Back to 1920s Economic Orthodoxy with Neo-Liberal New Labour

140323labourpolls

Poll showing the fall in Labour’s lead over the Tories after Balls and Milliband declared they would not opposte the government’s austerity campaign.

Yesterday Mike over at Vox Political put up a controversial piece about the way Labour’s lead over the Tories had collapsed in the wake of Osborne’s budget. Mike argued that this was because Ed Balls and Ed Milliband, instead of defending the working and lower middle classes – the genuinely hard-working people of Cameron’s Britain – against the privatisation of the health service and savage cuts to benefits – Balls and Milliband had instead largely agreed with the government’s policies. To the disgust of many, Milliband has stated that he will not reverse the government’s austerity cuts despite the fact that these are economically nonsensical. Like his predecessor, Tony Blair, Milliband has stated that he wants the party to reach out to the middle class. Thus he appears to have abandoned the very people Labour was founded to represent – the poor, and the working class.

When Blair launched the New Labour project it was proudly held up as modernising the party, a policy and attitude that Milliband wishes to follow. Except that it hasn’t modernised the party. It’s done the opposite and dragged it back over 90 years to the 1920s. When the Labour formed its first government in that decade, contrary to expectations and the desires of its rank and file members and voters it followed a policy of model economic orthodoxy with fiscal restraint in order to pay for the War one of the government’s chief priorities. This was the same decade that Keyne’s produced his ground-breaking theories that overturned classical economics and argued that government spending would indeed create economic growth rather than the opposite. However, with the exception of Lloyd George, the parties across the political spectrum failed to adopt them and remained firmly wedded to classical liberal orthodoxy.

Despite the party’s formal commitment to socialism and the working class, there appears to have always been a reluctance amongst some members of its leadership to break with received economic wisdom and appearing too radical. Some of this may be due to the electorally weak position the Labour party has often found itself in. In the mid-1970s under Callaghan the party had a majority in parliament of five. Some of this may also simply be due to the ideological inertia of society as a whole. Once in power, Labour may feel powerless to challenge the entrenched economic and social views of wider society, including the Civil Service and the Bank of England.

It must also be admitted that there are sections of the Labour party, which also seems to share the views of their opponents across the floor, both in economics and in their attitude to the working class. One of the criticisms levelled at the new generation of Labour MPs in the 1970s was that they were largely drawn from the middle classes, and feared and distrusted the working classes on whose behalf they had been elected. This attitude became acute with New Labour, when Tony Blair adopted post-Thatcherite economic and social policies in order to win over the swing voters in key constituencies at the expense of their traditional working class electoral base. As New Labour proudly declared at the time, ‘we’re all middle class now’. Except that we weren’t, and the working class and the poor suffered as a result. Some of that attitude was due to desperation. One female Labour politician in Owen Jones’ book, Chavs: The Demonization of the Working Class states that they turned to the new, post-Thatcherite political orthodoxy simply to get into power, so that they could at last do something. It worked, but once in power New Labour forced through many of the same policies that Cameron is pursuing now, which are causing so much damage and harm to Britain’s ordinary, working people.

In the case of New Labour, there is also an ideological influence from American Conservativism. Reagan launched a project to influence the next generation of politicians over here in order to create an Atlanticist alliance and political consensus. This was the British American Project for the Successor Generation, or BAP. The individuals who participated ended up going on various courses in Washington, to meet the people at the heart of the American political system and to see elements of it adopted on this side of the Atlantic. BAP not only included British Conservatives, but also aspiring opposition politicians, including Blair, Balls and the rest of New Labour. The British parapolitical magazine, Lobster, has devoted a number of articles to this.

The result is the current Labour leadership, which seems desperate to follow whatever the Conservatives are doing at the moment, no matter how wicked or harmful, in order not to offend the middle classes. Not only is this a nasty, short-sighted policy that hurts the very people Labour was formed to represent, it’s also unnecessary. The number of people voting in elections is shrinking, partly because people don’t see any real difference between the parties, who are all competing for the same narrow demographic base. Labour could overturn this simply by returning its original Left-wing political orientation. The public does not want the privatisation of the health service and most would like to see the railways and the utilities renationalised. Simply appealing to those voters could massively increase Labour’s lead over the Tories.

