Is Brexit a culture war or a class war?

The dynamic of today’s service based economy means that social liberalism is in part generated by class.

Imagine someone with a piece of thin card. They draw a circle with a compass and cut out the circle. Two people arrive and pick up the card. One says look, someone has cut out a circle. The other says there is no circle, its just a thin bit of card. The debate over Brexit within the Labour party is in danger of following a similar structure.

For most Labour voters and members its position should be absolutely clear. Labour should stand for openness and international cooperation. Brexit is the opposite of these things. However a minority says that many in Labour’s working class heartlands support Brexit and we should not abandon them. The first side sees a circle but is in danger of ignoring that it is made out of card, and the second side sees only a piece of card.

We need to think about politics in two dimensions rather than just one. The first dimension is the traditional left/right division that used to be the mainstay of politics. The second is the dimension of culture or identity. At one end of the cultural dimension you have social conservatives, who value local communities and the nation and are suspicious of outsiders, where being an outsider can involve sexual norms, race or religion. At the other end are social liberals, who value diversity and tolerance, and who dislike borders of most kinds.

People see in three dimensions, so the card circle is both a circle and a piece of card. Equally people care about issues in both the left/right dimension and the cultural dimension. For most people Brexit is an issue on the cultural dimension. The call for Labour to represent Remain is straight forward. Labour has for decades been on the liberal side of the cultural axis, and so they should support Remain. It is the main reason why the majority of Labour voters and members support Remain.

The response of a minority in the Labour movement is to talk about Labour’s traditions as a working class party. Examples are John Cruddas or Lisa Nandy. It is a powerful argument for Labour party members, who both respect the traditions that Labour represent and do want the party to represent the working class. It is particularly powerful because there is some guilt that the Labour party, like other parties of the left, has moved from a party of the working class to being a party of what Piketty calls the Brahmin left, and Paul Mason calls the new core of the Labour project. But this argument could be accused of seeing the card circle as a piece of card.

Of course Labour should represent the working class along the familiar left/right dimension, in terms of labour market policy, industrial policy, reducing inequality and so forth. Cultural politics in no way replaces class politics. But just because working class communities tend to be more socially conservative than professional classes does not mean we should abandon Labour’s liberal stance on issues like immigration and, of course, Brexit. Labour should represent the working classes in the economic dimension but not the social dimension.

To reinforce this point Danny Dorling points out that Leave was as much a middle class as a working class vote. Furthermore, as I noted here, once you take London out of the equation the North is now only slightly more pro-Brexit than the South, and there is as much a divide between the West and the East. Why should Labour be the party that supports middle class social conservatives?

Adding the dynamic of today’s big cities

This conceptualisation of Brexit as essentially a culture war and not a class war is powerful and contains a lot of truth. But it leaves some puzzles unresolved. The first is geographical. If Brexit is a guide to people’s position on the cultural axis, why is London along with other dynamic cities full of social liberals and the towns, depressed cities and countryside much more socially conservative? The second is about class. Again if Brexit is a measure of social conservatism, why is the working class more socially conservative than the professional class? If where we are on the culture axis reflects innate preferences, why don’t we find as many social liberals as conservatives in different regions and classes?

One possible answer may relate to the geographical and social dynamics of an advanced, service based economy, where towns and cities based around manufacturing plants are an exception rather than the rule. Suppose in countries of this kind, where the state does little to intervene (it is neoliberal), it is the cities that provide the dynamic that propels the economy forward, while cities based on old industries and rural areas are more stagnant. This does seem to be true for the UK and other advanced countries. In addition, people flow constantly between the dynamic and stagnant areas, in part because cities tend to be younger.

If this is the case, then this dynamic could play a geographic sorting role. Those who are more open, who like change and diversity will move to the city. Those who prefer continuity and community will stay, or may even move from the city to the town after a time. So over time you will find the more socially liberal tend to be in cities, and the more socially conservative tend to be in more rural areas.

In addition, those from middle class backgrounds will find it easier to gain the skills that the city needs, while those from working class backgrounds will find it harder through no fault of their own. The less the state intervenes to assist social mobility, the more this will be true. If you are middle class the more likely you are to be in environments (universities and then cities) that are diverse and therefore encourage social liberalism, while if you are working class you are more likely to get stuck in towns or stagnant post-industrial cities. This helps explain something else about Brexit: lack of education is one of the strongest predictors of support for Brexit.

