Labour and its Left

The 1980s were a battle between what eventually became New Labour, and what is often referred to as the Hard Left. 1983 to 1997 was a long period where the Hard Left gradually lost influence within both the party (then the membership and trade unions) and among the parliamentary party (the PLP). But this didn’t mollify the distaste New Labour had for the Hard Left.

This period meant that those opposing the left adopted two propositions which became almost hard-wired into their decisions.

1. The left within Labour were more concerned with controlling the party than winning elections. That has often been said about Jeremy Corbyn over the last two years.
   
   
2. That the Left, and their ideas and policies, were toxic to most voters. The right wing press assisted in this by talking about the loony left.
   
   

In short, it was best to act as if Labour’s Left were a political pariah. As a result of these ideas the left minority within the PLP was tolerated (Labour needed to be a broad church), as long as it remained small and powerless. Triangulation became the way to win power: to adopt policies that were never from the Left, but adopted a centre ground between the Left and the Conservatives. New Labour was not old Labour.

The strategy was extremely successful. Tony Blair won three elections, and it took the deepest recession since the 1930s to (just) remove Labour from office. The Blair government achieved a lot, particularly for the poor, but it also made serious mistakes, most notably Iraq. That stopped a lot of those on the left actively supporting the party.

In 2015, when Labour under Ed Miliband was defeated, the general mood among the PLP seemed to be that it needed to triangulate once more and move further to the right. Crucially, some leading figures suggested Labour should all but embrace George Osborne’s austerity policy. The three main candidates to take over from Miliband were seen (with justification or not) as representing this thinking. Austerity was a critical issue, in part because - if accepted - it potentially constrained what Labour could do to a large extent. It was also an economically illiterate policy, which I can safely say with authority. Worse than that, it was a policy that - as the deficit fell - began to lose its popularity, so for Labour to adopt it at just the point it was losing its popular appeal seemed a doubly crazy thing to do.

Before Corbyn won that election I wrote

“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. …. 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.”

At this point I was receiving impassioned pleas by some to come out against Corbyn. These mainly went along the lines that Corbyn was unreformed from the 70s/80s, and wanted to take over the party for the ‘old left’. Many said he could not win an election because his policies would be too radical. He would be a disaster with the electorate. It was unmodified 1980s thinking. These arguments sounded unconvincing to me, mainly because Corbyn would have to work with the PLP. Unlike the 1980s, the left were now such a small minority within the PLP that they would have no other choice.

As I had anticipated, Corbyn and McDonnell did form a shadow cabinet of all the (willing) talents, and as far as economic policy was concerned they were far from radical. McDonnell set up the Economic Advisory Council (EAC), which I and I suspect others were happy to join because it involved no endorsement of Labour’s policies. Arguments that we should have withheld our advice because Corbyn was somehow ‘beyond the pale’ were again straight from the post-83 playbook, and I am very glad that I ignored them. I helped Labour adopt a fiscal rule which in my view exemplified where mainstream macroeconomics was, and which incidentally some sections of the Left were very critical of. It formed a key part of their 2017 manifesto

What I had not anticipated, back when Corbyn was about to be elected, was how foolish some Labour MPs would be in those months following his election. Critical briefing of the press was constant, and tolerated by many in the PLP. As I wrote at the time, this strategy was stupid even if you hated Corbyn, because it gave the membership the excuse to ignore Corbyn’s failings. I was more right than I could have imagined. This was the first major mistake that the PLP made after the election.

The other thing I had not anticipated was Brexit. This triggered the second major mistake by the PLP, which was the vote of no confidence. It was in many cases an emotional reaction to Brexit, the leadership’s role in the campaign and earlier incompetence. It was understandable, but it was nevertheless terrible politics. Corbyn’s supporters were gifted the perfect narrative in the subsequent leadership election: the PLP had sabotaged Corbyn’s leadership.

