The centre ground is collapsing

British politics is in deadlock, with two extremes increasingly dominant. These extremes are a militant, conservative nationalism and an increasingly aggressive assertion of liberal values. The main battleground is Brexit, but it is by no means the only one. The centre ground, which seeks a compromise that the country as a whole can live with is imploding.

Thus we have a paradox. Most MPs want Britain to implement the 2016 referendum result and take Britain out of the European Union. And yet they have been unable to do it, and the possibility that Britain will never leave is now growing. That is because the militant nationalists insist on a radical interpretation of Brexit, and are prepared to block compromise. This is having two effects. First it has deadlocked the House of Commons and prevented the government from passing an exit deal. The second is that it is provoking Remainers into increasing militancy themselves, since to them such a radical interpretation is a clear violation of the referendum result, which after all was a narrow one.

The leaderships of both main parties are holding crumbling middle ground, which seeks an orderly exit from the EU, and a reasonably smooth economic relationship with it, and, in particular, an open but functional land border between the EU and the UK in Ireland.

How did we get here? In June 2016 the referendum gave a narrow but clear majority for Britain to leave. About a third of the country were delighted, another third wished the result could somehow be made to go away, and the remaining third accepted that the country needed to leave, with varying degrees of enthusiasm. The mandate to the government and parliament was clear. All but a handful of Conservative MPs accepted the referendum result, and most Labour ones did too. As Theresa May took over the helm as Prime Minister she interpreted this as proceeding with as close a relationship with the EU as practical subject to three red lines: control over migration, no financial contributions and no jurisdiction of the European Court. This was a pretty fair interpretation of the referendum result, where migration and the financial contributions were key issues, as was sovereignty. A fourth red line soon crept in however: no customs union with the EU. The mandate for this was not a clear one, but many Tories considered that the ability of the country to negotiate tariffs with other countries to be critical. That is where things started to go wrong.

But even with these clear red lines, it was apparent that any deal with the EU would be messy and involve compromise: Britain’s bargaining position was a weak one. Notwithstanding this Mrs May gave the EU the two year notice required under Article 50 of the EU constitution in March 2017. She has been much criticised for this, but it did make sense. A later date meant that we would have been tangled in elections to the European Parliament, and after that the handover to a new Commission. Then Mrs May had a brainwave. If she called a General Election, she could establish a clear majority in parliament and that would give her the leverage to push the whole messy business through. Again, this was not an error. She badly needed a big majority, and also to stamp her authority on the party. The polls were very favourable.

Then disaster struck. Instead of leaving nothing to chance in the election, in the way of Tony Blair, and focusing her pitch exactly on Brexit, she let her close adviser, Nick Timothy, put together a hubristic manifesto that pushed into all sorts of other areas, notably funding social care for the elderly. She also listened too closely to the advisers who told her to keep her distance from the debate, and especially not to allow herself be exposed to a televised leaders’ debate. This was an understandable mistake because her public performances were dire. But it reinforced public doubts about her. It all unravelled and she ended up in a minority depending on Ulster’s DUP. She should probably have bowed out then and there. But she carried tuck on doggedly, and her party let her.

The big problem turned out to be the intra-Irish border with Northern Ireland. The Irish government insisted that the border remain an open one: but that implied that Northern Ireland at least would be part of a customs union with the EU, if not the Single Market. Mrs May (and others in her government) underestimated this. She was desperate to close the Withdrawal Agreement quickly, and so she allowed wording in this that implied either the UK as a whole or Northern Ireland would stay tethered to the EU Single Market in some shape or form, until somehow some other arrangement could be made that kept the border open. And this would be baked into an international treaty that a future parliament would find it hard to get out of. This issue than split her own party and alienated the DUP. The other parties were not going to help her out. Meanwhile the Irish government has stuck to a very hard line, notwithstanding the risk of a no-deal.

And so the impasse. We are still in the EU long after the 29 March departure date, and facing those European Parliament elections. The best hope of exit is through a deal between the Conservative and Labour parties to agree on some form of compromise. Talks are under way, but both leaders are being urged to abandon them. This is partly because of entrenched views on Brexit, on the one side insisting that there can be no customs union, and on the other that there must be a further referendum. It is also because there is polarisation beyond Brexit along more traditional left and right lines. This is where both parties want to fight the next general election, and they are keen to paint the other side as muddled extremists.