I would like to add one additional dynamic here. The more educated you are, the more likely you are to be familiar with multiple sources of information, and the more open you will be to different perspectives. You are more likely to value expertise because your position in the labour market depends on your own expertise. As a result, you will be less likely to be influenced by what you read in one newspaper, and more likely to seek out what experts are saying on issues like Brexit. In my view newspaper coverage, both of immigration and then of Brexit itself, were important factors behind Brexit, and may be part of the reason that Scotland voted for Remain.

This suggests two social processes. First, this economic dynamic based on growth in cities sorts those at different points of the cultural axis by geography. Second, and I think more importantly, where you are in this cultural axis may not just be the result of your genes, but may also be a result of this sorting process itself. Liberal attitudes may be encouraged by a university education and working in dynamic, diverse cities.

In a dynamic environment where there are plenty of opportunities, diversity seems like a natural consequence of that dynamism. Indeed it may even be seen to contribute to the dynamism, which in fact it does. And of course a university education often gives you a skill set that defines your class position. In contrast, if you live in areas that are economically stagnant you are more likely to see things in terms of a zero-sum, us and them mindset. If immigrants arrive, or you fear they might arrive, you naturally think that they must take away something you already have. These are all tendencies of course. There are plenty in the cities who see little benefit from their dynamism, and plenty in the countryside who are much wealthier. There are Leave voters in dynamic cities and Remain voters in the countryside.

Power and Populism

There is one additional point about this segregation between dynamic cities and more stagnant towns. Political power generally resides in dynamic cities, and this leads to a perception at least that the political elite acts only in the interest of the cities. As a new and fascinating paper by Will Wilkinson argues for the US, this economic divide that both sorts for and encourages certain social attitudes among those in cities can cause resentment and alienation in the rest of the country to a degree that can create the conditions for populism to flourish.

Trump’s support, like support for Brexit, comes from rural America or areas of industrial decline, while most in dynamic cities view this type of populism with incredulity. Population sorting, where power and growing wealth lie in cities where the governing elite rule, leads to self-reinforcing resentment against the elite from those who live elsewhere. That resentment can manifest as simply protest, as happened with the gilet jaunes in France, or it can be captured by politicians or policies that pretend to attack the elite.

Where does that leave our original two dimensional conception where most of the Brexit action takes place on the socially conservative to liberal axis? We can now add two key caveats. First, while a position on this axis is often portrayed as reflecting innate characteristics, it may also be in part a consequence of economic forces and class. Second, support for Brexit may in part reflect some basic economic forces to do with the geography of economic dynamism in predominantly service economies.

Does this mean those arguing that Labour should support Brexit because the working classes are more likely to support it are right? Of course not. Brexit, like Trump, will do nothing to help the working class, and Labour should never become a socially conservative party. Indeed Brexit will do precious little to help any of those that voted for it: it is an utterly stupid policy. But equally seeing this as a culture war that the progressive side have to win is much too simplistic. The roots of our current populism are based on an economic dynamic where growth occurs in large cities, and an economic system that does not spread enough dynamism, knowledge, wealth or power to the rest of the country.

When two mass movements clash

Last week saw leading lights in one mass movement, the Labour party, attack elements of another mass movement, those who want to remain in the EU. What led to this attack seemed to be posters issued by an organisation called OFOC depicting John McDonnell in the pocket of arch Brexiter Jacob Rees-Mogg. My own view is that these poster were a waste of money and hardly worth bothering with. But leading lights in the Labour movement tried to suggest to grass roots Remain supporters that they are being used as a way to attack Corbyn, as here for example.

As it happens I have quite recently suggested that some Remain campaigners risk the danger that their message is sounding very similar to the numerous anti-Corbyn attacks you can find throughout the media. For example suggesting that the only thing in the way of stopping Brexit is Corbyn (ludicrous) and that therefore he has to go (won't happen). As the only chance of a vote on the final deal is if Labour supports it such a message is positively counterproductive.

However the attacks from Bastini, Mason and others took a different tack, listing in great detail how OFOC was connected to, and possibly funded by, certain Tory and LibDem figures. This was the basis of the ‘being used’ claim. There are two big problems here. First, Remain is a cross party movement. So what exactly is the big deal with establishing all these links? So what, you might say. Second, Remainers have every reason to be critical of Labour policy, which is now clearly not to stay in the EU. 

