A dreadful year for the British left comes to a close with some grim news: that Britain may be heading for a hung parliament next May. The smart money has always had this as a good bet; there is solid electoral bias towards Labour worth as much as 6% of the national vote whilst there are a number of regions where the Conservatives will struggle to make headway. (See my blog in October for the numbers). Why should this be such bad news? It might, after all, keep the beast called Cameron away from our doors. The key point is that the left has to begin to make a strategic assessment of its role and just where it can begin to exert any kind of political influence and a hung Parliament is just the worst place to start from.
There is, it seems, still a current inside the Labour Party which believes that it can persuade Gordon Brown to adopt a policy of taxing the rich and increasing public expenditure as part of Keynesian expansion and so win a popular victory at the polls. Compass’ deeply quixotic report In Place of Cuts: Tax reform to build a fairer society is a well-publicised example of this. Dream on. Whether such a policy could win enough support to win an election is debatable but one stark political fact is not. Gordon Brown no longer runs domestic policy. Lord Mandelson does whilst Gordon seems to be laying the ground for his inevitable exit to some high-sounding job in an international agency. And the Lord of Darkness is not now going to let a band of old-style soak-the-rich wannabees take that role away from him.
A Tory victory with a majority of 50-100 would not be quite the devastating defeat which, naturally, it suits Labour leaders to portray. It is doubtful whether, in practice, there would be much difference in public economic policies between Labour and Conservative; the current recession was partly created by New Labour and is causing much greater economic pain than anything likely to stem from Cameron. He is in fact more likely than Labour to get us out of the quagmire called Afghanistan and might even, post-Chilcot, manage finally to dump the necessary ton-weight on Blair and all those involved in the cover-up over British involvement in sanctioned torture. Not that he would do this out of respect for human rights, just that he is not be part of the ghastly lock which Blair seems have over the Labour leadership.
The central point is that a Tory victory would finally force the left inside and outside Labour to make some strategic evaluation of their options and, perhaps, finally set up some form of united left grouping that would have a few years to develop its electoral position. Possibly a delusion but at least there would be some political impetus for such. Meanwhile, five years of Tory government would just be more of the same.
Consider what a hung Parliament will bring. Labour will be run by Mandelson, the person seen as saving it from oblivion. Brown would be looking for an early retirement to his new job and Lord Peter might even take the step of running for the leadership. Inside Parliament, the form taken by the intense political manoeuvring resulting from no clear majority would depend critically upon the precise numbers. One thing is certain, however. Brown and Labour would still be the government after such an election and they would endeavour to hang on without any decisive vote of confidence for the few weeks until M.P.s left for their customary three-month break during which time deal-making and alliance-building would carry on apace. The outcome of all this is hard to forecast as just about any possible coalition including some kind of Labour/Tory National Government would be on the table.
Both Brown and Mandelson know all about this kind of back-room politics. Such of the left-MPs as remained would be just about the only factions excluded. Whatever their brand of left thought it would not be welcome inside these smoke-filled rooms. (Speaking metaphorically of course; the image of Lord Peter smoking a fag is just too implausible even to win a vote). But they would of course be required to stick to that tribal loyalty to the Party, even to leaders they loath, which has long characterised the left, if not the right, inside Labour. They would vote as they were told on pain of defeating the government.
And outside Parliament, everything would be put on hold. Realignment, reformation, reorganisation, everything would be put on one side until the deals were done. And if, by clever bargaining, Labour remained inside government, either as a minority administration or in some kind of coalition, the same old, same old would carry on amongst the wider left.
So where does this leave us? Essentially almost powerless except to resist the old siren song of voting Labour to keep the Tories out, the ‘hold your nose and vote Labour’ motto first invented by the International Socialists in 1970 and carried on valiantly ever since. Vote Green, vote Plaid, vote Respect, vote SNP, vote for any left-leaning candidate who stands. If nothing else is on offer then either vote for the Lib Dems, who at least retain an honourable stance on the wars, or just stay away. Resist above all, the idea that keeping the Tories out is the only strategic political policy that matters. It isn’t. In fact it comes a long way down the list. The central priority is for the British left to accept that it has to come together of finally to be put out of its misery.
Friday 27 November 2009
Wednesday 14 October 2009
A Sea Change in British Politics
There seems little doubt that the next general election will herald a sea-change for the British left. The old monolithic Labour Party, which has for a century dominated left politics, seems unlikely to survive in its present form. The problem is that it is hard to see through the veils of deception and fantasy which presently surround both it and all the attendant left groups and minor parties to any clear view of what it might look like after the election.
A historical survey of why the left has come to this pass can be found at www.hegemonics.co.uk. What I want to do here is muse on just what kind of formations might come about depending upon the actual outcome of the election using the UK Elect forecasting software (www.ukelect.co.uk) which provides the kind of forecast results which accompany media surveys of public opinion.
The first scenario might be seen as the most unlikely; that Labour manages against all current odds to gain a small overall majority. Such a scenario is not as it happens totally inconceivable. Certainly it has to be worth a small bet at current odds. The reason for this is that the present electoral setup contains a substantial bias in favour of Labour whose base is a large number of small city-seats compared with the Conservative base of large suburban and rural seats. The slow workings of the Electoral Commission has yet to catch up with the de-population of these inner city seats though, presumably, it will do so in the next Parliamentary term. David Cameron’s promise to reduce the number of seats in Parliament to 500 will accelerate this process but it is bound to happen to some degree whatever the ruling party.
The result of this imbalance is that, if Labour wins, it will almost certainly do it with the smallest proportion of the popular vote ever seen. It could even do it without being the largest party in voting terms. A split of Conservative 36%, Labour 34% and LibDems 19% would probably hand it a small overall majority of about 7 ─ small but not unworkable. Improving economic performance and a snap election after a year or so, before electoral changes kick in, could see it improving on this.
Small party performance plays little part in this apart from UKIP which could seriously harm Conservative prospects if anti-European sentiment really kicks in. The SNP would chafe at this. Its own electoral prospects require almost insurmountable odds in order to erode Labour majorities in small Scottish lowland constituencies, which have become Labour’s rotten boroughs, providing that Conservative and LibDem votes hold up. The result is that this victorious (just) Labour government would rule because of a majority of Scottish seats often gained by less than 20% of the electorate.
So what Labour Party can one see emerging from this electoral miracle? First and foremost, one in which Peter Mandelson becomes Lord not just of Foy and Hartlepool but of the Labour Party itself. The nominal leader would stay as Gordon Brown but the real power would pass to Lord Peter given the acknowledged deficiency of Brown’s leadership. One probable course would be for Gordon to be shipped off to a prestigious position in such as the IMF whilst leadership would pass to David Miliband or possibly even Peter himself. The new Labour government would privatise everything possible, certainly the Royal Mail, would not dump Trident but would implement swinging cuts in local authority expenditure particularly their capital budgets. They would also implement the same cuts in welfare benefits which Cameron at least has the honesty to signal in advance.
All this will bring little comfort to the left either inside or outside Labour. The standard-bearers of the two left groups, John McDonnell and Jon Cruddas, would both keep their seats handily unless McDonnell is expelled before the election for running on a non-authorised manifesto. It is difficult to see either leaving the Party even though it will implement policies which are, in principle, against their beliefs; the overall aura of unexpected electoral victory would make this almost impossible particularly in the context of protecting a small majority. Neither would wish to be seen as the person who brought Labour down after its unexpected comeback. Instead they would have to acquiesce in the major internal change in their party ─ its transformation from a membership body, albeit one with little internal democracy, to a purely supporters party in which registered supporters provide money and some electoral activism but without any, even nominal, say in party practice. David Miliband has already signalled this shift and it would certainly have the backing of the overlord Mandelson. At a guess, Cruddas would accept a minor government post rather than spend another decade talking against the government and voting with it.
Nor would smaller left groups find much to be happy about. Caroline Lucas might scrape through in Brighton though the odds are against this; George Galloway might keep Bow. But elsewhere, and in particular in Scotland, Labour’s triumph would spell electoral disaster. Tactical voting in the sense of voting for a party likely to win rather than one almost certain to come last would significantly help Labour giving it about 1 extra seat for each percentage point of such voting.
Perhaps the most interesting unknown factor would be the public response to what would amount to a Labour ‘steal’. How would the citizens of Salford respond to ‘our lass’ once again swanning off to her London flat (is it the third or the fourth)? More importantly, how would Scotland react to a Labour victory more distorted there than in any other part of Britain? Speculatively, there would be a significant move towards Scottish independence which would be taken full advantage of by the astute Alec Salmond. A major constitutional crisis would then be sparked by a Labour government, rejected by a large majority of the Scottish people and pushing through policies unpopular by an equally large majority, but refusing to consider independence precisely to bulwark its precarious majority in the British parliament.
It is a sign of the confusion and disarray of the left that the Compass pressure group on the centre-left appears to be justifying a Labour vote on the grounds that a Conservative victory would eliminate the current electoral bias to Labour and put Scottish independence on the agenda and thus wipe out the even more biased Labour base in that country. An odd stance for a group which has recently espoused electoral reform.
So what about the other extreme of electoral spectrum; a massive Labour defeat? It is, because of Labour’s inbuilt bias, rather hard to forecast this unless the Conservative vote stays above 40% and Labour’s drops much below 30%. For example, a 40/31/19% split would still leave the Conservatives 5 seats short of an overall majority. However a 43/24/23% split would give them a majority of 216 ─ a genuine wipe-out from which Labour would take a decade at least to recover, if at all. In this scenario, the SNP would be stuck of 6 seats though Plaid would gain 2. A 43/29/19% split would still give the Conservatives a 154 majority. A 43/31/19% result would, incredibly, give the Tories only a narrow majority of 5 seats. What is at work here is the way in which FPTP voting produces a kind of cliff-edge pattern in which nothing much changes over a range of voting patterns then, wham, there is a cliff-edge over which majorities soar for one party and plummet for the other.
In the 43/24/23% split, which is broadly the peak Conservative lead in recent polls, Labour is reduced essentially to a party of city centres and a few ex-mining constituencies. It would also become an even more Scottish party with 28 seats, the same as all the other parties combined. This situation is largely unaffected by the SNP votes unless they can find a way of targeting their efforts on to the small Labour seats in Glasgow and the ex-mining seats with their big Labour majorities. In large areas of England, Labour would simply cease to exist.
In such a situation, Gordon Brown would, of course, leave the stage rather quickly, perhaps even without the dignity of a plum international job. No doubt he would leave cursing Blair’s luck even more as he sees him cavorting around the world as a wealthy EU President. Jon Cruddas and John McDonnell would also have left the stage. It is difficult to see Lord Mandelson staying on for a ten or fifteen-year haul so the leadership would presumably pass to whoever of the current pack both survive the electoral carnage and see their future careers as opposition politicians. Most of the well-known faces would still be there. The young Labour advisers parachuted into safe northern seats, the Milibands, Balls, Cooper, Alexander, Benn, Johnson (just) and so on, chose their seats wisely or rather had them chosen for them. Harriett Harman is safe in Camberwell. Just which of these would choose to soldier on would depend as much upon their personal inclination as any electoral choice even when Cameron carries out his promise of reducing Parliamentary to 500. There would be little to gain by shifting party allegiance as the LibDems suffer as much as Labour as the Conservatives win back seats in the south of England whilst the Tories would have no need to accept Labour turncoats. Sean Woodward would have no chance of emulating Churchill and “re-ratting”.
The key constitutional as well as political issue in this scenario would probably again be Scotland where Labour would hold on to around half the seats on as little as a quarter of the popular vote. There would almost certainly be a big shift towards Scottish independence which, as Compass suggests, the Conservatives might concede even though they have a strongly Unionist tradition. Oddly, this might have much less impact on a possible Labour revival than might be expected. The point is that although the 27-30 seats Scottish Labour deliver provide a virtually impregnable bedrock for the party, they also have very little chance of much increase. The huge mountain which Labour would be faced with would be increased by their loss but Scotland would offer very little hope for the massive improvement in total numbers required to form a government ever again.
A more serious problem faced by Labour would be the wipe-out from local government which would accompany such a massive Conservative victory. They might hold on to Manchester where the Conservatives have no base at all but elsewhere they would hold almost nothing. In previous defeats, the existence of Labour councils has provided a political springboard to sustain local parties. This time they would not exist and local party organisation, already flimsy, would largely collapse.
So much, so gloomy. But what of a hung Parliament, the goal which seems the most realistic target for Labour. This is actually possible under a wide range of scenarios, some of which might seem quite plausible. Take 38/29/22% with UKIP polling 3% of the national vote. This would leave the Tories, 21 seats short with the Ulster Unionists only providing 11 extra even if this idiosyncratic bunch could be persuaded to stick to their natural home. An even odder result would be 37/32/19% which would make Labour the largest party in Parliament, though 21 short of a majority, despite being well behind the Tories in the popular vote. Although odd, it does illustrate the point that a hung Parliament with Labour the largest party is far from an unlikely outcome of the next election unless the LibDems can get their act together.
There has been pressure on Labour to adopt electoral reform as part of their platform particularly as most surveys suggest that this would be a popular move gaining them votes. So why has their response been so half-hearted with only the possibility of turning to the Alternative Vote system, one which tends to reinforce the current lack of fairness rather than reducing it? The answer is perhaps too obvious from the above number juggling. The party which benefits most from the current FPTP system is Labour as its seats in its old heartlands remain untouched by even massive losses whilst it can benefit from a hung Parliament even when its share of the votes is far from the largest.
The hung Parliament which may result would be very complex with several nationalist groups having 5-10 seats as well as the LibDems. There may also be a few ‘wild card’ independents adding to Galloway and Swyre, both of whom are likely to keep their seats. Caroline Lucas could well win in Brighton and there are bound to be a few seats where the voters rebel against party domination if they have a particularly noxious sitting candidate and a strong independent challenger. In such a situation, there would certainly be a frenzy of deals and, quite possibly, a certain amount of shifting of nominal party allegiance. Either of the main parties might try to form a ‘national emergency government’ rather on the model of Ramsay MacDonald in similar parlous economic circumstances. Any defection from Labour would certainly cause a final split in the monolith with at least two fragments going their own way. It is often assumed that a deal on electoral reform would have to be part of the package leading to formation of any workable alliance or coalition. Well, perhaps. But would Nick Clegg’s hunger for some taste of power override his party’s policy on this issue. And if it did would the LibDems stay united? Or could one or other of the big two form a government on the basis of defections from the other large enough to override any need to deal with the smaller groups?
The basic point of all this playing with numbers is surely this: that the 2010 election will be the final proof of the electoral bankruptcy of FPTP voting and a further stage in the crisis of political legitimacy which exists in Britain. The country hovers on the edge of a multi-party system in which regional as well as national parties will have strong allegiances which are unfairly represented, both up and down, in the UK parliament. However, neither of the main two parties have much incentive to change the system which has served them well for a century. Just how this crisis will play out following the next election is very hard to predict. Unfortunately, it may turn out to be interesting times in the very worst sense.
A historical survey of why the left has come to this pass can be found at www.hegemonics.co.uk. What I want to do here is muse on just what kind of formations might come about depending upon the actual outcome of the election using the UK Elect forecasting software (www.ukelect.co.uk) which provides the kind of forecast results which accompany media surveys of public opinion.
The first scenario might be seen as the most unlikely; that Labour manages against all current odds to gain a small overall majority. Such a scenario is not as it happens totally inconceivable. Certainly it has to be worth a small bet at current odds. The reason for this is that the present electoral setup contains a substantial bias in favour of Labour whose base is a large number of small city-seats compared with the Conservative base of large suburban and rural seats. The slow workings of the Electoral Commission has yet to catch up with the de-population of these inner city seats though, presumably, it will do so in the next Parliamentary term. David Cameron’s promise to reduce the number of seats in Parliament to 500 will accelerate this process but it is bound to happen to some degree whatever the ruling party.
The result of this imbalance is that, if Labour wins, it will almost certainly do it with the smallest proportion of the popular vote ever seen. It could even do it without being the largest party in voting terms. A split of Conservative 36%, Labour 34% and LibDems 19% would probably hand it a small overall majority of about 7 ─ small but not unworkable. Improving economic performance and a snap election after a year or so, before electoral changes kick in, could see it improving on this.
