Paul Krugman quite rightly often complains about people he calls professional centrists, who always suggest there is a middle road between the ‘extreme’ views of Democrats or Republicans. He noted that such centrists always have to blame both sides, and would typically fail to note that although the Democrats have stayed pretty much in the centre of politics, the Republicans have been gradually moving further right.
Centrists of this type were quite rightly attacked during the height of austerity, because milder cuts were not the answer. In the UK the right answer was to have no cuts until the recovery was secure and interest rates were clear of their lower bound. The centrists at the time in the UK were the Labour party (too far, too fast) and that compromise policy not only missed the point but was also unpopular because it satisfied no one. It certainly didn’t satisfy Labour party members, which is why Labour are now led by Corbyn.
But doesn’t Corbyn’s victory mean that the UK today needs centrists, because we have not just got a Conservative government which has morphed into UKIP but also an opposition led by the hard left. Here is Philip Stephens attacking the Labour leadership peddling snake oil populism of the left variety. If you search my blog you will see that I normally think Stephens gets things right, but I think there are three major problems with this diagnosis of where we are.
The first mistake is a variety of the failure I talked about above, which is to fail to see how the political landscape has changed. Here is the first paragraph from Stephens' article.
“John McDonnell has a plan. The Labour party’s would-be chancellor prefers Marx to markets. So he intends to nationalise the energy, water and railway industries, impose big tax rises on businesses and wealthy individuals, shackle the banks, and pump up public spending and borrowing. The organising goal, he told the Financial Times in a revealing interview, is “an irreversible shift in the balance of power and wealth in favour of working people”.”
If you think this is damning stuff, look at the detail. Nationalisation - just returning some industries to public ownership, much as they are in many European countries. Taxes on business - just reversing cuts to corporation tax made by George Osborne since 2011. Higher taxes on the wealthy will only begin to reverse inequality at the top that began growing in the 80s. Shackle the banks? - about time too. Pump up spending and borrowing - in reality just borrowing to invest, with current spending held by a fiscal rule which, outwith a liquidity trap recession, is not very different from the rule of the Coalition government of 2010. The killer line about an irreversible shift in power - from Harold Wilson’s 1974 manifesto (HT George Eaton).
So Stephens is wrong to say this is another 1983 suicide note. McDonnell might prefer Marx to markets, but Labour’s 2017 manifesto gives us a world that if it had been proposed to Harold Wilson he would have thrown it out as involving too much privatisation and too many tax cuts for the rich. Labour’s manifesto is just a modest reversal of some of the things that have happened since Thatcher introduced us to neoliberalism.
But why wasn’t the 2017 manifesto like 1983, given the current Labour leadership? The answer leads us to the second mistake many centrists make: to imagine that any leader from the hard left can impose their will on a soft left parliamentary party. Stephens mentions this, but it is far more central than he suggests. Labour will be extremely lucky to get an overall majority at the next election, and even if they do there are plenty of MPs that will happily vote against their government the moment that Corbyn and McDonnell overstep the centre left mark. Give them 20 years and it is possible to imagine that they might be able to create a PLP more in their image, but they do not have 20 years and those who follow will be from a different generation with different reference points.