Philip Whiteley's Blog

December 12, 2019

The descent of British politics into populism

Filed under: Uncategorized — felipewh @ 8:44 am

I am writing this early on the morning of 12th December 2019. I was going to wait until tomorrow, when we know the result of the latest General Election, but there is not the remotest possibility of a good outcome today, so perhaps I should pen it now. Plus, I can’t sleep for worrying.

Every major British party and movement is now mostly taken over by shallow populism, which I should, of course, define. It is an approach that places the interests of a party and its closely linked interest groups above that of the general population. The key features are:

  • Feverish spinning of narratives that are mostly or completely false, and always self-serving,
  • Lack of inquiry into the behavioural dynamics of society and the economy,
  • Finger-pointing and demonization of opponents; scapegoating,
  • Generation and manipulation of fear,
  • Short-termist, opportunistic focus.

Most of my readers will be left-leaning, so I imagine that many will, by now, be saying: ‘Not us, surely! Those features only apply to the Brexit Party, and the Conservatives now they’ve been taken over by Boris Johnson.’

No. I mean you, too. The Labour Party has been one of the worst offenders, and the ‘moderates’ have been slightly worse than Momentum, at least on economic issues. The Liberal Democrats were reasonably statesmanlike for a few years but they, too, have now got the populist bug.

To explain what went wrong, we have to go back. A decade ago, all British citizens were victims of a monumental white collar crime. Its cost was probably north of £1 trillion; it had reached £850bn even in the early phase of the crisis. The impact of the scandal is still with us, but its cause has disappeared from public discourse, replaced by populist messages. It was in the period 2008-2010 that the British taxpayer took on the huge cost of speculation and fraud by rogue elements of the banking industry. It was a partial collapse of a supposedly self-regulating market system put in place by the Thatcher administration. Although supported by a dogma of the market, over the years, the investment banking industry had lobbied for effective protection from full market disciplines, and tacit state guarantees. It had become, in effect, an oligarchy, as this brilliant expose by former IMF economist Paul Johnson explained in 2009 (this focused mainly on the USA, but the same dynamics affected the UK).

One would think, given that the Thatcherite financial system had undergone a partial collapse, requiring state bailout, that Labour would seize the opportunity to critique what went wrong, and present a coherent and radical alternative. What Labour did instead was quite extraordinary to a normal citizen, and only makes sense if you live in a political world, guided by populist instincts. I vividly remember the Labour conference of 2010, a few months after its defeat at the general election after 13 years in power. Ed Miliband, newly elected leader, and Neil Kinnock, a former leader, were chortling with glee in TV interviews at the predicament that the young Conservative-Liberal Democrat coalition found itself in. ‘We’ve got our party back!’ grinned Kinnock, displaying not a whisper of conscience about what was, at the time, a quite major social and economic crisis, with an impact being felt in every household.

What was going on?

The explanation, it turned out, was that Labour had realized that the coalition was going to have to take some difficult decisions, and was going to revel in this. The deficit was huge, the public debt had doubled in the course of just a few months, the British state was borrowing £1 out of every £4 that it was spending; the situation was unsustainable. Cutting too fast risked depression, failing to act risked a hard default. There were no easy options.

Instead of being gripped by a sense of crisis, Labour were going to exploit it by pretending that the impact of the banking bailouts – austerity, as it came to be known – was a political choice by the Conservatives. They were embarking on a campaign against ‘Tory cuts’. I was dismayed: a once-in-a-century opportunity for genuine reform, rebalancing of the economy, ensuring that capital serves the interest of society, rather than the other way around under Thatcherism, was being thrown away.

A decade after the crisis, and Labour’s narrative of ‘austerity’ is dominant. A coherent alternative is as far away from political discourse as possible. I have spent some time on the left and I think I understand why it is that they have reacted in this way. It is linked to a faith in public spending, more specifically a belief in the continual increase in public spending, as an inherent good in itself, irrespective of borrowing, of taxation levels or  whether there is a social or economic benefit in the spend. It is a purity test on the left: refuse to believe in this and you won’t get a column in The Guardian or any position of influence. In the early years of the past decade, left-leaning economists decided to pretend that the economic crisis caused by the banking scandal was really a cyclical recession and that the government should use cheap borrowing rates to ‘invest’. Belief in the magic money tree began to take hold. Today, millions of my fellow citizens will be voting Labour in the sincere belief that their policies will end austerity, when there is a very real risk that they will make it worse.

The other item of superstitious faith on the left is the NHS. At every general election since 1951, Labour has claimed that voting Conservative meant risking the future of the NHS. It was only after the third or fourth general election campaign that I followed that I realized that they were just making this stuff up. Even now, in 2019, they are trying it on again.

What of the Conservatives? Well, for a few years, they could hardly believe their luck. Labour, instead of critiquing the Thatcherite financial system that had failed, let them off the hook. Most voters could see that the debt situation made Labour’s spending ambitions quite absurd, so the Conservatives could play the fiscally responsible card and be the grown-up party. They were further helped by Labour’s lurch to the left, as Momentum, the aggressively radical leftist movement, took over the institution. In terms of economic analysis, Momentum’s is actually the least wrong, because at least they pay token attention to the role of the banks. But sadly they too believe in the magic money tree, and their spending commitments dwarf even those of Ed Miliband. Their peculiar obsession with, and scapegoating of, Israel on Middle East policy has resulted in a disturbing crisis of antisemitism.

Then came Europe, and the referendum. On the morning of 24th June 2016, the pattern of Leave voting was clear; the heaviest votes against staying in the EU were in Labour-voting deprived areas. I was dismayed, but sympathetic. Working class people felt left behind, grievances over immigration and pressure on public services became germane. Instead of responding to these concerns, many Liberal Democrats and Remain-supporting Labour activists became high-octane populists, denouncing any Leave supporter as stupid, racist and wrong. This culminated in the Lib Dems’ policy decision in summer 2019 to ignore the result of the referendum completely. This was on the basis that the Leave campaign had lied, but actually both sides lied, as I reported at the time.

The Lib Dems’ conversion to a single-issue populist movement, a mirror image of the Brexit Party, was complete. They seem unable to realise that their campaign plays into the hands of Nigel Farage. This, in turn, has had a toxic effect on the Conservatives, who feel they have to become the Brexit Party Lite simply in order to stay in business.

The Scottish Nationalists, who believe that all Europeans make wonderful close economic and political partners, except for the English, are perhaps the most populist of all. Given how awful the English parties have become, however, the SNP’s narratives will have resonance. They will probably be the biggest winners from today’s election.

What should have been the response to financial crisis and austerity? Honesty and patience, I would argue, backed by a transaction tax, sometimes known as a Tobin tax, in which the financial industry paid back every penny that the taxpayer donated to them while reforming themselves, accompanied by a steady and progressive rebalancing of the economy. But the opportunity, I’m afraid, has passed.

I was tempted to end on a pessimistic note, but there are reasons to be hopeful. The British constitution peacefully resisted attempts by Boris Johnson to prorogue Parliament in August; the tone of debate did improve for a while after, and the More United campaign, in honour of the late Jo Cox MP, emphasizes reaching across boundaries of party and faith. Things are bad, but they are not bound to get worse.

(I’m going to vote for the Yorkshire Party, perhaps the only balanced and pragmatic party left. It’s not campaigning for independence, by the way ….)

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