A Capital Idea

According to the Financial Times, "Chancellor John Healey has rejected calls by senior Labour figures to raise capital gains tax to the same level as income tax, amid warnings that such an increase would hit Britain’s attractiveness to investors." The report is based on four unamed sources, one of whom "called the proposal 'batshit crazy', while another pointed to the argument that people would change their behaviour by leaving the UK or delaying sales, resulting in a drop in income for the Treasury." One of the few people quoted by name, former Conservative Chancellor Jeremy Hunt, said "equalisation was always a non-starter. Every chancellor is briefed that the revenue-maximising rate of capital gains tax is 24 per cent after which you start losing money. Officials will never say [economist] Arthur Laffer has a point but that is the gist of it." (Nice to see the FT feels the need to explain to its financially-savvy readership who Arthur "napkin" Laffer was). The only other named source is Jim O'Neill, who claimed that equalisation "would pour more fuel on this idea that every other wealthy person is planning to move to Place X".

It's entirely possible that this is a bit of misdirection by Healey's sherpas, but he doesn't strike me as someone who likes to pull rabbits out of hats. He does strike me as a typical product of the Labour right, being obsessed with an image of probity (recall his self-important resignation as Defence Secretary under Starmer) and fiscal rectitude, the latter less a firmly-held principle than an unwillingness to challenge Treasury mandarins or the Governor of the Bank of England, which places him in a tradition that dates back to Philip Snowden in 1929. Whatever the outcome in two weeks time, it is worth understanding the debate around the equalisation of capital gains tax (CGT) with income tax, both as an indicator of the interests the government feels it must placate and the role of investment in our political economy, or at least its rhetorical role. The contingent argument in favour of equalisation is that CGT was not among the taxes that Labour's 2024 manifesto explicitly ruled out increasing, so it presents an opportunity for the Chancellor in filling his fiscal "hole".

The fundamental argument in favour of equalisation is that capital gains are just another form of income. This is actually made clear by HMRC when you do a tax self-assessment. The different rate is not because CGT is a distinct tax, despite the name, but because income tax is applied at different rates against different categories of income, e.g. pay and pensions, bank interest, share dividends etc. The more moral argument, traditional to socialists, is that a capital gain is unearned income, like rents. If we are to "euthanise the rentier", in John Maynard Keynes's phrase, then we should actually tax unearned (or "passive") income at a higher rate than earned (i.e. wages), not at a lower rate. Historically, starting in the nineteenth century, the UK has tended to do just that. This culminated in the 15% Investment Income Surcharge, applied on top of the income tax rate, in the mid-1970s. Under Margaret Thatcher, the higher rates of income tax were drastically reduced and in 1998 Nigel Lawson abolished the difference between income and capital gains with both now equalised at 40%. This is a fact that Jeremy Hunt either never knew or has conveniently forgotten.

The move towards favouring capital gains relative to earned income came under New Labour when Gordon Brown introduced taper relief in 1998 to encourage more patient investment (the tax rate would go down the longer you held the asset before selling). The flat rate of 18% was introduced by Alistair Darling in 2008, 20 years after Lawson's equalisation, along with a lower 10% Entrepreneur's Relief rate. In 2010, George Osborne reintroduced a tiered system with the higher rate at 28%. There have been lots of other tweaks to the rates, to special reliefs and to the annual exempt amounts (currently £3,000). There are two lessons to take from this potted history. First, that it is Labour that has been the more generous party in government to asset-holders since 1990. This, as much as the "pro-growth" shibboleth, suggests that John Healey is unlikely to break from tradition, despite his own voting record. The second lesson is that UK governments have never settled on a consistent approach to the taxing of capital gains, which is why equalisation remains a live issue. The two together explains why some in the Labour Party, and not just those on the left, think that CGT should be equalised with income tax.

There are three key arguments against equalisation, or more broadly against taxing capital gains at all. The first is the idea that people won't invest in UK assets. The second is that they will be dissuaded from selling their assets when they appreciate, leading to lower economic activity and macro inefficiency. The third, that they will be encouraged to leave the country (as per Jim O'Neill). These arguments are often deployed in combination even though they are not complementary - e.g. if you're not investing in UK assets then you won't have any to sell. The argument that having to pay a little more CGT might tip you into exile ignores that the sort of people who choose to become tax-resident abroad (e.g. Jim Radcliffe in Monaco) are thinking in much larger terms and avoiding many more taxes. The more coherent argument, though it often rests on these three, is that the tax will distort investors' behaviour. This is more credible, if you substitute "change" for the value-laden "distort", simply because tax is often meant to change behaviour (e.g. Pigouvian taxes on alcohol and tobacco). The question is what kind of changes are likely to arise if we tax capital gains? To answer that, you first need to ask who pays the tax.

According to the government, "Broadly, those paying Capital Gains Tax are business owners (for example, holding shares in an unquoted trading company), investors (for example, holding a buy-to let property, a second home or a portfolio of listed shares outside a pension or ISA) and employees (for example, who participate in share schemes)." To translate that into flesh and blood, the first category are people who start private businesses that they later either float on the stock exchange or sell to a competitor. Many of those businesses will already have a diluted share ownership because of options awarded to staff, particularly senior management incentivised to stick around after flotation or a trade sale. It's not just the founders who realise gains at an IPO, and it's not just in Silicon Valley that such options are widespread. The second category mixes rentiers (buy-to-let landlords), the well-off (second home owners) and the wide range of people who hold shares, from those who inherited holdings to day-traders. The last category, employees in share schemes, is thought to number around 1 million people. 

In short, it's mainly the middle classes, not the "entrepreneurs" beloved of financial journalism. Obviously not everyone who pays CGT has the same number or value of assets. At the top end, there will be people who have grown and floated a business, without diluting their ownership, who would face a considerably larger bill, and there will be speculators in UK shares and property who would also have to pay more tax. But neither is an issue as there are always loopholes by which the really wealthy and professional investors can lower their tax bills. There is an entire industry devoted to this. The people who actually pay CGT are predominantly those who already pay UK income tax and who treat their occasional capital gains (and regular dividends) as just another income stream. For the 2017-18 tax year, there were 265,000 taxpayers who paid some CGT (quoted in a government report from 2020), which is broadly 1 in 12 income taxpayers. So how would a higher rate of CGT, let's say 40%, change their behaviour?

The argument that CGT disincentivises investment is based on the idea of risk. Matthew Elliott (the Taxpayers Alliance, Vote Leave and ennobled by Liz Truss) puts it this way: "Start with the principle. A capital gain is not a wage. A salary is paid for showing up doing a job; a capital gain is the reward, if one ever arrives, for putting money and time at risk with no guarantee of return. The farmer who sinks a lifetime’s savings into land and machinery, the entrepreneur who forgoes a salary to build a company, the investor who backs a business before anyone else will: none of them are paid until, and unless, the risk pays off". This obviously ignores the level of risk entailed in zero-hours contracts, the gig economy, and the fact that wage-earners can be fired at will. But it also ignores that much farming does not produce enough savings to reinvest, which is why so many farmers have large debts and others are selling up. It also ignores that an entrepreneur who forgoes a salary must have other income lest she starve, and that investors who back startups operate on the principle that risk can be spread across a portfolio (they rarely back just one business) and hedged through insurance and derivatives.

As ever, the capitalist imaginary bears little relationship to the real world. For the vast majority of asset-holders who may pay CGT there is very little risk, if any, involved. Property prices might be flattening, but they aren't about to crash. The well-known imbalance of supply and demand won't disappear any time soon. And even if you have to hold on to an asset for longer, you may still have an income stream (e.g. dividends or buy-to-let rents). Likewise, while share prices may fluctuate, most shareholdings are through unit trusts or otherwise diversified portfolios. The idea that you need a 16-19% risk premium (the difference between CGT and income tax rates) to allow you to hold property or shares is ridiculous. Elliott quotes a HMRC model from 2025 that estimated the impact of specific rate changes on tax revenue. This assumed an annual loss of as much as £3.5bn by 2029 based on behavioural changes if the higher CGT rate went up by 10%. Given that the total CGT revenue is currently around £20bn, that's some pretty big changes.

