Winner of the New Statesman SPERI Prize in Political Economy 2016

Tuesday, 31 May 2016

Why the political centre needs to be radical

In a recent article on Tony Blair, George Eaton wrote:
“[Blair] said of Corbyn’s supporters: “It’s clear they can take over a political party. What’s not clear to me is whether they can take over a country.” It was Blair’s insufficient devotion to the former task that enabled the revival of the left. As Alastair Campbell recently acknowledged: “We failed to develop talent, failed to cement organisational and cultural change in the party and failed to secure our legacy.” Rather than effecting a permanent realignment, as the right of the party hoped and the left feared, New Labour failed to outlive its creators.”

I beg to differ. The rise of Jeremy Corbyn is not a result of Blair failing to “cement .. cultural change in the party”. It is a result of the financial crisis, of everything that has followed from that, and the centre’s failure to offer a radical response to that momentous event.

Echos of the financial crisis are everywhere for those that care to listen. Even in the EU referendum, which at first sight is about free trade areas and sovereignty. The main reason Brexit has such wide popular support is concern over immigration, and that in turn is driven by a belief that immigration reduces real wages and puts pressure on public services. Yet the main reason public services are under pressure is austerity, which in turn was a reaction to the financial crisis. Immigration improves the public finances. The main reason for the decline in real take home pay for the low paid is not immigration but stagnant productivity following the financial crisis (and increasingly austerity measures).

The financial crisis was a major event not just in its consequences, but because it raised crucial questions about our current economic system. For most on the political right that question was too threatening to contemplate, so they doubled down by reducing the size of the state using deficit deceit as a means. But as many people did not want less spent on the things the state does, and a smaller state did nothing to immediately inspire the private sector, that only intensified popular frustration with the economic status quo.

Rescuing the banks should have been a prelude to radical reform of the financial sector, yet the centre only seemed to be concerned with putting the pieces back together again and making minor changes that are very vulnerable to being unravelled by political pressure from the banks. In many countries the centre seems paralysed by the glare of populism, whether that populism is used by governments (austerity) or the far right.

For the UK’s centre-left this paralysis comes in a particular form called ‘electability’. Radical policies almost by definition upset the status quo, who will attempt to frame such policies as anti-business or anti-aspiration. If electability becomes synonymous with avoiding anything that might be framed in this way, that rules out radical solutions. Yet radical events or profound changes in society and the economy may well require radical solutions, and if the centre avoids them they let people like Donald Trump or Boris Johnson in.

In a recent article Dani Rodrik wrote about populist politics in response to the impact of inequality and globalisation, but it could equally apply to the financial crisis. The two are connected of course: it was the globalisation of finance rather than anything happening in the UK economy that destroyed UK banks.
“The appeal of populists is that they give voice to the anger of the excluded. They offer a grand narrative as well as concrete, if misleading and often dangerous, solutions. Mainstream politicians will not regain lost ground until they, too, offer serious solutions that provide room for hope. They should no longer hide behind technology or unstoppable globalization, and they must be willing to be bold and entertain large-scale reforms in the way the domestic and global economy are run.”



19 comments:

  1. "if the centre avoids them they let people like Donald Trump or Boris Johnson..."

    ... or Corbyn.

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  2. The usual left-wing propaganda into which this blog has degenerated.

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    1. Not a very useful observation.

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    2. Keith,

      I'm afraid it is the last word.

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  3. I regret there are a lot more nasty things in the woodshed we have yet to find. It can only get worse.

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  4. http://www.dailymail.co.uk/news/article-2281941/600-000-decade-white-flight-London-White-Britons-minority-capital.html

    I didn't quite explain this. What the cosmopolitan neo-classical economist /neo-liberal political elite is depicting is that the exodus of Londoners is to enjoy the countryside and seaside. The real reasons of course, are the costs of living in London and low wages and social alienation and marginalisation. But this cannot be put down to austerity. There is a shortage of council and low cost housing, of course, but your are on another planet if you do not think there are limits to the level of housing that can be supplied without severe social and environmental effects. The elite of course see the sophisticated effects of globalisation in the choice of restaurants they can visit in their small enclosed worlds of Hampstead with their regular trips to France and Tuscany. They definitely do not spend time in Elephant and Castle (unless they are landlords) or have second homes in Clacton-on-Sea. And what do they think has happened to the original inhabitants of gentrified parts of London - they have all retired on the seaside? The article is a good one in showing the patronising attitudes of the neo-classical economist and the elite that have pushed globalisation and ultimately played their part in contributing to inequality and inequity.