With the main parties deadlocked, the initiative is moving elsewhere. Most spectacular is the new Brexit Party, led by former Ukip leader Nigel Farage. This is running to a highly nationalist script, stirring up anger over the alleged betrayal by the metropolitan elite. It is copying much of its playbook from Donald Trump. Mr Farage has a ready audience, and is playing to packed out and enthusiastic public meetings. This is a message of pure anger; there is no suggestion of any constructive path out of the mess the country finds itself in. But many formerly resigned and politically inactive people tasted political success in the referendum, and they are not ready to give it up. Probably as much as a quarter of the electorate are supporters, with many more willing to vote for it as a protest in European elections.

Other parties are becoming more militant too. Most successful of these is the Liberal Democrats. This party has often flirted with the centre ground, and often practices centrist government locally – but on the national stage they have become militant Remainers. The Greens too are doing well, combining their environmental militancy with a European one (not so long a go I remember them having a very large Eurosceptic faction – which shows how times are changing). Change UK, the new party made of defectors from both Labour and Conservative, is muddled about whether it is centrist or extremist, and is losing momentum as a result. In Scotland and Wales local nationalists are seizing the opportunity in their own particular way, with a combination of their own nationalism and Remainer militancy.

Meanwhile Conservatives and Labour are losing control. Both have succeeded through being coalitions of different interests, and so have had a natural tendency to be centrist – long seen as essential to winning power. But increasingly their activists are losing sight of that and wanting to join the polarising tide.

Where will this end? The two most likely outcomes are a no-deal Brexit (probably in October this year), or a further referendum which ends up stopping Brexit altogether. Each would be a victory for one of the extremes. Both would leave a legacy of bitterness that will take a generation or more to heal. Perhaps that is something our country has to go through before it reconciles itself to its new fate, whatever that is.

The two party system takes a blow – but what about a general election?

It is a good moment to be a Liberal Democrat, after the party’s strong showing in last week’s local elections. The party were unequivocal winners, while both the the big parties fell back. After years of being ignored and told that the party was broken forever, it is good to be back.

But it is better than that. What the results show is that the party is rebuilding its grassroots strength, and with it a base in local government. This has been the party’s secret weapon, little understood by the Westminster chatterers – local government was how the party built its strength in the 1990s, before it became a significant parliamentary force in 1997. This is the result of hard work by activists working at local level across the country. It wasn’t just the Lib Dems. What surprised the political commentators even more than the success of the Lib Dems, which was as the upper end of expectations, was the relative success of the Greens and local independents. This too required grassroots activism.

Meanwhile the Conservatives, who had the most to lose this time, did very badly, losing over 1,300 seats, at the top end of expectations. The seats were last fought on a relative high for the party in 2015, so some loss was expected. They did worst in areas with a high Remain vote in 2016. What really surprised commentators was how Labour failed to capitalise on this. The party gained seats in some places, but lost in others, with a small net loss of seats overall. Nobody was expecting a spectacular performance, but if the Tories were doing very badly, they were expected to pick up some of the pieces. Unlike the Conservatives, Labour fared worse in high Leave supporting areas.

The retreat of the main parties comes as a surprise to many politicos. Two party politics had been in decline for since the 1980s, with the rise of first the Lib Dems (and their predecessor parties) and then Ukip. But in the 2017 general election both the Lib Dems and Ukip were crushed. This was a huge relief to both Conservatives and Labour, and to many Westminster journalists too. Two party politics seemed to them the natural way of being, and allowed most politicians to focus on their internal party jockeying, rather than having to talk to voters much. Life became much simpler.

But that collective sigh of relief was a huge mistake, as both major parties turned inwards. The Conservatives tore themselves up over Brexit. To be sure this was an important issue, but they assumed that whenever they went to the country they could rally the voters around an anti-Labour message, and get away with it. First they managed to upset their supporters who voted Remain, only to disappoint the Leavers by failing to agree on how to implement Brexit on the target date of 29 March. The indecision is worse than choosing the wrong strategy: now Remainers who had been persuaded to buckle down in the name of democracy are starting to question that logic, as so many Brexiteers try to move the goalposts towards something much more extreme than they advocated in 2016.