The source for this was an Office for Budget Responsibility paper about anticipated taxpayer behaviours in respect of the 2025 budget. This foregrounded changing the date of asset sales in two ways: "forestalling", i.e. selling before the new tax rates come into effect, and "locking in", i.e. hanging on to assets in the hope of a more favourable future tax regime or avoiding CGT altogether through inheritance. The second behavioural change was shifting between asset classes for better tax rates or shifting between gains and wage income. The other changes were tax planning (i.e. avoidance), migration (defined as "either becoming non-UK resident for tax purposes, or diverting some or all activity to jurisdictions where the tax liability is lower"), and non-compliance (i.e. evasion). The paper itself is cautious on these impacts: "[forestalling is] not possible for the increase in main CGT rates as it takes effect on the day of the Budget", while "migration is not a significant factor in the response to the increase in the higher main rate of CGT". 

It's worth emphasising that this model only makes sense in relation to the proposed budget in 2025 and cannot be assumed to hold in all circumstances. Most of the claimed behavioural changes would be irrelevant if CGT rates were increased as part of a wider reform (and simplification) of the tax system, namely a move to treating all sources of income (capital gains, dividends, inheritance, gifts) as income and taxing them at the same (and ideally more progressive) rates. In fact, all that would be left would be non-compliance, i.e. tax evasion. It's also worth noting that an earlier report, by the Office for Tax Simplification in 2010, which contra the OBR said that "More closely aligning Capital Gains Tax rates with Income Tax rates has the potential to raise a substantial amount of tax for the Exchequer", saw the major "distortions" of CGT being due to its use as a means of tax avoidance, e.g. treating income as capital gains or converting cash bonuses into share awards. 

My own guess is that Healey won't do anything dramatic with CGT precisely because he isn't about to propose a sweeping and radical reform of the tax system. Given the institutional resistance at the Treasury, the ideological priors of the media, and the general timidity of the Labour Party in respect of fiscal engineering (New Labour notwithstanding), this is going to be a cautious and unimaginative budget, which means we can expect to see more cheese-paring on welfare. Investors will be happy, but those investors are not the entrepreneurs and market-movers of lore (though no doubt they will also be untroubled), but the petty capitalists who abhor risk and have no intention of becoming tax exiles. Sociologically, they are a step up from the traditional "savers" (nowadays, more likely to be young workers trying to get a deposit together for a flat). They are middle managers with share options, people who inherited unencumbered property (including ex-council houses), and people who started and sold a small business. The overlap with MPs is considerable.

The Representation of the People

The Observer is a pretty rubbish newspaper these days, its strengths in world coverage a mere memory and its commitment to flogging stuff exceeding even that of The Guardian. The one positive is that its football reporting has improved of late after a disastrous start under Tortoise Media. But it has the advantage that its remove from the daily news cycle means that it can take a more analytical, even judicious, view of what is going on in the world. Obviously it doesn't actually do that. What it does do is summarise the consensus of the media. Rachel Sylvester's report, headlined "Greens facing ‘existential threat’ as membership plummets after anti-Zionist motion", rehearses all the various claims made since Thursday's Holborn and St Pancras byelection, coming to the paradoxical conclusion that (in so many words) "The antisemitic left have infested the party so its Jewish leader must step down". It even goes so far as to quote the usual suspects on the subject, Ian Austin and Adam Langleben. Insofar as there is any analysis here, it is the speculation, based on a tiny sample, that Green Party membership may have "plummeted" by up to 2%, which is well within the bounds of seasonal fluctuation.

It is quite possible that many party members have resigned over the anti-Zionist motion, because party members routinely resign over policy turns and this one is undoubtedly substantial in nature and likely to be provocative for many. But it's equally likely that some members will have resigned because they can see the way the wind is blowing - i.e. that the party will now be subjected to a full-on antisemitism scare across the media and that senior members of the party (notably former leaders like Caroline Lucas and Adrian Ramsay) will leverage this for factional ends. If you think the purges are coming, you may well decide to jump before you are pushed, and one factor in deciding this may be the signals you get from the current leadership. Zack Polanski has been accused of a failure of leadership for not having opposed the motion, but he can also be accused of such a failure for not having immediately called out the media's bias and the wrecking of those party grandees. If this all sounds familiar, it is because it was also the strategic error made by Jeremy Corbyn.

It's worth recalling that after rising steeply under Corbyn, the Labour Party's membership fell by 40% between 2019 and 2025. This was only partially down to expulsions, with the bulk of the fall due to resignations in despair or simple hopelessness leading to lapsed subs. But the press saw that as a triumph, not a concern, as it meant the party was returned to its rightful "owners". There isn't a sincere worry that the Greens will lose Jewish members over the adoption of an anti-Zionist policy but a gleeful expectation that they can be harried into expelling left-leaning members, which will incidentally include Jewish ones (like Polanski) and also Muslims, who in UK politics are now coded as left, because of Palestine, regardless of their actual views. This repeat of what we might call the Corbyn manoeuvre won't follow exactly the same trajectory, however. While it is credible to suggest that you must destroy Labour to save it (from the left), because the depth of support in urban seats means it will always return a rump of MPs, you can't suggest the same for the Greens without reducing them to low single figures in vote share and possibly zero MPs.

The right of the Green Party of England and Wales understands this, but some are deluding themselves that agreeing to the media's demands will return them to the status quo ante of 2024, and perhaps even tempt Caroline Lucas out of retirement. What they don't seem to realise is that the aim is not to cleanse them ahead of a relaunch as a once more respectable party but to make them ineffective as an incentive for Burnham to steer left. Polanski's real offence was not his failure to kill the motion but his claim that a vote for the Green Party would keep Burnham honest. Plenty in the media have noted that it was the Greens that effectively toppled Starmer with the by-election win in Gorton and Denton and thus paved the way for Burnham's journey to Number 10. Their celebration of his recapture of voters that had drifted to the Greens is tempered by an insistence that he must not diverge from centrist orthodoxy to indulge them. Those recaptured voters must accept compromise, and they'll only do that if the Greens are no longer a credible threat. The "Burnham bounce" may not survive beyond the next budget, so it is important that the Greens are disabled now. Those on the left hopeful that Burnham will push "left wing solutions" should consider the extent to which the Labour Party's reponse this week has focused on delegitimising the Greens, not on emphasising the attractiveness of those solutions to the voters of Holborn and St Pancras.

The media only concern themselves with marginal parties insofar as they can be used as goads against the major parties. That, after all, is why Nigel Farage is always on the telly. The purpose of Reform isn't to supplant the Conservative Party but to keep it firmly on the right: eurosceptic, pro-US, small state, anti-tax etc. The racism and bigotry are incidental. This is something that Farage understands, which is why he has tried to draw a clear line between Reform and the far-right of Restore Britain and its neo-Fascist satellites for whom the racism trumps the nationalism. It is also something that Kemi Badenoch understands, which is why her conference speech focused on shoring up support among the upper-middle classes with promises on inheritance tax and childcare, rather than "culture war" nonsense. The aim is not merely to bolster support in the Home Counties seats the Tories lost to the Liberal Democrats at the last general election, but to reassure the Daily Telegraph et al that they can pick up the slack as the parties further to  the right of them descend into sleaze, rhetorical confusion (e.g. who can be English) and street thuggery.

