The crisis of the British political economy has now become an urgent crisis also for British politics
I just don’t understand why mainstream political commentators in Britain are not shouting about it in every column and appearance on radio and television. But it can be said in no uncertain terms on the SPERI blog: the unfolding crisis of the British political economy has now become an urgent crisis also for British politics. Indeed, it explains just about everything important that is happening in British politics at the moment.
Consider the following observations about where we are politically just seven months before the general election of 7 May 2015. There are six, because – and this itself is a measure of how much has been thrown up in the air – no less than six political parties now matter in Britain. (By the way, these snapshots are meant to be largely uncontentious. The argument comes later.)
- The Conservatives are stalled in the opinion polls, their uncosted tax bribe recently announced by David Cameron seemingly having had no impact.
- Labour stays 1 or 2 percentage points ahead, but equally can’t get popular traction, appearing stuck at 32-33% in the polls regardless of whatever enticing future policy commitments it makes.
- The Liberal Democrats are reduced to the desperate hope that the so-called ‘incumbency effect’ will prevent their representation being completely cut to shreds.
- UKIP is bounding along, setting the agenda and tapping ever more successfully into significant reservoirs of discontent within lower-middle-class and former working-class communities in forgotten parts of England.
- The SNP has experienced a huge surge in both membership and support since the Scottish referendum and looks forward to playing (for the first time) a decisive role in British, as opposed to Scottish, politics.
- The Greens are lately also lifting up a bit in the polls, running at 7% support in the last few YouGov surveys.
All in all, it’s not neat and it’s uncharted. Nobody knows what we will be looking at on the morning of 8 May next year.
So why is this happening? What explains all the trends encapsulated in these brief state-of-play observations? The answer is very clear: the British political economy is failing its people and party politics is now being decisively shaped by the various impacts this failure is having on different parts of the country and different groups in society.
Let’s work again through the six parties that matter and connect their current performances to important aspects of the crisis of the British political economy.
The Conservatives have eventually succeeded in reflating the old Anglo-liberal growth model (for maybe one final time?) on the basis of an asset bubble within the London housing market. But economic growth, although back, is neither firm nor durable. It hasn’t come close yet to making up for lost output since 2008 and it certainly hasn’t made the majority of the British people feel good. By the same token, the sector of society it benefits and services – the rich and well-off in the private sector – is too small on its own to drive an electoral majority.
Labour definitely has a big enough constituency of people hurt by recession and austerity to which to appeal. It has moved on from New Labour and has developed a veritable array of useful economic policies. But it hasn’t succeeded in crafting a convincing story about the nature of a new British growth model grounded in the ‘responsible capitalism’ once articulated by Ed Miliband. Its self-confidence has been damaged by its presence in office when the party stopped in 2008 and it has failed to explain to the British people that the crisis was a crisis of the market and that only emergency action by the last Labour government prevented a recession from being a depression.
The Lib Dems can be briefly discussed, because they now have nothing distinctive to say to the debate about the British political economy – a striking shift from the years 2003-9 when Vince Cable was warning presciently of the risks of the accelerating deregulation of finance.
UKIP is really interesting. Although there is much that is nasty about the party and its programme for British exit from the EU would be catastrophic for many sectors of the economy, it is in fact the only political party in England speaking directly to the egregious levels of inequality that have come to characterise the Anglo-liberal growth model. Many parts of England (and Scotland, Wales and Northern Ireland for that matter) were left out of the growth party generated by the Britain’s post-Thatcher embrace of globalisation – and they resent it. UKIP muddles this with nostalgia for a 1950s England that has irredeemably gone, and is interested only in English manifestations of this discontent, but at least it touches it. UKIP is conservative and radical at the same time.
The SNP’s near-victory in the Scottish referendum drew extensively on a strong measure of cultural nationalism, fuelled by longstanding differences in key institutions in Scotland from the rest of Britain. Yet what was truly remarkable, and new, was the support that it won for independence in working-class Glasgow and other Labour heartlands. This was not just a Scottish response to British misrule, but also perhaps even more a popular class response to the biased governance of a narrow ruling class – passionate evidence that the people of old industrial cities like Glasgow no longer had much of a role in the British political economy and felt angry about it.
Finally, the Greens for their part have been drawing on a growing sense amongst more and more people that economic growth, however delivered, can’t just be allowed to resume as normal business – that in effect a radically different political economy is needed in the context of escalating environmental threat and intensifying climate instability. The Greens are as yet an inchoate political force, but their impact is unlikely to lessen.
What does all of this add up to? It is obvious: a political economy that has failed its people and a politics that is lashing about wildly trying to develop a coherent response. Politics is always fundamentally a politics of political economy – the play of agents responding to and seeking to manage structural changes in society and the economy. This is the politics that we need now to be talking about in Britain. Everything else is either fluff or derivative of this core crisis.
One final point, a point of conjecture still at this moment: do these various trends show that, at last, neoliberalism is unravelling in Britain, and unravelling, what is more, from below? Many have noted that the anticipated anti-neoliberal moment did not occur after 2008-9; instead, the mainstream political elite turned to either the actual pursuit of neoliberal austerity (the Conservatives and Lib Dems) or its mimicry (Labour). However, in politics change often begins at the bottom and forces its way to the political surface. Possibly, just possibly, the British people in their apparently contradictory reactions to the crisis are now signalling that they have had enough of neoliberalism and want something that actually delivers to their aspirations and needs.