Small party performance plays little part in this apart from UKIP which could seriously harm Conservative prospects if anti-European sentiment really kicks in. The SNP would chafe at this. Its own electoral prospects require almost insurmountable odds in order to erode Labour majorities in small Scottish lowland constituencies, which have become Labour’s rotten boroughs, providing that Conservative and LibDem votes hold up. The result is that this victorious (just) Labour government would rule because of a majority of Scottish seats often gained by less than 20% of the electorate.
So what Labour Party can one see emerging from this electoral miracle? First and foremost, one in which Peter Mandelson becomes Lord not just of Foy and Hartlepool but of the Labour Party itself. The nominal leader would stay as Gordon Brown but the real power would pass to Lord Peter given the acknowledged deficiency of Brown’s leadership. One probable course would be for Gordon to be shipped off to a prestigious position in such as the IMF whilst leadership would pass to David Miliband or possibly even Peter himself. The new Labour government would privatise everything possible, certainly the Royal Mail, would not dump Trident but would implement swinging cuts in local authority expenditure particularly their capital budgets. They would also implement the same cuts in welfare benefits which Cameron at least has the honesty to signal in advance.
All this will bring little comfort to the left either inside or outside Labour. The standard-bearers of the two left groups, John McDonnell and Jon Cruddas, would both keep their seats handily unless McDonnell is expelled before the election for running on a non-authorised manifesto. It is difficult to see either leaving the Party even though it will implement policies which are, in principle, against their beliefs; the overall aura of unexpected electoral victory would make this almost impossible particularly in the context of protecting a small majority. Neither would wish to be seen as the person who brought Labour down after its unexpected comeback. Instead they would have to acquiesce in the major internal change in their party ─ its transformation from a membership body, albeit one with little internal democracy, to a purely supporters party in which registered supporters provide money and some electoral activism but without any, even nominal, say in party practice. David Miliband has already signalled this shift and it would certainly have the backing of the overlord Mandelson. At a guess, Cruddas would accept a minor government post rather than spend another decade talking against the government and voting with it.
Nor would smaller left groups find much to be happy about. Caroline Lucas might scrape through in Brighton though the odds are against this; George Galloway might keep Bow. But elsewhere, and in particular in Scotland, Labour’s triumph would spell electoral disaster. Tactical voting in the sense of voting for a party likely to win rather than one almost certain to come last would significantly help Labour giving it about 1 extra seat for each percentage point of such voting.
Perhaps the most interesting unknown factor would be the public response to what would amount to a Labour ‘steal’. How would the citizens of Salford respond to ‘our lass’ once again swanning off to her London flat (is it the third or the fourth)? More importantly, how would Scotland react to a Labour victory more distorted there than in any other part of Britain? Speculatively, there would be a significant move towards Scottish independence which would be taken full advantage of by the astute Alec Salmond. A major constitutional crisis would then be sparked by a Labour government, rejected by a large majority of the Scottish people and pushing through policies unpopular by an equally large majority, but refusing to consider independence precisely to bulwark its precarious majority in the British parliament.
It is a sign of the confusion and disarray of the left that the Compass pressure group on the centre-left appears to be justifying a Labour vote on the grounds that a Conservative victory would eliminate the current electoral bias to Labour and put Scottish independence on the agenda and thus wipe out the even more biased Labour base in that country. An odd stance for a group which has recently espoused electoral reform.
So what about the other extreme of electoral spectrum; a massive Labour defeat? It is, because of Labour’s inbuilt bias, rather hard to forecast this unless the Conservative vote stays above 40% and Labour’s drops much below 30%. For example, a 40/31/19% split would still leave the Conservatives 5 seats short of an overall majority. However a 43/24/23% split would give them a majority of 216 ─ a genuine wipe-out from which Labour would take a decade at least to recover, if at all. In this scenario, the SNP would be stuck of 6 seats though Plaid would gain 2. A 43/29/19% split would still give the Conservatives a 154 majority. A 43/31/19% result would, incredibly, give the Tories only a narrow majority of 5 seats. What is at work here is the way in which FPTP voting produces a kind of cliff-edge pattern in which nothing much changes over a range of voting patterns then, wham, there is a cliff-edge over which majorities soar for one party and plummet for the other.
In the 43/24/23% split, which is broadly the peak Conservative lead in recent polls, Labour is reduced essentially to a party of city centres and a few ex-mining constituencies. It would also become an even more Scottish party with 28 seats, the same as all the other parties combined. This situation is largely unaffected by the SNP votes unless they can find a way of targeting their efforts on to the small Labour seats in Glasgow and the ex-mining seats with their big Labour majorities. In large areas of England, Labour would simply cease to exist.
In such a situation, Gordon Brown would, of course, leave the stage rather quickly, perhaps even without the dignity of a plum international job. No doubt he would leave cursing Blair’s luck even more as he sees him cavorting around the world as a wealthy EU President. Jon Cruddas and John McDonnell would also have left the stage. It is difficult to see Lord Mandelson staying on for a ten or fifteen-year haul so the leadership would presumably pass to whoever of the current pack both survive the electoral carnage and see their future careers as opposition politicians. Most of the well-known faces would still be there. The young Labour advisers parachuted into safe northern seats, the Milibands, Balls, Cooper, Alexander, Benn, Johnson (just) and so on, chose their seats wisely or rather had them chosen for them. Harriett Harman is safe in Camberwell. Just which of these would choose to soldier on would depend as much upon their personal inclination as any electoral choice even when Cameron carries out his promise of reducing Parliamentary to 500. There would be little to gain by shifting party allegiance as the LibDems suffer as much as Labour as the Conservatives win back seats in the south of England whilst the Tories would have no need to accept Labour turncoats. Sean Woodward would have no chance of emulating Churchill and “re-ratting”.
The key constitutional as well as political issue in this scenario would probably again be Scotland where Labour would hold on to around half the seats on as little as a quarter of the popular vote. There would almost certainly be a big shift towards Scottish independence which, as Compass suggests, the Conservatives might concede even though they have a strongly Unionist tradition. Oddly, this might have much less impact on a possible Labour revival than might be expected. The point is that although the 27-30 seats Scottish Labour deliver provide a virtually impregnable bedrock for the party, they also have very little chance of much increase. The huge mountain which Labour would be faced with would be increased by their loss but Scotland would offer very little hope for the massive improvement in total numbers required to form a government ever again.
A more serious problem faced by Labour would be the wipe-out from local government which would accompany such a massive Conservative victory. They might hold on to Manchester where the Conservatives have no base at all but elsewhere they would hold almost nothing. In previous defeats, the existence of Labour councils has provided a political springboard to sustain local parties. This time they would not exist and local party organisation, already flimsy, would largely collapse.
So much, so gloomy. But what of a hung Parliament, the goal which seems the most realistic target for Labour. This is actually possible under a wide range of scenarios, some of which might seem quite plausible. Take 38/29/22% with UKIP polling 3% of the national vote. This would leave the Tories, 21 seats short with the Ulster Unionists only providing 11 extra even if this idiosyncratic bunch could be persuaded to stick to their natural home. An even odder result would be 37/32/19% which would make Labour the largest party in Parliament, though 21 short of a majority, despite being well behind the Tories in the popular vote. Although odd, it does illustrate the point that a hung Parliament with Labour the largest party is far from an unlikely outcome of the next election unless the LibDems can get their act together.
There has been pressure on Labour to adopt electoral reform as part of their platform particularly as most surveys suggest that this would be a popular move gaining them votes. So why has their response been so half-hearted with only the possibility of turning to the Alternative Vote system, one which tends to reinforce the current lack of fairness rather than reducing it? The answer is perhaps too obvious from the above number juggling. The party which benefits most from the current FPTP system is Labour as its seats in its old heartlands remain untouched by even massive losses whilst it can benefit from a hung Parliament even when its share of the votes is far from the largest.
The hung Parliament which may result would be very complex with several nationalist groups having 5-10 seats as well as the LibDems. There may also be a few ‘wild card’ independents adding to Galloway and Swyre, both of whom are likely to keep their seats. Caroline Lucas could well win in Brighton and there are bound to be a few seats where the voters rebel against party domination if they have a particularly noxious sitting candidate and a strong independent challenger. In such a situation, there would certainly be a frenzy of deals and, quite possibly, a certain amount of shifting of nominal party allegiance. Either of the main parties might try to form a ‘national emergency government’ rather on the model of Ramsay MacDonald in similar parlous economic circumstances. Any defection from Labour would certainly cause a final split in the monolith with at least two fragments going their own way. It is often assumed that a deal on electoral reform would have to be part of the package leading to formation of any workable alliance or coalition. Well, perhaps. But would Nick Clegg’s hunger for some taste of power override his party’s policy on this issue. And if it did would the LibDems stay united? Or could one or other of the big two form a government on the basis of defections from the other large enough to override any need to deal with the smaller groups?
The basic point of all this playing with numbers is surely this: that the 2010 election will be the final proof of the electoral bankruptcy of FPTP voting and a further stage in the crisis of political legitimacy which exists in Britain. The country hovers on the edge of a multi-party system in which regional as well as national parties will have strong allegiances which are unfairly represented, both up and down, in the UK parliament. However, neither of the main two parties have much incentive to change the system which has served them well for a century. Just how this crisis will play out following the next election is very hard to predict. Unfortunately, it may turn out to be interesting times in the very worst sense.
Tuesday 11 August 2009
Rumblings from inside the beast
The rumblings from inside the stomach of the Labour Party clearly seem to be leading up to a bout of violent projectile vomiting once the expected defeat occurs next year. The spookiest of these reverberations comes from Lord Mandelson, the Prince of Darkness himself, who seems to be entertaining ideas of leading Labour once the mighty one has been thrown out. The really interesting feature of this is not any vision of a newly encommoned Mandelson facing Cameron at PMQ. It is hard to imagine Peter settling for at least five years of such limited fun. No power, no money, not quite the thing for which he gave up Brussels. No, the smart money in his case must be on the entirely possible scenario, given the bias to Labour in the present electoral setup, that the next election will be quite close-run without a clear Conservative majority. In such a situation, would it be entirely surprising to see Peter leading at least part of the Parliamentary Labour Party into some kind of national government coalition with the Conservatives? As commentators often observe, Labour is in his blood ─ you know, the Ramsay Mac lineage.
At least one must suppose that Mandelson has some kind of political strategy though one, which for obvious reasons, he keeps close. Other contenders, who have begun set out their stall, seem oblivious to any need for anything similar. David Miliband comes closest with his proposal basically to eliminate the need for any conventional political party just a vague body of ‘supporters’ who can chip in money or run phone lines as required without having any inconvenient ideas about forming party policy. (www.tribunemagazine.co.uk/2009/08/07/how-the-next-decade-can-belong-to-labour) This idea does at least have the merit of formalising the present situation in the Labour Party but one has to wonder at the insight of a man whose idea of “a new relationship with three million-plus affiliated trade unionists” consists of getting them “signing up to the political fund of their union, making them a much closer part of a genuine Labour movement.” In other words, giving the Labour Party money. Not sure how the army of labour will take to that.
Passing over Harriet Harman in silence, always best, the other notable rumble has been the unlikely double-act of Jon Cruddas and James Purnell, one having Neal Lawson’s Compass think-tank as his PR machine, the latter working out of a rather weird project in the Demos think-tank (www.openleft.co.uk) which seeks to answer the question: What does it mean to be on the Left today? Both write freely about the ‘left’, without making much effort to define what they mean by this carpetbag word, and appear to be setting themselves up as Labour’s pathfinders for its post-2010 world. One can expect much in the way of a ‘narrative’ involving ‘paths to equality and individual empowerment’ as well as ways to ‘reclaim Labour’s lost constituency’ before the year is out. The problem with both Cruddas and Purnell is that they appear to see the left as an inchoate mass just waiting to be mobilised for Labour if only the right policy buttons can be pressed. They lack any apparent sense of the current structure of the left; political life is frozen for them perpetually in 1997 when, as Blair children, (both have been Blair aides), they saw what seemed to be a united coalition of the left supporting Labour. Both seem to regard the early Blair as their exemplar, promising a new world without being too specific about the details and gathering around them a joyous mass of the left.
Meanwhile, on the lonely extremities of the Labour Party, there seem to be the first stirrings of revolt. John McDonnell, perpetual leadership contender if he could only raise enough MP votes to be nominated, suggests standing as “Labour MPs making it clear at the next election that they stand on a policy platform of real change as ‘change candidates’” (http://l-r-c.org.uk/press/labour-left-threatens-candidates-for-change-slate-if-policies-dont-change). It remains uncertain as to just what this means. If mouthing off about the deficiencies of the leadership, then there’s little new. If he means standing with a published manifesto different to that prepared by the central machine then it would mean deselection and expulsion. This encapsulates the central contradiction of the Labour Representation Committee which McDonnell leads. As the statement goes on: “These would be Labour candidates binding together as a slate, committed within Labour, setting out the policy programme they will be advocating as a group and supporting in Parliament if elected. Only in this way can we demonstrate to the supporters that want to come home to Labour that there is the hope and prospect of change.” In other words, setting up as an electoral faction to persuade supporters (of what exactly?) to “come home to Labour” knowing that such a move would result in instant expulsion from this same party and, presumably, setting up some kind of alternative political group in opposition to it. This is the nettle which the LRC has to grasp at some point.
So one can set out two scenarios for 2010 and the Labour Party. In one, the election results in no clear majority for the Conservatives and the Lord of Darkness marches a small, though perfectly formed, group of MPs into some kind of National Unity government. John McDonnell leads an even smaller group of expelled MPs (though a much bigger proportion of party members) into the wilderness whilst David Miliband or similar organises a party without members but with continuing union finance into the world of virtual internet campaigning based upon a large Facebook group and words of wisdom from Cruddas and Purnell (unless the latter joins the PoD).
In the second, Labour is comprehensively defeated and the LoD slopes off to some well-paid job in an international organisation. Miliband succeeds to leading the much-depleted band of Labour including McDonnell, who decided not to court expulsion just yet but still fails to get the required 12.5% of Labour MPs to nominate him. Cruddas and Purnell both lose their seats and join think-tanks to write books about the future of Labour. In short, nothing much changes.
History favours this scenario but, as Gramsci said, pessimism of the intellect, optimism of the will. In other words, you know things will get worse but you still hope they will get better.
At least one must suppose that Mandelson has some kind of political strategy though one, which for obvious reasons, he keeps close. Other contenders, who have begun set out their stall, seem oblivious to any need for anything similar. David Miliband comes closest with his proposal basically to eliminate the need for any conventional political party just a vague body of ‘supporters’ who can chip in money or run phone lines as required without having any inconvenient ideas about forming party policy. (www.tribunemagazine.co.uk/2009/08/07/how-the-next-decade-can-belong-to-labour) This idea does at least have the merit of formalising the present situation in the Labour Party but one has to wonder at the insight of a man whose idea of “a new relationship with three million-plus affiliated trade unionists” consists of getting them “signing up to the political fund of their union, making them a much closer part of a genuine Labour movement.” In other words, giving the Labour Party money. Not sure how the army of labour will take to that.
Passing over Harriet Harman in silence, always best, the other notable rumble has been the unlikely double-act of Jon Cruddas and James Purnell, one having Neal Lawson’s Compass think-tank as his PR machine, the latter working out of a rather weird project in the Demos think-tank (www.openleft.co.uk) which seeks to answer the question: What does it mean to be on the Left today? Both write freely about the ‘left’, without making much effort to define what they mean by this carpetbag word, and appear to be setting themselves up as Labour’s pathfinders for its post-2010 world. One can expect much in the way of a ‘narrative’ involving ‘paths to equality and individual empowerment’ as well as ways to ‘reclaim Labour’s lost constituency’ before the year is out. The problem with both Cruddas and Purnell is that they appear to see the left as an inchoate mass just waiting to be mobilised for Labour if only the right policy buttons can be pressed. They lack any apparent sense of the current structure of the left; political life is frozen for them perpetually in 1997 when, as Blair children, (both have been Blair aides), they saw what seemed to be a united coalition of the left supporting Labour. Both seem to regard the early Blair as their exemplar, promising a new world without being too specific about the details and gathering around them a joyous mass of the left.