When a marginal party approaches critical mass in terms of support and membership, it starts to exhibit the characteristics of a larger party. This includes bothersome ex-leaders, opportunist candidates and the promotion of technocratic managerialists who tend towards the political centre. But the chief change is that it becomes a coalition. The Greens have always been divided crudely into fundamentalists and realists, but over the last decade they have become more clearly divided between conservative ecologists, concerned about the evironment but fundamentally accepting of the social status quo, and eco-socialists who believe the safeguarding of the environment depends on the reform of society. This left-right dichotomy does not map precisely onto the more traditional one of "fundis" and "realos", for whom the dividing line was over the extent of their engagement with the political party system. In fact, both left and right of the party are realists, in that regard. The instinct of the media is to play upon the inevitable tensions of a party's internal coalition and to suggest that particular factions should move across party boundaries, and for that purpose a left-right orientation is necessary.

Though we like to think the British party system is historically stable, it has actually been marked by major reformations and splits, from the merger of the Liberal Unionists with the Conservatives to the launch of the SDP. In recent decades, we've had the farce of Change UK and the fragmentation of the right around Brexit. Much of this has been driven by the media. Today, you will still hear press voices urging the Tories to "unite the right", while others now demand that Labour rule out the possibility of a coalition with the Greens. The point is not the substance of what is being argued, which is entirely contingent and can change with the weather, but the idea that party politics is mutable and should respond to the demands of the media, rather than to the dictates of internal democracy The current concern that the Green Party must ensure it is not vulnerable to takeover by extremists is just the latest iteration of the belief that politics should be left to the professionals, not civilians. 

The plan to disable the Greens goes beyond forcing Polanski out and rests on a particular analysis of the party's current social composition. According to Andrew Rawnsley, "The Greens are an unstable coalition of middle-class planet-loving environmentalists, pro-Palestinian activists and ultra-left militants who have migrated from Labour and elsewhere". The objective is to prise the party apart. The respectable middle-class rump will be patronised (I'm surprised Rawnsley didn't refer to them as "tree-huggers") and generally disregarded as they revert to 2% of the national vote. The pro-Palestine activists and ultra-left militants are largely the same people, but it suits Rawnsley's purpose to suggest a more fragmented landscape of single-issue groups and cranks rather than a coherent left that draws parallels between rent controls in the UK and settler violence in the West Bank. They will once more be expelled into the political wilderness. The champions of proportional representation will again insist that some people should never be represented in our political system.

Reading and Democracy

Most contemporary journalism about social developments starts with a series of assertions. This is a form of argument that can be described as "Imagine if this were true". A recent example is John Harris in The Guardian suggesting that we're all so distracted by TikTok that the death of reading is imminent, and that in turn spells an end to democracy. The mechanism that Harris offers for the first assertion is contextual ignorance: the youth of today - subject to "a distracting and seemingly infinite jumble of random moving images" - cannot see the Fascist overtones of masked men blocking a port. As he puts it (with a smidgen of self-awareness): "But a background in the pre-digital world helps people not just follow national and global events, but clarify and contextualise them. In this case, at the risk of sounding hopelessly pompous, the fear many of us felt as we watched what happened in both ports was surely full of the perspectives gleaned from years of soaking up books and newspapers – and the sense that history often either repeats itself, or rhymes." In support of his claim, Harris cites a new book by the Times columnist James Marriott. I've not read the book (and am not about to), but have read the Substack essay (The dawn of the post-literate society) that was the germ of it and which provides the gist of the argument that we are undergoing an epochal transformation.

According to Marriott, "The tradition of learning is like a precious golden thread of knowledge running through human history linking reader to reader through time. It last snapped during the collapse of the Western Roman Empire as the barbarian tides beat against the frontier, cities shrank and libraries burned or decayed. As the world of Rome’s educated elite fell apart, many writers and works of literature passed out of human memory — either to be lost forever or to be rediscovered hundreds of years later in the Renaissance." Marriott's conservative register - the Burkean "linking" of the generations, the dissolution of the educated elite, the immigrant "tides" - means his prose sounds like something that could have been written in the Edwardian era (and probably was). This tone is front and centre in the expanded and scary title of the book: "The New Dark Ages: The End of Reading and the Dawn of a Post-Literate Society". As the more libertarian conservative Henry Oliver puts it in a review, "it feels as if James is part of a cohort that wishes to be in a different part of history".

That use of the discredited term "Dark Ages" should set alarm bells ringing. Historians prefer Late Antiquity, a period that runs from the late 3rd to the early 8th century in Western Europe. There was no "collapse" of the Western Roman Empire in 476AD, no "snapping of the thread", but a gradual evolution of the socioeconomic structure away from slave production and commodity trade towards stationary subsistence and a more attenuated trade in elite goods. The social order this gave rise to was more rural and less urban, but this was not an end to civilisation - i.e. the culture of the city - even in areas where towns were largely abandoned, such as Britain. Rome's educated elite didn't disappear, they simply became Church prelates. It's also worth noting that many of the barbarians had already been employed and even educated by the Romans, a longstanding practice. Perhaps the most famous of these was Arminius (Hermann the German), who was taken as a child to Rome, eventually becoming an equestrian rank military officer before leading a revolt in 9AD in defiance of Rome's plans to extend its territory from the Rhine to the Elbe. 

Taking high-ranking hostages like this was routine policy throughout the history of both the Republic and the Empire, which emphasises both the porous nature of the Roman/barbarian boundary at the personal and social level as well as the fact that many barbarian tribes were formal clients or allies of Rome. A similar policy was adopted by many subsequent empires, most notably the British, particularly in respect of the Indian princely states (think of Hurree Jamset Ram Singh becoming an excellent young gentleman at Greyfriars School). The Dark Ages was a popular trope with conservatives a century ago both because of an anglocentrism that assumed the atypical end of Roman rule in Britain was typical of Western Europe and because of long-held fears, from Gibbon onwards, that the British Empire would end in a similar manner: weakened from within and assaulted from without. Or to put it in terms that remain resonant for conservatives today, betrayed by its elites and over-run by foreign invaders.

The historical reality is that the successor states were as literate at an elite level as the same areas were during the late Empire. In other words, literacy was always confined to a small minority of the population. We can be confident about this because of those states' adoption of Christianity, a religion of the Book that drew a clear distinction between the need for a literate elite stratum and for the restriction of literacy among the wider population. By the time of Charlemagne and Alfred the Great, the state was taking a lead in encouraging the spread of literacy, at least among the nobility and the auxiliary classes required to support the state, such as the clergy and merchants. This gradual expansion highlighted a tension in the competing needs of secular society (as commerce and civil law became more prevalent) and the superstructure of the state. This would eventually lead to the Reformation, the explosion of printed matter and popular literacy.

Prior to printing, works of literature frequently "passed out of human memory" due to their fragility and the paucity of copies. Much of Greek literature was lost during the heyday of the Roman Empire, notably with the shift in medium from papyrus scrolls to bound parchment codexes. The latter were more expensive to produce, but longer-lasting, which resulted in many lesser works being dropped. This was exacerbated by a tendency to value Christian texts over pagan at a time when most manuscripts were predominantly produced by the Church (and which explains why many works of Greek philosophy come down to us via Arab copies). Marriott ironically reveals his own ignorance by assuming that these elisions were calculated rather than banally selective: "Ignorance was a foundation stone of feudal Europe. The vast inequalities of the aristocratic order were partly able to be sustained because the population had no way to find out about the scale of the corruption, abuses and inefficiencies of their governments." This would explain the total absence of any peasants' revolts during said era. John Ball, one of the leaders of the English Peasants' Revolt of 1381 was a priest, which meant he was literate ("When Adam delved and Eve span, Who was then the gentleman?")

Harris doesn't back up his second assertion, that a decline in reading will lead to a decline in democracy, but Marriott does. Unfortunately, he simply cites Neil Postman whose rather silly 1985 book Amusing Ourselves to Death claimed that television was making us passive and incapable of rational argument. For Marriott, "Just as the advent of print dealt the final death blow to the decaying world of feudalism, so the screen is destroying the world of liberal democracy." This is wrong on three counts. The period of expanding print literature (the post-incunabula era) runs for 300 years from 1500 to 1800. The final death blow to feudalism did not happen till 1806 with the formal end of the Holy Roman Empire. Likewise, we have been entranced by screens for over a century now, both in the cinema and the corner of the living room, yet that period saw the apotheosis of liberal democracy during les trentes glorieuses. Cause and effect is hardly proved in either case. 