The two mistakes made by the PLP ensured that for many members the 2016 vote became the PLP against the membership. One big mistake Owen Smith made was to not side with the membership in terms of changing the 15% leadership rule, so naturally they said if you do not trust us we will not trust you. Nevertheless I supported Smith over Corbyn, because I could not see a future for a party that had become so deeply divided. I thought the next election was winnable for Labour, but not if the party was seen by the electorate as at war with itself. That was one of the key reasons I resigned from the EAC: whether that was the reason three others also left I cannot say.

After Corbyn won for a second time, the polls suggested Labour’s future was bleak. This is what led May to call her snap election. However two things happened after Corbyn’s re-election which surprised me and many others, and meant that my predictions of no future under Corbyn proved wrong. First, the internal squabbling within Labour stopped almost completely. Second, the leadership started putting together a manifesto that would prove very popular, with a competence that had earlier been missing. During the general election divisions within Labour were not part of May’s main attack, in part because she chose to make the campaign presidential in style..

Many will say that Labour achieving 40% of the popular vote vindicated the membership’s faith in Corbyn. Others will go further and say ‘if only the PLP had been more cooperative we could have won’. That is going too far..The election result was also a consequence of a truly terrible Conservatives campaign, headed by a Prime Minister who exposed herself as just the wrong person to lead the country through Brexit  The economic environment couldn’t have been better for Labour: unlike 2015 we had falling real wages and the slowest quarterly GDP growth rate in the EU. Labour’s manifesto held out hope, while the Conservative manifesto was a liability. Despite all this, the Conservative vote share was above Labour.

What the election does show beyond doubt is that the attitudes most of the PLP had towards the Left, which they had carried with them from the 1980s, are no longer appropriate. The result was not the disaster they had been so sure would happen. That showed some left wing policies can be very popular, even if they are called anti-capitalist by those on the right. The curse of austerity on the UK electorate has lifted. Unlike the ‘dementia tax’, none of the policies in Labour’s manifesto proved to be a millstone around Corbyn’s neck. The days when Labour politicians needed to worry about headlines in the Mail or Sun are over.

The big lessons of the last two years are for Labour’s centre and centre-left. The rules that applied in the 1980s no longer apply. The centre have to admit that sometimes the Left can get things right (Iraq, financialisation), and they deserve some respect as a result (and vice versa of course). The centre and Left have to live with each other to the extent of allowing someone from the Left to lead the party. Corbyn has shown that the Left are capable of leading with centre-left policies, and the electorate will not shun them. With the new minority government so fragile, it is time for the centre and centre-left within Labour to bury old hatchets and work with Corbyn’s leadership.

What are ABC to do?

This is quite a long piece about politics, that I suspect no one will like. I have said before that I depart from my comfort zone of macroeconomics when I think an important point is being missed from the public debate. In this case the second sentence may follow from the first.

What should the strategy be for the great majority of Labour MPs who did not vote for Jeremy Corbyn (ABC=anyone but Corbyn)? They can continue to expound their misery to receptive political journalists. They can continue to stand aghast at the dislike that some now in power hold for their predecessors. But for a group that has lost two crucial elections within the space of a few months, they really need a more positive focus.

Tony Payne, director of SPERI at Sheffield University, has a suggestion which I think has a great deal of merit. They should “come to terms fully, properly and honestly with Labour’s record in government under Blair and Brown between 1997 and 2010”. This is not in some kind of masochistic, ‘what we got wrong’ kind of exercise, but rather to recognise what that Labour government got right. I was part of a group of academics that looked at economic policy under Labour, and the sense I got was that there were an awful lot of positives to note. But in looking at the negatives, one point that should be recognised is that these (e.g. Iraq, not enough banking regulation, perhaps not enough local support for inward migration) did not come from any tendency to be too populist. Instead rather the opposite.

I’ll come back to that in a second, but actually I decided to write this in response to another post by Tony Payne, which could perhaps be described as a lament for the centre-left. You can get the flavour from this passage:

“what underpins and ultimately characterises centrist politics (whether in its left or right variant) is a rejection of what I see as the easy moral simplicities of populist politics in favour of the complex, awkward and often unsatisfying and unsatisfactory world of governing, of trying to find the best way through the most difficult problems, even if that involves compromise. The latter is of course the dirtiest of words in the lexicon of the populist left (and right).”

