For readers not in the UK, some background. When Ed Miliband resigned as Labour leader after the 2015 election defeat, the election process for a new leader went like this. You needed 35 MPs (members of parliament) to nominate potential successors, and there would then be a contest over a few months before party members got to vote to choose one of the nominated candidates as leader. 3 people got the required number of MPs to nominate them, but the candidate from the left - Jeremy Corbyn - did not have enough MPs. Some MPs felt it would be good for balance to have someone from the left standing, so they switched their nominations in order that he too got the required 35.
From this you will gather that the left of the Labour party is pretty weak in parliament. It was also thought to be weak among Labour party members: the candidate of the left in the elections of 2010, Diane Abbott, received little support from the membership. So the general expectation was that Corbyn - who is not a particularly charismatic speaker - would also get little support this time. This expectation has proved completely wrong: polls put him in front, his meetings have been attracting growing audiences, and senior party figures are now panicking that he might actually win (in a similar manner to the reaction of Republican grandees to Trump winning their nomination).
Perhaps as a result, a few people have asked me to write about Corbyn’s macroeconomic policies - in some cases in the expectation that I would rubbish them, and in other cases in the hope that I would provide support. But the real question people should ask first is why is Corbyn proving to be so popular. It is nonsense to suggest that the Labour party membership has suddenly become markedly more left wing than it used to be. Corbyn’s popularity has much more to do with how the party in parliament has responded to both election defeats.
On issues like welfare, immigration, business or inequality, you can see Labour as having two impulses: one to go with its natural inclination, and another to try and woo the floating middle or working class voter whose views seem to be nearer those of the Daily Mail or Sun respectively (i.e. much more regressive). In terms of policy, this tended to produce either inoffensive emptiness, focusing on small differences from the government, or simple right wing appeasement. But perhaps more importantly, in terms of style it produced a kind of defensiveness where the chief goal of their leaders was to avoid anything that could be used against them by the right wing press. And not without reason: when Miliband gave a thoughtful speech where he talked about how you could have irresponsible capitalism that just went for the quick buck whatever the long term or social costs, he was forever after dubbed anti-business. This resulted in an opposition seemingly devoid of any clear policy message.
The issue of austerity is indicative. Labour have never adopted a clear anti-austerity line, even during the 2010-11 period of acute cuts. This is because they knew that much of the press would label this as fiscal irresponsibility, and that the BBC follows the lead of the press and the financial markets on these things. Their actual proposals in the 2015 elections involved far fewer cuts than Osborne promised, but because they were desperate to appear to be ‘tough on the deficit’, they either gave out a confused message or tried to talk about other things. Crucially, they failed to defend their record in government. As a result of their 2015 defeat, many senior party figures are now suggesting it is best for Labour to essentially follow Osborne’s macro plans.
The reaction of most of the parliamentary party to the 2015 defeat seems to be that the pre-2015 strategy was right in principle but had just not focused enough in placating the marginal English voter, which they believe means more appeasement and shifting further to the right. The party membership seems to have reacted very differently to the 2015 defeat. The membership appears to believe that the pre-2015 strategy has clearly failed, and it is time to start talking with conviction about the issues you believe in. This is exactly what Jeremy Corbyn does: he is a conviction politician, who is not prepared to try and be someone else to win votes.
Does that mean the choice is between arguing for your convictions and losing or trying to appease the right wing press and maybe winning? No, there is a way through this dilemma, but it is a way that is alien to most of those in the Labour party, and that is to spend much more time thinking about political spin. Labour lost the election because they lost the battle of spin. Labour did not lose in 2015 because they were anti-business, but because they were perceived as anti-business. They did not lose in 2015 because they had been fiscally irresponsible in government, but because they were perceived to be. They did not lose Scotland because their policies were damaging to Scotland, but because they were perceived to be.
Again, lets use fiscal policy as an indicative example. Labour lost because they were perceived to have been, and perceived to continue to be, fiscally irresponsible. That perception did not just arise because of a biased press or bad luck, but also because of good political judgement by Osborne and bad judgement by Miliband and Balls. Before the financial crisis it was generally thought popular support for a higher level of public spending was too strong, which is why the Conservatives had pledged to match Labour’s spending plans. But Osborne was quick to see that the recession changed things, because he could attempt to blame Labour for the deficit that was bound to arise as a result of the recession, and use deficit reduction to achieve their political goal of a smaller state. Labour’s counter to this in the first few years of the coalition government was to focus on the stalled recovery, but that in contrast was poor political judgement because eventually the economy was bound to recover, and at that point Labour appeared weak. In addition by failing to effectively challenge the Osborne narrative about the past, Labour lost a crucial battle of political spin.