Labour, meanwhile tore itself up over an internal power struggle, as the left saw its chance to take a radical left wing programme to the country by consolidating their power within the party. If the Tories cared too much about Brexit, Labour did not care enough. They assumed that the Tories would make such a mess that they would clean up at the next election. That left them with little to say on the big issue of the day. Labour Brexiteers are annoyed at the party’s role in delaying Brexit; meanwhile the party is unable to pick up disillusioned Remainers from the Conservatives.

That meant a poor performance at these English locals for both big parties, which each picked up a 28% vote share, the lowest combined total for many years. There is likely to be an even worse performance at the forthcoming elections for the European parliament, though they should be able to shrug these off, as they have in the past.

The key question is how much this matters at a general election. The electoral system makes it hard for smaller parties to break through. Both the big parties have some reason to hope that it will be business as usual. That would be complacent.

Firstly neither party looks well placed to roll back the threat from the SNP in Scotland, which will be critical to Labour’s chances in particular, but also important to the Tories. Up to 50 seats may be unavailable. The Lib Dems will doubtless hope that they can get a dozen or more additional seats, with the Conservatives looking the most vulnerable. The Greens look stronger than they were, but can only mount a challenge in a handful of seats.

But the big unknown is how well two brand new parties will perform. The most significant is Nigel Farage’s Brexit Party. This has made an impressive start. It looks well organised and well funded. It is sure to do well at the European Parliament elections, which play to its strengths. It is mainly an air war election, and Mr Farage has no difficulty in getting the attention of mainstream media, much to the annoyance of other smaller parties, who are routinely ignored by the BBC among others. The party has also managed to distribute some centrally organised literature. It will doubtless try to make mischief on social media, a successful medium for populist parties not interested in proposing any constructive policy programme. But, though the party attracts interest and volunteers, it has no grassroots organisation. This is not one of Mr Farage’s strengths, and it is a vital ingredient to success at general elections. Mr Farage himself might be a successful spoiler candidate (he is rumoured to be mulling a challenge to Boris Johnson, widely thought to be the the most likely next Conservative leader), but the party may turn out to be no more than a nuisance.

The second new party is the former Independent Group, Change UK. This party appears weak organisationally, and it is unclear what it actually stands for. It is trying its hand at the Euro elections, but even if it does well there (which I am not expecting), it is hard to see where that will lead. Building a grassroots organisation is very hard work, and it is far from clear whether they are up for it. Cannibalising Lib Dem support, a strategy which many in the party clearly wanted to attempt, now looks a lot harder. There are plenty of places where the Lib Dems are weak, though. Will they try to do something there?

So things don’t look so bad for the big parties when it comes to parliamentary elections. But they do have a problem: Brexit. The country could continue to muddle on trying and failing to leave; it could leave with a deal, which will not be unlike the one the government has already negotiated; there could be a crash out with no deal; or there might be a further referendum which halts Brexit altogether, or else leads to exit with or without a deal. Each of these outcomes will cause major problems for both the Conservatives and Labour. Dramatic upsets can happen (for example the rise of the SNP in Scotland in 2015, or the election of Emmanuel Macron in France). It would be foolish to rule such an earthquake out.

What should the progressive smaller parties do? Some kind of an arrangement to stay out of each others’ way looks sensible for the Lib Dems, the Greens and Change UK, whether or not an electoral pact is feasible or desirable. Meanwhile, each of these three needs to think of ways that it can capture the imagination of a public that is fed up with politics as usual. If these parties could agree on a broad programme of political reform, radical action on the environment, and revitalising left-behind parts of the country, perhaps that would do the trick.

Jeremy Corbyn and Hobson’s Imperialism: why it scares me

The latest antisemitism row to engulf Labour concerns Jeremy Corbyn’s foreword to to a modern edition of the writer J A Hobson’s Imperialism: A Study, written in 1901. This is dividing Mr Corbyn’s critics and supporters in a familiar way. But its wider significance is what it reveals about the way Mr Corbyn, and many of his allies, view history and politics.