I think that speaks to where a lot of the ABCs are right now. They say we tried to be sensible in the face of difficult problems, but we were outflanked on both sides by the moral simplicities of populist politics. I suspect (and to be fair Tony Payne does not make this link) it also passes as some sort of explanation as to why ABC lost two elections. They were the realists who lost out to the idealists and populists. As an explanation I think it is completely inadequate, and to be frank comes close to denial.

Let me take my own subject as an example, partly because austerity is also central to much else. In the end what quite a few of the ABCs wanted to do was to junk the complex and perhaps awkward truths of how to run a sensible fiscal policy in favour of the populist politics of talking about the nation’s credit card. Osborne’s fiscal charter is not supported by a single economist I know, but many of the ABC’s have advocated supporting it. In this case what those ABCs have been doing is adopting - or at least flirting with - populist politics, but the popular politics of the right rather than the left.

That in turns comes from what seems to be the dominant mantra of the ABCs, which is that only they are serious about trying to win elections. That is why, we are told, they have to adopt the populist policies of the other side, because only that way can they win. Notice first how different this is from the noble Weberian concept of the centre that Tony Payne puts forward. Notice second that these populist policies seem to come from the right rather than the left: whenever there is a populist policy from the left (like renationalising rail), then it becomes time to cast aside populism and be ‘sensible’.

I have struggled to understand what is going on here. But the thought that I keep coming back to is regulatory capture. This is the idea that the regulators of an industry become captured by the industry itself: by its objectives, values and methods. In some cases the reason for capture is straightforward (revolving doors), but in some cases it reflects the fact that regulators cannot match their industry in terms of knowledge and analysis. My idea is that in this case instead of an industry you have a Westminster discourse which, under the coalition, was dominated by the thinking of the centre-right. Most Labour MPs simply didn’t have the time or resources to find alternatives to this, and gradually became hostage to this discourse. As Paul Krugman might say, after a time all they hear are the views of Very Serious People.

Part of this Westminster discourse involves the tactic of exclusion for individuals and ideas that are deemed to be outlandish. (Outside the Overton window, if you like.) I have experienced that on a personal level recently: imagine a biologist being told that they would be ‘branded’ if they gave technical advice to a major political party!? Rather more important it leads some politicians on the centre left with strong skills and expertise reluctant to sit at the same table as those in their own party with more radical views, even when those holding more radical views have every incentive to seek compromise. You have to ask who benefits from this.

It is often said in politics that voters vote for and against incumbents, not oppositions. I doubt very much if Labour party members voted for Corbyn because they had suddenly become converted wholesale to a Bennite type platform. Instead they voted against what the parliamentary party had become. I think recognising their responsibility for their own failure is the first step to recovery. I said that the ABCs would do well to follow Tony Payne’s advice and focus on what the Labour government did right. One of those things was the regime of tax credits, which cut poverty and made it easier for people to work. They might then reflect on the reasoning, forces and processes that led so many of them this July to abstain on the bill that cut those credits.

The centre left needs to retrace its steps as a first stage to recovery, and learn from the many things it got right when in government. In the UK and elsewhere in Europe it is important this happens sooner rather than later. Hopefully in doing this it will rediscover positive virtues and ideals that go beyond simply a negation of populism. I strongly suspect a strong political centre (left or right) is vital for good governance, and that both the UK and Europe is suffering from its absence.   

Corbyn's popularity and relativistic politics

This is just a short gripe about some of the commentary around the Labour leadership contest. So many who write about this express their puzzlement about how someone from the left of the party can suddenly appear to be so popular. This can only mean, they suggest, that the Labour party membership must have moved to the left. (For example this, from the FTs Jim Pickard.)