As I tried to argue here, if Labour is to have any hope in 2020 it has to start attacking Osborne’s unnecessary and obsessive austerity, as well as getting the past history straight. There are also reasons for thinking that the power of deficit fetishism for voters will steadily decline. In that sense, on this issue and perhaps others, Corbyn seems to have an advantage.
But, and it is a huge but, as I have also argued on the deficit, you can only successfully run an anti-austerity line if you have a clear and robust counter to the irresponsible borrowing charge. You do have to reassure enough marginal voters, and as a means to that the non-partisan political pundits that determine the political tone in a lot of the media. It is not clear that Corbyn will be able to do this. Firing up the base, as Corbyn clearly does, is only part of a successful winning strategy. There is a strong danger that he will lose credibility on the budget through overoptimistic claims on tax avoidance or misguided ideas about monetary financing. You will not shift the Overton window on austerity and other issues if your position is too easily discredited. Blair and Brown won in 1997 partly by imposing strong discipline on the party, which collectively gave out a clear set of messages to the electorate.
Part of Corbyn’s problem is not of his making (unless you take a long historical view), and that is his fellow MPs. It was their majority that chose not to oppose Osborne’s welfare bill, which epitomised the disastrous strategy that I have described above. It is very regrettable that two of the three other leadership candidates have refused to serve under him. If, following a Corbyn win, the party united around him in exchange for Corbyn parking some of his less popular policy positions, Labour could once again become an effective opposition. If instead his leadership is accompanied by constant public division within the party, there is a danger that this will overshadow everything else.
It seems very unlikely that Corbyn as leader could win the 2020 election. Perhaps the most optimistic yet still plausible outcome is that the period of a brief Corbyn leadership will be sufficient to shift the centre of political debate (the Overton window) to the left on a sufficient number of issues like austerity. He would then step down to allow a new candidate from the centre left to take over before 2020, and win enough popular support by appearing to be less of a risk and a more natural leader, while retaining key Corbyn positions like a strong anti-austerity line. Whether that would happen I have no idea.
Whether Corbyn wins or loses, Labour MPs and associated politicos have to recognise that his popularity is not the result of entryism, or some strange flight of fancy by Labour’s quarter of a million plus members, but a consequence of the political strategy and style that lost the 2015 election. They should reflect that if they are so sure they know what will win elections, how come they failed to predict the Corbyn phenomenon. A large proportion of the membership believe that Labour will not win again by accepting the current political narrative on austerity or immigration or welfare or inequality and offering only marginal changes to current government policy. On economic policy in particular they need to offer reasons for voters to believe that there are alternatives to the current status quo of poor quality jobs, deteriorating public services and infrastructure, and growing poverty alongside gross inequality at the top. That means, whether he wins or loses, working with the Corbyn phenomenon rather than dismissing it.
Typo: 1979 should be 1997.ReplyDelete
Typo #2 - 2010 should be 2020 in penultimate para.Delete
Apologies for an unusually large number of typos in this one. Currently helping look after my 2 year old granddaughter, but I guess its a bit unfair to blame her!Delete
The Guardian's generally allergic reaction to Corbyn is explained by many things, of which the mixed motives of the m.o.r. middle-class left is only one. This is another - 3 or 4 years ago, in the Guardian Weekly, Alan Rusbridger let slip what a close friend of Condoleeza Rice he was, how they both loved Tchaikovski or something ... why it may even have hinted at more than that ... That does rather place him in the outer circles at least of the neo-cons, or at least someone diligently cultivated by them....Delete
Also replace 2010 with 2020ReplyDelete
"It seems very unlikely that Corbyn as leader could win the 2010 election. Perhaps the most optimistic yet still plausible outcome is that the period of a brief Corbyn leadership will be sufficient to shift the centre of political debate (the Overton window) to the left on a sufficient number of issues like austerity. He would then step down to allow a new candidate from the centre left to take over before 2010, and win enough popular support by appearing to be less of a risk and a more natural leader, while retaining key Corbyn positions like a strong anti-austerity line. Whether that would happen I have no idea. "
Also Corbyn needed 35 Mp's not 25 to get on the ballot.
"It is nonsense to suggest that the Labour party membership has suddenly become markedly more left wing than it used to be"ReplyDelete
As over half of those voting will be people who signed up since the General Election, this claim is impossible to prove.
If we look at full party members, according to Sky newsDelete
the current total is around 270,000, of which 200,000 were members at the election. If you look at the latest You Gov poll (link in post), around 50% of full members would vote Corbyn on the first ballot. So either left wing people have to have replaced right wing people before the election, or individual members have changed their own political views leftwards, or my interpretation is correct. One of the reasons I wrote that earlier post was because of Labour party members I knew who I knew were certainly not 'hard left' who were now supporting Corbyn.