Meanwhile, on the lonely extremities of the Labour Party, there seem to be the first stirrings of revolt. John McDonnell, perpetual leadership contender if he could only raise enough MP votes to be nominated, suggests standing as “Labour MPs making it clear at the next election that they stand on a policy platform of real change as ‘change candidates’” (http://l-r-c.org.uk/press/labour-left-threatens-candidates-for-change-slate-if-policies-dont-change). It remains uncertain as to just what this means. If mouthing off about the deficiencies of the leadership, then there’s little new. If he means standing with a published manifesto different to that prepared by the central machine then it would mean deselection and expulsion. This encapsulates the central contradiction of the Labour Representation Committee which McDonnell leads. As the statement goes on: “These would be Labour candidates binding together as a slate, committed within Labour, setting out the policy programme they will be advocating as a group and supporting in Parliament if elected. Only in this way can we demonstrate to the supporters that want to come home to Labour that there is the hope and prospect of change.” In other words, setting up as an electoral faction to persuade supporters (of what exactly?) to “come home to Labour” knowing that such a move would result in instant expulsion from this same party and, presumably, setting up some kind of alternative political group in opposition to it. This is the nettle which the LRC has to grasp at some point.
So one can set out two scenarios for 2010 and the Labour Party. In one, the election results in no clear majority for the Conservatives and the Lord of Darkness marches a small, though perfectly formed, group of MPs into some kind of National Unity government. John McDonnell leads an even smaller group of expelled MPs (though a much bigger proportion of party members) into the wilderness whilst David Miliband or similar organises a party without members but with continuing union finance into the world of virtual internet campaigning based upon a large Facebook group and words of wisdom from Cruddas and Purnell (unless the latter joins the PoD).
In the second, Labour is comprehensively defeated and the LoD slopes off to some well-paid job in an international organisation. Miliband succeeds to leading the much-depleted band of Labour including McDonnell, who decided not to court expulsion just yet but still fails to get the required 12.5% of Labour MPs to nominate him. Cruddas and Purnell both lose their seats and join think-tanks to write books about the future of Labour. In short, nothing much changes.
History favours this scenario but, as Gramsci said, pessimism of the intellect, optimism of the will. In other words, you know things will get worse but you still hope they will get better.
Thursday 9 July 2009
The bottom of the barrel
This really must be the bottom of the barrel, the last scrapings of a government that has lost the will to live. The involvement of the British security services and, for that matter, police-forces in the torture of British Moslems held in overseas prisons must now be accepted as fact. The only questions which really remain unanswered are: how many and, more important, has it stopped? Yet, despite the overwhelming evidence, the only response by Labour ministers to questions about this scandal is to lie.
It is quite clear that every Prime Minister, Home, Foreign and Defence Secretary and various junior ministers, certainly since 2003, have signed off a policy which knowingly colluded in the torture of British subjects. Literally, signed off, for we know that, in order to avoid prosecution in the UK for offences committed overseas, security officers need the protection of the so-called ‘class seven authorisations’ which have to be signed by the home, foreign or defence secretary of state. Not, of course, that we are allowed to know how many such warrants have been signed. When asked to supply this information in parliamentary question, the request was refused as “it would assist those unfriendly to the UK”. Certainly it might assist those unfriendly to the UK government inside the UK on the grounds of its shameful human rights record but it is difficult to see who else. Al Qaeda operatives presumably know that they will be tortured if caught and it is difficult to see that they would be much incentivised in their work by knowing that their British torturers will not be prosecuted in Britain.
We know about this because of diligent journalism by one newspaper (http://www.guardian.co.uk/politics/2009/jul/08/mi5-mi6-acccused-of-torture), a few tireless human rights workers and, most shamefully, because of the release in America of copious documentation about the use of torture. It is all there, on the record. Yet the response of Labour politicians has been to lie over and over again. Blair, Blunkett, Smith, Miliband and Brown have lied and continue to lie. Soon, the new Home Secretary, Alan Johnson ─ the people’s friend ─ will lie about the matter. Margaret Beckett (Foreign Secretary 2007-2008) when chair of the only parliamentary committee which has any oversight of the security services (albeit in secret) refused to allow it to consider the issue as does the present chair, Kim Howells (minister at the Foreign Office, 2007-2008). Court proceedings are held in secret, court rulings are sealed, evidence is suppressed; all to protect the reputation of the government.
It could all have been handled so differently. In 1972, when the use of torture in Northern Ireland was exposed, the government of the day set up an inquiry headed by the Lord Chief Justice which concluded
“We have received both written and oral representations from many legal bodies and individual lawyers from both England and Northern Ireland. There has been no dissent from the view that the procedures are illegal alike by the law of England and the law of Northern Ireland. ... (d) This being so, no Army Directive and no Minister could lawfully or validly have authorized the use of the procedures. Only Parliament can alter the law. The procedures were and are illegal.”
The Prime Minister of the day, Edward Heath, then stated: “[The] Government, having reviewed the whole matter with great care and with reference to any future operations, have decided that the techniques ... will not be used in future as an aid to interrogation... The statement that I have made covers all future circumstances.”
No one seriously believes that this prevented IRA suspects from being treated roughly thereafter and the Irish government pursued Britain through the European Court on Human Rights. But at least the Heath government refrained from gagging orders and outright lies after they were caught red-handed.
What distinguishes this current government is their dogged refusal to face facts and take action even when not to do so will simply result in even more embarrassment. Even when confronted with a new American president willing to put past American practice behind him, at least up to a point, and to release documentation about such practices, they stick by their line.
Why? A bit of ‘new-brooming’ never does an incoming political leader any harm. Of course, admission that the British government had engaged in some dodgy practices would have bruised the moral halo that Blunkett likes to wear and a few other Labour bruisers would have been tarnished. But does anyone care that much about John Reid? The biggest mystery, of course, is just what is it about Tony Blair that makes him untouchable? We know he is a serial liar though some have claimed, in his defence, that he does not lie but rather is a serial fantasist. But whether he deserves criminal prosecution or just sectioning is beside the point. The interesting thing is just why the obvious course of fessing up and dumping it on Tony is always avoided. Too late now, of course. Too many others, no doubt including Brown, have become swallowed by the mire. But one has the impression that Brown is too pleased to see his erstwhile rival, the sainted boy Miliband, banished to seminars on water-boarding too worry about such trivia as his own reputation.
Although it stands by itself for sheer immorality, the government’s behaviour over the torture allegations is of a piece with all its recent actions or rather inaction. It seems to have simply lost the will to live even to take the most obvious measures to salvage its reputation. It must have known that taking a pound of bankers’ flesh would have been received with joy. But it just lets the old lags depart with multi-million pound payoffs leaving slightly newer lags to revive the same old system. Just one prosecution for fraud or corporate malfeasance would have satisfied the mood. But no.
Similarly over parliamentary expenses, a few prominent heads would have sufficed. But no. Even the patently corrupt Hazel Blears is allowed to scuttle back to Salford to marshal her local support whilst a mildly-unwise Ian Gibson is summarily dismissed despite the support of his local party.
Of course it comes as no surprise that really important action in the banking sector or in the political system has been ducked. This is a profoundly conservative government led by a profoundly conservative man. But why have even a few populist gestures been so rigorously abjured? The fact is that we now have a zombie government supported by zombie MPs who are just waiting to be put out of their misery. That the only MP prepared to take a stand on the torture allegations is David Davis, a right-wing Conservative, is really the final epitaph on the Labour left in Parliament.
It is quite clear that every Prime Minister, Home, Foreign and Defence Secretary and various junior ministers, certainly since 2003, have signed off a policy which knowingly colluded in the torture of British subjects. Literally, signed off, for we know that, in order to avoid prosecution in the UK for offences committed overseas, security officers need the protection of the so-called ‘class seven authorisations’ which have to be signed by the home, foreign or defence secretary of state. Not, of course, that we are allowed to know how many such warrants have been signed. When asked to supply this information in parliamentary question, the request was refused as “it would assist those unfriendly to the UK”. Certainly it might assist those unfriendly to the UK government inside the UK on the grounds of its shameful human rights record but it is difficult to see who else. Al Qaeda operatives presumably know that they will be tortured if caught and it is difficult to see that they would be much incentivised in their work by knowing that their British torturers will not be prosecuted in Britain.
We know about this because of diligent journalism by one newspaper (http://www.guardian.co.uk/politics/2009/jul/08/mi5-mi6-acccused-of-torture), a few tireless human rights workers and, most shamefully, because of the release in America of copious documentation about the use of torture. It is all there, on the record. Yet the response of Labour politicians has been to lie over and over again. Blair, Blunkett, Smith, Miliband and Brown have lied and continue to lie. Soon, the new Home Secretary, Alan Johnson ─ the people’s friend ─ will lie about the matter. Margaret Beckett (Foreign Secretary 2007-2008) when chair of the only parliamentary committee which has any oversight of the security services (albeit in secret) refused to allow it to consider the issue as does the present chair, Kim Howells (minister at the Foreign Office, 2007-2008). Court proceedings are held in secret, court rulings are sealed, evidence is suppressed; all to protect the reputation of the government.
It could all have been handled so differently. In 1972, when the use of torture in Northern Ireland was exposed, the government of the day set up an inquiry headed by the Lord Chief Justice which concluded
“We have received both written and oral representations from many legal bodies and individual lawyers from both England and Northern Ireland. There has been no dissent from the view that the procedures are illegal alike by the law of England and the law of Northern Ireland. ... (d) This being so, no Army Directive and no Minister could lawfully or validly have authorized the use of the procedures. Only Parliament can alter the law. The procedures were and are illegal.”
The Prime Minister of the day, Edward Heath, then stated: “[The] Government, having reviewed the whole matter with great care and with reference to any future operations, have decided that the techniques ... will not be used in future as an aid to interrogation... The statement that I have made covers all future circumstances.”
No one seriously believes that this prevented IRA suspects from being treated roughly thereafter and the Irish government pursued Britain through the European Court on Human Rights. But at least the Heath government refrained from gagging orders and outright lies after they were caught red-handed.
What distinguishes this current government is their dogged refusal to face facts and take action even when not to do so will simply result in even more embarrassment. Even when confronted with a new American president willing to put past American practice behind him, at least up to a point, and to release documentation about such practices, they stick by their line.
Why? A bit of ‘new-brooming’ never does an incoming political leader any harm. Of course, admission that the British government had engaged in some dodgy practices would have bruised the moral halo that Blunkett likes to wear and a few other Labour bruisers would have been tarnished. But does anyone care that much about John Reid? The biggest mystery, of course, is just what is it about Tony Blair that makes him untouchable? We know he is a serial liar though some have claimed, in his defence, that he does not lie but rather is a serial fantasist. But whether he deserves criminal prosecution or just sectioning is beside the point. The interesting thing is just why the obvious course of fessing up and dumping it on Tony is always avoided. Too late now, of course. Too many others, no doubt including Brown, have become swallowed by the mire. But one has the impression that Brown is too pleased to see his erstwhile rival, the sainted boy Miliband, banished to seminars on water-boarding too worry about such trivia as his own reputation.
Although it stands by itself for sheer immorality, the government’s behaviour over the torture allegations is of a piece with all its recent actions or rather inaction. It seems to have simply lost the will to live even to take the most obvious measures to salvage its reputation. It must have known that taking a pound of bankers’ flesh would have been received with joy. But it just lets the old lags depart with multi-million pound payoffs leaving slightly newer lags to revive the same old system. Just one prosecution for fraud or corporate malfeasance would have satisfied the mood. But no.
Similarly over parliamentary expenses, a few prominent heads would have sufficed. But no. Even the patently corrupt Hazel Blears is allowed to scuttle back to Salford to marshal her local support whilst a mildly-unwise Ian Gibson is summarily dismissed despite the support of his local party.
Of course it comes as no surprise that really important action in the banking sector or in the political system has been ducked. This is a profoundly conservative government led by a profoundly conservative man. But why have even a few populist gestures been so rigorously abjured? The fact is that we now have a zombie government supported by zombie MPs who are just waiting to be put out of their misery. That the only MP prepared to take a stand on the torture allegations is David Davis, a right-wing Conservative, is really the final epitaph on the Labour left in Parliament.
Thursday 11 June 2009
A Tale of Moloch and Belial
We are now governed by a viceroy ─ a direct appointee of the Queen who rules as monarch over a subject people. His court is filled by lords and ladies ennobled at his command and by various other temporary appointees. It is not a happy place. His food is tasted to prevent poisoning and there are guards at every entrance searching those who seek audience. Banished courtiers plot in their country houses whilst, in the taverns, bolder citizens talk of uprising. The viceroy maintains a parliament which meets occasionally to acclaim his decrees and has recently sent a delegation to request audience with him. Accept our solemn vows of allegiance, sire, they say but please listen to the grievances of your devoted subjects. And, with a smile, he graciously accepts their petitions, promises to consider them most carefully and rewards them with permission to spend the summer relaxing at his country estate. Meanwhile, on the borders, an army assembles raised by a pretender to the throne. It is said that it will invade next year and few of the court would survive the slaughter. Some send him discreet messages of support. Other avail themselves of the plentiful wine in the cellars and plan their escape to happier realms.
Gordon Brown is now presiding over the second crisis of his premiership. The first was the economic recession, the second is a crisis of legitimacy over the fundamental processes of democracy in Britain. Like the economic crisis, the seeds of this legitimacy crisis were planted right at the start of the New Labour regime in 1997. It needs to be remembered that Labour’s landslide victory then was based not upon a massive popular vote but upon a drop in voter turnout from nearly 78% in 1982 to just over 71%. You have to go back to the Depression year of 1935 to find a comparably low turnout. It has dropped every election since.
From the very start, Tony Blair made clear his general contempt for Parliament and developed a style of government which was increasingly distanced from Parliamentary involvement, a process in which Brown was a willing participant. The processes by which this was accomplished included rigid control over the party, in particular the selection of candidates which gradually cut back the number of potential rebels; expansion of the ‘payroll’ vote with more nondescript junior ministers; the introduction of huge portmanteau bills with limited time for scrutiny and the use of panic tactics to rush through bills based upon public anxiety. The turning point was undoubtedly the use of biased evidence and outright lies to force through acceptance of an unpopular war and the subsequent cover-up. Once Blair had survived that scandal, it became clear that Parliament could be sidelined with impunity.
Immediately after his coronation, Brown started further down the same path by his use of appointing peers to take over government jobs. Something which began as a vague PR stunt ─ remember Lord Jones, the ex-CBI boss ─ became a serious tool of governance with appointments like Lady Vadera and Lord Myner and has now reached new heights with an unelected peer becoming effectively the deputy prime-minister. Lord Mandelson now presides over eleven junior minsters, six of them peers. Or is it seven? What actually does Lady Kinnock do? Is Lord Sugar in government or not? Who cares. Government ministers, government advisers, party spin-doctors, all have become mixed up into a general melange in which the House of Commons is but a sideshow. The House of Lords, once derided as an hereditary nonsense has been transformed into a vast pool of executive power.
Taken together with the almost total removal of discretionary powers from local councils, democratic process in Britain has been, if not destroyed, then hugely limited. The exception is Scotland where an independent democratic process has been set up which, although not perfect, does maintain levels of independent scrutiny and control of executive power.
It is this process which has precipitated the huge furore over MPs expenses. Most people can see that many of the individual claims are little more than goes on in many private businesses. If MPs were seen as useful parts of government then the fuss would have been much more muted. Ironically, Brown himself could easily have defused the whole business months ago had he allowed openness and scrutiny just as he could have won a general election a few months after he received the call to Buckingham Palace. In both cases, he failed to take notice of a wider public voice, once to his disadvantage, now to his disgrace. Brown, who understands how to control the Labour Party, has only a vestigial knowledge of a wider world.
The new proposals he has introduced in response to the furore have vague references to reforming the Lords, to give MPs more power and to electoral reform. Don’t hold your breath. The definite idea is to create yet another regulator, this one to supervise MP’s expenses and salaries. Remember Oftoff, set up to regulate entry into universities. Well now we are to have Ofpal to keep MPs up to the mark. In other words, another appointed agency with a redundant banker probably heading it, responsible to the executive. They may deserve it but the result will be another diminishing of MP’s power, this time over their own income. Just where this process will end is unclear but it looks increasingly unlikely that democracy will triumph.
Moloch and Belial? Well, in Paradise Lost, Milton imagines a council of the fallen angels banished from heaven for rebellion against God. Living out their lives in a dreary limbo, they are gathered to discuss their future action. Moloch is the big beast with a loud voice, much given to shouting and biffing. We have already met him. Belial is a much lesser devil given over, according to Milton, to the vices of lewdness and peculation. His argument is, in effect, to do nothing but wait and hope for better times. After all, he says, suppose we did something and it made things worse, if God called down all the fires on our heads. It’s not so bad really, Belial argues, and it could be a lot worse. It is left to you to decide just which bunch of craven Labour MPs most match up.
