proven useless, and imitating Blair will be no better." As we prepare for Austerity 2.0 and the Labour Party seeks to erase the Corbyn interlude from history, it is clear that what we are witnessing is both a conservative reaction by the establishment and an attempt to conjure a conservative electorate into being in time for the next general election. It's worth looking at this in more detail to understand the relationship of the parties.
According to George Eaton in The New Statesman, "Sunak is the UK’s most Thatcherite prime minister since Thatcher herself". That's pretty meaningless when you consider her contradictory impulses, such as her English chauvinism and her championing of the EU single market, neither of which chime with the current inhabitant of Number 10. What Eaton means is that Sunak is not the technocrat "who will administer harsh but necessary medicine" but is instead an ideologue who will seek to shrink the welfare state and protect class interests. Exactly how that makes him different to any other Conservative Party leader since Margaret Thatcher isn't that clear. Indeed, he looks an awful lot like a Brexity Cameron. Explicitly stating that you will take money from "deprived urban areas" and give it to Tunbridge Wells isn't the novelty Eaton imagines. The rather obvious objective here is not merely to suggest that Keir Starmer is the true "pragmatic centrist", in whom we could expect to find competent, technocratic leadership, but to paint him as the continuity candidate not just of New Labour but of a more responsible Tory tradition that stands in opposition to Thatcher.
The irony is that this means Starmer is being positioned as the Johnsonite candidate. The political commentariat are only too well aware that the former Prime Minister remains popular with the electorally-significant bloc labelled the "red wall", but which more accurately is older voters who own their homes outside of South East England. Labour will be cast as the true party of levelling-up and Sunak as the champion of London and the South East (despite being a Yorkshire MP). The Labour leader's near-pathological reluctance to commit to significant policies, while happily trumpeting socially conservative views, is not some cunning plan that will produce an eye-catching manifesto in two years. It is rather a clear message that he intends minimal change, and will even go so far as to ape the Tories in style as well as substance, a point that his supporters in the press are only too happy to highlight. The suggestion that the party is about to adopt a strategy of shifting taxation from income to wealth, so departing from the orthodoxy of the last 75 years, is wishful-thinking.
One reason I'm sceptical about the lesser evil argument for supporting Labour now is that Starmer shows every sign of wanting to supplant the Tories as the true conservative party, pushing them to the margins as an unrepresentative and reckless party of libertarians with "foreign" ideas. You can dress this strategy up as Labour positioning itself as "the natural party of government", in Harold Wilson's words, but what we are not being offered is the idea of Labour as the party of progressive reform. While Tony Blair paid lip-service to progressive notions, and may even have been sincere about some of them, Starmer has never taken a position that could be considered progressive, let alone radical. This is partly down to electoral calculation - those "red wall" voters - but it also appears to reflect his own temperament. For all the talk of his work as a human rights lawyer, it is clear that the former Director of Public Prosecutions has wholly internalised the establishment's conservative worldview, from trans rights to electoral reform.
As someone once said, there were three of us in this marriage. In addition to Sunak and Starmer, Andrew Bailey, the Bank of England Governor, is also in the business of defining conservatism. It has been much remarked that the two-step of monetary and fiscal policy since 2008 has now changed. Where previously one would offset the other - low interest rates ameliorating some of the pain from cuts to government spending - now we have both pushing in the same direction, which is certain to exacerbate the coming recession. That this is being done to stop inflation exceeding 5%, a historically unremarkable level, indicates that there is a political dimension to the bank's intervention at a time when the government is signalling that it intends to suck demand out of the economy. The issue appears to be the belief that the labour market is too tight, and that this will lead to rising wage demands and thus the potential for upward pressure on prices. It's hard not to believe that the latest hike in interest rates to 3% is a direct response to the current wave of strike action. In other words, it is Bailey, not Sunak, who should be considered the echt Thatcherite.
Our blogger's observations are interesting, but I think that they are a bit too influenced by the "conventional wisdom", which for me looks mostly like propaganda.
ReplyDeleteMy main difference with it is that the past 40 years have been decades of boom, with rapidly rising living standards, "the economy" has been doing very well, from the point of view of thatcherite (Conservative, New Labour, LibDem) voters, so this to me seems ridiculous without qualification:
«The rolling crisis at Westminster since 2008 centres on the failure of our political parties to move on from neoliberalism. This is not simply a case of an interregnum birthing morbid symptoms, but more fundamentally a refusal to countenance change.»
