This, we are continually told, is meant to be a seismic, even historic election: with this usually referring to the fundamental implications of Brexit. What is seldom addressed is that this election also signifies far-reaching change in another aspect of politics. This is the confirmation of the jettisoning of the economic assumptions which have defined UK politics for the past 40 years – sometimes described as neo-liberalism.
This shift is a continuation and reinforcement of a change witnessed in the 2017 UK election, commented upon in a few places, then forgotten. That election saw, for the first time since the 1970s, a contest where neither of the two big parties, Conservative or Labour, were advocates of the neo-liberal settlement.
Labour's shift under Jeremy Corbyn is self-evident: a rupture with the compromises of New Labour, Blair and Brown. Less discussed has been the change in the Conservatives after Cameron and Osborne, and their gleeful embrace of austerity. Hence, the Tory manifesto of Theresa May, primarily written by her chief of staff Nick Timothy, contained a powerful dismissal of the politics of asocial individualism: 'We do not believe in untrammelled individualism. We reject the cult of selfish individualism. We abhor social division, injustice, unfairness and inequality'.
The upcoming General Election has accentuated this break with the recent past. The 105-page Corbyn Labour manifesto is one of the most sweeping critiques of the economic status quo and British capitalism, and for an extension of the powers of government and the state that Labour has ever produced.
Less emphatically, the 59-page Conservative manifesto contains within it the aspiration for a different conservatism from Thatcher and Cameron, one where government has a more pro-active role, public spending in health, education and law and order is boosted, and inequality and poverty are at least recognised. One might not agree that this is a sincere change or their suggested policies adequate, but it is a remarkable shift, and one obscured by the dominance of Brexit over the election and Tory priorities.
The reasons for this shift are not hard to fathom, even if much of this intent has yet to take over the world of government, media, capitalism and think tanks. The neo-liberal era came about because of problems in the developed world in the 1970s: of slower growth, labour power and capitalists believing that they had to break trade union influence. Yet, while the 1945-75 era saw slower UK growth relative to its main competitors and used this as a catalyst for Thatcherism, the UK has not seen faster growth since, and neither has the world's richest economies.
The UK has been a good test case for the promises of this revolution. The fundamental historic weaknesses of the UK economy: the dominance of the City and finance capitalism, short-termist business horizons, corporate governance prioritising shareholder interests, poor R&D investment and low productivity levels, have all become even more entrenched and pronounced.
Take one example. In 2013, an international study found that the UK had one of the lowest levels of R&D investment as a share of GDP in the entire world – 159th out of 173 – with only 14 countries behind the UK, seven of which were from sub-Saharan Africa. This was put to David Cameron in Prime Minister's Questions and he tried to laugh it off and accuse the questioner, Labour MP Michael Meacher, of being on 'mind-altering substances'.
The UK has become one of the most capital-centric economies of any major economy, only exceeded by South Korea. The dominance of London over the rest of the UK economy distorts nearly every aspect of public life and public policy, with GDP per head in the city almost two-thirds higher than that of the UK average.
The UK is one of the most unequal countries in the developed world, set according to Danny Dorling – an expert on inequality – to become 'the most unequal' if existing trends continue. Reinforcing this is the soaraway nature of executive pay: in 1980 a CEO of a FTSE company would on average earn 25 times that of the average pay of a worker; by 2016, that had risen to an astronomical 130 times average pay. The usual defence that this is because of an unprecedented explosion of productivity and innovation at the top is groundless; over the period 2000-2008 the FTSE fell by 30% in real terms, but CEO pay went up by 80% in real terms. What has changed is normative values: meaning the ability and audacity to get away with it.
Despite this record, there are still numerous apologists trying to maintain this failed order. There is the role of right-wing think tanks, such as the mysteriously-funded Institute of Economic Affairs (IEA) and the non-transparent Taxpayers' Alliance, who take a simplistic economic determinist line that free markets are good, government is the problem and deregulation is always stifling.
There is the role of right-wing publications such as The Spectator,
edited by Fraser Nelson. Under his tutelage, it has become an ideological house journal for the right, with Nelson continually punting the good news story of the past decade about 'the British jobs miracle', without addressing the downsides of the story: of economic inequality and insecurity, let alone the fundamental weaknesses of the UK economy which have got worse.
In a similar vein, the free market economist Ruth Lea said recently, talking of the economy and the election: 'we are at full employment'. This is in the context of a country with 1.3 million 'officially' unemployed, leaving aside the hidden unemployed from the figures and underemployed. The right-wing true believers seem to be unable to deal with the downside of the revolution they have proselytised for.
This shift is not fully formed and needs to become more explicit. The Tory prospectus is lightweight and unconvincing in its commitment and depth of change. The party is also in hock to hedge funds and Russian oligarchs, representing some of the worst aspects of excessive capitalism.