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  5. " The rise of Jeremy Corbyn is not a result of Blair failing to “cement .. cultural change in the party”. It is a result of the financial crisis, of everything that has followed from that, and the centre’s failure to offer a radical response to that momentous event."

    No it isn't. It is result of Labour losing the 2010 and 2015 elections. If it had not, Corbyn would not now be leader. I think 2010 was hard for Labour to win, and it would have been necessary to ditch the unpopular leaden footed Brown to do so. 2015 should have been won. Labour lost because the members made a self-indulgent choice of leader in 2010, a bet they doubled down on in 2015.

    The membership (and the £3ers) have decided that they may as well be hanged for a sheep as a lamb. This is well explained here by Chris Dillow

    http://stumblingandmumbling.typepad.com/stumbling_and_mumbling/2015/07/corbyns-success-labours-shame.html

    Much the same kind of "screw it, what does it matter", attitude that explains the rise of Trump.

    Populists like Corbyn and Trump are the product of disillusionment with politics. Which is why it s so important that sensible people lend them no aid whatsoever.

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    1. The role of liberal commentators is to frame the discussion so that, as with TINA (There is No Alternative) in the Thatcher era, we now have its continuation under the guise of "electability".

      As part of that discourse, neo-liberal orthodoxy is unquestioned. That is what New Labour, and the right-wing lump of the PLP, have bought into. According to your hypothesis, in the 2010 election, what was Labour to do that it didn't do? Make David Miliband leader? Even had they won, how would that have changed things? Would a DM-led New Labour government have been much different from the coalition? What significant difference would that have made to those abandoned by the Labour Party? How would the disillusion that you refer to have been avoided?

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    2. You could speculate endlessly about what's going on in Corbyn supporters' minds, or you could ask someone. I put down my £3 to vote for Corbyn & subsequently joined the party, so if you're actually interested in how "the membership and the £3ers" think I may be able to help. But I don't consider myself to be disillusioned with politics - or not to belong among 'sensible people' for that matter.

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  6. "and the centre’s failure to offer a radical response to that momentous event."

    What center? Only proper response to financial crisis would be more left then Corbyn is now. Proper response would be to put half of bankers in jail on the trail of what Iceland is doing or what Bill Black did with S&L crisis in USA in 1987-92.
    Icelandic example shows proper example by allowing democracy to decide what to do as a response to banker's fraud:
    http://bilbo.economicoutlook.net/blog/?p=33707

    SW-L. You and Bill Mitchell have astonishingly similar proposals to solving GFC yet methodology that got you there is very different. But still there i overwhelming need to join the efforts in implementing solutions. Doesn't the situation and conditions that people are in asks you to make peace with heterodox? Is it not the goal worthy of a bit of sacrifice?

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  7. Yep, this guy (George Eaton) would be well inspired to read the following

    http://www.theguardian.com/commentisfree/2016/may/31/witnessing-death-neoliberalism-imf-economists

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  8. «For the UK’s centre-left this paralysis comes in a particular form called ‘electability’. Radical policies almost by definition upset the status quo, who will attempt to frame such policies as anti-business or anti-aspiration.»

    What can you do when many swing voters in marginal seats are reactionary southern small property rentiers? You can either build a coalition with them, or let the big property rentiers build it with them.

    Building a coalition with reactionary southern property rentiers requires some ugly moves, maybe even letting loose many ASBOs, pushing up southern property prices and rents, boosting immigration of the cheapest immigrants, etc., but the alternative is worse.