Before launching into this I need to clear the deck. First, this new edition was published in 2011, long before anybody, including himself, could have viewed Mr Corbyn as a potential Labour leader, whose words would be subject to widespread scrutiny. That makes it more revealing, but it doesn’t say how his understanding of antisemitism might have moved on since. Second: I have read neither Hobson’s book, nor Mr Corbyn’s foreword, which doesn’t seem to be available online (and I don’t have a Kindle). I am having to base my views on two sources: the original article from The Times‘s Daniel Finkelstein that kicked the current episode off. Second a short article by academic Mike Taylor on Hobson’s book in the Guardian, which doesn’t add anything to Mr Finkelstein’s article, but helps give me more assurance about its factual accuracy.

Hobson sought to show that 19th Century Imperialism was driven by financial interests, who succeeded in manipulating the politics of the time to support imperialist policies from which they made financial gain. He further went on to say, unusually for time, that imperialism was exploitative and did not represent an advance to human civilisation. The antisemitism arises because he thought that what I have termed “financial interests” was a predominantly Jewish elite with no fixed national reference point. He doesn’t quite say that it is the Jews in this book, but a couple of references, one to a “single and peculiar race” and another to the Rothschilds, are unmistakable, and other Hobson writings are explicit, not just about high-flying financiers, but also the Jewish working classes of London’s East End. This was a widespread view at the time.

It isn’t too hard to mount a defence of Mr Corbyn. It does appear that Hobson’s antisemitism is worn quite lightly in this particular work: the same two quotes are used again and again. The important bit is not this, but there were (and are) powerful commercial and financial interests controlled by international (and national) elites capable of influencing policy. They don’t have to be Jewish, and probably Mr Corbyn doesn’t think that aspect is very important. The rest of the analysis stands, and it is very striking. The interests of big business and finance was doubtless a factor in the development of imperialism, as they found home markets constricted and European or North American markets hostile to foreign competition. In those days big business was dominated by food, textiles, mining, steel, capital goods (ships and railways especially) and armaments. It is not hard to see how that could lead to imperialism. Furthermore Hobson was clearly ahead of his time in understanding just how destructive imperialism was.

So far, so good. But three criticisms are still valid, and show just how bad a choice Labour members made when selecting Mr Corbyn to be their leader. First is that antisemitism. It runs right through this work, and at the time it was written that would have been understood clearly. It is one aspect of left-wing antisemitism which went on to the persecution of Jews in the Soviet Union and then throughout Soviet-dominated Eastern Europe. Hobson’s work was known to be highly influential to Lenin and it formed part of the narrative that drove this particularly ugly side to the political left. It it clearly hasn’t disappeared; it is rampant and barely challenged outside the developed world, and clearly remains an issue in parts of the modern Labour Party. Mr Corbyn’s foreword to this book was an opportunity to say something about this but instead he said nothing. Through ignorance or bad judgement it clearly wasn’t important to him.

Second, for all its farsightedness, Hobson’s analysis is clearly deeply flawed. Imperialism suited many other people beyond big business leaders. Not least of these were the workers of the imperialist powers, for whom big business generated jobs and income. This was a time (i.e. especially after the 1850s) when living standards for workers advanced steadily and when what people would later call the social democratic consensus started to develop, notably through the work of German socialist politician Eduard Bernstein. This followed the insight that capitalists and workers had a common interest in the health of the industrial economy. How far can workers of the time be allowed to take responsibility for their own political decisions, (i.e. in this case backing imperialism), or are they always being manipulated? This is one of the great divides in the history of socialism, with Lenin and Hobson taking the latter view. If Mr Corbyn is in this camp, which I have suggested before, it means that his commitment to democracy only goes as far as it suits him.

As an aside I can’t help but repeat a couple of quotes from Hobson’s book:

Does anyone seriously suppose that a great war could be undertaken by any European state, or a great state loan subscribed, if the house of Rothschild and its connections set their face against it?

And in reference to great European finance houses:

There is not a war, a revolution, an anarchist assassination, or any other public shock, which is not gainful to these men; they are harpies who suck their gains from every new forced expenditure and every sudden disturbance of public credit

Anybody who knows anything of the detail of the causes of the Great War in 1914 will understand just how silly this is. The causes were complex, but the forces of international finance were not part of it: instead an overmighty military in the three great empires of Germany, Russia and Austria played a large role, without the restraint of strong political leadership. If anything the forces of finance were part of the cautious inertia of the establishment which came so close to preventing the war from occurring. With reason. The thirty years of destruction unleashed by that war destroyed most of the accumulated wealth in the developed world, along with many millions of lives. It wasn’t rootless internationalism that caused war, but an excess of its opposite.