This mistake reflects something that Paul Krugman has remarked upon in the US: the tendency of commentators to define the centre as simply today’s mid-point between the two main parties. So as Labour moves towards the Conservatives, according to this way of looking at it the centre also moves to the right.

Now if that is how you want to define the centre, so be it. Such is relativistic view is very post-modern, I guess. But when that idea is then used to say that Labour party members must have moved to the left, its limitations become self-evident. In reality all that might be going on is that the views of Labour party members have not moved at all, but they have become left behind as Labour MPs and other prospective leaders have moved to the right. I think we have clear evidence that this is more likely to be what is happening. [1]

The most obvious example is the welfare bill, and Labour’s shameful decision to abstain on this. But another that is close to my heart is austerity. Talk to some, and being anti-austerity has become synonymous with being well to the left. Of course in reality it is just textbook macroeconomics, but if we stick to measuring everything on a left right axis, then remember that it was only as far back as 2009 that the need for fiscal stimulus rather than deficit reduction was the position advocated by a centre/left Labour party in the UK, and the Democrats in the US. It cannot be surprising, therefore, that among a relatively well informed electorate that is the Labour party membership an anti-austerity position is still seen as a sensible policy. With an extreme relativistic view you could say that by sticking to this position these people have moved to the left, but please don’t appear surprised that this has happened.

[1] It is equally fallacious to think that those who vote for Corbyn agree with every one of his policies. Some of his popularity may be a form of protest not just at the policies of his competitors, but also their style: see the clip in the middle of this typically amusing article by Mark Steel.

Inequality, business leaders and more delusions on the left

Those who think current levels of inequality are not a problem can skip this one

The Blair governments did a lot to fight poverty, but were famously relaxed about inequality, or more specifically the earnings of the 1%. For many in those governments this reflected their own views, but it also reflected a political calculation. The calculation went as follows. To win, Labour needed to be seen as competent to run the economy. The media all too often look to business leaders to answer that question. So Labour needed to be business friendly. Now being business friendly should mean creating an environment that business can thrive in. However to get the approval of business leaders you also need to create an environment where business leaders can thrive personally, and they are very much part of the 1%. QED.

Labour today is not following this strategy. First, Miliband has said quite clearly that he sees tackling inequality as a major issue: "Now I have heard some people say they don’t know what we stand for. So let me take the opportunity today to spell it out in the simplest of terms. It is what I stood for when I won the leadership of this party. And it is what I stand for today. This country is too unequal. And we need to change it." Second, it has two policies that directly impinge on the 1%: the mansion tax and restoring the 50p income tax band.

There are some on the left who dismiss these measures as marginal. One of the comments on my earlier post said that “When it comes to the broad trend of ever greater inequality there really is no meaningful difference between the main parties.” This seems to me a colossal tactical error. To see why, you only have to note what has happened over the last week in the UK. Various business leaders have proclaimed that a Labour government would be a disaster. Stefano Pessina, who among other things runs the Boots chain, declined to elaborate on why exactly Labour would be a disaster. In contrast, he was quite clear that the UK leaving the EU would be a big mistake, which of course is much more likely to happen under a Conservative government!

There is an obvious inference. Labour would not so much be bad for business, but bad for business leaders personally. [1] They, unlike some on the left, recognise that Miliband is not Blair, and that there has been a key shift in the direction of Labour policy. So they will do what they can to stop Labour winning. Labour in turn has responded by attacking the tax avoidance practiced by many of these companies. This is the beginnings of a major battle.

There are at least two important implications. First, the non-partisan media need to understand what is going on. Getting business leaders to comment on the relative merits of the two main parties programmes is no longer a neutral decision - it is giving additional airtime to one side. Second, everyone who cares about inequality needs to realise the importance of this election. Inequality is a key election issue, and there is a very meaningful difference between the two main sides. Certain business leaders clearly understand that.

[1] Another possibility is that they think Labour would be much tougher on business tax avoidance than the Conservatives, but saying this in public would be embarrassing.  