Gordon Brown is now presiding over the second crisis of his premiership. The first was the economic recession, the second is a crisis of legitimacy over the fundamental processes of democracy in Britain. Like the economic crisis, the seeds of this legitimacy crisis were planted right at the start of the New Labour regime in 1997. It needs to be remembered that Labour’s landslide victory then was based not upon a massive popular vote but upon a drop in voter turnout from nearly 78% in 1982 to just over 71%. You have to go back to the Depression year of 1935 to find a comparably low turnout. It has dropped every election since.
From the very start, Tony Blair made clear his general contempt for Parliament and developed a style of government which was increasingly distanced from Parliamentary involvement, a process in which Brown was a willing participant. The processes by which this was accomplished included rigid control over the party, in particular the selection of candidates which gradually cut back the number of potential rebels; expansion of the ‘payroll’ vote with more nondescript junior ministers; the introduction of huge portmanteau bills with limited time for scrutiny and the use of panic tactics to rush through bills based upon public anxiety. The turning point was undoubtedly the use of biased evidence and outright lies to force through acceptance of an unpopular war and the subsequent cover-up. Once Blair had survived that scandal, it became clear that Parliament could be sidelined with impunity.
Immediately after his coronation, Brown started further down the same path by his use of appointing peers to take over government jobs. Something which began as a vague PR stunt ─ remember Lord Jones, the ex-CBI boss ─ became a serious tool of governance with appointments like Lady Vadera and Lord Myner and has now reached new heights with an unelected peer becoming effectively the deputy prime-minister. Lord Mandelson now presides over eleven junior minsters, six of them peers. Or is it seven? What actually does Lady Kinnock do? Is Lord Sugar in government or not? Who cares. Government ministers, government advisers, party spin-doctors, all have become mixed up into a general melange in which the House of Commons is but a sideshow. The House of Lords, once derided as an hereditary nonsense has been transformed into a vast pool of executive power.
Taken together with the almost total removal of discretionary powers from local councils, democratic process in Britain has been, if not destroyed, then hugely limited. The exception is Scotland where an independent democratic process has been set up which, although not perfect, does maintain levels of independent scrutiny and control of executive power.
It is this process which has precipitated the huge furore over MPs expenses. Most people can see that many of the individual claims are little more than goes on in many private businesses. If MPs were seen as useful parts of government then the fuss would have been much more muted. Ironically, Brown himself could easily have defused the whole business months ago had he allowed openness and scrutiny just as he could have won a general election a few months after he received the call to Buckingham Palace. In both cases, he failed to take notice of a wider public voice, once to his disadvantage, now to his disgrace. Brown, who understands how to control the Labour Party, has only a vestigial knowledge of a wider world.
The new proposals he has introduced in response to the furore have vague references to reforming the Lords, to give MPs more power and to electoral reform. Don’t hold your breath. The definite idea is to create yet another regulator, this one to supervise MP’s expenses and salaries. Remember Oftoff, set up to regulate entry into universities. Well now we are to have Ofpal to keep MPs up to the mark. In other words, another appointed agency with a redundant banker probably heading it, responsible to the executive. They may deserve it but the result will be another diminishing of MP’s power, this time over their own income. Just where this process will end is unclear but it looks increasingly unlikely that democracy will triumph.
Moloch and Belial? Well, in Paradise Lost, Milton imagines a council of the fallen angels banished from heaven for rebellion against God. Living out their lives in a dreary limbo, they are gathered to discuss their future action. Moloch is the big beast with a loud voice, much given to shouting and biffing. We have already met him. Belial is a much lesser devil given over, according to Milton, to the vices of lewdness and peculation. His argument is, in effect, to do nothing but wait and hope for better times. After all, he says, suppose we did something and it made things worse, if God called down all the fires on our heads. It’s not so bad really, Belial argues, and it could be a lot worse. It is left to you to decide just which bunch of craven Labour MPs most match up.
Wednesday 3 June 2009
Salford politics
The television cameras and journalists who crowded around Hazel Blears at the recent council bye-election in north Salford were after a juicy quote about her expenses on various London homes. They got little but smiles and bland words from the ever-smiling Blears and missed the real political story around them.
Irwell Riverside is a typical bit of the Greater Manchester Labour heartland; large council estates, closed factories and mills, few shops and a sense of not quite being anywhere. People here mostly vote Labour and have done for many years, since 1917 to be precise when Salford North elected Ben Tillett, a prominent union organiser in the docks. In 1945, there were three Salford seats and each turned in Labour MPs. Salford North gave Labour 60% of the votes on a turnout of 72%. In 1997, when Ms. Blears got her chance, Salford was down to one seat and gave her 69% of the vote on a turnout of 56%. In 2005, when Salford had been merged with Eccles, Hazel Blears still got 57% of the ballots though on a turnout of only 42%. On May 21 this year, young Matt Bold was elected to Salford Council with just 606 votes ─ a turnout of 17.6%.
The fear running around the count was that the BNP would make big gains here, possibly even win the seat. A bye-election in February in a north Manchester ward had seen them jump to second place and that before the Parliamentary expenses scandals had begun to bite. What happened was less spectacular but still wounding to English democracy; the voters just stayed at home.
North Salford is a place where the council ought to matter. Housing waiting lists are long and growing. The recession is biting hard here in an area where unemployment is high. But the fact is that people have long given up on the local council as a source of support or turned to local councillors for advice on housing or social problems. In the ward in north Manchester where I stand, vainly, for the council they also weigh the Labour votes rather than counting them. Taking leaflets round a tower-block, a couple of residents said they would vote Green just because it was the first time they could remember anyone bothering to distribute election material. I hope they did but it is more likely that they stayed at home like 75% of other local voters.
The electorate are not stupid. Councils in Britain have ceased to have much in the way of a democratic function. They have, apparently, large budgets but almost no say in how they are spent. A detailed survey of council expenditure in Burnley showed that only 8% of its budget was actually discretionary, the rest was dictated by the rules of a central government which in any case supplied most of the funds. The councillors who are elected to govern communities actually do very little apart from rubber-stamping decisions taken by officers based upon central diktats. Even their role in looking after the interests of their electorate has been largely taken over by MPs who, in the words of a retiring MP, Tony Banks, act mainly as second-rate social workers employing their family to reply to the hundreds of letters they receive. We have slipped into a degenerate political system in which the majority of elected representatives, locally and nationally, are useless or perhaps, more accurately, pointless. It is little wonder that many devote such time to concocting their expenses. For me, a low point of all the political interviews which have cluttered the news recently was with a Labour backbencher who doubted that there would be a leadership contest as MPs would soon be off on their two and a half month summer break. Two and a half months with, officially, nothing to do. Words really cannot do it justice.
Hazel Blears is now ready to square things with her constituency executive and make ready for life in opposition. One doubts that she will gracefully stand down in acknowledgement of any mistakes even though she has jumped from the Cabinet. And when the time comes, Salford will re-elect her unless there is a political earthquake. The only question is whether the turnout drops below 40%. They value loyalty and solidarity there, virtues which Ben Tillett would have understood and which once saw Labour supporters through hard times. Not any more. In Salford, Labour wins. And everybody loses.
Irwell Riverside is a typical bit of the Greater Manchester Labour heartland; large council estates, closed factories and mills, few shops and a sense of not quite being anywhere. People here mostly vote Labour and have done for many years, since 1917 to be precise when Salford North elected Ben Tillett, a prominent union organiser in the docks. In 1945, there were three Salford seats and each turned in Labour MPs. Salford North gave Labour 60% of the votes on a turnout of 72%. In 1997, when Ms. Blears got her chance, Salford was down to one seat and gave her 69% of the vote on a turnout of 56%. In 2005, when Salford had been merged with Eccles, Hazel Blears still got 57% of the ballots though on a turnout of only 42%. On May 21 this year, young Matt Bold was elected to Salford Council with just 606 votes ─ a turnout of 17.6%.
The fear running around the count was that the BNP would make big gains here, possibly even win the seat. A bye-election in February in a north Manchester ward had seen them jump to second place and that before the Parliamentary expenses scandals had begun to bite. What happened was less spectacular but still wounding to English democracy; the voters just stayed at home.
North Salford is a place where the council ought to matter. Housing waiting lists are long and growing. The recession is biting hard here in an area where unemployment is high. But the fact is that people have long given up on the local council as a source of support or turned to local councillors for advice on housing or social problems. In the ward in north Manchester where I stand, vainly, for the council they also weigh the Labour votes rather than counting them. Taking leaflets round a tower-block, a couple of residents said they would vote Green just because it was the first time they could remember anyone bothering to distribute election material. I hope they did but it is more likely that they stayed at home like 75% of other local voters.
The electorate are not stupid. Councils in Britain have ceased to have much in the way of a democratic function. They have, apparently, large budgets but almost no say in how they are spent. A detailed survey of council expenditure in Burnley showed that only 8% of its budget was actually discretionary, the rest was dictated by the rules of a central government which in any case supplied most of the funds. The councillors who are elected to govern communities actually do very little apart from rubber-stamping decisions taken by officers based upon central diktats. Even their role in looking after the interests of their electorate has been largely taken over by MPs who, in the words of a retiring MP, Tony Banks, act mainly as second-rate social workers employing their family to reply to the hundreds of letters they receive. We have slipped into a degenerate political system in which the majority of elected representatives, locally and nationally, are useless or perhaps, more accurately, pointless. It is little wonder that many devote such time to concocting their expenses. For me, a low point of all the political interviews which have cluttered the news recently was with a Labour backbencher who doubted that there would be a leadership contest as MPs would soon be off on their two and a half month summer break. Two and a half months with, officially, nothing to do. Words really cannot do it justice.
Hazel Blears is now ready to square things with her constituency executive and make ready for life in opposition. One doubts that she will gracefully stand down in acknowledgement of any mistakes even though she has jumped from the Cabinet. And when the time comes, Salford will re-elect her unless there is a political earthquake. The only question is whether the turnout drops below 40%. They value loyalty and solidarity there, virtues which Ben Tillett would have understood and which once saw Labour supporters through hard times. Not any more. In Salford, Labour wins. And everybody loses.
Wednesday 20 May 2009
Onlookers of a train wreck
Perhaps it is time to avert out eyes from the slow-motion train-crash of the Labour government and the varied cries of the occupants. It’s fascinating, of course, and possibly marks an historic turning point in British political life. But we also need to acknowledge that the British left are, at least at the moment, cast purely as onlookers of the wreck whether laughing or crying. This is almost the perfect storm for our social system. Financial greed has sunk the economy whilst personal greed has blown away support for our political leaders. The Labour Party, the monolith which has held sway over left politics since the 1920s, may be on the verge of meltdown. And yet it is hard to find a single voice which is distinctively of the left which can be heard. At the moment when some new leadership is desperately required — step forward Esther Rantzen.
It is not as though there is any lack of groups which claim to stand for some part of the left. The Labour Representation Committee (aka John McDonnell MP), and the Compass group (aka John Cruddas MP) within the Labour Party and a myriad of groups outside it, all claim some kind of left presence and all virtually ignore each other just as they are largely ignored by the electorate. Meanwhile the country’s favourite left politician is Vince Cable, a classic social democrat effectively marooned within a party which clings to the centre ground like a limpet. The next general election is less than a year away and it promises to be a wild one. A left alliance of some kind putting forward radical policies for both the economy and the political system could be sure of a hearing and could even win seats. Yet even initial steps for the formation of such an alliance are lacking.
One thing which needs to be accepted is that the English left’s basic problem right now is its failure to understand just what it stands for, a fundamental block as to how it is defined. The left as a loose political alliance standing for progressive reform of capitalism has been around for as long as capitalism itself. It was first defined as a seating bloc in the National Assembly set up by the French revolution. Its aims have changed over the years as many of its initial demands such as an enlarged suffrage and rights of free speech have been effectively won and become part of the general political consensus. But always it has been composed of a broad spectrum of opinion. The key turning point for left politics, at least in Europe, came at the end of the nineteenth century when a hegemonic position within this broad left was taken by the socialist left, which promised not just to reform capitalism but to replace it. This dominance was maintained through most of the twentieth century even thought the socialist left itself split into many pieces. As late as the early 1980s, it would have been impossible to be adopted as a Labour candidate without accepting the label ‘socialist’ however nuanced might have been the individual interpretation of the tag. (Gordon would probably have still believed in it; Tony would have produced the famous boyish grin and sworn undying allegiance).
This dominant role gradually disintegrated in the last two decades of that century. In Britain, this happened because of two factors. First, the failure of the socialist left to provide any effective opposition to Thatcher instead collapsing into the sectarian squabbles which marked both the climactic miners’ strike and the local council resistance to rate-capping. In its place a more generalised radical opposition was partially successful centred on specific issues such as nuclear power or gender and race. These were radical left but not socialist campaigns and led to what might be called the NGOing of the left, something to which I referred in my last piece. By this I mean the left as a set of single-issue campaigning and lobbying bodies. The second factor was the collapse of communism which, however much various groups may have distanced themselves from this ‘actually existing’ form of socialism, led to a general failure of confidence in any definition of socialism.
The result of this has been that the organised left, whether inside or outside the Labour Party, still largely assumes that ‘socialism’ in some form retains its hegemony within the wider left but has, in fact, been left trailing behind waving banners with largely incomprehensible slogans. It is not just that a centralised machine in the Labour Party has crushed left-wing dissent, though of course it has. The key point is that this effective obliteration of the Labour left was enabled by its inability to re-define what it actually stood for. There can be little more symbolic evidence for this than the adoption by one strand of the left the title of Labour Representation Committee, a name which harks back over a hundred years to a long-past mythical world when Labour was, in principle at least, socialist.
So what is to be done? A starting point might be setting out a set of principles which could be said to define the broad left. This is an example of what these might be:
that the left encompasses those who believe in some measure:
• that usually social and collective responses to general social and economic issues are to be preferred to individual ones;
• that, in particular, market processes are undesirable in providing public services;
• that these public services include education, health and public security as well as some other areas which might include some natural utility and transport monopolies and some aspects of housing;
• that services such as health and education should be free to all without discrimination;
• that a practical and functioning democracy should exist in all areas of social activity including economic;
• that forms of ownership other than private may be preferred in many sectors of the economy;
• that all citizens are entitled to receive a basic level of financial support from the state if they are without personal resources;
• and that equality is a public good in its own right.
There is plenty of scope for the argument and dispute traditional on the left over these and it is likely that they could be expanded particularly internationally, but they encompass what most would think of as forming the broad left. It also excludes certain key issues, notably climate change, on the grounds that this is not simply a left issue though they need to be taken on by any agent on the left.
Where could the left go if something like this could be adopted as a definition of ‘left’? Perhaps it could then start on a process of forming some kind of coalition around these aims to include existing groups, some sitting MPs and all those prepared to stand in an election on such a platform. It would mean some people finally breaking with the Labour machine and some swallowing of differences over narrow arguments about how to interpret them. It would also require many socialists accepting that their position needs to be coherently argued rather than naively asserted as obvious. All this is difficult. But in the context of a general breakdown of traditional political allegiances it could bring the left back into the business of how Britain can get through this perfect storm.
It is not as though there is any lack of groups which claim to stand for some part of the left. The Labour Representation Committee (aka John McDonnell MP), and the Compass group (aka John Cruddas MP) within the Labour Party and a myriad of groups outside it, all claim some kind of left presence and all virtually ignore each other just as they are largely ignored by the electorate. Meanwhile the country’s favourite left politician is Vince Cable, a classic social democrat effectively marooned within a party which clings to the centre ground like a limpet. The next general election is less than a year away and it promises to be a wild one. A left alliance of some kind putting forward radical policies for both the economy and the political system could be sure of a hearing and could even win seats. Yet even initial steps for the formation of such an alliance are lacking.