The YouGov survey also kept track of when the members surveyed joined the party. Corbyn still wins among members who joined since Miliband became leader. He loses to Burnham and Cooper, but only by a very small margin and with a 13-point lead on first preferences, among members who were there before Miliband.Delete
Thanks - I missed that info. That is pretty much what I would expect.Delete
I don't see the Labour Party winning over Murdoch by 2020 as Blair did before 1997, so splitting the Sun-Daily Mail rightist axis.ReplyDelete
But this alliance delivered 36.9% of the vote in 2015, compared to 41.9% of voters in 1992; I don't know if this accurately reflects the fall in their tabloid readership over that period, but the lessening of tabloid influence must be near its turning point.
And as for the BBC, I keep hearing on there that the polls for the UK election were wrong, which is not quite true as the margin of error that could have produced the Tory victory did.
Whether that makes the BBC more amenable to changing its ways I don't know, but its hierarchy seems to think it's own popularity will save it, whereas some of us believe that, by failing to put liquidity trap economics forward, perhaps in 2015 IT WAS THE BBC WOT WON IT!
Hi Simon. Good blog. I attend Corbyn's policy launch in Leeds last week and tried to ask him a question related to this topic.ReplyDelete
The question was about whether he has any ideas not just about trying to win the debate once on austerity and economic policy, but whether he had any policy ideas which might shift the overton window on the economic debate more permanently, to ensure that Labour are more likely to get a fair hearing in future and not get drowned out by a biased, misinformed, and largely right wing press, as they current do on economic matters.
Judging by the answer, I think my question was misunderstood as being critical of his economic policies (this defensiveness highlighted why it was a relevant question!).
I was wondering if you have any ideas on this matter, on how we could put some foundations and structures in place to vastly improve the national debate on economic matters, to somehow referee it, and government economic policy better, and try to reduce the absence of rational, evidence based debate we see so much.
My own two ideas were as follows:
1) In the same way as we have a Chief Scientific Adviser to the Government, can we elect a Chief Economic Adviser, or even better, a Council of Economic Advisers. The EU have one, and I think the Scottish Government, but other than economic advisers embedded in the Civil Service and Government departments, I'm not sure the UK have one? Their job would be to publish reports and advice to the government freely. Perhaps they are elected from the academic and business community by their peers. Certainly the mechanism would need to be independent from government.
This might end up like the US Supreme Court: getting staffed by political placements to get the answer the government of the time wants, but hey ho, no system is perfect.
2) Mandating the OBR to audit opposition economic plans, as Ed Balls requested they do during the last election. I'm a very amateur economist, so correct me if I'm wrong, but I think the reason the tories blocked this was because the OBR would have judged that Labours plans would have lead to faster / more growth and faster deficit reduction than the Tories, because there was less austerity. This is because I understand that the OBR had adopted into their forecasting models, the 2012 IMF research into the fiscal multiplier, which found it highly likely to be above 1, during this recession?
Those are my two ideas. Otherwise, while I agree your point of view is a useful contribution to Labour becoming economically credible again, what your point of view doesn't necessarily achieve is putting some firm foundations in to improve the debate, and instead relies on good opposition leaders and ideas, and the country becoming less bothered about austerity as the recession begins slowly to recede.
Good suggestions, Gareth. The reason the Tories blocked the OBR audits is the same one that galvanised them to remove the requirements from local government policy documents for a social impact assessment; in the last five years they would have been too revealing of the shocking amount of social damage being wrought by their dismantling of the welfare state. Reinstating these assessments might be a third suggestion to add to your above.Delete
Your point about spin is right on the money. This is why Corbyn (or any left-winger) could never do it, even if they were right. They don't have the money, or the means of communication on their side.ReplyDelete
1. The Labour membership has always been well to the left of the PLP. The reason Healey defeated Benn was because of the unions. Back then the bulk of the unions were on the right of the labour movement, and acted as a stabilising force. Benn won amongst the membership. He may well have won the leadership in 83 if he had not lost his seat.ReplyDelete
Union influence has not only dramatically declined, what remains has gone to the left. That is because union membership is now dominated by public sector unions. A big factor in their rejection of Burnham/Cooper has been the public sector pay freeze, backed by Balls in opposition. The CWU used to be the union of Alan Johnson. it now calls Blairites a virus.
Blair was tolerated because he won. This hid how the Labour party had become destabilised by the loss of people like Bill Morris.
In 2010 Abbott was a weak candidate. Her son's schooling counted against he. Miliband was a viable soft left candidate. Corbyn has less personal baggage than Abbott, and doesn't face a superficially plausible soft-left candidate.