Lastly, despite the focus on TikTok, most of what we see on phone screens is print. The Internet is a literary medium that incorporates images. It's like a book with illustrations, but dynamic and with added interactivity (so not passive). It's still the case that print > image online. The idea that we're going to lose the ability to read is obviously ridiculous, but there is no shortage of evidence that particular reading skills or habits are changing. But this isn't novel or even necessarily worrying, and the evidence for this evolution has been around for a very long time. For example, the claim that new university students are functionally illiterate is one that academics have been making since the curriculum was exclusively in Latin. This is self-serving both in the sense that it emphasises that students are empty vessels who must first accept their inferiority, and in the sense that it suggests academics have an ever harder job to do and should be paid accordingly. Likewise, the idea that the young (or the lower orders) are acquiring a novel argot that debases manners and promotes vice has prompted moral panics ever since the earliest days of newspapers.

The reality is that reading techniques change over time to suit the medium and the social context. When you owned only one book, you didn't skim read. When you bought a disposable daily newspaper, you did. The contemporary concern about the loss of literacy is about the how and why of reading, as much as the what. Rose Horowitch, in an influential essay in The Atlantic, claimed that "people are losing the ability to think deeply about writing. That doesn’t mean they are forgetting how to decode individual words. Rather, they are losing the higher-order abilities of comprehension and synthesis". That "higher-order" is a tell, like the assumption in 1984 that the proles could be kept quiet with pornography. The challenges of comprehension and synthesis are better explained by the superabundance of text (a fact) rather than the degradation of our abilities (an assumption about the weakness of others, rather than our literate selves). We are inundated with the written word - adverts, labels, tags - in a way that a Medieval scholastic would have found terrifying. This is capitalism, not a loss of virtue.

Just as the remnants of feudalism were cleared away by geopolitics rather than The Rights of Man (let alone the spread of the vernacular Bible in the 16th century), so democracy is now under threat from the power of money in politics and a general disillusion among voters as choice has been restricted to the options acceptable to the rich. Blaming our current situation on TikTok is akin to European reactionaries blaming Napoleon on the Freemasons or twentieth century liberals claiming that Hitler came to power solely because of the Volksempfänger (the people's radio receiver). This kind of hyperbolic history and naive technological determinism, repurposed to justify contemporary pessimism, is what you would expect from a conservative writer like Marriott. What remains less clear is why Harris should echo him so willingly. Is this simply The Guardian's hatred of social media finding common cause with Eeyorish reaction? Or does it reflect the nonconformist traditions of the paper and its belief that the lower orders should devote themselves to self-improvement? Answers on a postcard, if you still know how to write.

Of Fictions and Factions

The media response to Andy Burnham's first week as Prime Minister has been both positive and sniffy. His communication skills have drawn praise, though doing a better job than Keir Starmer in this regard is just walking and chewing gum at the same time, to coin a phrase. His early announcements around the cost-of-living have been eye-catching but also small-beer in the grand fiscal scheme of things, while his willingness to start disappointing the left over defence spending and support for America's wars has brought a warm glow of contentment to Atlanticists everywhere. The Financial Times delivered a typical school report: "But so far, the parts of Burnhamonomics that are bold are not concrete, and those that are concrete are not bold." Meanwhile, the Grand Panjandrum of centrist opinion, Andrew Rawnsley, was prepared to be indulgent: "If the aim was to get off to a positive start, before pivoting away from sticking plasters and towards fixing the underlying problems, then perhaps some sketchy short-termist policies with sketchy funding is a price worth paying."

The most interesting response has focused on the reaction of those members of the Starmer cabinet who were promptly relieved of their duties on Monday. By Tuesday, Peter Walker in the Guardian reported that "Allies of Keir Starmer have questioned Andy Burnham’s pledge to end factional infighting after he removed or demoted more than half of the outgoing prime minister’s cabinet in his first reshuffle." The jarring detail here is the suggestion that Starmer had allies, as opposed to the contingent support of career opportunists. The man was promoted as a clean-skin who could gull the membership, but that just made him a willing (if ignorant) tool, not the intellectual pole around which a party tendency would coalesce. By Wednesday, this freshly-conjured grouping was being described by an unnamed Labour MP in a Politics Home report as "an incredibly powerful phalanx of skilled political operators who intimately know the government’s fiscal position", which sounded both delusional and threatening

Thursday was relatively quiet on the faction fabrication front but by Friday the Guardian had decided to go all in on the call-to-arms. According to Kiran Stacey, "Keir Starmer’s leaving party had been planned for some time. But in years to come it might be seen as the birth of a new Labour movement." By Sunday, Andrew Rawnsley had got with the programme: "Having previously said that he wanted to “move beyond” the “infighting” and “factionalism” that has “bedevilled us”, he sacked 11 cabinet ministers, many of whose common offence was declining to call for Sir Keir to quit. He then carried out a purge of Starmer loyalists in the junior ministerial ranks." Stacey's explanation for this sudden emergence was not the petulance and sense of entitlement of the likes of Darren Jones and Steve Reed but Starmer's own curious path to power: "One of Starmer’s biggest problems in government was that he did not have an identifiable faction of people who were willing to defend him at all costs – a symptom of both his late entry into politics and of his relative lack of ideology."

Given the ruthless purge conducted against the left of the party, the idea that Starmer lacked ideology or factional muscle is ridiculous, and that's before you consider his record in office, from unnecessarily persisting with austerity to backing Israel's "right" to murder civilians. For the last two years you would struggle to find anyone who would willingly identify as a "Starmerite", but now we are asked to believe that they are a disciplined army that could threaten a government majority of 158. The political press have a long tradition of inventing Labour factions, usually in order to isolate the socialist left - most notably the ever-useful and mutable "soft left", the Play-Doh of social democratic aspiration - but they've excelled themselves in conjuring a "movement" around the cypher of Keir Starmer and the totem of Rachel Reeves' fiscal rules. Stacey eventually concedes that this novel faction may only be the result of musical chairs: "But many of those whom Burnham sacked or demoted after entering office did have one thing in common: they were close to the former prime minister and had not called for him to resign."

Since Burnham won the Makerfield byelection, there has been a noticeable shift in the Guardian's use of the term "factionalism". During the Starmer era, it was rarely mentioned in the context of the expulsion of the left, despite that being a textbook factional operation that many participants were only to happy to brag about publicly, for example in Patrick Maguire and Gabriel Pogrund's tell-all book Get In. It is axiomatic to centrists that they are not factional, with the implications of blind loyalty and a refusal to face facts, while their critics are. Unsurprisingly, Rafael Behr now compares those disappointed opportunists with the "radical left", essentially to dismiss them as not serious people: "Labour’s radical left is always on a hair trigger, poised to denounce compromise as betrayal of socialist principle. Now there is also a small but aggrieved band of Starmer loyalists in exile poised to highlight (or relish) missteps and vulnerabilities." It's bad enough to lose your cabinet job, but to be expelled from the ranks of the sensible must really hurt.

The whining of Starmer's supposed "allies" is a return to the faux-factionalism of Blair/Brown, in which ideological congruity is obscured by personal hatred. The attempt to conjure the soft left as part of Ed Miliband's threat to market stability was shortlived, but you can expect that notional faction to reappear when the need once more arises. Andy Burnham was always going to get rid of the higher profile Starmer appointees to the cabinet, if only to emphasise that he was a new broom, so I don't think too much can be read into Reeves, Lammy, Reed, Kyle, Kendall, Hermer et al getting the elbow. None particularly distinguished themselves in office. Ed Miliband and Shabana Mahmood have offended many, at either end of the ideological spectrum, but they've also proved they can get stuff done, and Labour badly need tangible results by 2029. The same rationale explains why John Healey is now the latest Iron Chancellor: butter rations will be halved but we will definitely have more guns.