    The main criticism of Blair is not that he pursued a coalition with the reactionary southern small property rentiers, but that he went a bit too far with the "treats" for them (ASBOs less easy to get, house prices zooming more slowly, ...), and could have done more for the other parts of the New Labour coalition. But perhaps he eventually identified himself just with the rentier constituency, and I am fairly sure that contemporary blairites do that.

    My usual very revealing quote from Lance Price's diary 1999-10-19:

    «Philip Gould analysed our problem very clearly. We don’t know what we are. Gordon wants us to be a radical progressive, movement, but wants us to keep our heads down on Europe. Peter [Mandelson] thinks that we are a quasi-Conservative Party but that we should stick our necks out on Europe. Philip didn’t say this, but I think TB either can’t make up his mind or wants to be both at the same time.»

    «If electability becomes synonymous with avoiding anything that might be framed in this way, that rules out radical solutions. Yet radical events or profound changes in society and the economy may well require radical solutions,»

    I think the big property rentier interests have done pretty well with the "salami"/"boiling the frog" technique of incremental change, moving the Overton window their way a little bit every year, a small changes to laws and rules here and there. Radical change gets too many backs up, and the UK has too many constituencies that have to be taken care of to elect a parliamentary majority.

    Overall I am not an optimist; the best strategy is probably the J Corbyn one of speaking softly hoping for the tories to make themselves unelectable, e.g. by having to let house prices fall. If house prices fall or some equivalent catastrophe (from the POV of reactionary southern property rentiers) makes them unelectable, he is in, otherwise nobody would have a chance.

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  9. Response to SWL main post:

    As I've said a number of times in response to your posts on politics: What centre?

    The people you've labelled as centre-left are all right-wing politicians; some of them may be liberally right-wing (narf) but they are still right-wing all the same.

    Blair and Brown didn't regulate the market enough and it led to the problems that we have now, and they didn't do that because they are right-wing politicians in a centre-left disguise that fools no-one.

    The Labour Party needs to have a serious conversation about whether or not it should be the kind of broad-church that consists of both left-wing and right-wing members, and it can't do that while people keeping fuelling the pretence that the centre-left position actually exists.

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  10. Reminds me of Ed Balls after the general election saying he didn't like the energy price freeze policy (which was popular and gave a boost in the polls, even if it wasn't a great idea), because the press called it anti-business and if you get a reputation as anti-business then you're in trouble. The press can just call any policy anti-business then, to decide Labour's policies for them.

    If Brexit happens and this causes a new recession when the recovery from the Great one isn't yet complete then anything can happen. Anything! Thanks very much centrists.

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  11. 'Globalisation' is a term that dates only from the 1990s.

    The last time before 2008 that British banks failed was in the 1860s for England and the 1870s for Scotland.

    The speed of the collapse in world trade was quicker in 2008 than in 1929.

    How inane must a politician or a journalist be to see that 2008 is of immense significance?

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  12. No comments by 13,32 hours GMT, June 1st, 2016 : For good reason.

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  13. I agree that the political centre needs to be radical and the radicals, revolutionary.
    I am afraid however, that the reason why the political right wanted (and did) reduce the size of the state, was not because of any questions on the economic system was was too threatening to contemplate, but because the State is the only Institutions that citizens have to oppose the disruptive power of private capital and the structure of asymmetric income distribution that it create.
    Hence austerity is meant to reduce the size of the State as the only entity that can fight this war in people's name:
    http://www.goodreads.com/quotes/123058-there-s-class-warfare-all-right-but-it-s-my-class-the

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  14. Really interesting article! Keep the good job! :)

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  15. Your correct that radical change is needed. But unfortunately the Labour party and movement seems full of dim people who gave far too much credit to Blairism as some kind of magic solution for winning elections rather than a temporary fudge with good PR. All of the detailed policy created by the Blair Government assumed that the sort of colapse in Capitalism we saw in 2008 was impossible. The very things which produced this crisis were the basis of the achievements of the Labour Government. The anti corbyn faction want to believe they can revive the same method some how without great ideological revision. They are wedded to the past just like the Tories.

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