The days of triangulation are over. We now know that the Labour leadership wants a negotiated deal with the EU that has some safeguards on nationalisation etc, and for some MPs at least some limits to free movement. As the great majority of Labour members and voters support staying in the EU, this is a difficult position for the Labour leadership to take. Labour are therefore acutely vulnerable. Indeed as there is a chance that Labour might back a people's vote but May never will, it is sensible that Remainers now concentrate any pressure on the Labour leadership. 

Picking a fight with some Remainers by suggesting they are, knowingly or not, just an anti-Corbyn front because they attack Labour on Brexit seems to both miss the point and to be terrible politics. I guess it can be what happens when two mass movements with considerable overlap in terms of membership clash. Of course any Brexit negotiated by Corbyn would be less harmful than the Brexit May might be able to negotiate, and Labour still might vote against the final deal and support a referendum on it, but until Labour do start saying No Brexit is better than May’s Brexit Labour are vulnerable and have to accept that Remainers will try and put pressure on them.

All of which is of course a minor sideshow to what will be the main story of the next few months: will May be able to negotiate a deal with the EU? Labour are completely irrelevant in answering this question. The answer will depend on whether May will finally break with the Brexiters, and how much these Brexiters react to this rejection. The deal that will be done, which involves at a minimum being in the Customs Union and the Single Market for goods, is anathema to most of the Brexiters based on their past behaviour. That deal, as I have argued before, represents the almost complete failure of the Brexiter project.

The Brexiters have two choices. They can try and make it as hard as possible for May such that she fails to get a deal, and hope that the UK leaves with No Deal as a result. Although there is much you can criticise in May as a Prime Minister, her stubbornness probably means she will not allow her deal to be sabotaged in this way, but that will probably not stop the Brexiters trying. The second choice Brexiters have is to park their displeasure at the deal until we leave in 2019, and hope that they can achieve further breaks from Europe subsequently, perhaps by getting a Brexiter as Conservative party leader. The problem with this strategy is that time is not on their side: demographics, losing the Mail, and people seeing how the UK steadily falls behind the rest of the EU are just some of the reasons why.

There is no doubt that May will do what she can to get a deal, and I suspect the Brexiters will not have the support or the will to stop her once she stops appeasing them. Which leaves Labour in a dangerous position, where they may alienate Leavers by voting against the deal, and alienate Remainers for not supporting Remain. The days when they could keep both groups happy by triangulating, and almost win a general election, are over. They cannot be crazy enough to vote for or abstain on the final deal, because then they become complicit in all the economic harm that Brexit will do, as well as alienating the majority of its own members and voters. It would mean four years of Labour  losing Leave voters to the Conservatives (as the Brexit press would spin anything other than a vote for the deal as Labour opposing Brexit), and Remain voters to the LibDems or Greens.

One thing we have learnt in the last week is that most of the handful of Tory rebels will not have the courage to vote against any deal May makes. (No deal is another matter.) So Labour will lose the parliamentary vote on the final deal. Labour are not in government, and the deal is being done now, so what they would want to do in government is irrelevant. That means that they have little to lose by backing the popular people’s vote against May’s deal as well as voting against that deal. No Brexit is better than May’s Brexit. That way, they allow the two movements to march as one.

Postscript 27/06/18

Conversations with some Labour party activists both before and after this post suggest that Labour has to focus on winning over Leave voters in traditional Labour held constituencies, and so has to appear to back Brexit where it can. There is a danger that they are taking for granted many who voted for them in 2017 because they thought Labour would stop Brexit, and still do (See, for example, this poll in January 2018, where only 19% of Labour voters think Labour is pro-Brexit.) There is a danger that we are seeing a repeat of what happened over austerity in 2015: Labour taking for granted that anti-austerity voters would vote for them, and at the same time failing to win over pro-austerity voters with talk of being 'tough on the deficit'. Much the same happened with immigration.   

Hope, experience and the left

Paul Mason has an article in the Guardian which I think exemplifies where many on the left are right now. He looks back at the electoral failure of Michael Foot in 1983 and the formation of the SDP, which together began the gradual marginalisation of the left in the UK. He goes through the obvious differences between that history and now, but then notes a key similarity:

“As with the SDP, there is a prospect that a few entitled Labour MPs will split, and that the media will get behind the narrative that they are the “true” Labour party. Disunity has already damaged Labour in the polls, just as it did with Michael Foot.”