Which crisis? Which morbidity? Thatcherite voters, party officials, MPs, of all three major parties, have been doing splendidly for 40 years. They are all horrified by the mere possibility of change: they are "doing alright, Jack", and want absolutely no change to that. My usual quotes:
Commenter on "The Guardian": «I will put it bluntly I don't want to see my home lose £100 000 in value just so someone else can afford to have a home and neither will most other people if they are honest with themselves»
A 79-year-old retired carpenter in Cornwall: «who bought his council house in Devon in the early 80s for £17,000. When it was valued at £80,000 in 1989, he sold up and used the equity to put towards a £135,000 fisherman’s cottage in St Mawes. Now it’s valued at £1.1m. “I was very grateful to Margaret Thatcher,” he said.»
All that the Conservatives have to do is to defend at least in part their 80 seat margin, and all New Labour have to do is to grab it for themselves by out-torying them.
«Colin Crouch describes as "a democratic politics that finds it increasingly difficult to address voters as adults who must think about their collective as well as their individual selves"»
Why should they think of the “collective”? Most of them no longer have opportunities in their lives, but they got theirs, and that's the only thing that matters to a thatcherite.
«"[...] Yet mimicking Thatcher has so far proven useless, and imitating Blair will be no better."»
ReplyDeleteThe details don't matter: thatcherism is at the core the furthering of the interests of incumbents, which both Thatcher and Blair pursued, and in particular by increasing asset earnings, and reducing labour costs.
«"Sunak is the UK’s most Thatcherite prime minister since Thatcher herself". That's pretty meaningless when you consider her contradictory impulses»
Sure she had them: she was at the same time a nationalist tory and a globalist whig, thus embodying both the "Conservative"-nationalist and "Liberal Unionist"-globalist sides of the merged party, which have been warring on the details. An apposite quote:
«However, it is undeniable that Thatcher’s policies led to a nation that was more individualistic, hedonistic and greedy. With this in mind, I press Filby as to whether Thatcher ever regretted unleashing the forces she did. “Yes,” comes the instant reply. “Peregrine Worsthorne [Telegraph journalist] once said that, ‘Margaret Thatcher came into Downing Street determined to .’ It’s a pretty damning assessment but it’s actually quite true.”»
«her English chauvinism and her championing of the EU single market»
No contradiction there: for both Thatcher and Blair the EEA/Single Market was quite transparently a tool to disgregate the EEC/EU:
* Her view was that continental state businesses were ballasted by too high social spending and too high wages, and therefore thanks to the lack of barrier of the Single Market they would be destroyed by competion from USA and japanese owned "maquiladora" factories based in low-wage, low-tax Britain, and then continental voters would get angry and demand exit from the EEC/EU in Italy, France and eventually also Germany.
* His view was exactly the same, but with USA and japanese owned "maquiladora" factories in the UK having the advantage of having a vast pool of millions of low wage eastern european immigrants to hire, while Italy, France and Germany had delayed by many year their "free movement" of workers.
In the end it was the UK that exited the EEC/EU :-).
«Sunak is not the technocrat "who will administer harsh but necessary medicine" but is instead an ideologue who will seek to shrink the welfare state and protect class interests. Exactly how that makes him different to any other Conservative Party leader since Margaret Thatcher isn't that clear.»
It is always bigger asset earnings and smaller labour costs, but the details are more or less nationalist-torysm or globalist-whiggism, and partially overlapping with that priority to industrial-commercial or financial-property interests.
«Indeed, he looks an awful lot like a Brexity Cameron.»
Same as Starmer! But I reckon that is just image and positioning for them, their preference would be globalist-whig just like Cameron.
«take money from "deprived urban areas" and give it to Tunbridge Wells isn't the novelty Eaton imagines»
Bigger asset earnings, smaller labour costs is an enduring, well tested, highly successful approach, who needs novelties?
«the continuity candidate not just of New Labour but of a more responsible Tory tradition that stands in opposition to Thatcher»
But Thatcher was both radical "whig" (poll-tax) and a responsible "tory" (no railway and post nationalization).