The third criticism to make about Mr Corbyn’s foreword is what else he says, beyond praising its insight and prescience. According to Mr Finkelstein:

Since the Second World War, the Labour leader argues, “the big imperial force has been the United States on behalf of global capitalism and the biggest, mostly US-based corporations”. This has been supported by propaganda about “freedom”. This propaganda effort was designed to “accompany the military re-occupation [of Europe] under the guise of Nato. Thus the Cold War was followed by American media and cultural values, in an attempt to create an empire of the mind.”

He contrasts this attempt to subjugate people through the “malign influence of the CIA” and pliant governments with the influence of the Soviet Union. “The Soviet influence was always different and its allies often acted quite independently,” writes Mr Corbyn.

Daniel Finkelstein, 30 April 2019, The Times

This is exceptionally revealing. Of course the history of the Cold War is a lot murkier than the version our politicians fed us, and industrial interests played their role – though I would argue that these were at least as powerful and important in the Soviet bloc. But to argue that NATO amounts to a military occupation of Western Europe by US interests is plain silly. What popular uprisings did US-led fores put down? And how independent really were Soviet allies after their interventions in East Germany, Hungary and Czechoslovakia? And should we really see European people as helpless victims of the imposition of US culture, dictated by big US corporations (after their subjugation of their own people?). And did the Soviet authorities not try just as hard to manipulate people’s minds? Again we have the idea that ordinary people cannot be trusted because they are so easily manipulated by the rich.

It is no surprise that this leads to support for the Castro regime in Cuba and the Chavez/Maduro one in Venezuela. It is one thing to take a hard-headed view about the influence of US policy in the world, and to recognise its considerable dark side. It is another to indulge in fantasy. Socialists can be divided into roughly two sorts: the romantics who have faith in a bottom up movement of the masses (think Rosa Luxembourg) and the hard-headed sort who ruthlessly focus on control of power by a select elite (think Lenin or Xi Jinping). The former end up in failure, the latter in oppression. Mr Corbyn is trying to romanticise the ruthless strand of socialism, which is the worst of both worlds. It suggests that while he is not a ruthless operator himself, he is liable to be manipulated by those that are.

All of which leads to the question of what would happen if Jeremy Corbyn became British Prime Minister. It suggests that a government under his leadership would lack the competence to govern effectively, while turning on any British institutions when things go wrong. I think those British institutions are strong enough to survive, and that the Labour Party will eventually reject the hard-left narrative that Mr Corbyn represents. But what this country does not need after years of stasis arising from Brexit (whichever way it eventually goes), is another few years in a muddled and incompetent experiment with socialism.

Beyond Brexit: Vince Cable’s valedictory

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As we left the Liberal Democrats conference in York we were handed a small book: Beyond Brexit: Liberal politics for the age of identity, by the party leader Vince Cable. Vince had already announced his imminent departure as leader. This was his parting shot. Good and bad, it is a fitting verdict on his leadership.

Beyond Brexit is not a difficult read. It is a series of short essays, a few pages apiece, which flow well enough. Alas that is not entirely good news. Vince is a careful and studious politician. In his essays he likes to analyse what is going wrong. Along the way he also has another agenda: to defend the record of Liberal Democrats in the coalition government of 2010 to 2015. Both of these tasks are important. Too often the left dismisses current problems as being some combination of “austerity” and “capitalism”, assuming that this is obvious; the populist right similarly assume that problems arise from departing from the ways of the 1940s and 1950s. Likewise the Lib Dem record in government is dismissed as a big mistake on the basis that it was electorally disastrous for the party without bothering to understand what it actually achieved.

But the trouble is that this doesn’t leave much space to develop solutions. Too often these seem to amount to “maybe a bit of this, may be a bit of that”. The hope seems to be that we should trust somebody with wise insights about what is wrong to come up with good answers, without being very specific about what they are. No individual proposals seem particularly radical. No sweeping away of fiscal discipline; no universal basic income or job guarantee; no Green New Deal. Taken as a package, however, Vince’s ideas would be a radical alternative to the various paths proposed by the conservative right, the neoliberal right or the radical left. Whether it amounts to a radical departure from the social democratic left depends on how seriously we take his ideas on devolving power. Too often politicians drop such ideas when going gets rough, as it inevitably does; social democrats have no real patience for devolution.

