The political times are changing: Boris Johnson’s broken economic Britain and beyond
Scottish Review, 6 October 2021
Boris Johnson’s campaign of shameless differentiation from the Tory Governments that directly proceeded him goes on, as he tries to distance himself from David Cameron, George Osborne and Theresa May.
It has now extended to a break not just with the past Tory decade of austerity, but over the past weekend to a rupture with the politics and economics of the past four decades which have shaped the UK. This is in words a break with Thatcherism and New Labour, and a whole set of assumptions which have defined public life and institutions, mainstream media alongside debate in Scotland.
Johnson’s comments on Marr of ‘the broken model of the UK economy’ involved him railing against ‘low wages and low skill and chronic low productivity’ which successive governments have been more than happy to preside over. He combined this with an assertion that both Labour and Tories have been prepared to ‘reach for the lever of uncontrolled immigration to get people at low wages’ and that this short-term band-aid has to stop.
This set of statements is both important and calculated; it is brazen, daring, shameless, and going against so much of what Toryism has stood for in recent decades. In so doing Johnson has left the Conservatives politically disorientated – differentiating itself from its own past and divided in its core project and values.
While the Tories talk the vague language of ‘levelling up’ beyond that there are deep divisions. On the one hand there is Boris Johnson who is a political opportunist and chameleon and on the other Chancellor Rishi Sunak, a traditional Thatcherite espousing the need for low taxes and small government, who does not see his values as anything to do with ‘mindless ideology’ and ‘dogma’ – because they have been so uncontested in the political elite or so long.
Until recently the UK political consensus of Tories and Blairite Labour, believed there were significant limits to the power and reach of government; there were bottom lines to taxation and to redistribution, and business should be left alone to self-regulate and run its own affairs. Winners in the economy and society had to be venerated and treated as messiahs; losers treated as failures and made to feel bad and – if relying on welfare -humiliated, degraded and punished.
All of this was regularly paraded as a gospel with no alternative, cloaked in a triumphalist hyperbole of self-congratulation and British exceptionalism. This was the mindset which produced rhetoric such as ‘We put the Great back into Britain’ under Thatcher and a continual mantra of a supposed ‘British economic miracle’ to draw a distinction between the UK that emerged from Thatcherism and the country of Wilson and Macmillan before.
There was no Thatcherite economic miracle
The reality was always a lot more mundane. There was no Thatcherite economic miracle. The Thatcher and Major governments did not solve the fundamental weaknesses of the UK economy – merely disguised it through the proceeds of privatisation and North Sea Oil.
Looking back factually at the state of the post-war British economy and at two periods 1945-73 and 1979 to the present – the two periods defined by first the post-war consensus and second the Thatcher revolution onwards and bookended by the 1973 and 1979 OPEC oil price hikes – the pattern isn’t what you would expect from today’s mainstream politics and media.
In the former there is higher economic growth, productivity, rising living standards and lower unemployment than post-1979. After 1979 we have witnessed an era shorn of the rhetoric of unimpressive economic growth, lower productivity, flatlining living standards – and a whole host of other major negatives – widening inequality between people and regions, declining public services and an atrophied public realm and local government: economic growth has averaged 1.25% in the UK over the past 20 years: under half the rate of the 1960s. Taxation has become increasingly regressive and less redistributive, while the UK has become a country with burgeoning debt – not just government, but corporate, financial and household.
Yet the economic critique of structural weaknesses of the economy before Thatcher has been marginalised over the past forty years. Pre-Thatcherism there was a coherent liberal-left analysis looking at what was wrong with the UK. It addressed Treasury orthodox economics, endemic short-termism in business, the lack of research and development compared to UK’s competitors, the absence of long-term industrial strategy, and the power of finance capital over the real economy.
The mirage of Thatcherism and Blairite New Labour washed all this away. But the conceits of the years since 1979 have been challenged by a series of dramatic shocks. First, there was the bankers crash of 2008; followed by the attempt by Cameron, Osborne and Clegg to restore the economic order. Second, the global COVID pandemic has forced reluctant governments to reconsider everything about how they see the world and reinvent the state and state intervention in the economy. Thus, within little over a decade, the neo-liberal order of believing capitalism and markets are the solution and government the problem has been twice turned on its head.
How long British Conservatism with its uneasy embrace with higher public spending and increasing taxes, talking of the need for higher wages and productivity, will continue on its present course or what the consequences will be are unclear. What is clear though is that the political weather is being dramatically reset – and as in previous fundamental shifts in political settlement is happening at an elite level, in-between elections, driven by crisis. This follows the roots of the post-war consensus in the wartime coalition, ‘people’s war’ and the 1942 Beveridge report; or the embrace of neo-liberalism pre-1979 by Labour PM Jim Callaghan due to the IMF crisis.
This then is a time of major historic importance in the UK and indeed across the global economy: a watershed where everything which has defined politics, government and economics in recent decades has now been discredited or is at least open to question.