Insofar as the reshuffle advanced one faction over another, it was in the geographical rather than the ideological sense, with a noticeable shift to more Northern MPs in cabinet and particularly those from the North West. This is not just a symbolic attempt to push the narrative of devolution, reinforced by the launch of "Number 10 North" this week, but a reflection that Starmer was very reliant on a London core for his support, both in terms of MPs, party apparatchiks and the media. Whether this will impart a genuinely different flavour to the government is moot. It's notable that none of the MPs aligned with the Mainstream grouping, set up to counter the drift to the right under Starmer, got a sniff at a junior ministerial post. So far, Burnham does not look likely to diverge from the post-Thatcher consensus despite his early talk of an end to Neoliberalism and regrets over privatisation. A tilt towards Ordoliberalism, which historically valued devolution, seems more likely, which means there will be little challenge to property rights and little that is recognisably socialist.

In this context, the creation of factions serves to substitute court politics for the clash of interests that might have a more profound, and therefore destabilising, impact on policy. Though there have been the usual "warnings" from union leaders directed at Number 10, the discourse has barely featured the concerns of organised labour (outside of oil and gas jobs) any more than the particular concerns of civil society organisations. As usual, we've heard more from think-tanks than protest groups. Of course this is manna from heaven for political journalists and commentators, for whom ideology is a dirty word. Of the current political caucuses at Westminster, Blue Labour and the Labour Growth Group are likely to be absorbed into the main body of Burnham's support, while the soft left will remain quiescent. This leaves the for/against dichotomy familiar from the New Labour years but with those resentful of Burnham lacking any obvious champion, leading to the current absurdity of the Starmerite resistance. 

Looking back over the last 16 years, the PLP lacked the talent to succeed Blair and Brown, hence the Miliband(s) debacle and the runaway success of Corbyn. The result of that was the decision to import a leader from outside Westminster: first the unknown Starmer conning the membership; and then a recycled Burnham avoiding the need for an election through PLP discipline. What few are prepared to acknowledge is that this underlying dearth of talent, as much as the shenanigans, reflects the slow death of the Labour Party as an organic product of civil society, a process accelerated by the purge of the left. Burnham's municipalism (a more accurate label than Manchesterism) is a desperate attempt to reconnect with society through revitalised local government, even as it requires central government to mandate capped bus fares. The acid test will be council housebuilding. She wasn't central to the week's discourse, beyond ruling out rent controls, but the success of this government will probably now rest on the shoulders of Angela Rayner, the new Secretary of State for Housing, Communities and Local Government. She will no doubt shortly be awarded her own faction.

Burnhamesque

The symbolic moment of the handover of power between Keir Starmer and Andy Burnham this week was not the former's maudlin PMQs session but the leak that the latter is thinking of appointing Shabana Mahmood as Chancellor of the Exchequer. This may not actually come to pass, but what matters is the public emphasis placed on the need to keep the bond markets happy, and the private reassurance that it is the party right that remains firmly in charge, not the battalions of the soft left (once more conjured into existence by the media) massing behind "Red" Ed Miliband. Mahmood is not known for heterodox thinking on economics, while her stint as Shadow Financial Secretary to the Treasury lasted all of 4 months, ending when she resigned from the Shadow Cabinet the day after Jeremy Corbyn assumed the party leadership. It is that action that clearly commends her both to the PLP and to the media. 

In some ways it is remarkable that we have moved so quickly from the expectation that Andy Burnham would bring down the curtain on "40 years of Neoliberalism" (it was only in May) to a resigned acknowledgment that little will change. In June in The New Stateman, Michael Jacobs commended the sentiment but worried that Burnham might be fighting the last war, while Karel Williams and David Edgerton characterised the coming administration as likely to be "more of the same, with added vibes", a theme promptly picked up by Owen Jones in the Guardian as part of the campaign to get Miliband promoted. Since then, Burnham appears to have been speed-running Starmer's trajectory, caveating previous statements and rowing back on his assumed intentions, albeit having had the sense to not put much in writing. He is obviously not a man of cast-iron pledges but of cheery vibes, and that will probably help avoid repeating those tricky situations where a shifty Starmer was confronted with his bald lies. So far, Burnham has disappointed the left on Gaza and defence, and shows every sign of intending to disappoint them elsewhere too. 

Central to cartel politics is the idea of the markeplace of ideas, in which policy entrepreneurs compete to attract the admiring gaze of the political class in a sort of intellectual beauty contest conducted through the medium of slide-decks and chunky PDFs - i.e. in the manner of a business pitch. The ideological frame is clear enough, but so is the idea that politicians themselves have no fixed beliefs and are merely pragmatists interested in "what works". Burnham's victory in the Makerfield by-election prompted a rash of ideas that quickly coalesced under the title of Manchesterism. Matthew Lawrence and Alex Williams' paper on The Productive State, subtitled "A Framework for Manchesterism", is perhaps the most substantial offering to date, largely because it has been long-gestated at the Common Wealth think tank (someone must have been very pleased with herself for coming up with that name). The problem is that these ideas have been knocking around among progressives for some years now but, outside of the Corbyn/McDonnell interregnum, there has been litlle interest in them from the Labour Party.

Chris Dillow made the point that while Lawrence and Williams recognise the central issue of power - "The fundamental problem is ownership, not conduct. It is impossible to regulate away a problem created by ownership" - they offer little in the way of practical advice on how power can be acquired beyond noting that "Postwar nationalisations used government debt as compensation" and that "compulsory acquisition would typically require compensation based on fair market value, and acquiring assets materially below prevailing market valuations would likely require primary legislation and could face legal challenge." Given that public utilities and the NHS have been systematically looted for decades now, we surely need to question whether we want to re-enact the prim and proper approach of the Attlee government. Instead, the advocates of nationalisation today have been at pains to emphasise this pragmatism. Thus Larry Elliott in The Guardian noted that "Compensation to the owners of the mines and the big four rail companies was actually quite generous, which is why the nationalisation programme was relatively trouble-free." No shit.

This timidity is the consequence of the marketplace of ideas as much as ancestor-worship: the elevation of theory over practice, unless the latter is in the form of "reforms" to existing services and regulations - i.e. within the boundaries of neoliberal practice. Nobody at Common Wealth or the Resolution Foundation is going to put up a slide saying we need a general strike, a mass boycott or a refusal to pay. Revolutionary methods cannot be expected from the "radical realists" of Labour's latest grouping, Mainstream (just typing these labels is depressing), any more than we can expect them to invoke democracy and the people except at the most abstract level, hence the popularity of the phrase "public control", which is less about masking the preference for regulation over ownership than making the public a mere fetish. The competition for Andy Burham's ear is about securing influence over the mechanisms of the centralised state. For this reason, we should be sceptical about the talk of devolution.

The Productive State came out in June. I doubt many people still have much hope for its recommendations to be taken up by the new administration, or even for many of them to make their way, however heavily diluted, into the manifesto for the next general election. The media have focused their attention on the promise/threat of a wealth tax, the "debates" over whether we should junk Net Zero and the ECHR, and the need for more crackdowns on immigration and welfare. This is not simply a case of media-owners pursuing their own interests in those areas but a conscious attempt to narrow the government's bandwith, by "flooding the zone with shit", such that more radical ideas will be squeezed out. The debate over who should be Chancellor has similarly been conducted as a distracting and tedious contest between "Chaos with Ed Miliband" and whichever Labour politician looks most likely to continue Rachel Reeves' good work and do nothing to frighten the horses.