Of course this lack of headline radicalism isn’t necessarily a bad thing. I tire of activists on the left who demand “radical” solutions. Such ideas have two flaws: almost by definition they go well beyond any evidence for what works (using the argument that everything else has failed…), and politically support for them tends to be narrow, so implementation requires some sort of mechanism to bypass consent. Most activists assume that the people are behind them, and that popular frustration with the system will lead to support for their form of radicalism – and it isn’t too hard to sneak such ideas through in a manifesto few people read. When they eventually collide with political reality, things are apt to get ugly. There is something to be said for a steady but gradual approach.

But political ideas don’t just need to be right, they need to hit the political zeitgeist. That is as much a matter of timing as it is of content. Mrs Thatcher seemed right in 1979; and her polar opposite, stylistically, John Major in 1990. Unfortunately now is not the hour for Vince’s understated intelligence and good-natured engagement. If his policy programme is right, it needs to be sold in a radically different way.

How? The most important step is to identify a single organising idea, with maybe a couple more to be held in support. This is plainly lacking in this book. It ends with a chapter on “My Roadmap to a Better Britain”, with ten points. All worthy, but these need to be organised around as few deeper themes as possible. Up until now the single organising idea for the Lib Dems has been opposition to Brexit. In the title of his book Vince rightly understands that the party has to move on from this: both because the issue will, eventually, recede one way or another, and also because it has become very tribal. Labour have such a theme: opposition to austerity. So do the Greens: radical action to reverse climate change. From Vince’s book there are a number of candidates for a Lib Dem theme, of which the main ones are education, environment (or the “Green Economy”) and political reform. There is also something he calls the “Entrepreneurial State” and housing.

Personally I think that political reform is the most important theme. The country’s politics is too centralised, while dominated by big parties that can be taken over by extremists. Fix this and the problem of disenfranchisement and the left-behind can be solved. But it suffers from two fatal drawbacks. First the British public is very conservative on political structures: we learnt this from the referendum on the Alternative Vote in 2011. They may agree that politics is broken, but they think that it is the politicians that need replacing, rather than the system that needs fixing. They are easily persuaded that any change will at best be a waste of time and money, and at worst make things worse. Brexit may be an exception, but that was sold on the basis of membership of the EU being a constitutional reform that had gone wrong or overreached – and being as unspecific as possible about what would replace it. And on that last point the country has become quite stuck, between conservatives who want to take the country back to 1970, and conservatives that want to leave things as they were in 2016. Secondly, when reform is about devolving power and improving democracy, it usually has the effect of giving sustenance to your political opponents. Proportional representation has helped conservative populists gain traction; local power centres are often conservative (as experience the highly devolved countries like Switzerland and Austria shows). To me this is a necessary part of the journey, but for most politicians it is simply self-harm.

The Green Economy, or Green Growth, has a lot going for it, as it combines popular concern for the environment with an answer to the challenge that it will make working people worse off. But both Labour and the Greens are likely to pick up something like a Green New Deal: a programme of top-down investments and regulations designed to have a rapid impact. While the Lib Dems may get away with camouflaging its more bottom-up approach with that name, it will be hard to make an impact in such contested space – which makes it a useful supporting theme, rather than the main line of attack (much as Labour will use it).

So maybe education is the best place to find an organising theme. There is no chapter on it in Vince’s book, but it comes up in several places. Fourth in his roadmap is “The best education in the world”. In particular Vince wants to develop vocational and lifelong education, especially through FE colleges. This is promising. Also the way in which the Conservatives have let loose the Treasury cynics on Britain’s schools is both damaging and unpopular. While some schools are not as financially well-run as they could be (though many are), this drive points to a narrowing of the curriculum and tossing difficult cases out of the system. This is desperately short-sighted. So education will resonate as an issue with a lot of voters.