One thing which needs to be accepted is that the English left’s basic problem right now is its failure to understand just what it stands for, a fundamental block as to how it is defined. The left as a loose political alliance standing for progressive reform of capitalism has been around for as long as capitalism itself. It was first defined as a seating bloc in the National Assembly set up by the French revolution. Its aims have changed over the years as many of its initial demands such as an enlarged suffrage and rights of free speech have been effectively won and become part of the general political consensus. But always it has been composed of a broad spectrum of opinion. The key turning point for left politics, at least in Europe, came at the end of the nineteenth century when a hegemonic position within this broad left was taken by the socialist left, which promised not just to reform capitalism but to replace it. This dominance was maintained through most of the twentieth century even thought the socialist left itself split into many pieces. As late as the early 1980s, it would have been impossible to be adopted as a Labour candidate without accepting the label ‘socialist’ however nuanced might have been the individual interpretation of the tag. (Gordon would probably have still believed in it; Tony would have produced the famous boyish grin and sworn undying allegiance).
This dominant role gradually disintegrated in the last two decades of that century. In Britain, this happened because of two factors. First, the failure of the socialist left to provide any effective opposition to Thatcher instead collapsing into the sectarian squabbles which marked both the climactic miners’ strike and the local council resistance to rate-capping. In its place a more generalised radical opposition was partially successful centred on specific issues such as nuclear power or gender and race. These were radical left but not socialist campaigns and led to what might be called the NGOing of the left, something to which I referred in my last piece. By this I mean the left as a set of single-issue campaigning and lobbying bodies. The second factor was the collapse of communism which, however much various groups may have distanced themselves from this ‘actually existing’ form of socialism, led to a general failure of confidence in any definition of socialism.
The result of this has been that the organised left, whether inside or outside the Labour Party, still largely assumes that ‘socialism’ in some form retains its hegemony within the wider left but has, in fact, been left trailing behind waving banners with largely incomprehensible slogans. It is not just that a centralised machine in the Labour Party has crushed left-wing dissent, though of course it has. The key point is that this effective obliteration of the Labour left was enabled by its inability to re-define what it actually stood for. There can be little more symbolic evidence for this than the adoption by one strand of the left the title of Labour Representation Committee, a name which harks back over a hundred years to a long-past mythical world when Labour was, in principle at least, socialist.
So what is to be done? A starting point might be setting out a set of principles which could be said to define the broad left. This is an example of what these might be:
that the left encompasses those who believe in some measure:
• that usually social and collective responses to general social and economic issues are to be preferred to individual ones;
• that, in particular, market processes are undesirable in providing public services;
• that these public services include education, health and public security as well as some other areas which might include some natural utility and transport monopolies and some aspects of housing;
• that services such as health and education should be free to all without discrimination;
• that a practical and functioning democracy should exist in all areas of social activity including economic;
• that forms of ownership other than private may be preferred in many sectors of the economy;
• that all citizens are entitled to receive a basic level of financial support from the state if they are without personal resources;
• and that equality is a public good in its own right.
There is plenty of scope for the argument and dispute traditional on the left over these and it is likely that they could be expanded particularly internationally, but they encompass what most would think of as forming the broad left. It also excludes certain key issues, notably climate change, on the grounds that this is not simply a left issue though they need to be taken on by any agent on the left.
Where could the left go if something like this could be adopted as a definition of ‘left’? Perhaps it could then start on a process of forming some kind of coalition around these aims to include existing groups, some sitting MPs and all those prepared to stand in an election on such a platform. It would mean some people finally breaking with the Labour machine and some swallowing of differences over narrow arguments about how to interpret them. It would also require many socialists accepting that their position needs to be coherently argued rather than naively asserted as obvious. All this is difficult. But in the context of a general breakdown of traditional political allegiances it could bring the left back into the business of how Britain can get through this perfect storm.
Tuesday 5 May 2009
I have had a few testy comments about my last piece, in particular my description of the English left having no politics just policies. It is clear that to some people the distinction is not clear. Perhaps I should explain.
A policy is some measure that one would like to see put into practice. Politics is about how one goes about exerting enough power to actually get a particular set of policies in place. The two are not wholly separable. If one wants, for example, to nationalise all the banks or create an independent Scotland then the kind of politics one engages in will be different to that if one wishes to, for example, alter the capital-reserve ratios of banks or give greater freedom to local councils to build houses. There are levels of policy change which imply different levels of political action. But there is a clear distinction: politics is about power, policy is about how power is used. And just as the formation of alternative policies requires a culture in which policy can be debated so any politics requires a culture in which alternatives can be considered, compromises reached and differences resolved ─ or not.
The English left (and specifically the English left) has taken a decade to find itself a culture of policy formation after the intellectual battering which it took under Thatcherism culminating in the sneering and condescension which it suffered in the early years of New Labour when just the curling of Peter Mandelson’s lip or the raising of Tony Blair’s eyebrow was enough to see off any faint effort to resist free market liberalisation. No longer. Mandelson’s reported histrionics in Cabinet, when he banged his head on the table at voiced opposition to privatising the Post Office, are no longer effective. The recession has clearly spelled an end to extreme neo-liberalism, simply on the grounds that it obviously doesn’t work, but there is also some solid spadework being done on what kind of policy alternatives might exist to this discredited paradigm. The Compass seminar just before the G20 summit showed off some of these and the current issue of Soundings magazine provides other examples. (http://www.lwbooks.co.uk/journals/soundings/current.html).
But what the left lacks is any political culture which is concerned with how these policies could be comprehensively implemented. I described in my previous piece how the English left has become almost an extension of progressive charities and think-tanks, bodies which are good at forming policies but whose political purchase is essentially one of lobbying the existing power centres. Such lobbying can be effective. The environmental NGOs such as Greenpeace have shown that strenuous lobbying combined with good PR can get results. But lobbying has its limits, ones shown most clearly in a time when some kind of fundamental shift in the way a society runs may be on the cards. There has been enough talk about the ‘end of capitalism’ to suggest that we may in the midst of such a moment now. In this situation, the limits of lobbying are very apparent for in the end all the left is able to do with its new policies is write a letter to Gordon or, after the apparently inevitable election defeat for Labour, hope that someone better turns up. A good example of the limits of such lobbying is the Compass campaign to stop privatisation of the Royal Mail. In the end its alternative plan, a good policy proposal, culminated in a meeting at No 10 with ministerial aides which ‘failed to convince’ them.
We all know that Britain in a political as well as an economic crisis with the former arguably being more serious than the latter. Already the Labour Party seems to be writing its own suicide note as the wrangling over the Brown succession begins. There are strong rumours that the right of the party is preparing an exit strategy based upon some kind of organised defection to the Lib Dems or, possibly, the Conservatives. However the left, both inside and outside the LP, seems frozen, unable even to think about its political response. The one independent action taken so far is the NO2EU campaign fronted for various far-left fractions by the RMT union-leadership (though without any consultation with its members). Apart from its slightly racist overtones (how could they dream up the slogan ‘It’s a Black and White Issue’ straight from the BNP lexicon), the very name seems like a throwback to the 1970s when opposition to the EU was devised as a substitute for genuinely radical policies. (See Gayle O’Donovan’s diary for more on this).
Apart from this bizarre distraction, there is a vacuum. There remains an almost pathological aversion to discussing the one obvious way forward ─ that the LP should split and that that the left should reform around a new political formation along the lines of those already formed in Germany and Italy. A key demand of this formation and one which could make it instantly popular would be the reform of the British electoral system. This aversion has long historical roots. Any suggestion of a split has been anathema on the left since the 1930s after Ramsay MacDonald’s defection pushed Labour outside government for a decade and more. The entire left, within and without the LP, from then on uniformly believed in the general strategy of winning it for the left though, of course, the precise tactics for achieving this differed acrimoniously between the various groups. There was a moment around 1980 when this strategy appeared to have been successful only to founder on the rocks of an intransigent right-wing prepared to sabotage electoral success to prevent any left victory. The same is likely to be true now unless the left is prepared to take a much tougher and more strategic approach, ditching the Labour machine which now wholly controls the party and preparing to face the task of rebuilding the left around a different organisation. It would be a difficult choice and one which would involve a great deal of hard negotiation. But it would at least be about politics.
A policy is some measure that one would like to see put into practice. Politics is about how one goes about exerting enough power to actually get a particular set of policies in place. The two are not wholly separable. If one wants, for example, to nationalise all the banks or create an independent Scotland then the kind of politics one engages in will be different to that if one wishes to, for example, alter the capital-reserve ratios of banks or give greater freedom to local councils to build houses. There are levels of policy change which imply different levels of political action. But there is a clear distinction: politics is about power, policy is about how power is used. And just as the formation of alternative policies requires a culture in which policy can be debated so any politics requires a culture in which alternatives can be considered, compromises reached and differences resolved ─ or not.
The English left (and specifically the English left) has taken a decade to find itself a culture of policy formation after the intellectual battering which it took under Thatcherism culminating in the sneering and condescension which it suffered in the early years of New Labour when just the curling of Peter Mandelson’s lip or the raising of Tony Blair’s eyebrow was enough to see off any faint effort to resist free market liberalisation. No longer. Mandelson’s reported histrionics in Cabinet, when he banged his head on the table at voiced opposition to privatising the Post Office, are no longer effective. The recession has clearly spelled an end to extreme neo-liberalism, simply on the grounds that it obviously doesn’t work, but there is also some solid spadework being done on what kind of policy alternatives might exist to this discredited paradigm. The Compass seminar just before the G20 summit showed off some of these and the current issue of Soundings magazine provides other examples. (http://www.lwbooks.co.uk/journals/soundings/current.html).
But what the left lacks is any political culture which is concerned with how these policies could be comprehensively implemented. I described in my previous piece how the English left has become almost an extension of progressive charities and think-tanks, bodies which are good at forming policies but whose political purchase is essentially one of lobbying the existing power centres. Such lobbying can be effective. The environmental NGOs such as Greenpeace have shown that strenuous lobbying combined with good PR can get results. But lobbying has its limits, ones shown most clearly in a time when some kind of fundamental shift in the way a society runs may be on the cards. There has been enough talk about the ‘end of capitalism’ to suggest that we may in the midst of such a moment now. In this situation, the limits of lobbying are very apparent for in the end all the left is able to do with its new policies is write a letter to Gordon or, after the apparently inevitable election defeat for Labour, hope that someone better turns up. A good example of the limits of such lobbying is the Compass campaign to stop privatisation of the Royal Mail. In the end its alternative plan, a good policy proposal, culminated in a meeting at No 10 with ministerial aides which ‘failed to convince’ them.
We all know that Britain in a political as well as an economic crisis with the former arguably being more serious than the latter. Already the Labour Party seems to be writing its own suicide note as the wrangling over the Brown succession begins. There are strong rumours that the right of the party is preparing an exit strategy based upon some kind of organised defection to the Lib Dems or, possibly, the Conservatives. However the left, both inside and outside the LP, seems frozen, unable even to think about its political response. The one independent action taken so far is the NO2EU campaign fronted for various far-left fractions by the RMT union-leadership (though without any consultation with its members). Apart from its slightly racist overtones (how could they dream up the slogan ‘It’s a Black and White Issue’ straight from the BNP lexicon), the very name seems like a throwback to the 1970s when opposition to the EU was devised as a substitute for genuinely radical policies. (See Gayle O’Donovan’s diary for more on this).
Apart from this bizarre distraction, there is a vacuum. There remains an almost pathological aversion to discussing the one obvious way forward ─ that the LP should split and that that the left should reform around a new political formation along the lines of those already formed in Germany and Italy. A key demand of this formation and one which could make it instantly popular would be the reform of the British electoral system. This aversion has long historical roots. Any suggestion of a split has been anathema on the left since the 1930s after Ramsay MacDonald’s defection pushed Labour outside government for a decade and more. The entire left, within and without the LP, from then on uniformly believed in the general strategy of winning it for the left though, of course, the precise tactics for achieving this differed acrimoniously between the various groups. There was a moment around 1980 when this strategy appeared to have been successful only to founder on the rocks of an intransigent right-wing prepared to sabotage electoral success to prevent any left victory. The same is likely to be true now unless the left is prepared to take a much tougher and more strategic approach, ditching the Labour machine which now wholly controls the party and preparing to face the task of rebuilding the left around a different organisation. It would be a difficult choice and one which would involve a great deal of hard negotiation. But it would at least be about politics.
Tuesday 14 April 2009
A good word, palimpest
I have always wanted to use the word ‘palimpsest’. Now my chance has come. Technically it means an ancient manuscript cleaned for reuse so that the original writing was removed except for faint traces which can be seen by close examination. But it also acts as a political metaphor, something started by Marx and Engels, no less, when they criticised German revolutionaries for over-writing French socialist thinkers with inscriptions of their own pedantry and abstraction. And so to the English left which was displayed in all its glory in the days before the G20 summit.
As the website (www.putpeoplefirst.org.uk) of the march organisers put it “on 28th March 2009, 35,000 marched through London as part of a global campaign to challenge the G20, ahead of their summit on the global financial crisis” A couple of days later, Compass and the New Economics Foundation held what they termed a “Global Economic Summit: No Turning Back” for a hundred invited luminaries of the left (or more precisely what Compass sees as the ‘centre-left’). A couple of days later there was some generalised marching and camping around the City of London accompanied by various kinds of police control and thuggery ending with homicide.
But that was yesterday and today we have to ask just what were all these people marching and talking about and, perhaps more important, just how they hope to achieve whatever it is they want? The first is harder to answer than it might seem, not because they want so little but because they want so much. Global justice, nationalise the banks, support Palestine, effective action on climate change, stop the war, end world poverty ─ there is a list waiting to be made here that would fill this page. All want, in Compass’ term, to build ‘the good society’ and to build it now. Nothing wrong with any of this. In fact a good deal that is right about it. But the problem with such a massive package is that it needs some kind of organising principle to bring it about, in short it needs a politics and that, let us be clear, is just what all this great carnival lacked.
The problem could be seen in the workshop session I attended at the Compass/nef do on climate change. There was no lack of good ideas or original thought. But when it came down to the critical issue of how to carry the ideas through into practical action there was little suggested between individual behaviour ─ the lifestyle project ─ and government legislation. There was a complete absence of any intermediary agencies; parties, factions, councils, unions, anything that might be used to put these ideas into practical effect. At the final session, intended to be about implementing change, it became clear that this was a common thread; plenty of good ideas but nothing on how to implement them.
The most telling moment of the whole afternoon came right at the end when one young man had the nerve to ask the question which had hovered over all the main speakers without answer. We are beginning the run-up to the next general election; what would the panel suggest we do ─ vote Labour, sit on our hands or look elsewhere. There was one ‘politician’ on the panel, that is someone elected to some democratic assembly, John Cruddas, who inevitably pops up at all Compass talk-fests. In fact, looking over the list of the hundred invited luminaries, he seems to be the only person labeled in any party political manner. He gave an opening speech which forecast likely splits and crisis in the British political system though, perhaps oddly, he illustrated this by suggesting that the Conservatives were likely to split into UKIP and BNP fractions, something which, on the eve of an election victory, did sound a touch like whistling in the wind. Or was he trying to tell us something else? Then, in response to the question, he shook his head and passed, preferring not to answer. If a Labour MP cannot respond to this then we are indeed in trouble.
The fact is that neither the marches nor the seminar had any real political content if by political one means the search for functional ways to change how society works. Good ideas aplenty but, as for their implementation, the plan seemed to be write a long letter to Gordon Brown. Better still, write a pamphlet and send that to Gordon Brown. Looking down the long list of the march organisers and the jobs of those at the seminar it is easy to see why this has come about. Dozens of progressive charities, a number of institutes for this and foundations for that, a few unions; in short the left as a think-tank, a kind of extended intellectual academic seminar hoping that its discussions will be noticed by those who matter and that some participants will be invited over to No. 10. This is not a criticism of the ‘centre-left’ only. Those on the wider shores of the left, as might have been seen at the ‘alternative’ G20 summit which might have been held at the Docklands campus of the University of East London had the university authorities not, unhelpfully, closed the campus for the day, seem equally bereft of any political strategy. Ken Livingstone (Save the GLC), John MacDonnell (ditto, only still not talking to Ken), Tariq Ali (Save, save the LSE) would, no doubt, have all lambasted the bankers no end. But any idea as to political action to shift the government would have been in short supply.
So, the British left as a palimpsest; a blank sheet scraped almost clean but with faint traces of its past still to be seen on close inspection. Here an old Labour stalwart, there an old left activist, over there a left academic or two. A dozen or so remnants of the old Communist and Trotskyists parties still just visible. And on the margins, a host of environmental and social campaigning activists lacking any political leadership and largely disillusioned with the whole political process. It is all there waiting to be written on but so far the ink seems lacking.
