Winner of the New Statesman SPERI Prize in Political Economy 2016

Friday, 31 July 2015

Corbyn's popularity and relativistic politics


This is just a short gripe about some of the commentary around the Labour leadership contest. So many who write about this express their puzzlement about how someone from the left of the party can suddenly appear to be so popular. This can only mean, they suggest, that the Labour party membership must have moved to the left. (For example this, from the FTs Jim Pickard.)

This mistake reflects something that Paul Krugman has remarked upon in the US: the tendency of commentators to define the centre as simply today’s mid-point between the two main parties. So as Labour moves towards the Conservatives, according to this way of looking at it the centre also moves to the right.

Now if that is how you want to define the centre, so be it. Such is relativistic view is very post-modern, I guess. But when that idea is then used to say that Labour party members must have moved to the left, its limitations become self-evident. In reality all that might be going on is that the views of Labour party members have not moved at all, but they have become left behind as Labour MPs and other prospective leaders have moved to the right. I think we have clear evidence that this is more likely to be what is happening. [1]

The most obvious example is the welfare bill, and Labour’s shameful decision to abstain on this. But another that is close to my heart is austerity. Talk to some, and being anti-austerity has become synonymous with being well to the left. Of course in reality it is just textbook macroeconomics, but if we stick to measuring everything on a left right axis, then remember that it was only as far back as 2009 that the need for fiscal stimulus rather than deficit reduction was the position advocated by a centre/left Labour party in the UK, and the Democrats in the US. It cannot be surprising, therefore, that among a relatively well informed electorate that is the Labour party membership an anti-austerity position is still seen as a sensible policy. With an extreme relativistic view you could say that by sticking to this position these people have moved to the left, but please don’t appear surprised that this has happened.



[1] It is equally fallacious to think that those who vote for Corbyn agree with every one of his policies. Some of his popularity may be a form of protest not just at the policies of his competitors, but also their style: see the clip in the middle of this typically amusing article by Mark Steel.


31 comments:

  1. May I also point out to younger commentators that it is not unknown for Labour party leaders to come in from "the left"? Harold Wilson is now remembered as a managerial figure, but at the time of his election he still had "Bevanite" associations.

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  2. I think that's the difference between moderates and centrists. Centrists are indeed always exactly between the two parties because their idea is that all parties are equally good/bad. And compromise is always the best. The media likes to be centrist because they cannot afford to lose their sources on either side.
    Moderates do not really move with the political parties and simply support a classic mixed economy, as opposed to the free-market right and the state-governed left. I cannot see what's so radical about Corbyn. From what I have heard he is proposing moderate policies.

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  3. OK, but there's other evidence that the Labour Party membership have moved to the left. The most obvious is the negative feelings that many seem have regarding New Labour's period in office (and not just on foriegn policy). It seems reasonable that Labour Party members in the 2000s were content with the Labour government's (domestic) policy record but now there seems to be quite a lot of revisionism going on.

    It's hard to show this quantitatively, as it's hard to poll a party's members (and pollsters don't normally bother outside of leadership elections). But there is some evidence that the trade union movement has moved to the left: the union movement was happy to co-operate with the Blair/Brown governements (e.g. the Warwick accord) but now some talk about purging Blairite "viruses".

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    1. "It seems reasonable that Labour Party members in the 2000s were content with the Labour government's (domestic) policy record but now there seems to be quite a lot of revisionism going on."

      Actually they left in droves.

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    2. OK. So has Conservative Party membership since the 2010 election. Do you think that this is evidence that the Conservative Party has become more left wing?

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    3. The high water mark of (New) Labour membership, "things can only get better", surprised me with the number of my "professional" class friends who joined the party. These people did not share legacy old Labour values, indeed many were natural Conservative voters, who were disappointed/disgusted by the behaviour of Tory MPs in the fag end of the Major years. A consensus/average view at that time of Labour Party membership values would have been far to the right of traditional core Labour voters.
      With demise of Blair, and Brown's misfortune to be in place during the recession, regardless of his handling of the situation, these New Labour members deserted as quickly as they arrived.
      That of course leaves the core traditional members. Why is it surprising that these members are to the left of the peak Labour membership?
      So, I get where Simon is coming from, but I think/suspect, that Labour's membership has actually moved back to the left, by virtue of the evacuation by "here today, gone tomorrow" New Labour members.
      If anyone has the numbers I would be very interested to see how they play.

