Tuesday 1 March 2016

Is Labour Ready for Another Economic Crisis?

Ellie Mae O'Hagan writes that the Tories are politically prepared for another economic crisis, should one hit. Looking at the lack of profitable opportunities for capital presently, the ongoing investment strike, stock markets that went up and then came down, and the inflating credit bubble you'd be daft to rule one out with certainty over the coming years.

Ellie talks about how she felt the left response the the crash(es) of 2008 were bland and complacent. My experience was different. I wrote at the time that there was a bit of energy and excitement about, even though we knew the government would strive to make a crisis of private capital into a question of public spending. For our part (I was a Socialist Party member up until early 2010) it was a spur for activity, of trying to raise questions about the crisis-ridden character of capitalism and get people to take our analysis seriously. Never mind that the SP's theory of crisis was premised on the underconsumption of the working class, and therefore was both wrong and owed more to Keynes than Marx, and that it had confidently predicted 15 out of the last three recessions, we felt we were right and that our ideas had been vindicated after 30 years of neoliberal consensus.

Ultimately, the far left in its manifestations weren't able to press home the political advantage of its cornering the niche for forecasting economic Armageddon, though I remember one international current pompously claiming The Graun echoed its own unreadable editorials. Dream on ...

The Labour Party was intellectually paralysed by the crash. Credit where credit is due, Gordon Brown overcame his predilection for dithering and moved decisively to prevent the meltdown of Britain's banking system. His rescue package became a model for elsewhere and helped stop the so-called 'Great Recession' from tipping over into an unwelcome retread of the Great Depression. But you got the sense this was all done rather reluctantly. Earlier in the year as Northern Rock courted liquidation, Alistair Darling appeared genuinely contrite that it had to be nationalised. And small wonder. As far as Labour under Blair and Brown had a political economy, it was one marked not just by market fundamentalism, but by the belief that it was the job of the state, as per Thatcher and Major before them, to create new opportunities for profit making and profit taking funded by the tax payer. None of this erases the positives of the last Labour government, but one cannot help noting these advances were tacked onto a core politics that, in all essentials, did not deviate from the script handed down from Thatcher to her successor.

When the crisis erupted, Labour was not ready for it. It had a narrative, that the crisis was caused by the collapse of the US housing market and how exotic (and toxic) forms of debt were held by British banks which, in turn, placed them in danger of failure. It wasn't our fault, guv. The problem was Labour had repeatedly told the City that it was fine and dandy, intensely relaxed some might say, with the financial alchemy driving the treasury tax take. With government seeing itself as facilitator of rather than regulator of economic activity, there was no position from which it could tell a story that exonerated its previous actions. It didn't matter that the Tories under Dave were committed to the same spending plans and had attacked Blair and Brown for regulating too much - the only oppositions the popular media scrutinise come from the left. And so the future PM and chancellor articulated a position as per Ellie's article, and we know what happened next.

Are we in a better position today? One of the few positives to come from Labour's loss back in 2010 is an opening up of debates around economics. Matters are a touch more heterodox now. Too late in the dying days of the Brown government, our beloved comrade Peter Mandelson talked about the need for the state to do industrial activism. Noted by his sometime admirer George Osborne, the Tories have talked a lot about this with their long-term economic plan and northern powerhouse nonsense, but it was only Labour that embedded it in their programme. Unfortunately, for a variety of reasons, the punters weren't takers. Now? Well, the position has moved further to the left. Austerity is rightly attacked as unnecessary, harmful, and damaging from the perspective of capital as well as the people at the sharp end. The book is closed on neoliberal policy as even standard bearers of the Progress right swap Friedman and Hayek for Keynes, and we have closeted and not-so-closeted Marxists taking up advisory roles to Labour leadership.

Despite these welcome changes, there is no indication this ferment is breaking news to people outside the strange little club of the politically interested and committed. We can talk about austerity and cuts, but the sad truth is it gets through to precious few. The Tories gambled that paring back public services and flogging off parts of the NHS without adversely affecting the majority of people, and their judgement has proven correct. Doubling down on criticising austerity isn't going to work, and neither will exposes of cronyism and serious tax dodging. Unfortunately, I'm not in the possession of an answer either, and if I were change is made by movements of masses of people - ideas only gain flesh if they inhabit the thoughts and actions of millions. Perhaps, just perhaps, the ideas around the basic/citizen's income could be the basis of a platform that will make people take note of what Labour is currently saying about the economy and the prospects of another crisis. Which is why, seeing as the economy clock could be counting down to a renewed round of ruination, it should be adopted as a matter of priority.


Speedy said...