As the website (www.putpeoplefirst.org.uk) of the march organisers put it “on 28th March 2009, 35,000 marched through London as part of a global campaign to challenge the G20, ahead of their summit on the global financial crisis” A couple of days later, Compass and the New Economics Foundation held what they termed a “Global Economic Summit: No Turning Back” for a hundred invited luminaries of the left (or more precisely what Compass sees as the ‘centre-left’). A couple of days later there was some generalised marching and camping around the City of London accompanied by various kinds of police control and thuggery ending with homicide.
But that was yesterday and today we have to ask just what were all these people marching and talking about and, perhaps more important, just how they hope to achieve whatever it is they want? The first is harder to answer than it might seem, not because they want so little but because they want so much. Global justice, nationalise the banks, support Palestine, effective action on climate change, stop the war, end world poverty ─ there is a list waiting to be made here that would fill this page. All want, in Compass’ term, to build ‘the good society’ and to build it now. Nothing wrong with any of this. In fact a good deal that is right about it. But the problem with such a massive package is that it needs some kind of organising principle to bring it about, in short it needs a politics and that, let us be clear, is just what all this great carnival lacked.
The problem could be seen in the workshop session I attended at the Compass/nef do on climate change. There was no lack of good ideas or original thought. But when it came down to the critical issue of how to carry the ideas through into practical action there was little suggested between individual behaviour ─ the lifestyle project ─ and government legislation. There was a complete absence of any intermediary agencies; parties, factions, councils, unions, anything that might be used to put these ideas into practical effect. At the final session, intended to be about implementing change, it became clear that this was a common thread; plenty of good ideas but nothing on how to implement them.
The most telling moment of the whole afternoon came right at the end when one young man had the nerve to ask the question which had hovered over all the main speakers without answer. We are beginning the run-up to the next general election; what would the panel suggest we do ─ vote Labour, sit on our hands or look elsewhere. There was one ‘politician’ on the panel, that is someone elected to some democratic assembly, John Cruddas, who inevitably pops up at all Compass talk-fests. In fact, looking over the list of the hundred invited luminaries, he seems to be the only person labeled in any party political manner. He gave an opening speech which forecast likely splits and crisis in the British political system though, perhaps oddly, he illustrated this by suggesting that the Conservatives were likely to split into UKIP and BNP fractions, something which, on the eve of an election victory, did sound a touch like whistling in the wind. Or was he trying to tell us something else? Then, in response to the question, he shook his head and passed, preferring not to answer. If a Labour MP cannot respond to this then we are indeed in trouble.
The fact is that neither the marches nor the seminar had any real political content if by political one means the search for functional ways to change how society works. Good ideas aplenty but, as for their implementation, the plan seemed to be write a long letter to Gordon Brown. Better still, write a pamphlet and send that to Gordon Brown. Looking down the long list of the march organisers and the jobs of those at the seminar it is easy to see why this has come about. Dozens of progressive charities, a number of institutes for this and foundations for that, a few unions; in short the left as a think-tank, a kind of extended intellectual academic seminar hoping that its discussions will be noticed by those who matter and that some participants will be invited over to No. 10. This is not a criticism of the ‘centre-left’ only. Those on the wider shores of the left, as might have been seen at the ‘alternative’ G20 summit which might have been held at the Docklands campus of the University of East London had the university authorities not, unhelpfully, closed the campus for the day, seem equally bereft of any political strategy. Ken Livingstone (Save the GLC), John MacDonnell (ditto, only still not talking to Ken), Tariq Ali (Save, save the LSE) would, no doubt, have all lambasted the bankers no end. But any idea as to political action to shift the government would have been in short supply.
So, the British left as a palimpsest; a blank sheet scraped almost clean but with faint traces of its past still to be seen on close inspection. Here an old Labour stalwart, there an old left activist, over there a left academic or two. A dozen or so remnants of the old Communist and Trotskyists parties still just visible. And on the margins, a host of environmental and social campaigning activists lacking any political leadership and largely disillusioned with the whole political process. It is all there waiting to be written on but so far the ink seems lacking.
Tuesday 24 March 2009
The man must be mad
Increase unemployment benefits! More student grants! Special social security payments! Tax rebates for low incomes! The man must be mad. Doesn’t he know that there are hungry bankers out there who need our money.
Luckily for us, the man is not Gordon Brown but Barack Obama who, unaccountably, does seem to have read the Keynes for Dummies book if not all of The General Theory of Money. The general stimulus package passed by the US legislature has to some degree been ignored here amidst the plethora of vast sums which are being handed out almost daily to ‘rescue’ the financial institutions. It does, however, reward a closer scrutiny.
The total cost of the package is $825 billion which amounts to about 2.8% of the US annual domestic product. The sheer size of this number makes it difficult to understand so let’s put it in UK terms. As the UK economy is, at current exchange rates, about 1/25 the size of the American, it helps to convert all the numbers to a British scale so in what follows everything has been divided by 25 and then converted to pounds. This means that in British terms, Obama proposes to disperse some £23 billion over two years.
A part of this is in the form of tax cuts for business which may not translate into spending but two-thirds of it goes to direct spending of various kinds. For example, a direct tax credit of £3.1 billion and an increase in unemployment benefits of almost £1 billion. Help to states to prevent education cuts comes in at £1.45 billion whilst money for highways and bridges amounts to £0.75 billion. £84 million will go to improving public parks, £37 million on rural water and waste facilities, on and on through dozens of items down to £1.4 million for research into alternative fuel pumps. (All this in UK equivalents remember).
There has been some criticism of this package on the grounds that it has too much ‘pork’, that is projects in the constituencies of influential politicians and there is probably some truth in this. It has also been criticised for being too little with some estimates for the level of stimulus required to return to full employment three times or more the proposed amount. But it is certainly a genuine effort to boost actual employment.
On 17 March, the New York Times reported on the ‘race’ to be first to actually implement a project financed by the stimulus package. (www.nytimes.com/2009/03/17/us/17shovel) In a very tight finish, the winner was deemed to be the California Conservation Corps who had 18 workers doing “trail work” in the San Bernardino National Forest. And, lo, there is a picture of them, stalwart chaps in hard hats with their shovels hitting the dirt. Close behind was the Missouri Department of Transportation which had started the approval process for work on a dilapidated bridge within minutes of Obama actually signing the bill. Presumably the grants to train health workers might engage a wider spectrum of workers but it is a start.
How different to our own neo-Keynesians whose direct stimulus package to date consists of…well, what does it consist of? Nothing? Almost nothing? Something so close to nothing that it resembles an economic neutrino? Certainly the blessed Lord Mandelson does seem to go to a number of lunches which must count for something towards keeping the catering industry going. We know that on 20 March he visited the North East “to meet with local businesses and see how they are taking advantage of the new global low carbon economy” and that he had a breakfast meeting before going to the Nissan factory. We also know that his Department wants have a “vision” for a low-carbon economy and is anxious to hear our views on this. But actual hard cash seems to flow one-way only, that is bankwards.
The question has to be asked: do these boys really want to get the economy out of recession? Is this some kind of Manchurian candidate scenario where the long-time sleepers set up by various Trotskyite sects finally get to work to doom British capitalism? Or are they just so deeply, painfully in hock to their banker advisers that they cannot get their heads round Keynesian economics, Level 1. In the 1930s, my unemployed grandfather was given a shovel and told to get working widening the A11 nears Enfield just like the healthy men of the CCC seem to be doing. It was demeaning work for a craftsman jeweller but it did bring money into the house. Today, there have to be many more constructive ways in which people’s skills can be used. Have the intellectual powers of Brown, Darling and Mandelson degenerated to the point where they cannot even understand this basic point, that to reduce unemployment you need to get people working?
Luckily for us, the man is not Gordon Brown but Barack Obama who, unaccountably, does seem to have read the Keynes for Dummies book if not all of The General Theory of Money. The general stimulus package passed by the US legislature has to some degree been ignored here amidst the plethora of vast sums which are being handed out almost daily to ‘rescue’ the financial institutions. It does, however, reward a closer scrutiny.
The total cost of the package is $825 billion which amounts to about 2.8% of the US annual domestic product. The sheer size of this number makes it difficult to understand so let’s put it in UK terms. As the UK economy is, at current exchange rates, about 1/25 the size of the American, it helps to convert all the numbers to a British scale so in what follows everything has been divided by 25 and then converted to pounds. This means that in British terms, Obama proposes to disperse some £23 billion over two years.
A part of this is in the form of tax cuts for business which may not translate into spending but two-thirds of it goes to direct spending of various kinds. For example, a direct tax credit of £3.1 billion and an increase in unemployment benefits of almost £1 billion. Help to states to prevent education cuts comes in at £1.45 billion whilst money for highways and bridges amounts to £0.75 billion. £84 million will go to improving public parks, £37 million on rural water and waste facilities, on and on through dozens of items down to £1.4 million for research into alternative fuel pumps. (All this in UK equivalents remember).
There has been some criticism of this package on the grounds that it has too much ‘pork’, that is projects in the constituencies of influential politicians and there is probably some truth in this. It has also been criticised for being too little with some estimates for the level of stimulus required to return to full employment three times or more the proposed amount. But it is certainly a genuine effort to boost actual employment.
On 17 March, the New York Times reported on the ‘race’ to be first to actually implement a project financed by the stimulus package. (www.nytimes.com/2009/03/17/us/17shovel) In a very tight finish, the winner was deemed to be the California Conservation Corps who had 18 workers doing “trail work” in the San Bernardino National Forest. And, lo, there is a picture of them, stalwart chaps in hard hats with their shovels hitting the dirt. Close behind was the Missouri Department of Transportation which had started the approval process for work on a dilapidated bridge within minutes of Obama actually signing the bill. Presumably the grants to train health workers might engage a wider spectrum of workers but it is a start.
How different to our own neo-Keynesians whose direct stimulus package to date consists of…well, what does it consist of? Nothing? Almost nothing? Something so close to nothing that it resembles an economic neutrino? Certainly the blessed Lord Mandelson does seem to go to a number of lunches which must count for something towards keeping the catering industry going. We know that on 20 March he visited the North East “to meet with local businesses and see how they are taking advantage of the new global low carbon economy” and that he had a breakfast meeting before going to the Nissan factory. We also know that his Department wants have a “vision” for a low-carbon economy and is anxious to hear our views on this. But actual hard cash seems to flow one-way only, that is bankwards.
The question has to be asked: do these boys really want to get the economy out of recession? Is this some kind of Manchurian candidate scenario where the long-time sleepers set up by various Trotskyite sects finally get to work to doom British capitalism? Or are they just so deeply, painfully in hock to their banker advisers that they cannot get their heads round Keynesian economics, Level 1. In the 1930s, my unemployed grandfather was given a shovel and told to get working widening the A11 nears Enfield just like the healthy men of the CCC seem to be doing. It was demeaning work for a craftsman jeweller but it did bring money into the house. Today, there have to be many more constructive ways in which people’s skills can be used. Have the intellectual powers of Brown, Darling and Mandelson degenerated to the point where they cannot even understand this basic point, that to reduce unemployment you need to get people working?
Monday 9 March 2009
Mandelson's trail of green slime
Paul Dirac, the greatest British physicist of the twentieth-century, had it just right. In 1933 in a speech at the presentation of his Nobel Prize, he stated that in a depression it was important to protect the workers’ wages. He was probably more impressed with Soviet Russia than was Maynard Keynes but, even so, the greatest British economist would have agreed with the essentials of this. Both, after all, were fellows of good Cambridge colleges.
It seems as if Obama also thinks along these lines at least when in front of the cameras. A couple of days ago he popped up in Columbus, Ohio, to publicise the fact that federal funds had been provided to save the jobs of forty Columbus police cadets who, otherwise, would not have been given jobs on their graduation.
However, in Salford things seem to march to a different tune. On Saturday, there was a demonstration against the possible loss of 180 jobs in Salford Council over the next 12 months. A month ago, the same streets were packed as hundreds protested against proposals by Salford University to cut 150 jobs and close courses as the University sought to save £13.5 million over the next three years. This is a local response to a national situation. According to The Times (2 March) some 40,000 council jobs could go this year. Leeds Council, for example, plans to lose some 650 people in 2009.
Similarly, there is a pattern of national job cuts in many English universities not just Salford. A random search shows cuts at Plymouth, Cumbria, Reading, even prestigious Cambridge University and it is certain that these are not isolated examples. Perhaps the most savage are proposed at London Metropolitan where some 500 redundancies are proposed following a statistical error in reporting course completion data which has resulted in the government insisting that £38 million should be returned to the Treasury.
All these job losses are happening not because of the collapse of banks nor because the market for their services is dropping. Councils report, naturally enough, a growing demand for social services following increasing unemployment in their area. They are happening because central government is squeezing public expenditure and demanding jobs cuts throughout the public sector.
It is difficult to over-emphasise the totally dysfunctional way in which this government is behaving. On the one hand, it pumps not just million but billions and more billions into the banks without any obvious result. On the other, it squeezes the public sector for a few millions in alleged cost savings with the result that tens of thousands are added to the dole queues. Even at the level of crude politics, it defies belief that Brown does not see that an appearance at Salford Town Hall announcing that funds are being made available to avoid job cuts would be worth far more votes than any brown-nose speech to the US Congress. If Obama can see the point, why can’t Brown?
The answer clearly lies in the problem Brown and his ministers have in shifting the economic and political vision which has informed their policies for ten years. Perhaps the best example of this is the appointment of Peter Mandelson as Business Minister. Leave aside the essentially undemocratic nature of this appointment. What is striking about it is the history of Mandelson whose direct knowledge of British industry (or Business and Enterprise as his Ministry is now called) dates from 1997 when he had a brief tenure as Minister for Trade and Industry (as it was then termed) during which his main claim to fame was his declared intention to abolish its work. Having resigned from this job (due to monetary problems), he popped up a year later as Secretary of State for Northern Ireland. After resigning from this (again after monetary problems, not criminal you understand just unwise), he was given the job of European Commissioner as the gift of his friend Tony Blair, perhaps to assist with his monetary problems. He then spent several years unsuccessfully attempting to negotiate a world trade deal whose main component was unrestricted free trade for the EU though not into the EU.
Just why Brown appointed Mandelson to oversee British policy with regard to industrial intervention in the recession is unclear. Possibly to gain his undoubted skills in presentation. Certainly it could not have been his beliefs in Keynesian public works given that his entire intellectual mindset previously seems to have been opposition to anything other than the free market doctrines of Friedman and Hayek. And so it has proved. A succession of speeches at conferences has affirmed a new-found belief in Keynesian policies. The words ‘a green new deal’ may even have passed his lips. But action has there been none. His department’s commitment to green industry turns out to mean more nuclear power (though without subsidy and unlikely to start before 2012) and some money for a pilot project in carbon-capture-and-storage from coal stations which may start in a few years.
According to Mandelson, “we are already one of the world's most competitive producers of low carbon technologies and services.” (6 March speaking to a grandly titled ‘Low Carbon Industrial Summit’) OK, let us take windpower, a resource with which Britain is better endowed than any other European country. In 2002, Vestas, the leading manufacturer of wind-turbines opened a manufacturing facility in Scotland at Machrihanish. In August, 2008, this closed because of a lack of orders with a loss of 92 jobs. Now, such turbines have to be imported from Denmark. Support from Mandelson. Nothing. Grand phrases from Mandelson. Uncountable.
Mandelson still lives in a world where British industry has thrived under New Labour policy “I believe that, over the last decade, in our fundamentals, the UK has overwhelmingly made the right choices. In our openness to trade and investment. In our competition regime and flexible product and labour markets. In the research and development policies that have helped innovative firms grow and prosper here.” (4 March, Mansion House Speech on Trade and Investment). “Our manufacturing record over the last decade in the UK is impressive - more than impressive. Our prospects are also better than good. We drove the first industrial revolution. And we will drive the next one.” (5 February, speech to CBI Manufacturing Dinner). He seems blithely indifferent to the fact that in the decade after 1997, Britain lost more manufacturing jobs than in either of the Thatcher recessions.
The fact is that it seems entirely outside of the intellectual universe of Mandelson and Brown to provide money for public works or for support any kind of British enterprise. They still cling on to the discredited PFI concept to finance public projects, stepping in to bail-out some collapsed schemes but still refusing to consider any form of direct finance. No doubt some loans to the most prominent of companies will eventually be squeezed out but, overall, the message is clear. If your are a banker, step up; anyone else, get back. In the case of Salford council employees, it will be back to the employment office.
