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.”