By July, the progressive end of the media was focused on prodding Burnham to consider practical solutions, such as Larry Elliott urging him to mandate the Bank of England "to provide a flow of low-cost, patient capital needed to fund the reindustrialisation strategy", an idea that obviously isn't going to survive contact with Shabana Mahmood, while Andy Beckett was insisting that "Overcoming Britain’s aversion to fundamental reform is not impossible. In the last century, David Lloyd George, Clement Attlee and Margaret Thatcher managed it, for three very different governments in three very different contexts". What Beckett didn't note was that the political context that gave them the authority to make radical change was actually the same: the kudos arising from a successful war, but also the recognition that the decades prior to the conflict could not be returned to. Burnham has made that acknowledgment, but he doesn't have the goodwill engendered by wartime sacrifice and victory.

Meanwhile, the helpful suggestions continue to come in from outside government, from rationalising the tax code to devolving power and finance to the regions. But when we turn to the ideas emanating from within government, we find a call to stop "simply writing a cheque" for health and disability benefit claimants, which sound awfully like a return to workfare. The other symbolic moment of the week was the passage of the Hillsborough Law - the Public Office (Accountability) Bill - in the House of Commons after much foot-dragging by the government over the security services' duty of candour (a major issue in respect of the Manchester Arena bombing). Burnham has been a  sincere champion for this cause, at least since he was publicly booed at a memorial ceremony held at Anfield in 2009, but the long delay in the passage of the bill indicates the limits of state reform, as much as the resilience of the campaigners. Burnham claim that the bill is "truly a rewiring of the state" is hyperbole.

In summary, there is little reason to believe that Burnham will be the social democratic saviour of the country that some were pining for back in May, but his deft media footwork and his willingness to cast greater regulation, whether by Whitehall or local authorities, as populist activism may be enough to save the Labour Party from electoral oblivion. The creation of some new public corporations, an emphasis on the common good, and an unabashed promotion of the state as a regulator of markets, all intended to help alleviate the cost-of-living through an attack on rentierism and private monopolies, may be enough for many voters. The irony is that the man promising an end to Neoliberalism may turn out to be the first truly Ordoliberal Prime Minister of the UK.

You Have to Want to Change

The Global Justice Project is an initiative whose aim is "to stimulate research, policymaking, and citizen engagement to shape a fairer, more democratic and sustainable 21st century". Though a collective effort, the project has been closely identified in the media with Thomas Piketty, which has inevitably led to curt dismissal by those who either deny that wealth inequality has grown or that it is driving the erosion of democracy and the degradation of the planet, and have done so since the Frenchman published Capital in the Twenty First Century in 2013. While that mighty tome proposed a globally-coordinated wealth tax, the GJP proposes three key initiatives in line with its more holistic ambitions and the expertise of the collective: fast decarbonisation of energy systems; a shift away from overconsumption towards sufficiency, which would entail a sharp reduction in labour hours and the use of raw materials; and "a drastic reduction in inequality of income, wealth and power, between countries and within them." Parallel to this, leading progressive economists, including Piketty, have also signed up to a roadmap to "end poverty and inequalities on a liveable planet", as proposed by Olivier De Schutter, the former UN Special Rapporteur on extreme poverty and human rights.

Rather than getting into the detail of the proposals, what I'd like to consider is the political viability of such radical change and what that in turn might look like on a smaller, more domestic stage - i.e. the UK. Dan Neidle, the British tax lawyer who has become a media fixture since his retirement from Clifford Chance, largely by publishing opinion about the tax affairs of prominent individuals and shaking his head wearily at the government, dismissed the GJP, aka "Tomas Piketty and a large team", as "potty" (Noah Smith called it "total nonsense"). Neidle's central claim is that it would require "unprecedented global cooperation" and "a powerful and benign world authority", but that if such things were possible they would already exist and we would therefore already have solved the problems of decarbonisation, over-consumption and inequality. He describes this as a circular argument. In fact, what he is offering is a non sequitur. Bretton Woods (the WTO, the World Bank) was a system of "unprecedented global cooperation", but it did not raise up the developing world or restrain global warming. Equally, the US has long claimed to be "a powerful and benign world authority" (not least through the exorbitant privilege of the dollar), but sees fit to attack other countries, murder non-combatants and kidnap heads of state at will (that's just this year).

It is perfectly reasonable to be sceptical of the GJP's ambitions, particularly when you consider the track record of other attempts at global coordination of the economy and climate, such as GATT and COP. But those initiatives have run into the sand because there are competing interests between nations. The classic example is the desire of developing countries to catch up economically before the music stops and planetary constraints oblige us to move to a steady state or even degrowth. The GJP explicitly addresses this through wealth transfers (and does likewise for domestic inequality). Whether you think that is politically feasible is another matter. The point is that history is littered with examples of international wealth transfers, specifically in the form of colonial empire. What is being proposed now is a coordinated transfer of accumulated wealth (think of it as reparations plus) rather than genocide, slavery and coercive exploitation. Even on the more modest scale of regional cooperation, the flow of money between net contributors and net beneficiaries in the European Union over decades has shown that transfers are hardly Utopian. 

If we think the degree of international coordination needed to implement the GJP's proposals is unrealistic, perhaps we should return to the idea of "socialism in one country", specifically the UK. Might Andy Burnham's proposed break with "40 years of neoliberalism" offer a more realistic course towards a radical reimagining of our political economy? According to David Edgerton & Karel Williams, writing in the New Statesman, "What we have is more of the same, with added vibes, plus a reversal of policy in certain areas, at the limits of what Labour radicalism will permit. It represents something more like political rhetoric than political change: when Margaret Thatcher and Tony Blair are associated with the free market, competition and private finance, it is argued that a small reversal in policy will itself improve things." Again, the point to emphasise is not that reversing the Thatcherite/Blairite dispensation is too challenging to even consider, but that there is a lack of political will to do so. Burnham is currently making promises left right and centre to win election as an MP and potentially as Prime Minister, but he doesn't look like a man with a radical plan.

Edgerton and Williams see the foundational economy and universal basic services as the vector for more profound social and economic change: "Improving household liveability should be the focus of expenditure. This should include making essential market goods affordable, ensuring foundational services work and are accessible, and integrating policies around the goals of preventing social harm and promoting environmental responsibility and social solidarity. We need to think about expansion of domestic food production as well as reforming food distribution and consumption." They make good points, notably that radical change to our political economy must start from tax reform ("Our tax system remains stuck in the 1940s when PAYE was introduced to tax the individual male bread winner"), but I feel their focus on "the four market essentials – housing, utilities, energy and transport" misses that one of those, housing, is an 800-pound gorilla. There is also a wider problem here, which we see with mainstream commentators as well, which is to view measures to alleviate poverty in supply-side terms ("making essential market goods affordable"). 

The UK economy has proven highly vulnerable in recent years to fluctuations in energy prices, arguably more so than in the 1970s when oil-fuelled inflation triggered labour militancy to push up wages in response. Then it caused inflation, but that was more of an issue for rentiers than for working households. Today, there is no countervailing tendency to force wages to keep pace with rising household costs (despite the Bank of England's attempt to revive the bogey of the "wage-price spriral"), with the result that even relatively small increases in energy costs can trigger a cost-of-living crisis as they impact other essentials such as food and transport. But this lack of financial resilience isn't simply down to weaker trade unions but to the fact that housing costs take up so much of household income, and to the fact that the dynamic is for those costs to expand as much as possible. In other words, there is simply no slack in most household budgets. Reforming planning laws to encourage more housebuilding will not alleviate poverty so long as rents are set by the market, both because developers are incentivised to build higher value properties and because those regulatory reforms will make it easier to do so.