The squeeze on public expenditure is already with us, quietly underway whilst Labour ministers carry on making grand speeches at grand conferences. And quietly the jobs are being lost. The great economist and the great physicist will be revolving in their graves. Obama will, no doubt, be grateful that he did not commit the US government to greater expenditure than the $100 for a set of DVDs. The money saved can go to another city government for some more jobs. And Lord Mandelson will carry on dragging his trail of green slime.
It seems as if Obama also thinks along these lines at least when in front of the cameras. A couple of days ago he popped up in Columbus, Ohio, to publicise the fact that federal funds had been provided to save the jobs of forty Columbus police cadets who, otherwise, would not have been given jobs on their graduation.
However, in Salford things seem to march to a different tune. On Saturday, there was a demonstration against the possible loss of 180 jobs in Salford Council over the next 12 months. A month ago, the same streets were packed as hundreds protested against proposals by Salford University to cut 150 jobs and close courses as the University sought to save £13.5 million over the next three years. This is a local response to a national situation. According to The Times (2 March) some 40,000 council jobs could go this year. Leeds Council, for example, plans to lose some 650 people in 2009.
Similarly, there is a pattern of national job cuts in many English universities not just Salford. A random search shows cuts at Plymouth, Cumbria, Reading, even prestigious Cambridge University and it is certain that these are not isolated examples. Perhaps the most savage are proposed at London Metropolitan where some 500 redundancies are proposed following a statistical error in reporting course completion data which has resulted in the government insisting that £38 million should be returned to the Treasury.
All these job losses are happening not because of the collapse of banks nor because the market for their services is dropping. Councils report, naturally enough, a growing demand for social services following increasing unemployment in their area. They are happening because central government is squeezing public expenditure and demanding jobs cuts throughout the public sector.
It is difficult to over-emphasise the totally dysfunctional way in which this government is behaving. On the one hand, it pumps not just million but billions and more billions into the banks without any obvious result. On the other, it squeezes the public sector for a few millions in alleged cost savings with the result that tens of thousands are added to the dole queues. Even at the level of crude politics, it defies belief that Brown does not see that an appearance at Salford Town Hall announcing that funds are being made available to avoid job cuts would be worth far more votes than any brown-nose speech to the US Congress. If Obama can see the point, why can’t Brown?
The answer clearly lies in the problem Brown and his ministers have in shifting the economic and political vision which has informed their policies for ten years. Perhaps the best example of this is the appointment of Peter Mandelson as Business Minister. Leave aside the essentially undemocratic nature of this appointment. What is striking about it is the history of Mandelson whose direct knowledge of British industry (or Business and Enterprise as his Ministry is now called) dates from 1997 when he had a brief tenure as Minister for Trade and Industry (as it was then termed) during which his main claim to fame was his declared intention to abolish its work. Having resigned from this job (due to monetary problems), he popped up a year later as Secretary of State for Northern Ireland. After resigning from this (again after monetary problems, not criminal you understand just unwise), he was given the job of European Commissioner as the gift of his friend Tony Blair, perhaps to assist with his monetary problems. He then spent several years unsuccessfully attempting to negotiate a world trade deal whose main component was unrestricted free trade for the EU though not into the EU.
Just why Brown appointed Mandelson to oversee British policy with regard to industrial intervention in the recession is unclear. Possibly to gain his undoubted skills in presentation. Certainly it could not have been his beliefs in Keynesian public works given that his entire intellectual mindset previously seems to have been opposition to anything other than the free market doctrines of Friedman and Hayek. And so it has proved. A succession of speeches at conferences has affirmed a new-found belief in Keynesian policies. The words ‘a green new deal’ may even have passed his lips. But action has there been none. His department’s commitment to green industry turns out to mean more nuclear power (though without subsidy and unlikely to start before 2012) and some money for a pilot project in carbon-capture-and-storage from coal stations which may start in a few years.
According to Mandelson, “we are already one of the world's most competitive producers of low carbon technologies and services.” (6 March speaking to a grandly titled ‘Low Carbon Industrial Summit’) OK, let us take windpower, a resource with which Britain is better endowed than any other European country. In 2002, Vestas, the leading manufacturer of wind-turbines opened a manufacturing facility in Scotland at Machrihanish. In August, 2008, this closed because of a lack of orders with a loss of 92 jobs. Now, such turbines have to be imported from Denmark. Support from Mandelson. Nothing. Grand phrases from Mandelson. Uncountable.
Mandelson still lives in a world where British industry has thrived under New Labour policy “I believe that, over the last decade, in our fundamentals, the UK has overwhelmingly made the right choices. In our openness to trade and investment. In our competition regime and flexible product and labour markets. In the research and development policies that have helped innovative firms grow and prosper here.” (4 March, Mansion House Speech on Trade and Investment). “Our manufacturing record over the last decade in the UK is impressive - more than impressive. Our prospects are also better than good. We drove the first industrial revolution. And we will drive the next one.” (5 February, speech to CBI Manufacturing Dinner). He seems blithely indifferent to the fact that in the decade after 1997, Britain lost more manufacturing jobs than in either of the Thatcher recessions.
The fact is that it seems entirely outside of the intellectual universe of Mandelson and Brown to provide money for public works or for support any kind of British enterprise. They still cling on to the discredited PFI concept to finance public projects, stepping in to bail-out some collapsed schemes but still refusing to consider any form of direct finance. No doubt some loans to the most prominent of companies will eventually be squeezed out but, overall, the message is clear. If your are a banker, step up; anyone else, get back. In the case of Salford council employees, it will be back to the employment office.
The squeeze on public expenditure is already with us, quietly underway whilst Labour ministers carry on making grand speeches at grand conferences. And quietly the jobs are being lost. The great economist and the great physicist will be revolving in their graves. Obama will, no doubt, be grateful that he did not commit the US government to greater expenditure than the $100 for a set of DVDs. The money saved can go to another city government for some more jobs. And Lord Mandelson will carry on dragging his trail of green slime.
Friday 27 February 2009
After the next election
The general election due in 2010 or even this year may well be the most important for the British left as any held over the past sixty years. We can safely assume that the Labour Party will be led into it by Gordon, a man too schooled in Scottish Labour politics to let himself be sidelined by some young pretender. The fate of David Miliband, trapped into seminars on the techniques of waterboarding so that he can talk with Karzai and Netanyahu on equal terms, will remind any potential challenger of just how an old pol deals with upstarts. We may also assume that its outcome will not be a ringing endorsement of Brown’s leadership. It is what follows from the election that may prove momentous.
There are some on the left who are pinning their hopes on a hung parliament in which the price of Liberal Democrat support will be some kind of proportional representation. Possibly. But placing one’s trust in such a fickle agent is misplaced. It is only too likely that, if Nick Clegg and his cohorts get a whiff of power and a couple of junior ministries, their alleged adherence to the principles of PR will fade like snow in summer sunshine. In any event, what we are likely to see is not any transitory alliance leading a quick return to the polls. This was the politics of the 1960s and 70s when minority governments and small majorities were the rule and when there were two dominant parties with clear ideological differences with the other. (In 1970, there were just 12 M.P.s outside the big two leaving aside Northern Ireland which has never conformed to the main British pattern). The situation now is quite different for four reasons.
The first is that the two-party system has slowly loosened if not collapsed. In 2005, there were 74 British M.P.s outside it with the Lib Dems just at the threshold of becoming the party which disrupts the two-party headlock. The second is that the fabric of the British state has also begun to fray with a slow-motion secession by Scotland and Northern Ireland and a loosening of ties with Wales. Just how far this process will go is hard to predict but it does mean that the single line of cleavage which has been the basis of British politics for many years has been augmented by a national as well as, for want of a better description, the old class split. The third reason is that the two main parties are now virtually indistinguishable in their policies and underlying ideology even though they continue to fight like snakes in a sack over largely invented differences. Fourth — and this is where it becomes complicated — we are approaching the depths of a painful and protracted recession.
Economic recession can often produce political consequences which seem divergent to its causes. In the early 1980s, Margaret Thatcher almost gloried in creating the economic policies which produced mass unemployment and the destruction of much British industry. It was, she asserted, the necessary pain to assuage years of compromise with organised labour. And, assisted by splits in the Labour opposition, she managed to achieve continuing electoral success that, whilst never wholly convincing in terms of a popular vote, gave her safe parliamentary majorities. On the other hand, in 1931, the hapless Labour party was almost eliminated from Parliament when the country turned towards a government of ‘national unity’ — effectively the Conservative Party plus a small splinter of the Labour party but one led by the sitting Prime Minister, Ramsay MacDonald.
The next election may well prove to be a bit ‘wild’, that is it may throw up a number of unusual victories. The Green Party might snatch a seat in the mildly eccentric constituency that is Brighton. Ominously, the BNP might come close to victory, if not actually over the top, in some places. One or two Labour independents could hold on whilst in Scotland and Wales, the nationalists could creep closer to dominance. Of course, the main story will be the size of the Conservative majority and whether the Lib Dems manage to at least hold their own. However, this underlying ‘wildness’, a symptom of a widespread disillusion with a sclerotic political symptom, could produce other results than a few maverick MPs. The tempting prospect for the Conservatives might well be the opportunity to create a new ‘national crisis’ government, one based firmly around the Conservative party but with enough of a leavening of Labour parliamentarians, preferably ex-ministers, to give the appearance of a national coalition.
One factor in this is the existence of a ready-made department of state whose team of assorted lords and ladies will continue to sit in Parliament for the rest of their lives (or at least until democratic reform) regardless of general election results. (It is a sign of just how much the House of Lords runs the absurdly named Department for Business, Enterprise and Regulatory Reform that its senior elected minister, Pat McFadden, is named as Minister for Employment Relations and Postal Affairs, that is keeping the unions under control and privatising the Post Office. Heaven forefend, that a real job such as Minister for Economic Competitiveness (Lady Vadera) or Minister for Trade and Investment (Lord Davies) should be given to a commoner with no banking experience). The overlord of this bunch, Lord Mandelson, is unlikely to want to give up his long-lasting dance with the rich and famous and it would be surprising if a few discrete feelers were not already going round the streets close to his Notting Hill villa. If one adds to this some of those Labour ministers who already seem indistinguishable from Conservatives then one can see the outlines of a dream ticket ─ a cross-party coalition based upon English MPs which could claim to be responding to a national economic crisis and which could rule without reliance upon Celtic votes.
It is also likely that a striking sign of the general disillusion with the political process will come from falling turnout. Already in the low 40 per cents in the Labour strongholds of North and Central Manchester where I live, it would be surprising if battered Labour voters were to do other than turn away entirely from the electoral process.
However, in this mix of disillusion and wildness, one factor is missing ─ any kind of effective leftwing challenge to the present hegemony of essentially neoliberal politics. In many ways, this is the most obvious political difference between now and the previous periods when the industrial economies were battered by deep recessions, the early 1980s and during the depression of the 1930s. Of course, in the latter time, both communism and fascism were real and ominous threats to the capitalist system whilst in the 1980s, the apparent challenge of socialism was essentially a house of cards. But the challenge, nevertheless, was present in the political process. In spending some hours recently in tracking through the many websites maintained by various components of the British (or at least English) left, the absence of any such voice became drearily apparent.
Essentially, one can split the politics of the left into three parts. The first comprises those in the Labour Party who still see themselves as the ‘left’ of that organisation grouped into the Labour Representation Committee and the Compass group (which may be a pressure group, a think-tank or a political fraction depending upon sources). Both look to an individual MP (McDonnell or Cruddas) to bring light to the Labour party whilst omitting any significant discussion of any possible political process whereby this might come about. The large number, seemingly a dozen or more, of groups descended from the Communist and Trotskyist parties of the 1970s, rely heavily upon that old favourite, the rising consciousness of the working class, whilst spending much of their energies on denouncing the particular characterisation of that elusive phenomenon by their rivals. Thirdly, the Green Party (of which I am a member), which is basically the thinking-person’s social democracy, relies upon a slow-motion electoralism picking up council seats in the hope that one day this will translate into higher things.
Am I being too critical? I really don’t think so. After all, in a parallel diary, John Nicholson, someone very conversant with and committed to left politics, has described its recent history as a modern-day Life of Brian. The one common feature of all these perspectives is a lack of any desire to engage with other fractions of the left to discuss just how they could work together in some way to take any kind of role in the national political drama currently being unfolded. This is despite a very large measure of agreement on the policies, big and small, needed in national government. Nationalise the banks? Save the Post Office from privatisation? Support the Palestinians? Raise basic benefits? Get rid of nuclear weapons? Yes, yes and yes again. But effective dialogue let alone cooperation?
Such a situation is even more dispiriting given the fact that in other European countries, the most notable being Germany, Italy and France, the left has come through a couple of decades of battering and has started to try and come together in some kind of united coalition. The fruits of these endeavours have, so far, been small but the efforts have been made and could come to something.
One small and flickering light in this gloom is the Convention of the Left held in Manchester in September, parallel to the Labour Party conference, and followed up in January by a one-day gathering. This attempts to bring together all parts of the self-defined left including both those organised into political groupings and activists belonging to no group. It is unclear where the Convention is going and it is not without its sectarian squabbles. Even so, to bring together 200 people from around Manchester not to hear speeches delivered from any platform by left ‘notables’, indeed lacking any notable speakers at all, but just to discuss how the left can advance is an important achievement.
Overall, however, a realistic pessimism must reign with regard to the possibilities of any significant left intervention in the next election. Perhaps the best that can be hoped for is that there will be enough initiatives along the lines of the Convention to provide the base to allow for some coordinated response to what happens after it.
There are some on the left who are pinning their hopes on a hung parliament in which the price of Liberal Democrat support will be some kind of proportional representation. Possibly. But placing one’s trust in such a fickle agent is misplaced. It is only too likely that, if Nick Clegg and his cohorts get a whiff of power and a couple of junior ministries, their alleged adherence to the principles of PR will fade like snow in summer sunshine. In any event, what we are likely to see is not any transitory alliance leading a quick return to the polls. This was the politics of the 1960s and 70s when minority governments and small majorities were the rule and when there were two dominant parties with clear ideological differences with the other. (In 1970, there were just 12 M.P.s outside the big two leaving aside Northern Ireland which has never conformed to the main British pattern). The situation now is quite different for four reasons.
The first is that the two-party system has slowly loosened if not collapsed. In 2005, there were 74 British M.P.s outside it with the Lib Dems just at the threshold of becoming the party which disrupts the two-party headlock. The second is that the fabric of the British state has also begun to fray with a slow-motion secession by Scotland and Northern Ireland and a loosening of ties with Wales. Just how far this process will go is hard to predict but it does mean that the single line of cleavage which has been the basis of British politics for many years has been augmented by a national as well as, for want of a better description, the old class split. The third reason is that the two main parties are now virtually indistinguishable in their policies and underlying ideology even though they continue to fight like snakes in a sack over largely invented differences. Fourth — and this is where it becomes complicated — we are approaching the depths of a painful and protracted recession.
Economic recession can often produce political consequences which seem divergent to its causes. In the early 1980s, Margaret Thatcher almost gloried in creating the economic policies which produced mass unemployment and the destruction of much British industry. It was, she asserted, the necessary pain to assuage years of compromise with organised labour. And, assisted by splits in the Labour opposition, she managed to achieve continuing electoral success that, whilst never wholly convincing in terms of a popular vote, gave her safe parliamentary majorities. On the other hand, in 1931, the hapless Labour party was almost eliminated from Parliament when the country turned towards a government of ‘national unity’ — effectively the Conservative Party plus a small splinter of the Labour party but one led by the sitting Prime Minister, Ramsay MacDonald.
The next election may well prove to be a bit ‘wild’, that is it may throw up a number of unusual victories. The Green Party might snatch a seat in the mildly eccentric constituency that is Brighton. Ominously, the BNP might come close to victory, if not actually over the top, in some places. One or two Labour independents could hold on whilst in Scotland and Wales, the nationalists could creep closer to dominance. Of course, the main story will be the size of the Conservative majority and whether the Lib Dems manage to at least hold their own. However, this underlying ‘wildness’, a symptom of a widespread disillusion with a sclerotic political symptom, could produce other results than a few maverick MPs. The tempting prospect for the Conservatives might well be the opportunity to create a new ‘national crisis’ government, one based firmly around the Conservative party but with enough of a leavening of Labour parliamentarians, preferably ex-ministers, to give the appearance of a national coalition.