Delusions on the UK left

Syriza has won the Greek election, which is the result I hoped for. For some this heralds the death of neoliberalism. To celebrate, George Monbiot - whose journalism consistently tells me more than most other journalists - says that here in the UK we should no longer vote tactically, but instead vote for what we want. What dangerous nonsense!

At least he is honest in what such an approach implies. Anyone who votes Green in any seat where Labour has a chance to win, aside from maybe a few seats where the Greens have a chance (more realistically one or two), is voting for a Conservative government. They will be in small part responsible for what happens under that government. (Not voting in a seat Labour has a chance to win is almost as bad.) This is going to be a tight election, so it matters. [1]

Monbiot says “If Labour wins in May, it is likely to destroy itself faster and more surely than if it loses, through the continued implementation of austerity.” His normal high standards of journalism based on solid research go out of the window. I have, along with the IFS and Resolution Foundation and many others, repeatedly pointed out that there is a huge difference between Labour and Conservative fiscal plans beyond 2015. It is quite possible that we will see very little additional fiscal tightening under Labour, and a lot more public investment.

But with Monbiot in this mood, all this means nothing. The additional hardship that those that depend on the state will undoubtedly suffer if Labour do not win: collateral damage for the eventual triumph of the left. The disintegration of the NHS starved of funds: it will happen anyway  - but the last Labour government raised taxes to increase NHS spending! This is not a strategy based on any kind of analysis, but wishful thinking because he finds it distasteful to vote tactically. (The British people had a chance to change their electoral system, and they chose not to.)

In looking at Labour, he sees only their departures from his own vision, and ignores their virtues and the realities of gaining power in today’s environment. He thinks Labour is currently silent on the evils of austerity because they believe in its virtues, whereas in reality they have been forced into this position by mediamacro’s obsession with the deficit. That is why they do not publicise their very different fiscal plans, but good journalism should see through that. Wouldn’t it be nice to have a prime minister who was prepared to stand up to the Murdoch press - oh wait. Wouldn’t it be nice to have a prime minister who said: “This country is too unequal. And we need to change it." - oh wait again (see postscript).

To say that Monbiot’s analysis represents a profound misreading of history seems trivially obvious, but not for left utopianism. Monbiot says “Fearful voting shifts the whole polity to the right.” Where is the evidence for that? Neoliberalism did not triumph because the left decided to compromise. Yes Greece voted for Syriza, but only when half of its young people were stuck in unemployment. Is that the future that he hopes for by abandoning tactical voting?

Parts of the radical left has always suffered from this misty eyed idealism, where through blurred vision everyone else looks the same. I remember being told by otherwise very intelligent people on the left that there was no real difference between George Bush and Al Gore. Monbiot described voting No in the Scottish referendum as “an astonishing act of self-harm”: no matter that the SNP tried to deceive the electorate that they would at all times be better off independent; a sorry claim given what has subsequently happened to the oil price. No doubt some said in 2010 that a future Labour government would be much the same as a Conservative government. Please, just look at the evidence.  

So, to repeat, anyone voting Green (or failing to vote) in a seat that Labour can win but the Greens cannot will in part be responsible for the consequences of a future Conservative government.

Postscript (19/2/15): Here is a link to those seats where this might apply. 

[1] An interesting question, from an academic point of view, is whether this argument is symmetrical, applying to UKIP and the Conservatives. Perhaps not in one sense. If Labour loses because of votes lost to the Greens, the reaction within the party will simply be to look for a more telegenic leader. If the Conservatives lose because of votes lost to UKIP, perhaps there is a chance that the Conservative Party will merge with UKIP, and adopt leaving the EU as policy.

The Left and Economic Policy

Why does the economic policy pursued or proposed by the left in Europe often seem so pathetic? The clearest example of this is France. France is subject to the same fiscal straightjacket as other Eurozone countries, but when a left wing government was elected in April 2012, they proposed staying within this straightjacket by raising taxes rather than cutting spending. Although sensible from a macroeconomic point of view, this encountered hostility from predictable quarters, as I noted here. But in January this year President François Hollande announced a change in direction, proposing tax cuts for business and public spending cuts. When your macroeconomic announcements are praised by Germany’s foreign minister as courageous, you should be very worried indeed. Any hopes that Hollande might lead a fight against austerity in Europe completely disappeared at that point.

