Tuesday 14 November 2017

The Economics of Polarisation

There are other things I want to say about the polarisation of British politics, and as this builds on arguments made in an earlier post I recommend reading it first. Okay, so we know the situation. We have a car crash of a government that makes the Major years at their worst look like a model of good governance. All kinds of awful has happened since the botched election in June, not least of which is permanent chaos. The vile episode that saw Johnson and Gove ignorantly impugn the innocence of Nazanin Zaghari-Ratcliffe, risking her an extra five years in prison being the lowest depths to which they and this government have crawled. And yet the Tories persistently knock about the polls in the 38-41% range. How to explain this situation?

As we saw previously, the Tories assembled an otherwise formidable electoral coalition by polling day in June. They are in along-term decline, being as they are comprised of declining constituencies of mainly older voters, but they're sticking with the Tories. There's no breaking away or leakage beyond an almost imperceptible trickle. What would do the business? Given the electoral collapse of UKIP during the campaign with about two thirds of its vote flowing to the Tories, it's probably fair to say a Brexit betrayal would excite them all again and see them spin back to kippery. Hence why the silly games playing with the exact date and time of Brexit, and Gove and Johnson issuing transitional deal ultimatums. Yet there is another, more powerful force helping keep the base of the coalition solid: the economics.

This only makes sense if you dispense with the received technical definition of economics. They are numbers on a spreadsheet, but these are representations of so much more. Economics are social relationships, whether face-to-face or at a distance, fleeting or sustained. They are the dispensing and hoarding of property, the exchanges of equivalences, the maskings of exploitation, the confluence, conflict and antagonism of interests, and much else. Historically it is an expansive understanding of economics the Tories have proved masters at selling to coalitions of voters and what made them the most successful party of all the established liberal democracies. They did so by combining the selfish with the selfless, or what is known as egotropic and sociotropic voting. As you might guess from the terms, the former refers to self-interest and the latter the wider interest - usually filtered in terms of how well the British economy is doing as measured by GDP, employment, inflation and so on. The Tories strike a balance by combining this with promises and dire warnings.

Take Thatcherism, as Stuart Hall noted in his masterful The Hard Road to Renewal collection, the ground for what happened in the 1980s was prepared by networks of authoritarian and reactionary movements, an ideological softening up by the press and their narrative of national decline, and as ever, a scapegoating of immigrants and minorities. Plus ca change. Thatcher was able to cloak her programme of class war in the red, white and blue of national renaissance. Closing state-run industries was a matter of shutting lame ducks, shrinking the public sector and allowing more scope for tax cuts. That the rich primarily benefited was hidden by made-up absurdities like the Laffer Curve and trickle down, that giving them more cash would see them spread the wealth through entrepreneurial activity. Privatisation wasn't sold as the looting of the public realm for the well-heeled, but introducing millions of small investors to the joys of share ownership. Selling off the council houses to tenants was all about creating a bedrock of owner occupiers who'd gratefully turn out for Maggie. All the time, this programme was positioned as the natural expression of individuality, and it solidified a coalition that saw three consecutively successful Tory defences of their Parliamentary majority. Forward to 2010 and 2015, Dave brazenly went for the carrot and stick approach, promising a land of milk and honey if he was allowed an axe to swing at public spending (which would, miraculously, repair the damage left by the 2008 crash) - the trick was to not let Labour wreck it with their coalition of chaos with the SNP and sundries. Dave's programme was relentlessly negative, but understood that insulating older voters from austerity, at least where their income was concerned, was key. This was a lesson lost on May, but her talk of one-nationism very briefly opened up the possibility of new hegemonic project that recuperated austerity weariness, allied to economic competence with Ed Milibandish characteristics. Each of these phases of modern Toryism were first and foremost about protecting the interests they've always protected, but also speaking to and acting as responsible custodians of the economy in the eyes of the Tory-inclined.

What does economic competence look like right now? The keeping down of prices, the freezing of taxes, the protection of pensions, the stoking of an over-heated housing market on the egotropic side. For the "selfless" side it has to be economic growth, growing employment (never mind these are quarter or half jobs arrived at by carving up full-time roles), and a sense everything is chugging along. It means an absence of danger. This is exactly what a Jez government represents. Labour would undo everything, not least the Tory consensus on taxes and property, and sell out mighty Britannia to the Bolshevist bureaucrats across the Channel. This demonstrates the clever move of Toryism: their politics simultaneously sells security and insecurity. Their carrot is a better future for you and your family, a life of work and self-reliance rewarded with rising living standards. But all this can be taken away by personal failure or by Labour governments. In this context, the Tory approach to employment and how it systematically produces and reproduces economic insecurity makes a lot of sense. Bootstraps self-reliance in austere circumstances are recipes for atomisation and, if they think they have something to lose, anxiety. As always, it's worth noting it's not the poor who feel this most acutely. The Tories, despite being the authors of policies that exacerbate economic ill-feeling are able to rally some of it as support for certainties, like flags, the nation, and authoritarian leaders. Theresa May single-mindedly went with strong and stable for a reason.