From a very different angle, Labour's faith in big government, centralisation and statism does seem from another age: that of 1945, Morrisonian nationalisation and the man from Whitehall knows best. It does not seem to chime much with the spirit of much of our times including in radical, progressive circles: of decentralism, self-determination and autonomy.
Also evident in Labour's manifesto is an absence of making strategic choices and priorities about what it should do in office. That seems less bold radicalism and confidence, and more insecurity and doubt. Labour's manifesto looks like a left-wing wishlist for a party leadership which thinks it is going to lose this election. What it has set out to do is engage in a vote-maximising strategy and to prepare for the post-election environment inside the party. It also aims to make the Corbynite revolution permanent when Corbyn goes – which he will if Labour lose.
In numerous left-wing circles there is an understandable impatience particularly amongst a younger generation radicalised by the experience of employment, being locked out of the housing market, and debt levels among students – which in England are the highest in the developed world. This has resulted in a rhetorical leftism which sees radical change as about having political will and uses the term 'neo-liberalism' as a scattergun about everything wrong in the mainstream political world. Moreover, the propensity in certain left circles to see such terms as an 'Universal Basic Income' and 'Green New Deal' as the blanket answer to the politics of redistribution and sustainable growth is used as a cover from having to think deeper about difficult issues.
There is a different story in Scotland, which never fully embraced turbo-charged neo-liberalism, but has also never been as social democratic as the main political players, Labour and SNP, claimed. Hence, last year saw the publication of the SNP's growth commission report, fronted by former RBS economist and current lobbyist, as well as ex-SNP MSP, Andrew Wilson. This attempted to present a detailed economic prospectus for independence and acknowledge the financial challenges of the early years of a self-governing Scotland. It laid out 10 years of debt reduction and constraints on public spending increases which the SNP leadership tried to deny was the austerity it was – which didn't seem a very fruitful or honest approach.
Left-wing critiques from the likes of Common Weal and the Radical Independence Campaign (RIC) do not like the above. But what they have consistently failed to do is set out a feasible analysis of what is and isn't possible within the framework of what an independent country is likely to look like. Instead, there is a belief that strong-willed leadership which doesn't compromise will somehow be able to overcome fiscal pressures and global markets in a manner which is lacking evidence, faith-based, and doesn't address what happens to small sized economies which try to buck the markets.
Something is shifting across the UK and across the West. Politics and economics go through specific phases. The 1945-75 era of managed capitalism grounded in the Bretton Woods settlement, the IMF and fixed currencies, gave succour to the Keynesian post-war era of active government and commitment to full employment. It fell apart due to the over-reach and indebtedness of America thanks to the Vietnam War, the OPEC oil price shock of 1973-74 and a drive from part of capitalism to be free of the shackles of organised labour.
This gave way to the era of triumphant, unapologetic, unrepentant capitalism which had its high period from 1979-2008. This rolled back government as an active economic agent, gave priority to corporate and finance capitalism, and encouraged inequality and insecurity to set markets and entrepreneurs 'free'. It has, since the banking crash of 2008, been in a zombie capitalism phase: globalisation shorn of its earlier promise, while national protectionism has emerged on the right and left as a reaction to the instability of the global order.
Many defenders of the existing order think it can continue, albeit a bit more humble and socially aware. They point out that the shift from one era to another requires detailed thinking and plans. Thus, they argue the 1945 and 1979 eras both saw preparatory plans in the UK and internationally: in 1945, by the two Beveridge reports, Bretton Woods and the creation of the IMF; in 1979, by the work of Thatcherite think tanks and the emerging Reaganite transformation of the US Republican Party.
This observation is correct but also a call to arms rather than vindication of things as they are. Any serious observer of politics, economics and society across the West cannot think the present is a satisfactory state of affairs, or not be concerned that unless radical change happens soon, even more ugly tailwinds than the present batch of populists might emerge.
The coming politics and economics after neo-liberalism is already evident in the intent of the Corbynite project, radicals in the US Democrats, new left and green parties across Europe, alongside radicals in the Global South. The politics of this will not be social democratic, economic determinist, or focused blindly on GDP. Rather it will require, as Mariana Mazzucato has argued, a different kind of state and a politics which is economically sustainable; puts economic democracy at its heart; is founded on social justice and environmental concerns; presents a challenge to traditional hierarchies and power structures; and is influenced by gender and feminist politics.
The upcoming General Election is an important milestone in the crumbling of this version of capitalism, with its limitations, dogma and inhumanity now widely accepted. Creating a convincing, coherent alternative, and overcoming the entrenched vested interests of this discredited order, involves the need for serious work, and thinking about the shape of not just a different
capitalism, but post
The future will not hold a return to the normal many crave, in a world of – just in the UK – Brexit, a disunited and discontent kingdom, pressures on public services and an elite who will not give up their power and privilege. However, at least we can start to dream, agitate and plan for a different future and society.