You could argue that France was initially trying to oppose irresistible economic and political forces, and no doubt there is some truth in that. But what was striking was the manner in which Hollande announced his change in direction. He said “It is upon supply that we need to act. On supply! This is not contradictory with demand. Supply actually creates demand“. This is not anti-left so much as anti-economics. Kevin O’Rourke suggests this tells us that to all intents and purposes there is no left in many European countries. It would indeed be easy to tell similar stories about the centre left in other European countries, like Germany or the Netherlands. With, that is, the possible recent exception of the Vatican!

Unfortunately Europe here includes the UK. Labour’s shadow chancellor, Ed Balls, was correct in saying that the government’s austerity measures were too far, too fast, yet the party now seems to want to show they are as tough on the deficit as George Osborne. (Its opposition prior to that often appeared half hearted and apologetic.) Again you could argue that they have no choice given the forces lined up against them, and again I would agree that this is a powerful argument, but I cannot help feeling that this not the complete story.

I am not trying to suggest that if Labour had taken better positions, it would have necessarily made much difference. Take the issue of flooding, where Labour did try. The BBC failed to ‘call’ this issue, by for example reproducing the official data shown here, and instead fell back on ‘views on shape of the earth differ’ type reporting. Here the BBC failed in its mission to inform, and instead behaved in a quite cowardly manner. But at least in this case Labour tried.  

What strikes me about the economic pronouncements of the Labour Party is the number of tricks they miss. On too far, too fast, for example, an obvious line of attack would have been to note how Osborne did change his policy (proclaiming U turn! finally followed our advice etc). In addition they could say the recovery only took place once austerity was (temporarily) abandoned. Simplistic stuff I agree, but this is politics. To take a much more recent example, an easy line for Labour to take on the last budget and pensions was that Osborne’s policies would reduce incomes for prudent pensioners. Yet all Labour seems to be saying is that they will support the reforms, but want to wait to see the details. In other words, there is no opposition to the government’s claim that this was a budget for savers and pensioners.

With austerity and pensions there may be subtle factors that I have missed, but in their absence one conclusion you could draw is that the Labour Party in the UK is not getting good economic advice. I’m afraid I have no deeper knowledge on whether this is true or not. That has to be the conclusion in the case of Hollande’s apparent embrace of Says Law. Yet I doubt that the left does not want good economic advice. As I noted here, in the last Labour government the influence of mainstream economics had never been greater. Is this a paradox?

Perhaps not, if you think about resources and institutions. Seeking out good advice (and distinguishing it from bad advice) takes either money or time. An established government finds this much easier than an opposition or a new government. When labour came to power in 1997 they did immediately introduce well researched and judged innovations in monetary and fiscal policy, but they had had 18 years to work them out.

In addition, with the Eurozone there may be a factor to do with governance. I have just read a fascinating paper by Stephanie Mudge, which compares how economic advice was mediated into left wing thinking in the 1930s compared to today. To quote: “it stands to reason that an economics that works through inherently oppositional national-level partisan institutions would be especially fertile terrain for the articulation of alternatives; an economics that keeps its distance from partisan institutions and is more removed from national politics, but is closely tied to Europe’s overarching governing financial architecture, probably is not.” What is certainly true for both the Eurozone and the UK is that leaders of independent central banks often appear naturally disposed to fiscal retrenchment.

This gives us two problems that occur for the left and not the right. However the right has two problems of its own when it comes to getting good policy advice. The first comes from a key difference between the two: the right has an ideology (neoliberalism), the left no longer does. The second is that the resources for the right often come with strings that promote the self interest of a dominant elite. So although the right has more resources to get good economic advice, these strings and their dominant ideology too often gets in the way. But what this ideology and these resources are very good at is providing simple sound bites and a clear narrative.