2. "the period of a brief Corbyn leadership will be sufficient to shift the centre of political debate (the Overton window) to the left "
Optimistic, at very best. You can shift the Overton window in government, not in opposition. Think
-Thatcher and privatisation
-Blair and the minimum wage
-Osborne and austerity
Many, many examples of this could be given, from a wide range of policy areas. You need to win to do it.
3. "There is a strong danger that he will lose credibility on the budget through overoptimistic claims on tax avoidance or misguided ideas about monetary financing"
The latter is, of course, your area of expertise, and I am sure I am not alone in having hoped that that was what you were going to write about.
On the former I couldn't improve on this
On the latter this seems to me to be persuasive
4. There isn't a lot that Labour could have done about Scotland. With a decent leader, making the right noises for five years about the need for fiscal rectitude from 2010 onwards, it would however now be in (minority) government. The rhetoric needed to win, and what you can then do once in office, not being strongly related.
Unfortunately Labour seems to have decided to move even further away from this conservative strategy, towards the more radical 'real alternative' one you prefer. At least it will test to destruction your views on how successful this will prove to be.
No doubt if it doesn't work it will still be the media's fault. That or those who don't really want to serve in a shadow cabinet under the leadership of the Chair of the Stop the War Coalition.
All good points. On (2) - shifting the Overton window, it's hard to think of an opposition party sucessfully doing so. From 1979-97, the Labour Party was unable to do so, in spite of taking positions quite at odds with the prevailing consensus. From 1997-2010 it's hard to think of anywhere where the Convervatives managed it.Delete
Hi Hugo. I started off thinking I agree with you about the difficulties of moving the overton window in opposition, but is it really impossible? - What about some of the ideas that the Tories copied from Ed once they won in Osborne's budget announcement. Living wage, non-dom tax status, bank supertax.Delete
Osborne's stated goal was to 'colonise the centre ground' in his latest budget. Does this not suggest that to do so means moving a little and the overton window therefore moving too?
Also what about e.g. Podemos, or Syriza? They didn't wait until power to move the overton window, they managed to dramatically change the window quite significantly from opposition (still in the case of Podemos), in fact from being relatively unknown / radical opposition.
I started out resigning myself agreeing to your point 2, but I've talked myself into being more optimistic.
Is it maybe the case that what Podemos and Syrize have shown is that it might only be possible to move the overton window in opposition, if you come from a more radical, non-establishment point of view, rather than if you are the type of 'Tory-lite', lets be a little to the left but not too far out, classic new labour standpoint.
Maybe Corbyn IS our best shot of moving the overton window like Simon suggests?
I'd take the entire period of 1979-2015 as a period when the opposition failed to move the Overton window. Perhaps they weren't trying hard enough, as some claim.Delete
Could we claim Thatcher managed it, 75-79?
"What about some of the ideas that the Tories copied from Ed once they won in Osborne's budget announcement. Living wage, non-dom tax status, bank supertax?"Delete
Hmmm. The Living Wage (sic) was a very clever wheeze to wrong foot Labour and hide the very bitter pill of social security cuts. This worked admirably (from Osborne's perspective).
I suspect that the non dom changes did happen because of Labour, although they were minor, they do provide Osborne with cover in 2020.
Podemos and Syriza are operating in a quite different world. Spain has 23% unemployment, and Greeece 26%. That is, what, the equivalent of 7m or so UK unemployment. In that world, the market for more radical positions is a stronger one.
Re: Overton window. Well the Labour Party did try hard to move it between 1979-83, but they failed. On Thatcher pre-79 - it's not obvious she did: remember that Callaghan may have won re-election before the winter of discontent. And the Thatcher's first manifesto was (supposedly) quite cautious. Most of the reforms we think of as "Thatcherism" happened after 1983, which indicates that she too moved it in government.Delete
The evidence for the existence of the Overton window is...weak, it's more a postulation. Even if it were not there are plenty of other variables (possible Tory disarray over Europe for example) that could lower the political energy required to shift that "window", things change. Remember the Tory fiascos around "Family Values" while it's MPs shagged everything in sight? That lowered the political effort required by Blair and New Labour to win.Delete
I would also appreciate some elaboration on the comment regarding "misguided ideas about monetary financing". What exactly is misguided about Corbyn's ideas?Delete
I think many Labour members have a poor understanding of the issues here, particularly when it comes to "people's quantitative easing" and would appreciate some expert opinion. We all know what Chris Leslie thinks, but a Shadow Chancellor hardly qualifies as an 'expert' these days.