It would be nice to fix our sewers and reservoirs, and fully electrify our railways and modernise the NHS, but this requires a level of real resources significantly greater than can be produced domestically, essentially because of 40 years of deindustrialisation following Thatcher's misguided Monetarism and Blair's equally misguided belief in a financial services-led economy. We could import resources - steel, bricks, engineers - but this would require us to export an equivalent amount or risk a balance of payments crisis and inflation. So, if we have only limited real resources, what should we prioritise? I would suggest that we focus on social housing initially. Not only does this address a pressing need, but it also gives us the opportunity to materially affect household spending by deliberately lowering rents, a policy that would be extended to existing council houses and flats. You might argue that this will deprive hard-pressed councils of revenue, but there is a solution to that as well, which is to buy out private landlords (using central government money - essentially by issuing mortgage-backed securities) and so increase council stock and revenues (even if those previously private tenants see their rents reduced in line with council rents).

This looks like a subsidy, but in fact it is simply deferred income as the rent can be increased once the cost of other essentials come down. So long as the investment - i.e. the cost to build and maintain - is recouped over the useful life of the asset (hopefully many decades in the case of housing - most UK council houses are over 50 years old) the timing of payments is simply a matter of cashflow, and that really isn't an issue for a monetary sovereign. Just as welfare spending is an automatic stabilisier of aggregate demand in a recession, so we should flex rents to help social tenants meet spikes in the cost of basics. This is a more practical approach than capping utility bills or freezing grocery prices. That the cost of living debate has been limited to those proposals, and the predictably choleric response of market fundamentalists, tells you how wedded the media have become to the idea that the crisis is a supply-side issue rather than the consequence of inadequate demand, and specifically demand among low income families. It sometimes feels like no one at the BBC has ever heard of Keynes.

Lowering rents is functionally no different to lowering interest rates that feed through to lower monthly mortgage repayments. The difference comes down to who benefits: tenants or mortgage-holders. The state currently has limited control over interest rates, due to the self-denying ordinance that is the Bank of England's "independence", and apparently no control over gilt yields (though in reality these are tied to inflation expectations and thus other government decisions). But it has complete control, if it wishes to exercise it, over council houses and their rents. After all, without that control Right-to-Buy would never have got off the ground, and nor would the Thatcher government have been able to impose an effective moratorium on building replacements for the properties sold off. The learned helplessness of British politics means that we easily forget the power of the state to remake society, even when such changes have been made in recent memory. It is no surprise then that more ambitious changes, on a global scale, are met with derision. But we should always remember a simple truth, most recently stated by Simon Wren-Lewis: "levels of poverty and inequality are what political elites and their influencers want them to be". That we have a government elected on the promise of "change" that has decided to change little does not mean that change is impossible, but that change is simply not what the government and its primary backers want.

The Starmer Legacy

To no one's surprise, the local election results have led to the demand, both inside and outside the Labour Party, that Keir Starmer stands down as Prime Minister. While short-lived premierships are not unknown, particularly over the last decade, Starmer's fall is spectacular. A man who arguably rose without a trace is destined for well-deserved obscurity. The first point to make is that his limited popularity started to drop immediately after Labour's general election triumph in 2024 when only 34% of the vote secured the party 63% of the seats in the House of Commons. His performance since then, from the winter fuel allowance fiasco to his support for Israeli war crimes in Gaza, has accelerated this trend, but he was never popular to begin with, even among Labour Party members and supporters who had seen him steadily renege on all the promises he made to win election as party leader. With the end of his ultimately barren political career imminent, the question we have to ask is what was the significance of Starmer? We understand the shenanigans and dumb luck that propelled him into Downing Street, but why him and why now?

Some commentators have taken to wondering if the country has become ungovernable, or if we are cursed by zombie politics, or if the problem is simply that our politics is fundamentally stupid. The common theme here is learned helplessness. The elevation of Starmer as first party leader and then Prime Minister is perhaps evidence that the country didn't think it could do any better, a feeling that persists and means Starmer will probably remain in situ for a while yet. Labour Party members may bemoan that they were deceived, but anyone remotely engaged with politics in 2019 could have told them that this was on the cards. Starmer was the clean-skin of the right, with the backing of shadowy Blairite fixers like Mandelson and McSweeney, and would purge the left as soon as he could. Likewise, the much-ridiculed claim in 2020 by the historian Glen O'Hara that what mattered was managerial competence - "Starmer can chair a meeting. He can draft a minute. He can lead a team. He can hold a press conference" - was quite simply a counsel of despair: a paean to lowered expectations, not an encomium. The irony is that subsequent events, and the anonymous briefings about his indecisiveness and lack of political nous, have shown that initial assessment to have been optimistic.

To understand the meaning of Starmer we have to put him, and this pervasive sense of learned helplessness, in its historical context. Unfortunately, this doesn't suit the fashionable concerns of our media, for whom history is just so much going over old ground and old arguments and so to be avoided. But this ahistoricism is also to be found among those who pride themselves on taking a longer view. For example, Simon Wren-Lewis thinks there was a change in the intellectual rigour of government between 2003 and 2008: "After these years when evidence-based policy making was the ideal, it was a genuine puzzle as to why the Western world had collectively decided to ignore basic macroeconomics and cut government spending in the middle of the worst recession since WWII when interest rates were stuck at their lower bound. Yet from today’s perspective, where everything from harvesting policy-based evidence to simple lying is so endemic, it all seems much less of a puzzle." But you might as well ask why the government adopted similar austerity measures in the 1930s when there was credible advice (notably from John Maynard Keynes) to do otherwise. The answer is: they did it because it was in their class interests to do so, not because of some sudden lapse in character. 

The idea that New Labour was wedded to evidence-based policy-making is obviously a myth (2003 was also the year of the instrumental lying over Iraq), but so too is Wren-Lewis's claim that "Brexit marked the first triumph of populism in the UK." Contemporary rightwing populism is marked by an anti-state fiscal obsession ("We'll make public spending savings and deliver tax cuts"), by xenophobia ("The immigrants are to blame for society's ills"), and by a belief that traitorous "elites" are undermining the nation (often in cahoots with the immigrants). If we're looking for this worldview's first triumph in British politics, surely the place to start is Margaret Thatcher's ascension to the leadership of the Conservative Party. Whatever her preferences in economic or political theory (monetarism, Hayek etc), her rise was founded on the idea that the establishment was rotten (the "wets", the traitorous BBC), had sold out to left-leaning elites (the trade union "barons", the liberal public sector that derided Victorian values), and was cultivating ethnic minorities against the interests of the nation ("people are really rather afraid that this country might be rather swamped by people with a different culture"). Curbing organised labour, restraining "loony left" councils, and imposing the national curriculum in education were all populist measures.

One explanation that Wren-Lewis offers is the role of the press in advocating austerity after the great financial crash: "The media made it hard for opposition Labour voices to argue that the government was going too fast, too hard on cuts, so Labour eventually gave up." But this is inaccurate. Alistair Darling was already promising deep, real-terms spending cuts in 2009. He may not have made a virtue of it, as George Osborne did, but there was unquestionably a political consensus on austerity even before the 2010 general election. Thereafter, Labour's opposition to the cuts was little more than quibbling, which directly led to the election of Jeremy Corbyn in 2015 on a platform of actually opposing the cuts (a point Wren-Lewis is willing to concede in a footnote). The question that should be asked is why there was a cross-party consensus on austerity in 2009. Can it be solely attributed to this country's horrendous media? Again, a comparison with the 1930s suggest that the economic orthodoxy - that budgets must be balanced through spending cuts and/or tax rises during a recession - was hegemonic across the major parties, hence the split in Labour in 1931.

Wren-Lewis continues: "The right wing media is hardly a source of informed and balanced commentary. To some extent that has always been true, but it does seem to have got worse over the last few decades: just look at the Daily Telegraph, or GB news. The transformation of social media, to the extent that it influences political debate and discourse, has been more dramatic, and is now clearly a source of simplistic views that tend to match those of its owners." Again, the British press is no more reprehensible than it has ever been. It hasn't got worse, it simply started out bad amidst the imperialist jingo of the late nineteenth century (when expanded literacy and growing affordability led to a boom in newsprint) and has never got any better. Simon's suggestion that social media reflects only the views of its rightwing owners is bizarre, particularly coming from someone who is quite active online and regularly gets into spats with people whose views are a million miles away from Elon Musk or Rupert Murdoch.