Why will that not matter this time? His answer seems to be that neoliberalism is on its last legs and the Labour party has 300,000 new members, which he describes as the main event of 2016. These are times of hope for the left, he says.

Of course a revitalised membership is great, as long as that membership understands that it is just one small part of what has to happen to actually change things. It has to combine with a united parliamentary party if it is to have any hope of victory. Just try putting yourself in voters’ shoes: voters who know little of politics, but want to elect a prime minister and a party that will govern well and govern in their interests. In Labour they see a party that has voted no confidence in their leader. It really does not matter if that happened yesterday or 4 years ago because the media will remind all concerned as if it was yesterday. They will say to themselves if their own MPs have no confidence in Labour’s leader, how can I?

I have made this point so many times over the last few weeks. Responses fall into two kinds. The first says that if Corbyn is reelected, MPs must unite behind him, and it will be disgraceful if they do not. If it all breaks down, it will be their fault. But MPs are not soldiers who must carry out orders (although even soldiers ordered into battle by a commander they think is hopeless do not fight very well), but people who have experienced Corbyn’s leadership at first hand. To disregard their experience as just the smears of Blairite plotters is escapism. There are some smears of course, but there is also real frustration and anger among MPs at failures of leadership. If this experience of MPs is ignored, it will be Labour party members, and they alone, who are responsible for the consequences of the votes they cast.

The second response is that the party will have to replace its troublesome MPs. Here history does suggest that this is a excellent way of achieving the split on the left that Paul Mason agrees may happen. To cross fingers and hope it does not happen, or to imagine it will not matter this time, is a triumph of hope over experience, to put it kindly.

But what about the imminent demise of neoliberalism? Here I have to disagree with Paul Mason. The main event of 2016 was the Brexit vote, not 300,000 new Labour members. To think otherwise is delusion. The Brexit vote, in its way, was a blow against neoliberalism, but of an entirely reactionary kind. Economic crises embolden both the radical left (those 300,000 new members) and the reactionary right, and how that turns out depends in part on how united, organised and smart each side is. Under Corbyn, even with 300,000 new members, the left was not able to stop Brexit. Thinking the next time will be different is again putting hope over experience.

What is more, this hope seems rather selective to me. What about putting hope a leader who is standing on a radical economic programme with no question marks over their commitment to closer ties with Europe. He cannot be trusted, I am told, even though he was once ‘core group plus’. Little hope extended there. What about a leader who will be able to unite the party, with a chance of taking power back from this Conservative government that is doing so much harm. He will be overthrown by the Blairites, I am told, even though according to the Corbyn camp the original number of hostile MPs numbered less than 40. This is close to paranoia. 

This is not a hopeful left, but a left that wants to rerun past victories rather than adapt to reality. A left that will not allow itself to believe that by electing Corbyn in 2015 the membership has stopped the drift of the party to the right. A left that does not want to see how Brexit has changed the political landscape. And above all else a left that will not let go of a leader who started out with less than 40 hostile MPs and ended up with 172. A man who is not a victim of some Blairite plot but of his own inability to lead.

Some thoughts on Paul Mason’s McDonnell road show talk

John McDonnell has got quite a collection of talent to give talks on economics around the country, and the latest is Paul Mason. His talk is wide ranging and certainly not academic in tone, as befits the occasion, and I agree with the broad thrust of it, although not all the details. Here are a few thoughts.

The impending second crisis.

There seems to be a general presumption in certain circles that we are heading for another crash. (Perhaps I could call it ‘the end of capitalism is nigh syndrome’.) This is always a possibility (of course), but I do not think it is a probability. In the UK, do not be fooled by the referendum blip (or pause). I think it is quite likely that Prime Minister Osborne will by 2020 be presiding over strong growth, as everything that was put on hold before the referendum comes on stream. I also think we may see rapid Eurozone growth before then.

On a related theme, there is also a widely held view that after the referendum the Conservative party will fall apart - it is the Corn Laws all over again. I would put that probability much smaller than the chance we might vote to Leave, or that Boris gets to be our next PM.