Delete«Labour will be cast as the true party of levelling-up»
Only talk: if anything like "levelling-up" happens, lots of employers and their employees will leave London for much cheaper places "up north", and this will crash the south-east property market, that relies on a constant influx of job seekers for price growth (properties price depend on the ratio between new jobs and new housing). The core constituencies of Conservatives, New Labour and LibDems are all hugely invested in south-east property.
«and Sunak as the champion of London and the South East (despite being a Yorkshire MP).»
Starmer represents ultra-safe Holborn in central London, and Sunak ultra-safe Richmond in Yorkshire, what an irony. Both were gifted those extremely desirable seats pretty much as soon as they entered active politics.
«Starmer shows every sign of wanting to supplant the Tories as the true conservative party, pushing them to the margins as an unrepresentative and reckless party of libertarians with "foreign" ideas»
I reckon that at the core both Starmer and Sunak are globalist-"whigs" and will govern as such, even if the "focus group" tell them to talk the talk of nationalist-"tories". Both Conservative under Cameron and New Labour before Corbyn lost millions of votes to UKIP...
That part of the quote should have been:
Delete“Peregrine Worsthorne [Telegraph journalist] once said that, ‘Margaret Thatcher came into Downing Street determined to recreate the world of her father and ended up creating the world of her son.’ It’s a pretty damning assessment but it’s actually quite true.”
«the furthering of the interests of incumbents, which both Thatcher and Blair pursued, and in particular by increasing asset earnings, and reducing labour costs.»
Delete«Philip Gould analysed our problem very clearly. We don’t know what we are. Gordon [Brown] wants us to be a radical progressive, movement, but wants us to keep our heads down on Europe. Peter [Mandelson] thinks that we are a quasi-Conservative Party but that we should stick our necks out on Europe.»
«in the urgent need to remove rigidities and incorporate flexibility in capital, product and labour markets, we are all Thatcherites now»
«low interest rates ameliorating some of the pain from cuts to government spending»
ReplyDeleteIt is quite the opposite, it is "fiscal dominance": the government pushes a tight fiscal and labour costs policy to "force" the central bank, given a fixed inflation target, to adopt a wildly loose credit policy to achieve the famous "wealth effect". Since the credit policy is tied to collateral, a loose credit policy mostly and directly pushes up the price of collateral assets (e.g. property), whose price is not included in the price index targeted by the central bank.
Massive asset price increases do result in higher consumer spending, but that is fairly weak, it takes very big asset price increases to boost consumption by the propertied classes enough to counter a tight fiscal and labour cost policy.
«Osborne admitted that the darkening international economic outlook would have repercussions for the UK but insisted that he had no intention of amending his tough deficit reduction plans. It was up to the Bank of England, he added, to support demand over the coming months. “A credible fiscal plan allows you to have a looser monetary policy than would otherwise be the case. My approach is to be fiscally conservative but monetarily active.”»
«It is hard to overstate the fundamental importance of low interest rates for an economy as indebted as ours… …and the unthinkable damage that a sharp rise in interest rates would do.
When you’ve got a mountain of private sector debt, built up during the boom… …low interest rates mean indebted businesses and families don’t have to spend every spare pound just paying their interest bills. In this way, low interest rates mean more money to spare to invest for the future. A sharp rise in interest rates – as has happened in other countries which lost the world’s confidence – would put all this at risk… …with more businesses going bust and more families losing their homes.»
«this is being done to stop inflation exceeding 5%, a historically unremarkable level»
RPI is running at 12%. Rent contracts specify rents increase by RPI+3% every year, so rents are increasing by 15%.
«the latest hike in interest rates to 3% [...] Bailey, not Sunak, who should be considered the echt Thatcherite»
With RPI at 12%, the BoE rate for "friends of friends" (big finance) is even more deeply negative than usual in real terms at -9%, and even the mortgage interest rate are -5-6% in real terms, while in real terms the value of mortgages is shrinking by 12% a year. Two related titles from the "Financial Times":
“Andrew Bailey: I ‘would never’ stage a coup”
“Bank of England: The dovest hawk you ever did see”
«the government is signalling that it intends to suck demand out of the economy. The issue appears to be the belief that the labour market is too tight»
The government is signalling that demand by *workers and renters* is simply unaffordable, given supply shocks in energy. A robust cut in demand by workers and renters will reduce imports and the overall price level to the benefit of asset proprietors.