Unions moved to the left because they saw their rights systematically dismantled by the Tories and not restored by the Blair government. The period 1992 to 1997 was a period when "Anything to Win" was the dominant Labour view. The period 1997 to 2010 showed this was not enough.Delete
I'd certainly concede that the desire to win (and thereby do anything at all) has been lost.
And, again on Abbott, that she was not a very strong candidate is reflected in the fact that even in this new dawn of the Bennites, she isn't going to come close to winning the Labour nomination for London mayor.ReplyDelete
Hi Simon. You mention both that Corbyn would face a formidable challenge leading Labour to victory in 2020 – in your words, it's "very unlikely" – and that "if Labour is to have any hope in 2020 it has to start attacking Osborne’s unnecessary and obsessive austerity".ReplyDelete
I'm curious who you think would be more likely to win the Commons back in 2020: anti-austerity Corbyn (without dropping out once he's done his best to shift the debate), or one of his rivals sticking with 'austerity light'?
So as not to be accused of setting you up, my head's with Corbyn. I agree that Labour needs to change public opinion rather than chase it and think turning bluer means playing into the Tories' hands: the Conservatives can either repeat their 2015 strategy by painting Labour as anti-austerity when they aren't – a position which, because Labour won't have spent five years challenging its logic, voters will still think is a bad one – or tacitly accept the similarity of the two fiscal platforms and emphasise valence issues: Labour’s changeability and record in government versus their own experience and consistency.
I am hardly an expert on this kind of forecasting, which in any case may be even more difficult than unconditional macro forecasting. So I will pass on your first question. (The Livingstone case of 2000 could be used to argue pro Corbyn, but a key difference is that Livingstone had already run London with some success.)Delete
However the following seems fairly obvious to me. If you either accept Osborne's numbers, or fail to adopt a clear anti-austerity line, then it becomes much more difficult to pin the blame on deteriorating public services on Osborne. Just as so many people blame Labour for 2010-12 austerity, they will in 2020 fail to blame Osborne for the effects of these cuts.
I think on policy Corbyn could be a clear winner. His leadership election platform promises to eliminate tuition fees. In a GE I imagine pretty much every middle class family voting for this policy if he can convince them it could be delivered on (suppose that's a big if).Delete
I think Simon's imagined scenario of a temporary Corbyn leadership followed by someone untainted by having been in a more centrist/Tory-lite (insert your own preferred Blairite euphemism) shadow cabinet. People who come to mind as possible winners are Stella Creasy, Dan Jarvis, Keir Starmer, any of whom could take up a position to the left of the current non-Corbyn candidates but be less easily attacked by the press and Conservatives than Corbyn.Delete
There's a somewhat parallel situation in the U.S. You mention Trump and the Republicans, but there's also Hillary's primary challenger Bernie Sanders who is experiencing unexpected popularity. Hillary meanwhile is discussing ideas like making corporations more focused on the long-term as Miliband did. But in the U.S. the Republican Party has gone barmy/potty/ off its trolley, which may help Hillary's chances and alter the electoral equation.ReplyDelete
I agree with most of the points about winning the spin war and the Overton window. However I worry that in the longer term, the situation of the center-left parties (Labour, the Democrats, the German SDP, the French Socialists, etc.) may be somewhat analogous to PASOC in Greece. Their actual policies - no matter the effectiveness of their spin - might not be enough to prevent deterioration and the Piketty doomloop, so eventually the voters abandon them and turn further to the left to a Syriza, (or turn further to the right).
sorry, PASOK not PASOCDelete
The problem for Corbyn, if he wins, is that he's going to be the leader of a PLP that contains few supporters of his policy positions and even fewer politicians of any real talent. He may have persuaded the CLP, the members and unions, but the PLP is a major impediment to the implementation of all but few of his policies. In the wider political context his ambitions will be hobbled by FPTP (i.e. rotten boroughs, key marginals, fragmentation and the in-built inability of the system to represent genuine plurality).ReplyDelete
What he [Corbyn] offers that the PLP doesn't and can't, is the kind of policies that might win back support from the nationalists, especially the SNP, the Greens and UKIP (although this might not be relevant as time goes by), and a possible platform for shaking up the whole political process. It is also possible that his policies might appeal to younger voters and the disaffected and in so doing increase the overall turnout (from its dire position at around a two-thirds of the electorate) to Labour's advantage. This, though, like much else, is speculative. The PLP, mindful that it doesn't really represent anything other than its own interests, a perceived appeal to the centre ground and illusory electability, will fight Corbyn at every turn and if necessary split the party to achieve its ends. There is a history of this. Although history is less instructive on other matters. The particularly set of circumstances we might find ourselves in will not necessary produce similar results to Labour under Foot and Kinnock, anymore than Brown and Miliband were able to replicate the success of Blair.