On the whole, people become more "selfish" as they become more wealthy, and they fear losing that wealth. This is why Labour's focus on benefits does not work - it is essentially championing the "losers" in society which as a message fails because

- it is negative
- it does not chime with the majority

A more "right-wing" Labour leadership would talk about generating jobs and wealth, which is what the old Labour was basically there for. Instead it has now become the champion of the most vulnerable, who don't tend to vote much, incidentally, which is not only futile, in terms of elections, but also damaging, as people do not wish to be associated with it.

The majority do not realise how vulnerable they are until they get sick, or lose everything, and find the social safety net full of holes, that they voted for.

At present Labour is in the thrall of the bourgeois class that looks down on, loathes (and fears) ordinary working people, the people Labour was supposed to represent, hence its championing of more or less anyone but them. Emily Thornberry is the personification of this trend. That this mediocre snob has been propelled so far upwards under JC says it all.

That's why Labour is unprepared: it is "Labour" only in name. Instead it directly supports the interests of the ruling elite by keeping the party of the people out of power.

BCFG said...

Blairism and so called third wayism is essentially Thatcherism/Reaganism taken to its logical conclusion. From meritocracy to managerialism. It was and is 100% genuine Thatcherism.

It isn't as speedy would have us believe, Social democracy dressed up in Thatcherite rhetoric.

Speedy's claims that the the Labour party has been taken over by the bourgeois would be laughable if it wasn't so ironic. I genuinely don't know if this speedy charcter is completely bonkers or just a wind up merchant. But he is certainly one or the other.

As the evidence clearly shows Corbyn's support came primarily from the working class while Cooper, Burnham and the other Blairite clones won their support from the well to do Middle Classes.

I am nearly convinced by the argument that there is a difference between New labour and the Tories. But speedy's assertion that New Labour is the "party of the people" is so nuts that it is off the scale.

The centre left are the enemy.

People like speedy are the poison in the well, who make debate totally impossible. When reading speedy I am reminded of the quote from Platoon, "Hell is the impossibility of reason". Unfortunately speedy is no lunatic exception, he is the lunatic rule. The biggest irony is that the poisoner speedy and his like are the true obedient servants of the ruling elite.

Welcome to hell folks!

But keep up the good work Jeremy!

Speedy said...

Well BCFG, as usual you are half-right.

"Contrary to what is frequently claimed, though, the problem isn’t that Corbyn only appeals to the middle-classes. The problem is that he’s equally unpopular with everyone. Recent research by YouGov found he has an average rating of 3.69/10 among people in ABC1 social groups and 3.75/10 among people in the C2DE groups."

You are right that he had more working class support to get elected, but that doesn't really mean a lot: more working class people voted for UKIP.

As usual, you can't see the wood for the trees. As Alan Johnson said, JC and his ilk were dressing down in denim when he and his pals were wearing suits. And in that observation you have the issue in a nutshell: the Labour party was created to represent working class aspiration, not the romantic fantasies of the middle classes.

If you want to slum it, join the SWP.

Igor Belanov said...

The problem with the promotion of economic ‘aspiration’ is that anyone advocating it in the current socio-economic climate of austerity, downward social mobility, an ever-increasing pension age, and job insecurity, is effectively deluded or dishonest. Given that only a select few will ‘succeed’, the policy is fighting firmly on Tory ground, and would require Labour not only to gain the votes of the ‘aspirational’, but also those who would suffer. The only way ‘aspiration’ can be advocated is if a radically different economic policy is proposed, if aspiration is posited in terms wider than the merely economic, or if it still means rising ‘with’ rather than ‘out of’ the working classes. None of these options is remotely proposed by the Blairites within the Labour Party.

Speedy said...

Well, you seem to have swallowed the Tory line Igor. All the things you refer to are possible to correct with a progressive economic policy that also does not ditch the realities of a global economy. If Brown had won, I suspect the economy would be looking very different now.

That does not mean I accept New Labour - I think there are many things that could be done to increase social mobility that they would not consider, but not getting elected, as JC's Labour will, is certainly not one of them.

I think you harbour the illusion that there is another game being played somewhere. You are right, it is, but it is over to the right - to the US, China, Russia, not the left. There is no left alternative, only a social democratic one, and you can fantasise all you like, but there is absolutely no prospect whatsoever of any sustainable alternative solution that would not impoverish this country.

Igor Belanov said...

@ Speedy

"Well, you seem to have swallowed the Tory line Igor"

" There is no left alternative, only a social democratic one, and you can fantasise all you like, but there is absolutely no prospect whatsoever of any sustainable alternative solution that would not impoverish this country."

Funny, but I thought 'There Is No Alternative' was a line straight from the mouth of Thatcher, and you describe my argument as 'Tory'!!!! Practically everything else you have said could have come from Nick Clegg between 2010 and 2015. I'm really not sure why you think your alternative (or non-alternative) would be any more popular than Jeremy Corbyn's (or Nick Clegg's) would.