At the same time, Labour has never been against the middle class. One of the founding organisations of the modern Labour party, the Fabian Society, explicitly rejected class warfare. They felt that socialism would benefit the whole of society, and so set about trying to win over the middle class support, which they felt was necessary for the successful implementation of socialism. Note: they wanted to win the middle classes over to socialism, not simply win middle class support at the price of jettisoning it. In fact the Fabian Society and the Labour party have often been accused of abandoning Socialism in order to gain the support of the middle classes, but even so, they did have a profound belief in Socialism, even if this was not always reflected in practice. The Labour MP Tony Crossland believed that Labour’s welfare policies actually benefitted capitalism, as it allowed the workers to purchase more goods and services, while government intervention in the economy meant that businesses were protected from the massive slumps and bankruptcies that occurred in the 19th century.

In many ways the Labour party has been far more pro-business than the Tories, even before Blair arranged for the party’s commitment to nationalisation to be dropped from its charter. The Labour administrations of the 1970s made grants available to businesses so that they could modernise their plants, and attempted to pursue policies that would allow businesses to compete in the international market. Compare that to Thatcher, under whose administration failing businesses were ruthlessly closed and millions were thrown out of work.

Economically and socially, Thatcherism and Neo-Liberalism are abysmal failures. They succeed politically because they benefit an immensely wealthy few, and appeal to some of the worst aspects of human nature – greed, insecurity and a vindictive, visceral hatred of the less fortunate.

The Neo-Liberal consensus it not shared by a large majority of the population. Labour can still win elections with a more Socialist political agenda – by strengthening the welfare state and providing better planning and support for businesses. All it needs is the political will from its leaders to do so. If Balls and Milliband don’t do this, then Labour will certainly lose the next election and the British people will suffer poverty and deprivation on the level of the Great Depression. Balls and Milliband have a choice. They can either return Labour to its Left-wing roots, or they should give up the leadership to someone who can.

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2 Responses to “Back to 1920s Economic Orthodoxy with Neo-Liberal New Labour”

  1. oblomovIII Says:

    Unfortunately, this generation of Labour politicians seem incapable of expressing any concept that takes some thought. Ie – “Socialism” can ultimately benefit everyone, and the people who tell you that it doesn’t are just looking at their own self-interest. However, this would take some explaining, especially with the quality of media opportunities available, and with their history of denouncing left-ist policies.

    Any they haven’t the nerve / conviction to try it. Better to try and get elected on a false premise (repeatedly) than to question the status quo. It worked before, but is less and less likely with each passing day, as the paint peels off the Grand Neo-Liberal Success, and everyone realises it was just feudalism with a shiny glass atrium.
    Events have overtaken the indecision of the Labour party. It is too late for them to re-invent themselves (for the next election), and it would be unbelievable without a huge change in personnel.
    So I can kind of excuse that.
    However, they could make a start by opposing some things, eloquently, incisively. And failing to do this is frankly an abuse of trust. They should hand back the Govt funding for being the “opposition party” or re-direct it to the Greens / TUSC. / bloggers.

  2. chriswaynepoetry Says:

    I remember reading an article a few years ago in which Che Guevara’s daughter Aleida was interviewed. When asked what she thought of the Democrats and the Republicans in the United States, she replied ‘Same dog, different collar’

    This answer has resonated with me since as it is the best description to how I feel about the three main political parties in this country. Their policies and targets are essentially the same, though they will likely implement them in a different way.

    As described in your article, both Labout and Conversatives geenrally have the same ideals. Part of the reason why a lot of people do not see this, is because generally a lot of people’s opinions on politics tend to be either left or right wing. To some degree that is understandable, as that is how a lot of the news media are when reporting on stories. Yet I have always found sticking to one end of a dichotomous scale and basing all opinion just on that end to be very restrictive.

    Maybe if people based their opinion on teh context of teh situation and not automatically be left or right wing and set their opinion around that will we be able to see through the myth of the main political parties, with regards to them having seperate ideologies.

    Just a thought.

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