The enduring fantasy of ABC - Anyone But Corbyn - is that none of the preferred candidates could dent the popularity of the SNP standing on a non-austerity platform. Their support for an austerity agenda or austerity lite could not be given up without completely conceding the argument that they ascribed to it out of some Machiavellian expediency rather than any conviction (i.e. the belief that it would make them more electable). Instead, they are left with being unelectable on their own platform and with the myth of their own profligacy and mismanagement, which they didn't think necessary to counter, still hanging around their necks like a brace of Albatrosses. It is indicative of how deluded they are that they actually believe they are winners, despite losing twice. They have been turned inside out. They've been exposed as weak, cowardly, opportunistic and manipulative and incoherent. The biggest disaster for them was Scotland.
Then there is the matter of how centrist British politics really is. Short of changing the electoral system, we'll never really know. The main parties, Labour and the Conservatives (outwith Scotland), are the default options for each other and the battleground lies in those key marginal seats that decide general elections.
If we really want anything approaching a popular, representative, accountable democracy, FPTP has to go. It might have worked reasonably well in a two horse race (and sometimes not even then), but in a more pluralist context it is a disaster. One need look no further than Scotland where the SNP polled 50% of the vote and controls nearly 95% of the seats, or the shameful distortion that left UKIP and the Greens with a seat apiece.
How far conviction can take Corbyn is a moot point. Under FPTP all possibility of change, except of a bipolar nature - Con-Lab, SNP-Lab - is disarmed, isolated and entombed in a kind of political amber.
That articulates where the party is at right now just about as well as i've read anywhere these last couple of months. The frightening thing for me is the lack of talent in the PLP that you noted - not just in the context of Corbyn supporters but the whole PLP itself.The smartest thing Corbyn can do is to continue getting advise from outside the party - i don't even think he himself is up to the challenge. I think that's what frightens the PLP - they know austerity-lite is wrong, but they don't have the guts, intellect or instinct to position, explain and argue for an alternative. Waiting for the other team to make a mistake and winning by default is much easier if you don't really know what you're talking about.Delete
I think the only way that this movement can go anywhere (and i'm sceptical it will) is from the ground up, an insurgency that gathers momentum - because there is no prospect of political change from the top down with the intellectual pygmies they have in charge.
He doesn't have to be a great leader - few of them are - he just needs to get enough capable people to make Shadow Cabinet government to work. He also needs, as you say, some good advisers to develop policy.Delete
You've got to hand it to the self-appointed 'illuminati' in the PLP, their delusion is only matched by their overbearing sense of entitlement. Not only have some of them refused to serve with a leader who hasn't been elected, some of them, if MSM are to be believed(?), actually propose to overthrow him if he is. They just don't seem to realise what kind of message this sends to their own members, supporters and the country as a whole.
I agree with you on the last bit, too. Our political system isn't built for popular democracy. It is built for Parliamentary democracy. As is abundantly clear, they don't mean the same thing.
It's true that Labour lost in part because they were perceived as being fiscally irresponsible and anti-business, as you say. But there is at least a grain of truth in each of these, which is why they stuck.ReplyDelete
For example, you could argue that the cost of running a current deficit in 2007 was small. But in political terms, if Labour had been running a current surplus (a few billions difference) or, more powerfully, an overall surplus, the charge that they were fiscally irresponsible in the good times wouldn't have washed. If and when a Labour government takes office again, would you agree that they have a strong political incentive to *appear* fiscally responsible (e.g. by adhering to the spirit, rather than just the letter of Gordon Brown's rules)?
You could argue that the Tories are ringfencing the NHS precisely for this reason - the public don't trust them with it - to (partially) protect them from the charge that they are running it down.
All good myths are based on half truths. My concern with trying, when in government, to preempt possible future myths by being 'whiter than white' is that it distorts policy in other directions. For example, Labour believed - based on earlier myths - that they had to commit to not raising the basic income tax rate to win elections. So when they had to raise taxes to pay for extra NHS spending, they used national insurance. But even then, so frightened were they of the higher taxation charge, they increased it by too little, which alone probably led to the mild excess deficit in 2007.Delete
"So when they had to raise taxes to pay for extra NHS spending, they used national insurance. But even then, so frightened were they of the higher taxation charge, they increased it by too little, which alone probably led to the mild excess deficit in 2007."Delete
Could you expand on this Simon? What is an "excess deficit"? How much should they have raised taxes?