This necessitates that serious critiques of the shortcomings of the UK economy are urgently undertaken. This would address the long-neglected subject of political economy, critique British capitalism and the Anglo-American model, understand the anti-business ethos of much of the City and Tory Party, and the vice-like hold of finance capital at the expense of genuine innovators and entrepreneurs.
There is the problem of the UK’s enduring legacy as an Empire State that evolved to engage in military intervention, imperialism and colonialism but was ill-equipped and often disinterested in the well-being of its own citizens. The historian David Edgerton has called one of the variants of this ‘the warfare state’ and noted the damaging consequences for this domestically as well as internationally – with UK research and development, cutting edge science and engineering, all disproportionately taken up with military matters such as the creation of the Spitfire.
Add to this that the City of London directly emerged from the administration of Empire and how to fund it – sitting as it did offshore and outwith the UK economy and not directly concerned with the domestic economy. In the 1970s, the Thatcherite right posed that the power of trade unions ‘crowded out’ investment and hampered economic growth – always an over-statement given the defensive power of unions. But the reach of the City of London and its appropriation of finance has ‘crowded out’ and consistently damaged the real economy and prosperity – depriving industry of sustained investment, support and resources.
Long-term weaknesses of the UK economy and the threadbare nature of the Thatcherite-Blairite-Cameron consensus have been revealed – as has the profound dishonesty in what passes for the British boosterism of ‘Global Britain’ with all its pretensions that buccaneer capitalism can once again ride the waves and conquer the world, this time through trade deals and overblown rhetoric. It is a fantasyland Britain, drawing deep from the well of 19th century capitalism, seeing the British as a fighting force treasuring the enduring legacy of Empire, and as such has a resonance in sections of the public.
Yet despite the above, the unhappy state of the UK and the multiple crises it currently faces, completely dislodging the neo-liberal consensus and its apologist insider class will take more than rhetoric and one announcement that we live with a ‘rotten economic model’. Rather, there is an entire class of political insiders, right-wing think-tanks and media (in particular The Daily Telegraph and Spectator), and parts of finance capital, outsourcers and deal makers, who have a self-interest in maintaining the current economic and social order – and who have little interest in ‘levelling up’, progressive redistribution and localism. They all imagine that Johnson’s new ‘red Tory’ rhetoric is just that – opportunistic mood music for the ‘Red Wall’ seats.
It is not an accident that ‘culture wars’ and the war on ‘woke’ have been rising up the political agenda of the right and its most ardent believers, because after promising economic prosperity and freedom for decades they have delivered the exact opposite – as even senior Tories recognise. Throwing such raw meat to Tory activists and the right-wing press keeps them happy on social and cultural issues, while the government is disorientating them on the social agenda. And even has the prospect of taking on the left on what they think their own terrain.
After the Palace Revolution
To defeat the inside class will require that the shift in part of elite discourse is matched by a political, economic and intellectual transformation. It is worth noting that every palace revolution needs a popular revolution – 1942 leading to 1945, 1976 leading to 1979 – for the change to be underpinned and legitimised.
That begs the question, that given the British state at its core has become a neo-liberal state how it is reclaimed from this insider class and set of interests? If the Corbyn-led Labour Party did not understand this fully what chance has Keir Starmer’s Labour Party? And with the forces of reaction so embedded in the state, media and public life how can they be realistically defeated and by what?
Related to this are the territorial questions of self-determination – Scottish, Welsh and Irish, which have a relationship with the problematic consensus of recent decades. Yet at the same time the pale social democracy on show in Scotland and Wales is barely adequate for the challenges ahead – and has been merely defensive, holding the line against the assault of the neo-liberal vandals. In a small polity such as Scotland with a very thin policy community how do we muster the resources to address the big questions about political economy, capitalism and climate change?
On top of this is the long painful journey of the UK from its illusions and delusions of Empire and believing in imperialist grandeur which has so disfigured everything about Britain – from the Tories to Lib Dems and Labour and progressives. Some understood this and pointed it out, for example George Orwell writing in 1945 (in the language of his time) that the prosperity of Britain was based on Empire and colonialism:
Labour leaders have never made clear to their followers the extent to which British prosperity depends on the exploitation of the coloured peoples. It has always been tacitly pretended that we could ‘set India free’ and raise our own wages simultaneously. The first task of the Labour Government is to make people realise that Britain is not self-contained, but is part of a world-wide network. Even the problem of introducing socialism is secondary to that. For Britain cannot become a genuinely socialist country while continuing to plunder Asia and Africa; while on the other hand no amount of nationalisation, no cutting-out of profits and destruction of privilege, could keep up our standard of living if we lost all our markets and our sources of raw materials at one blow.
Dismantling the Empire State and its grotesque assumptions at home and abroad will not be an easy task and reactionary opinion will tell us that not content with tearing down statues we are trashing our proud history. But we must recognise who Britain has been run for and why, and that even the more civilised, humane post-war period of 1945-73 did not go far enough as Orwell innately understood at its outset. Now we have an opportunity to dismantle the ‘rotten economic model’ and with it the British state and capitalism as it is currently deposed. Who ever said politics was boring and bereft of ideas?
Copyright: Alex Motoc