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  4. Also: it is perfectly reasonable for attitudes toward austerity to be state contingent. For example, if you thought that nominal rigidities were important in the immediate aftermath of a large shock, but become less important over time (as more firms have a chance to reset price/wages) then it could well make sense to support fiscal stimulus in 2009 and fiscal austerity now.

    You might disagree with this analysis, but it's not unreasonable.

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    1. That is a lousy reason. We remain very close to the zero lower bound. Furthermore you could be forgiven for thinking in 2010 that we had to undertake austerity because we might become like Greece, but that reason has disappeared.

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    2. It has now been almost seven years since onset of the crisis. It's hard to imagine that we have deficient demand now on the basis of prices which were set such a long time ago.

      Would be genuinely interested in your reasoning here. Do you have an alternative model than the canonical Woodford/Calvo model in mind? Perhaps v. strong complementarities in price or wage setting? Or do you just see interest rates at historical lows and conclude that we must have deficient demand, but are not sure about the microfoundation?

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  5. You only see if you look. They aren't looking. They're fully-paid up Panglossian apologists. Of course, they are helped in this matter, because of the woeful standard of the candidates. Three of them don't seem to know what they want or what Labour represents, so it isn't surprising that the only one who does is in the lead.

    Commentariat is doing a less than grand job squelching around in a swamp of anachronistic prognostication, wishful thinking, outright sophistry and political hokum. Upton Sinclair wasn't wrong: "It is difficult to get a man to understand something, when his salary depends on his not understanding it."

    We live in post-ironic shambles reminiscent of a Buñuel film. The party of failure is supported by its opponents and the press, and they all gang up on the only candidate who is brave enough to suggest something else. In the meantime, the electorate who are supposed to be sovereign but aren't, ignore what they've been told and gravitate to the 'non-consensus' candidate, who in actual fact is advocating a very consensual position (i.e. what most of the electorate claim they want re. NHS, taxation, rail renationalisation...).

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  6. When I read this, from Corbyn's economy speech:

    We all want the deficit closed on the current budget, but there was no need to try to do
    it within an artificial five years or even the extra five years George Osborne mapped out
    two weeks ago.

    As I said on the Sunday Politics, if the deficit has been closed by 2020 and the
    economy is growing, then Labour should not run a current budget deficit – but we
    should borrow to invest in our future prosperity


    I thought it represented a fairly sensible textbook approach to the deficit rather than anything obviously radical. I've been trying to hammer this point home to people I know in the Labour who'll listen but an awful lot of people seem to prefer using vague labels like "Bennite" (what does that even mean these days) rather than get into the actual policy nuts and bolts.

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  7. According to an article by John Gray in the New Statesman today, Friday, Friedrich Hayek could be Anti Austerity in certain given economic circumstances. The article suggests that Hayek was short on politics but often long in economics when read closely.

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  8. Do you know there is only one political policy I see that can be described historically as 'centre-ground' in the UK over the last generation, and that is staying in the EEC/EU.

    The Labour Party ripped itself apart in the late 1970s and early 1980s over Europe, and the Tories did the same in the 1990s.

    And that is where being a rightist press baron and their obsequious Oswald hacks becomes difficult because most advocate leaving the EU, thus putting themselves outside their own so-called 'centre'.

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  9. There appears to be a similar phenomenon with Bernie Sanders in the U.S. except you have Hillary arguing for the status quo.

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  10. Suppose following the next general election we still have a budget deficit but interest rates have risen to above two percent. In that case, wouldn't an anti-austerity postition have ceased to be simply 'textbook macro-economics' and have become, indeed, a heterodox, 'left-wing' position. I am not an economist, as readers will doubtless have guessed, but I am eager to understand.

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    1. Seems to me interest rates don't just move randomly. The reason interest rates have been kept low by the central bank is that the economy sucks--employment is too low, wages are low, therefore demand is low and growth is weak at best. I would expect interest rates to rise in response to changes in these underlying conditions (which austerity makes less likely to change). But 2% would still hardly be an indication of massive economic takeoff.
      Now that I think about it, I can't actually think of an economic condition under which "austerity" as defined by those who advocate it would be an appropriate response. In times of economic boom you'd want to do things that could roughly translate to "austerity", such as running budgetary surpluses to make more room for deficits during bad times, and increasing interest rates to stop things from overheating too much, and so forth. But it's not really what austerians are talking about.