They could have taken the ceiling off NI contributions for a start. That would have raised extra cash without affecting most people. Not enough to clear the deficit for sure, but helpful. Similar applies with Council Tax - past a certain point that's a regressive tax. Probably a local income tax is the fairest way to go, but failing that, adding additional bands would shift the tax burden onto those who could better afford it.Delete
My question is what proportion of academic economists would regard Corbynomics as making sense? Am I right that there is a good deal of credible non-aligned support? (But it may be hard to get right wing commentators and economists from the finance industry to understand Corbynomics when their salary depends on not understanding)ReplyDelete
I don't think there is much sense in using the collective term Corbynomics. Some ideas are better and would command non-aligned support more than others.Delete
You might have already read this but here is an article which shows you what proportion of economist might regard 'Osbornomics' as a failure: http://www.independent.co.uk/news/business/news/two-thirds-of-economists-say-coalition-austerity-harmed-the-economy-10149410.htmlDelete
I was one of them!Delete
For what it's worth, it seems like Corbyn is now putting out a 'will eliminate the deficit' message. So not exactly what I'd call anti-austerity.ReplyDelete
Yes, John McDonalds article in todays Guardian is a "cut the deficit" stance, didn't take long!Delete
"Let me make it absolutely clear that Labour under Jeremy Corbyn is committed to eliminating the deficit and creating an economy in which we live within our means." -- John McDonnell.Delete
So much for the "clear anti-austerity platform"!
Or it may be moving towards exactly the kind of approach I'm suggesting, which is to (conditionally) eliminate the CURRENT budget deficit by 2020.Delete
Don't see this as a contradiction between eliminating the deficit and being anti-austerity. If by reducing the scale of austerity or even reversing it, you cause huge jump in economic growth, then don't you automatically reduce the deficit as a result?Delete
I don't think that necessarily targeting the complete elimination of the deficit is a good thing. From my understanding of economic theory, there is no reason why a government can't perpetually run a deficit as long as it and the corresponding debt build up remain reasonably proportional to the size of the economy.
However harking back to Simon's points around half truths and winning the spin, I don't think the public would appreciate the nuanced view that there is nothing wrong with running a deficit in perpetuity and so probably much better to state now that your aim is to eliminate the deficit even if this is not quite the case.
By the time you get close to eliminating the deficit, it will have dropped down the list of voters and market's concerns (for 'market', read right wing commentators) sufficiently, that nobody would then mind if you then quietly abandoned this aim.
Corbyn might do well to check out the Bernie Sanders You Tube video from Portland Oregon. 20,000 in attendance with 10000 watching outside. I don't know about UK politics, but I think a solid program on education, infrastructure, and whatever issues are germane in the UK with a positive message would resonate. And there should be hammering of the issue of inequality .ReplyDelete
The right uses morality to push austerity. Push back by noting it's the world wide financial class, who have no loyalty to anything but their wallet , destroyed the word economy and got off scott free.
Of course we mustn't forget that the Tories are not pursuing austerity simply because they believe it's a valid economic doctrine. They are following it for ideological reasons, shrinking the state whilst appealing to a natural kind of English puritanism about debt being a bad thing. It may be that the spin Simon says Labour has to find, will never be found, but the electorate may just turn against the Tories once it realises that such a shrunken state is leading to truly harmful effects on our youth and on our infrastructure.ReplyDelete
Very very good analysis! Miliband thought he was sitting an exam while Cameron and Osborne knew they were playing chess. I'm a Labour member and you've hit all the nails on the head. I too am hoping for a brief Corbyn leadership to shift the debate. But the likelihood is that the leader following Corbyn will swing too far the other way again. Your points about the New Labour project cannot be underestimated. It was not a drift on from that which went before but a predetermined project assembling the right people and creating clear strategy and counter-strategy.ReplyDelete
"Cameron and Osborne knew they were playing chess"Delete
Chess, or poker? Actually, maybe more like spin bowling. Playing fields of Eton and all that....
Cameron/Osborne have clearly demonstrated they can move to meet their need.ReplyDelete
Labour have demonstrated they are not. Further, it is also clear there is nowhere for them to move to, to become electable. Corbyn may well be a good interim leader, but there is nobody there to take over from him. The current labour leadership battle is, apart from Corbyn, more to do with the various peoples egos' than any hope of becoming an elected government.
Elections are more to do with being the best of a bad choice now. Just look at our elected reps.....75% are millionaires....obviously, they are going to know jack-s### about living on the breadline.
NewsThump says it all:ReplyDelete
Isn't it nice to see some people having a civilised debate about this!ReplyDelete
Great post, though I share reservations about moving the Overton window whilst out of power. The main problem for the parliamentary Labour mainstream is that, after the Blair/Brown years, their members no longer trust them to do it whilst in power. It's hard for a party to operate whilst they are so discredited with their core supporters.