One factor in this is the existence of a ready-made department of state whose team of assorted lords and ladies will continue to sit in Parliament for the rest of their lives (or at least until democratic reform) regardless of general election results. (It is a sign of just how much the House of Lords runs the absurdly named Department for Business, Enterprise and Regulatory Reform that its senior elected minister, Pat McFadden, is named as Minister for Employment Relations and Postal Affairs, that is keeping the unions under control and privatising the Post Office. Heaven forefend, that a real job such as Minister for Economic Competitiveness (Lady Vadera) or Minister for Trade and Investment (Lord Davies) should be given to a commoner with no banking experience). The overlord of this bunch, Lord Mandelson, is unlikely to want to give up his long-lasting dance with the rich and famous and it would be surprising if a few discrete feelers were not already going round the streets close to his Notting Hill villa. If one adds to this some of those Labour ministers who already seem indistinguishable from Conservatives then one can see the outlines of a dream ticket ─ a cross-party coalition based upon English MPs which could claim to be responding to a national economic crisis and which could rule without reliance upon Celtic votes.
It is also likely that a striking sign of the general disillusion with the political process will come from falling turnout. Already in the low 40 per cents in the Labour strongholds of North and Central Manchester where I live, it would be surprising if battered Labour voters were to do other than turn away entirely from the electoral process.
However, in this mix of disillusion and wildness, one factor is missing ─ any kind of effective leftwing challenge to the present hegemony of essentially neoliberal politics. In many ways, this is the most obvious political difference between now and the previous periods when the industrial economies were battered by deep recessions, the early 1980s and during the depression of the 1930s. Of course, in the latter time, both communism and fascism were real and ominous threats to the capitalist system whilst in the 1980s, the apparent challenge of socialism was essentially a house of cards. But the challenge, nevertheless, was present in the political process. In spending some hours recently in tracking through the many websites maintained by various components of the British (or at least English) left, the absence of any such voice became drearily apparent.
Essentially, one can split the politics of the left into three parts. The first comprises those in the Labour Party who still see themselves as the ‘left’ of that organisation grouped into the Labour Representation Committee and the Compass group (which may be a pressure group, a think-tank or a political fraction depending upon sources). Both look to an individual MP (McDonnell or Cruddas) to bring light to the Labour party whilst omitting any significant discussion of any possible political process whereby this might come about. The large number, seemingly a dozen or more, of groups descended from the Communist and Trotskyist parties of the 1970s, rely heavily upon that old favourite, the rising consciousness of the working class, whilst spending much of their energies on denouncing the particular characterisation of that elusive phenomenon by their rivals. Thirdly, the Green Party (of which I am a member), which is basically the thinking-person’s social democracy, relies upon a slow-motion electoralism picking up council seats in the hope that one day this will translate into higher things.
Am I being too critical? I really don’t think so. After all, in a parallel diary, John Nicholson, someone very conversant with and committed to left politics, has described its recent history as a modern-day Life of Brian. The one common feature of all these perspectives is a lack of any desire to engage with other fractions of the left to discuss just how they could work together in some way to take any kind of role in the national political drama currently being unfolded. This is despite a very large measure of agreement on the policies, big and small, needed in national government. Nationalise the banks? Save the Post Office from privatisation? Support the Palestinians? Raise basic benefits? Get rid of nuclear weapons? Yes, yes and yes again. But effective dialogue let alone cooperation?
Such a situation is even more dispiriting given the fact that in other European countries, the most notable being Germany, Italy and France, the left has come through a couple of decades of battering and has started to try and come together in some kind of united coalition. The fruits of these endeavours have, so far, been small but the efforts have been made and could come to something.
One small and flickering light in this gloom is the Convention of the Left held in Manchester in September, parallel to the Labour Party conference, and followed up in January by a one-day gathering. This attempts to bring together all parts of the self-defined left including both those organised into political groupings and activists belonging to no group. It is unclear where the Convention is going and it is not without its sectarian squabbles. Even so, to bring together 200 people from around Manchester not to hear speeches delivered from any platform by left ‘notables’, indeed lacking any notable speakers at all, but just to discuss how the left can advance is an important achievement.
Overall, however, a realistic pessimism must reign with regard to the possibilities of any significant left intervention in the next election. Perhaps the best that can be hoped for is that there will be enough initiatives along the lines of the Convention to provide the base to allow for some coordinated response to what happens after it.
Friday 30 January 2009
Gordon and the bank manager
Gordon Brown's upbringing in a Scottish manse is often referred to as defining his character. If this is so then the figure of the local town's bank manager must have been a big influence, perhaps a dark-suited man keeping a careful eye on the finances of local business and indulging in just one glass of sherry after work. A man one could trust and whose advice would be respected. Little else can explain his inexplicable, almost obsessive desire to look after British banks in their hour of need.
Although very complicated in its detail, the credit crunch is at its heart quite simple. Banks create money. They originally did this by issuing bank notes. Gordon would have been familiar in his youth with notes from such as the British Linen Bank and the Union Bank of Scotland, now part of the Royal Bank of Scotland, as Scottish banks, unlike English, still retain the right, closely controlled, to print money. Now banks mostly create money by lending more than they have cash on deposit, again a process fairly closely controlled. This is what Gordon's local bank manager did and, to an extent, still does.
All money is a debt and vice versa. Look closely at your English £5 note and it says in small print "I promise to pay the bearer on demand the sum of five pounds" signed by the Chief Cashier of the Bank of England. Starting with John Kendrick in 1694 down to the current holder, Andrew Bailey, all have signed banknotes promising to pay out if you claim your debt. Of course, today if you found your way in the Bank of England and demanded repayment they would presumably give you another £5 note or possibly five £1 coins. The debt that banks have to their depositors is the base which they use to create more money.
The key to the current crisis began in the 1990s when banks began to borrow from other banks, notably from foreign financial institutions, and then used these loans as the base from which to create more money in the form of loans to companies, as mortgages or to other financial institutions who then proceeded to create more money. It was this process that was almost entirely unregulated.
The money so created was quite specialised being mostly available for the purchase of various kinds of asset notably houses but also such specialised assets as Premier football clubs. So much money chasing these assets led to price-bubbles. These bubbles were finally pricked when one type of loan, sub-prime mortgages in the USA, started to fail though in truth it could have started in many other places. Once begun, the entire process of money creation went into reverse as loans were called in and could not be renewed. The credit-crunch is essentially a money shortage as stark as if all the bank-notes in circulation were piled up and burnt.
The British government response to this has been to provide some of the British banks with huge amounts of money essentially so they could restart the cycle of money creation. So far, £185 billion has been loaned to Lloyds, RBS and HBOS. Barclays and HSBC have also had money pumped in, the former from Abu Dhabi, the latter probably from China. The problem is that far from creating more loans, the money has largely been used to pay off the banks' own debts to other institutions as they fall due and cannot be renewed. The cost of paying back these loans, mostly in euros or dollars, has steadily risen as sterling has fallen.
The result is that, although the loans may have saved the banks from defaulting on their repayments, nothing has been done to stimulate domestic demand, the Keynesian recipe for combating recession. What is required is direct intervention, what is loosely called 'public works'. Yet despite vague promises, very little has actually happened. Indeed far from releasing funds for direct intervention, there has been a continuing squeeze on much public expenditure. Local councils, for example, are actually making staff redundant because of cuts in central funding. Perhaps most ludicrous of all, student grants are being cut by £200 million because demand has exceeded budget limits. It is difficult to imagine a better form of public expenditure in a recession than grants to encourage young people to spend some years training rather than go on the dole. But that is what is happening.
It does seem as if Gordon Brown's childhood vision of the bank manager has totally taken over government policy. Surrounded by appointed ministers and advisers from banking backgrounds, he can do nothing but give them more money whenever they ask for it. It is a sound recipe for disaster.
Although very complicated in its detail, the credit crunch is at its heart quite simple. Banks create money. They originally did this by issuing bank notes. Gordon would have been familiar in his youth with notes from such as the British Linen Bank and the Union Bank of Scotland, now part of the Royal Bank of Scotland, as Scottish banks, unlike English, still retain the right, closely controlled, to print money. Now banks mostly create money by lending more than they have cash on deposit, again a process fairly closely controlled. This is what Gordon's local bank manager did and, to an extent, still does.
All money is a debt and vice versa. Look closely at your English £5 note and it says in small print "I promise to pay the bearer on demand the sum of five pounds" signed by the Chief Cashier of the Bank of England. Starting with John Kendrick in 1694 down to the current holder, Andrew Bailey, all have signed banknotes promising to pay out if you claim your debt. Of course, today if you found your way in the Bank of England and demanded repayment they would presumably give you another £5 note or possibly five £1 coins. The debt that banks have to their depositors is the base which they use to create more money.
The key to the current crisis began in the 1990s when banks began to borrow from other banks, notably from foreign financial institutions, and then used these loans as the base from which to create more money in the form of loans to companies, as mortgages or to other financial institutions who then proceeded to create more money. It was this process that was almost entirely unregulated.
The money so created was quite specialised being mostly available for the purchase of various kinds of asset notably houses but also such specialised assets as Premier football clubs. So much money chasing these assets led to price-bubbles. These bubbles were finally pricked when one type of loan, sub-prime mortgages in the USA, started to fail though in truth it could have started in many other places. Once begun, the entire process of money creation went into reverse as loans were called in and could not be renewed. The credit-crunch is essentially a money shortage as stark as if all the bank-notes in circulation were piled up and burnt.
The British government response to this has been to provide some of the British banks with huge amounts of money essentially so they could restart the cycle of money creation. So far, £185 billion has been loaned to Lloyds, RBS and HBOS. Barclays and HSBC have also had money pumped in, the former from Abu Dhabi, the latter probably from China. The problem is that far from creating more loans, the money has largely been used to pay off the banks' own debts to other institutions as they fall due and cannot be renewed. The cost of paying back these loans, mostly in euros or dollars, has steadily risen as sterling has fallen.
The result is that, although the loans may have saved the banks from defaulting on their repayments, nothing has been done to stimulate domestic demand, the Keynesian recipe for combating recession. What is required is direct intervention, what is loosely called 'public works'. Yet despite vague promises, very little has actually happened. Indeed far from releasing funds for direct intervention, there has been a continuing squeeze on much public expenditure. Local councils, for example, are actually making staff redundant because of cuts in central funding. Perhaps most ludicrous of all, student grants are being cut by £200 million because demand has exceeded budget limits. It is difficult to imagine a better form of public expenditure in a recession than grants to encourage young people to spend some years training rather than go on the dole. But that is what is happening.
It does seem as if Gordon Brown's childhood vision of the bank manager has totally taken over government policy. Surrounded by appointed ministers and advisers from banking backgrounds, he can do nothing but give them more money whenever they ask for it. It is a sound recipe for disaster.
Monday 26 January 2009
Origins of the crisis
There are many possible ways to approach the present crisis. The most superficial, and the one favoured by Gordon Brown, is to suggest that it all stems from some problems with the sub-prime mortgages in the USA which have, inexplicably, caused a global crisis. This category of debt, essentially unknown a few years ago, enables blame to be shifted on to various categories of trailer-trash in Florida and desperate house-wives in Ohio colluding with shady American mortgage salesmen; essentially the cast of an updated Arthur Miller play. An apparently deeper analysis lays great stress upon heightened greed in the entire international banking industry inventing more and more complex financial instruments which would conceal their increasingly risky nature behind a smokescreen of incomprehensible mathematics in order to pay themselves ever-larger bonuses.
As the basis for the screenplays which are undoubtedly being written at this moment, both explanations offer endless room for elaboration and they both offer partial truths.
There clearly has been incompetent, possibly criminal, behaviour by financial institutions, the extent of which will probably become clearer as the huge amount of Jarndyce vs. Jarndyce litigation, which is inevitable in the US courts, gradually unwinds. However in order to appreciate the fundamental reason for the current recession one has to dig deeper. In particular, it is necessary to appreciate that the recession derives from the working out of an underlying process in the kind of capitalism which has dominated the world economy for nearly thirty years.
It is usual to compare the present recession with that which followed the 1929 stock market crash in the USA. Certainly the comparison is better than with the recessions of more recent memory in the early 80s and 90s. These were, in effect, created deliberately by the Thatcher government to combat inflationary pressures in the economy and to stamp out the last remnants of the postwar settlement. The 1929 recession did have some common features with today, notably the collapse of a debt-fuelled speculative bubble in the USA with knock-on effects throughout the world economy. However, there are notable differences which render many comparisons dubious at best. Five are particularly important.
First, in 1929 the economic situation in the USA was very different to that in Europe where most countries had been bumping along in a fairly depressed state for much of the preceding decade. The USA, alone, had largely benefited economically from WW1 so that it was unique in having a significant consumer boom in the 1920s. Second, the huge trade deficits which have been run by the USA and the UK for many years, (the British deficit being quantitatively much smaller than the US but relative to its GNP even larger) were largely unknown in the 1920s with the consequence that there was no pileup of American and British financial debts in overseas treasuries. Third, the very high levels of personal debt seen in recent years particularly in the USA and UK and spreading throughout the industrial world were almost unknown. Buying goods on credit, hire-purchase or the ‘never-never’ was in its infancy, credit cards did not exist, most people had no bank accounts and house-purchase, growing but not by any means common, was undertaken under rather stringent financing conditions by specialist agencies. Fourth, both economies had manufacturing sectors which produced most domestic needs from cars and domestic appliances to toys and hand-tools. In both countries, buying foreign goods, whether food or products, was a rare and often rather exotic experience.
Fifth, the political context was very different. Throughout Europe, two competing extreme ideologies, communism and fascism, fought over what was widely seen as a
capitalist system in terminal decline. Even in the USA, in 1932, the White House was
protected by machine-gun posts against any possible assault by the Bonus Army encamped in its thousands in tented-towns around Washington. In contrast, the past ten years have been the calmest of political decades in most of Europe when compared with almost all the twentieth century.
The Great Depression which began in 1929 was never really relieved in peacetime not by Keynes nor Roosevelt nor, for that matter, by Hitler. The Grapes of Wrath, often seen as the classic indictment of the period, was published in 1939 as essentially contemporary reportage whilst Keynes’ General Theory came out in 1936. The most famous of several Jarrow Hunger Marches was also in 1936. Sporadic and localised economic revival occurred in most countries but it was only WWII which finally brought it to an end, particularly in the USA which benefited from 1939 onwards from a flood of orders from Britain and France for war materiél. Keynes’ most notable personal success was in the economic management of the war in Britain which avoided most of the problems of inflation and profiteering which had accompanied WW1. He was also influential in negotiating the Bretton Woods agreement which set up the framework for the postwar international economic scene though its actual form was rather different from the one he originally pursued. Keynesian intervention has, in fact, never pulled any economy out of recession as such despite the rather grandiose claims now made for his policies.
The most important impact of Keynes’ economic thought came after his death in shaping
the way in which economic management to prevent recession was undertaken in national
economies throughout Europe and, to a degree, in the USA. The three decades after 1945 are often referred to as a ‘golden age’ of capitalism in that a formula appeared to have been devised which ensured steady economic growth and full employment under
capitalism. The key point about this period is that it was a political settlement first with the economic tools of Keynesian demand management deployed to support this
settlement. It fell apart in the 1970s because of problems which lay outside Keynesian economics - inflationary pressures deriving from the three parties to the postwar settlement, capital, labour and government, each laying claim to national resources. In Britain, in particular, this inflationary crisis was accompanied by a steady fall in corporate profits to the point where British capitalism was essentially running on empty as the profit rate came close to zero. The British left failed to take advantage of the situation despite gaining political ascendancy in the Labour Party and became mired in a swamp of short-term ‘workerism’ with the prime objective an endless pursuit of money wage increases. (There is a longer exposition of this in Feelbad Britain which can be seen at .
A neoliberal government came in and managed through a turbulent decade to impose a new political settlement, one cemented by the New Labour government after 1997. This settlement pivoted around economic support for business by enlarging the share of profits in national income whilst enlisting the support of a large enough bloc of the electorate, re-badged as consumers, to ensure electoral majorities.
It is the collapse of this neoliberal settlement which is the basis of the current crisis. In future postings, I hope to go further into both the reasons for this collapse and what should be the left response.
Subscribe to:
Posts (Atom)