Here's the clever thing. This constitution of Tory support as an economic bloc of (perceived) shared interests isn't just about the defining and aligning of shared frames, it is done so in a series of active oppositions, of locating their interests against others, of creating a constituency and perfoming as if in opposition to other constituencies and coalitions of voters. For example, the property-owning voters created by Thatcher have a direct stake in rising property values, and this depends on restricting supply. For the landlord strata, depressing the number of first-time buyers ensures a large pool of renters exist, as well as a supply of housing they get first dabs on. Conversely insecure working makes getting on the housing ladder impossible and thereby feeds into the rental market. Austerity, then as now, makes cuts and passes any savings on in terms of tax cuts. For all the trumpeting around taking the low paid out of tax, every rise of the threshold benefits middling and wealthy tax payers too - though this is sold as punishing the feckless and undeserving poor. Their sustained engagement with public services depends on industrial peace, and so the organisations of working people - unions - are justifiably kept on a leash. The health of pension pots and small investments demands governments keep their hands off corporate profits. And they are actively positioned as a constituency by repeat right wing editorialising against the generation coming up. You know the nonsense about Generation Snowflake, their obsession with celebrity (cynically cultivated by the self-same media interests), their queering approach to gender and sexuality, their free easiness with a diverse and changing Britain, their addiction to phones, their lack of patriotism and entitlement; these serve to invite comparisons with themselves, the gritty post-war generation who came up through the school of hard knocks, and are deployed to rationalise the young's much less secure existence as tough love. Crap work, low pay, poor housing, few prospects, this is the just desserts for a spoilt cohort of kids who don't even know they've been born. It's class conflict sublimated through generational conflict, of setting up a gerontocracy of haves whose privilege depends on keeping the young as have-nots. And, as always, the very wealthiest benefit primarily because it's another line of divide and conquer, albeit one in which a wider layer of people who are more likely to vote have an interest in maintaining.

What can crack this deadlock? Obviously, it would be a very public stripping of the Conservatives' economic competence, which would directly affect the real and perceived interests of the Tory-supporting strata. Stock market crashes, banking scandals, an extension of austerity to pension incomes, the application of the bedroom tax to the elderly in social housing, all would have deleterious consequences for their coalition. Provided none of this happens, even if Brexit is a calamitous mess, as long as the Tories continue insulating this (declining) mass support from the consequences of their policies, the economics of polarisation will tend toward the present situation.


Anonymous said...

Very clear analysis. I presume the pension funds are mostly invested overseas aren't they? So trashing the British economy doesn't harm pensioners' interests nearly so much as those of workers.

One thing you don't mention is the lack of social contacts between older and younger generations. I get the impression that the age-groups are much more segregated in the UK than in many other countries. Would be interested to know if anyone's researched this.

richard yot said...

In terms of the economics we are essentially reliving the mistakes of the 1930s, almost to the letter. Then, as now, there was a stubborn "sound money" orthodoxy that insisted on austerity as the solution to the nation's economic problems, and then Keynes came along with the argument that in fact austerity and sound money policies only made matters worse. It was a lack of demand that was the root cause of the depression, and the way out was for the state to deficit spend and create jobs.

Keynes was able to persuade FDR, but they both met a huge amount of resistance to their ideas. It was only as a result of the command economy of WW2 that Keynes was vindicated, the US entered the war with unemployment at 25%, and came out of it with unemployment at around 2%.

In the end Keynes' intellectual victory was so complete that even conservatives were persuaded, for the next 30 years until Thatcher came along at least. But now it's as if all of this has been forgotten and once again conservatives insist on prolonging the economic malaise through austerity. But the tipping point will come, and the conservative governments of 2010 onwards will be remembered as the economic disaster that they so obviously are.

Keith said...

One must hope that economic and social policy will return to a more humane set of goals and methods. Off course the Second world war concentrated minds wonderfully. So far there is no equivalent trigger...