But spot on on Labour's defeat on spin and their weakness in opposition. But I'd suggest much of this was as much to do with fear of party splits on contentious issues (welfare, immigration, etc.) as much as fear of the press.
Response to the Corbyn Phenomenon:ReplyDelete
Perhaps you should read this before saying I am part of the problem:Delete
if corbin has integrity and courage, then you shouldn't sell him short, perhaps he can learnReplyDelete
The Tories really are masters at managing perception. People are concerned about immigration because it impacts on jobs (and with some reason - Channel 4 pointed out tonight record inward flows from the EU while unemployment, especially youth unemployment is rising despite recovery). Yet the Tories treatment of very vulnerable refugees entering from Calais and detention centres - really a very small part of the problem when considering their proportion of such migrants entering the country - gives the impression they are tough and in control of the borders.ReplyDelete
Labour criticised the Tories handling of the asylum seeker's problem- but it only made them look pro-mass immigration.
Rather like the way when they criticise the Tories they manage to look fiscally irresponsible.
It's very clever management of imagery.
The Tories should have no credibility on either of these - immigration and the deficit. They have not come close to meeting their targets on either.Delete
Yet it is Labour that are having to defend their record.
Simon - I'd be very interested to read your appraisal of Corbyn's document 'The Economy in 2020', which was released a couple of weeks ago and is very obviously and heavily influenced by Richard Murphy.ReplyDelete
For example, take Corbyn's/Murphy's concept of 'People's QE' - i.e. effectively using QE as a tool of fiscal as well as monetary policy. Is this sound macroeconomics? The goal of QE, at least as we know it, has been to inject demand into the market for gilts, thereby suppressing interest rates and preserving the value of sterling. If the BoE uses a form of QE to start buying up debt issued by a National Investment Bank (for the purpose of funding infrastructure investment) the effect would appear to be obviously inflationary - there is no semi-porous membrane between the increased money supply and the real economy. QE as we know it has allowed banks to act as this membrane, through which an unknown (assumed to be small) proportion of QE funds has passed on to the real economy. A National Investment Bank cannot act as a membrane - it would have a specific mandate to use 100% of the QE on earmarked projects. Does that sound about right?
In any event - why not just make the case for taking advantage of the low interest rate environment to borrow the money needed for investment? In the spin war you describe, surely this approach is more likely to win over those sceptical of Labour's fiscal prudence than 'People's QE'.
"The goal of QE, at least as we know it, has been to inject demand into the market for gilts, thereby suppressing interest rates..."Delete
"... why not just make the case for taking advantage of the low interest rate environment to borrow the money needed for investment?"
Do you not see the link there - which makes effectively for "People's QE"?
Not really - because if 'People's QE' has the inflationary effect one might reasonably expect, given the sudden and significant increase in the supply of money into the real economy, interest rates will have to rise, perhaps sharply. This will hurt businesses and families etc. Conversely, if the government borrows for investment purposes because interest rates are low as a result of 'Standard QE' (and it is therefore cost-effective to do so) the inflationary effect is less pronounced, reducing the likelihood that interest rates will need to go up sharply.Delete
'Standard QE' - tool of monetary policy.
'People's QE' - tool of fiscal policy.
I think it's important to distinguish these concepts viz. their relationship with interest rates, rather than elide them as Corbyn/Murphy and perhaps yourself seem to be doing...
'misguided ideas about monetary financing' I was wondering if you could say something about why the idea of a 'People's Quantitative Easing' (I think this is what you are referring to) is misguided? Is this a case of what Paul Krugman would describe as 'second-best macroeconomics'? It seem unlikely, but is Jeremy Corbyn going for the politically practical option? I'm not an economist and much of this goes over my head - especially when it comes to QE - but isn't preferable that QE be used to assist much needed public investment?ReplyDelete
Two important pieces should be added to your analysis: i) Scotland was voting in the wake of the Scottish referendum. The SNP had a lot of momentum and ii) Murdoch kept it going. This wiped out Labour's vote in Scotland and pulled it down in England, due to the threat of a Lab-SNP coalition, as well as that of the Liberal Democrats. The Conservative's vote hardly increased in terms of percentage.ReplyDelete
Ed Milliband didn't do too much wrong in terms of trying to win but not making friends with Murdoch was always going to make things difficult.
Before being too critical of Corbyn perhaps ask, after a long Blair government that wasin power during very largely favourable international economic circumstances -(the Great Moderation) they had everything going for them - did they deliver the kind of UK that most people want?ReplyDelete
No they did not. This is a big reason we get both Corbyn and Farage.
You will not find the answers for the kind of economy and society we want with a sticky price rational expectations optimisation model. This let Blair down and will not help anyone else. We need better ideas, engaged with people in other subject areas.