Fiscal rule

I’m glad he likes Labour's new fiscal rule. He writes: “There’s a school of thought among Labour supporters, and some academics, that the deficit is irrelevant, that “taxing the rich” solves all your problems. It does not.”

‘I did not know you could do that’

His reference to the Macdonald government coming off the gold standard is certainly apposite. Too often the centre left gets trapped by what it sees as unbreakable economic or political convention, only to see the other side break it (think minimum wage).

Monetary policy

What is said in this central section sounds radical, but I think it is meant to be read in the context of the impending next recession that I talked about earlier. What I think he is worried about is that, in that context, any fiscal action would need monetary support, and with the current regime it might not get it. In other words the economy tanks, the next Labour government wants to stimulate but inflation stays close to 2%, and the Bank of England does not cut rates to allow the fiscal rule's knock out to apply. For this reason he supports the proposal, which has a number of notable advocates, that the inflation target be raised to 4%.

I would agree this could be an issue: what economists called the ‘divine coincidence’ (that inflation would always provide the appropriate signals) just does not seem to work very well any more. Whether raising the inflation target to 4% is the best way of dealing with the problem, as opposed to for example an intermediate NGDP target, I’m less sure about but I’m open to persuasion. I agree with Paul that this is a problem involving the central bank's mandate, rather than its independence.

He also supports Corbyn’s original Peoples QE proposal. He cites me as opposing it, but in fact I did not oppose the idea as an alternative to the QE that the Bank would want to do otherwise. What I thought was wrong with Corbyn’s QE was that it appeared either to negate central bank independence, or make a National Investment Bank conditional on the Bank wanting to do QE. In the past I have talked (here, or via Tim Harford here) about how governments and the central bank could cooperate to do money financed fiscal stimulus. In other words Corbyn's QE is fine as an alternative to conventional QE in the context of recession fighting, but not as a general way to finance an investment bank.

I suspect he is also just a little bit worried that the bond vigilantes might finally arrive. I think there is no way that will happen, but we have some history of a central bank governor who worried that it might and gave the wrong advice as a result. If that happened again, we would want monetary policy makers to offer monetary finance of any fiscal stimulus (in exchange for a government commitment to always recapitalise the central bank on request), rather than urge fiscal constraint. Perhaps one way to do that would be to make the central bank’s ability to do unconventional monetary policy conditional on that money finance offer being made.    

Chronicles by Thomas Piketty: reflections on three reviews

As I have already reviewed this book for the New Statesman, I thought it might be interesting to compare my review with two others: Ben Chu in The Independent and Paul Mason in the Guardian. Paul uses some pretty positive language (“lucid”, “brilliantly concise”), Ben is much more critical, and my review is mainly descriptive (although I do use the word 'delicious'). To be fair, Ben’s main criticism is that putting together occasional newspaper columns (nicely translated from the French by Seth Ackerman) does not work as a book, so it is more a criticism of the publisher than the author.

I suspect there is less disagreement among reviewers than there first appears to be, for one simple reason: the Eurozone crisis. Inevitably quite a few of Piketty’s columns are about that crisis. It was obvious that Piketty should write about this at the time, but the columns work less well when they are collected together. I understand the Eurozone crisis much better now than I did as it was unfolding, and people will be rightly interested in the end result rather than the process by which I got there.

But it is not just that. Piketty, like many mainstream economists within and outside France, view a monetary union as fundamentally unstable. I find that frustrating for two reasons. First, a fiscal/political union seems to be a non-starter right now, so it is not a very helpful perspective, and it tends to prevent those that hold that view from exploring in more depth how the existing monetary union could be made to work better. In that respect I side with the position of Yanis Varoufakis, which I quote at the end of my joint review. (Both Paul and I review Piketty alongside the new book by Yanis Varoufakis, and I will talk more about this book in a later post.)

If we just consider the columns that were not about the Eurozone crisis, I positively enjoyed reading these. They are well written (and well translated), with little that a non-economist would find difficult. The word that keeps springing into my mind is refreshing, but I did not use it in my New Statesman review because I was not sure where that feeling came from. On further thought I think it is the combination of two things. First, the pleasure of seeing an excellent economist apply his knowledge in a very accessible way across a range of issues. Second, that his perspective is deeply and unapologetically egalitarian. He writes without needing to constantly defend his views against a more neoliberal perspective, something I suspect an Anglo-Saxon version of Piketty would feel the need to do.