My point in all this is that British politics has been on a populist trajectory since at least the 1970s but one that obscures a much more persistent conservatism. You could see the Major years and New Labour as a countermovement to Thatcherite populism, but in fact continuity was more obvious than change, hence the persistence of the fundamental economic dispensation (shrinking the state's role, protecting investors, restraining organised labour), the running sore of xenophobia (recast in terms of "bogus asylum-seekers"), the general tendency towards authoritarianism (ASBOs), and the  systematic marketisation of the welfare state. That said, there was a discernible shift in the political landscape around the millennium, arising from fundamental changes in political economy and the material base. Keir Starmer's ascension can be seen as emblematic of the way that three specific developments associated with this shift worked themselves out. They are: the intellectual bankruptcy of the political centre; the assisted death of the Labour Party by its own right wing; and the terminal delinquency of the press.

The political centre as a distinctive body of thought (the Third Way) came to prominence in the 1990s first under Bill Clinton in the US and then under Tony Blair in the UK. But it was already crumbling, essentially because the fall of the Berlin Wall in 1989 marginalised the idea of socialism for a generation. This meant that the premise of a middle way, a grand bargain between social democracy and free markets, was no longer required, which led to the era of liberal triumphalism and ultimately the folly of both Iraq and the dominance of financialisation. With the return of socialism as a viable alternative after 2008, if only rhetorically, centrist politics found itself without any space for manoeuvre - there was no meaningful middle way to plot any longer with social democracy all but gutted - obliging it to make common cause with conservatives in defence of the market. This was a key contributor to the emergence of cartel politics, with its emphases on fiscal orthodoxy, technocracy and the exclusion of the illegitimate fringe. It also compromised the media (the influence is bidirectional) by encouraging the idea that political journalism was about policing the boundaries of the cartel. The result of this in the UK has been the conscious strategy of Labour to replace the Conservatives as the dominant party on the centre-right, pursuing largely the same policies but with an appeal to managerial competence and recourse to the mawkish class sentimentality embodied by Starmer ("My dad was a toolmaker").

This shift explains the purging of the Labour left, a move that Starmer has taken to a level that would have been unthinkable to the likes of Hugh Gaitskell or Neil Kinnock. It's easy to dismiss the Labour right as slaves to factionalism and spite, but while this is a fair assessment of the pyschology of many individuals, the underlying dynamic is a pragmatic realisation that you cannot be a centre-right party and have a socialist leftwing. Fluffy liberals (aka the soft left), yes; Marxists, no. The problem that Labour faces is that while it has defined the left and right "extremes", in the form of the Greens and Reform, it hasn't managed to squeeze the fillings in the political club sandwich: the Liberal Democrats between it and the Greens, and the Conservatives between it and Reform. The reason for this is Starmer's lack of credibility, which is a consequence of his route to power. Many people have longstanding political loyalties (and antipathies), and Labour has been unable to provide a charismatic leader in the mould of Blair capable of reconstructing the party's electoral base. The problem for the Labour right today is that they don't have anyone of that calibre in waiting.

The third development is the economic decline of the press. This has been offset not by recourse to social media, as Simon Wren-Lewis imagines, but by the colonisation of TV. GB News is simply a visual tabloid - somewhere between the Sun and the Daily Mail - while political coverage on the BBC, ITV and Channel 4 has descended to little more than apeing the comment pages of the Times, the Telegraph and the Guardian. With newspapers increasingly consumed online with multimedia content, and with the decline of linear broadcasting leading to TV journalism being chopped up into short videos, and increasingly dominated by longer-form creator content, a merger of the two forms seems inevitable. This gradual process has led the press to become ever more directive about how TV should conduct itself. Whereas once Rupert Murdoch's interests were in breaking up broadcasting monopolies and undermining the state broadcaster, his successors will be far more interested in securing control of those broadcasters' political coverage. Were we to revive the Leveson 2 Inquiry, its scope would have to be considerably widened.

The significance of Starmer is to be found in the Labour Party's demographic challenges. Its skilled working class electoral core had shrunk through the twin pressures of deindustrialisation and embourgeoisement in the 1980s and 90s, leading to the New Labour reconfiguration around totems like "Worcester woman". But this obscured that its actual core vote was increasingly minorities and the educated but economically precarious young clustered in cities. The decision to colonise the centre-right, thereby marginalising both the Conservatives and the Liberal Democrats, required it to adopt an electoral strategy focused on post-industrial small towns and white-coded social conservatives ("Workington man"), along with the comfortable (and multi-ethnic) professional middle class from which its own candidates now largely hail. Purging the left was seen as attractive to both groups. The result of this, as seen in the local elections, has been the erosion of its urban core but no compensation in small towns. The latter is less to do with the success of Reform than the fact that small towns also have young and ethnic minority voters, not to mention more mature "lefties", many of whom are now shifting to the Greens in England and Plaid Cymru and the SNP in Wales and Scotland, allowing Reform to win on low vote shares much as Labour did in the 2024 general election.

The learned helplessness of the current political conjuction arises partly from this conscious attempt to reconfigure the party landscape. The centrist media's obsession with "populism" - i.e. the disparaging frame for emergent demands from outside the cartel for a "new politics" - together with its unwillingness to properly investigate the Labour Party's purging of the left as a political endeavour, rather than the "crisis of antisemitism", means that this strategy of reconfiguration has little salience in political analysis. At best, the attempt to win over social conservatives is described as the recapture of the party's historic core of non-graduate, manual labour (the "white working class"). Likewise, the decline of the Conservative Party is seen chiefly through the prism of the "revolt on the right" and the legacy of Brexit: a failure to resist the seductive powers of Nigel Farage rather than a failure to resist Labour's march onto its traditional territory. Prior to 1995 (i.e. the start of New Labour), no Conservative MP had defected directly to the Labour Party in its history. Since then, seven have, with an acceleration in recent years.

In addition to this increasingly volatile party landscape, the other factor encouraging the learned helplessness of the politico-media caste is the steady decline of state capability following the UK's extensive application of privatisation and outsourcing since the 1980s. This has seen government increasingly adopt the role of a regulator, setting targets and parameters, rather than an author of action. The recent Whitehall farce of the inquiry into Peter Mandelson's appointment as ambassador to the US was an object lesson not only in obfuscation and avoidance but a clear sign that there remains a gulf of understanding between government and the Civil Service. The former is driven by announcements and "resets" - performative actions that achieve little - and remains baffled that there are no levers of power that it can simply pull to get the desired outcome. The latter suffers the delusion that it has control over fragmented processes that long ago breached the boundaries of the state, ironically returning us to the culture of corruption and the promotion of "interests" that marked the era before the Northcote-Trevelyan reforms.

Keir Starmer will likely cling onto office for a while yet, not simply because there are no compelling alternatives among the PLP ranks (Streeting is obviously Marmite, even among that narrow constituency) but because the wider Labour movement is enervated (trade union general secretaries may publish their demands in the Guardian or Daily Mirror but they won't actually do anything) and the soft left remains a disorganised wannabe faction that lacks a coherent ideology ("Manchesterism" is little more than municipal buses - i.e. mitigating market failures). But perhaps I too am indulging in learned helplessness. Perhaps if Andy Burnham returns to Parliament he might recommit Labour to a robust social democracy that defies the financial markets and unwinds the damage done by both New Labour (of which he was a minister) and the Tory misrule of the last decade and a half. Perhaps. Pessimism of the intellect and optimism of the will, and all that. But I can't help feeling that the legacy of Keir Starmer, at the controls of a driverless train whose route was set by others, will be a diminished Labour Party that eventually convinces itself the best course of action in a fragmented political landscape will be a coalition with the parties to its right, rather than its left.