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  11. I'm a Labour member. Here's my two pence... There is no one candidate that I really want to vote for. Many members feel the same. So I am stuck trying to make sense of a least worst scenario. Most commentary is assuming that members have a strong preference but in truth they are just having to engage in a hopeless form of game theory. I wouldn't vote for Corbyn normally as we have a duty to be electable, but the other three are weak / unelectable / not making policy based on evidence. I am a signed up advocate of the Krugman / Wren-Lewis school of thought, so God help me I will probably vote for Corbyn.

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    1. Current candidates (except Corbyn) seem to wish to shape policy in the image of what they believe will win marginal votes in places like Bedford today and tomorrow. It therefore looks very much like conservatism with a pink tinge. My recollection of pre 1997 was that New Labour did have a strong promise of investment in key public services and was not an imitation of then conservatism. Labour does face a conundrum because its reliance and lack of attention to its core voters has come unstuck in Scotland and may do so elsewhere. It will be a big ask to win the next election anyway?

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  12. Interesting article..for more interesting sign into thinglink matrimony.

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  13. Yet again you peddle your anti-austerity myth despite the fact that the majority of analyses demonstfate that fiscal consolidations result in higher GDP growth.

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    1. In the same way that economic analysis in lead up to the financial crisis showed everything was OK? It is, I think, easier to prove that fiscal consolidations are usually a consequence of higher GDP growth and not the cause of it..

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  14. We have lots of polls in the US. Bernie Sanders has propsals like higher min wage, free public tuition for college, investing in infrastructure and Medicare for all.

    Seems very "leftist". Except polls show that vast majorities of Americans support these policies, some are even supported by Republicans. And we're probably more conservative than Europeans due to our ugly racial history and immigration.

    Right wing politics is divide and conquer, stoking resentment and paranoia. Germans hate lazy Greeks, Trump hates Mexicans, dogs hate cats.

    And if another poster say fiscal conslodation creataes growth in a demand slump near zlb, well, I don't what I'll do. Cheesecake or therapy. Or both.

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  15. A Professor in Economics, according to the book DEBT: The first 5000 economics is based on a fairy-tale...... just like FIAT currency and AUSTERITY

    The reason Mr Corbin is so popular is because of people like you.....

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  16. I've been a conservative all my life and I find it extremely irritating that conventional Keynesian and Freidmanite economics is now seen to be an attribute of "the extreme left".

    It is the mainstream right that has become "extreme".........

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  17. What do you make of Corbyn's plan for "people's quantitative easing", i.e. the use of quantitative easing to fund infrastructure projects rather than buying bonds?

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    1. Only heard briefly on the radio about this "people's quantitative easing" concept. It sounds like Helicopter Money. And then someone from Progress was wheeled out to condemn it as Hard-Leftism.

      Is this what we have come to? The Labour Party condemning Milton Friedman's ideas as hard left?

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    2. There is almost no difference.
      https://originofspecious.wordpress.com/2015/04/23/only-idiots-and-liars-say-government-borrowing/

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    3. We obviously need more detail on the mechanism behind 'People's QE', but on the face of it there is a key difference to Helicopter Money.

      As I understand it, a helicopter drop is initiated by the Independent Central Bank as an unconventional monetary policy tool. It's use is governed by rules that market actors can understand and anticipate under rational/ New Keynesian expectations. Using expectations, the drop has a powerful stabilizing effect on output and inflation.

      From the rhetoric, 'People's QE' is initiated by Government as a means of funding infrastructure investment. It is not tied to monetary rules. It is therefore likely to generate inflation shocks and corresponding contractions induced by high interest rates. The perception of government reaching for higher output could lead to permanently higher inflation with no corresponding output rise, which is sub-optimal.

      Whether the Government or the Independent Central Bank control the creation of money is a non-trivial distinction. It leads to very different outcomes. I think we should be careful to separate these policy proposals.

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  18. You're completely right about the lazy way 'the centre' gets redefined, and I think you're right that generally, the public stays fairly fixed in what it wants - especially on issues like the role of the state in the economy- while the parties dance around them. People voting Thatcher in 1979 didn't want her whole program, but they wanted to move in that direction. Then people switched to Labour in the 90s to course-correct, but didn't buy that whole program either, especially as it moved to a more traditional Labour fiscal position.

    But it's simply inaccurate to say Labour isn't moving left. There's plenty of evidence that younger members, especially new ones, are more likely to support Corbyn than those in their 30s and 40s. That reflects a real shift in public opinion.

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