But more important than that, liberals really believe in education. It is mass education, above all, that has spread liberal ideas. And a liberal education is probably the most compelling liberal idea, as it is a surer path to personal development than the rote-learning preferred by conservatives. The biggest weakness of populism is that it stands for a reversal of gender-fairness, and a rejection of diversity of race, culture and sexual orientation. This horrifies most younger people – which is clearly a function of improved education. In countries where education is weak younger people are as susceptible to populists as other age groups. There are pitfalls: too much open propaganda for liberal values in schools can, paradoxically, look intolerant (look at the problems sex and relationships education can have). Faith schools are a particularly ticklish issue. And neoliberals have too readily assumed that improving education is a substitute for other policies that address personal and regional inequalities. High quality universal education is a necessary but not sufficient condition for a fairer society.

But I suspect that Vince, ever the economist, thinks that his economic ideas should be the key theme: the first two ideas in his roadmap are “Strong public services and honest tax” and “An entrepreneurial state”. And yet I can’t see how that can be turned into a rousing organising theme to tackle the challenge of identity politics.

Such will be Vince’s legacy. I feel that he was the right man at the wrong time. I hope the party can find a replacement who is both capable of developing a strong policy programme and selling it to the public at large.

Britain’s European Parliament elections are the Brexit Party’s to lose

After the British government failed to arrange Britain’s exit from the European Union on 29 March, the country must now elect members for the European Parliament (MEPs) on 23 May. Few people wanted this to happen, but the state of EU law is such that it can’t be waved away.

These elections have a rather interesting place in the country’s democracy. Alas this has nothing to do with the job that MEPs have to do, though that is an important one. Because the result is inconsequential so far as most people are concerned, it is an ideal vehicle for a protest vote. And with a large array of parties competing for votes, there is no need for voters to choose one of the main ones. Indeed, for a strong message of protest it helps if you don’t. And in 2019 the vote is probably genuinely meaningless, as it is still likely that the country will leave the European Union before the year is out. So the result could be quite revealing about the population’s real political preferences.

The Euro elections, as they are often called, have played an important role in bringing Brexit about. The United Kingdom Independence Party (Ukip), when led by Nigel Farage, understood how to use the opportunity better than any other. It has provided the party with a platform and even political respectability. It came second on 2009 and the first in 2014. This served to raise the issue of Britain’s EU membership up the political agenda, and to scare the Conservative leadership into promising a referendum. The elections have also been quite useful to the Green Party, who have managed to get a small number of MEPs elected. For the Lib Dems, who have under-performed in these elections in spite of having candidates who really want to be MEPs, they have conferred a measure of establishment respectability, as they have managed to get somebody elected in most of the regional constituencies. Until 2014 that is, when they lost all but one of them – and the shock of that disaster was massive to party’s leaders, still in denial as to how low its fortunes had sunk.

Unfortunately the relatively strong performance of these smaller parties (as well as the racist BNP who got two MEPs elected in on election) has fostered the illusion that small parties can do well, and a profusion of them enter the fray. But the Labour minister Jack Straw, who devised the electoral system, and was no fan of proportional representation, made sure that things weren’t that simple. He divided the country into constituencies with a maximum of 10 MEPs and a minimum of three. That meant that a party generally needs to get 10%, or potentially much more, in a particular region, to get somebody elected. and they need more than 20% to really make a real impact. And without preferential voting (except in Northern Ireland) if your party doesn’t make the threshold your vote is wasted. A profusion of small parties can, paradoxically, make life easier for the bigger ones. This was shown last time in the North East of England, when Labour bagged two out of the three available seats with under 40% of the vote.

This will make the election very messy. The two main parties have struggled for years at the Euros, where their usual strategy of bullying electors for fear of the other lot has little traction. The Conservatives are in a desperate position. The politics of Brexit has put the party in a state of civil war, and its leader is a lame duck. Its members and donors don’t believe in the election, and it is hard to understand what message they will campaign under. Their poll ratings are in free fall; they could end up taking less than 20% of the vote and joining the shrapnel of minor parties. Labour are much stronger, but the leadership studiously sits on the fence as concerns Brexit, and that will weaken them. They have no good reason to change that strategy for now, as it seems to be working. If voters are anxious to show their views on Brexit, then it will leak votes in both directions. A lot of its traditional supporters will not vote. Nevertheless the party could do relatively well if it can hold on to enough of the vote to stay out of the shrapnel zone.

On the Brexit side of the other parties there are two main runners. Ukip is still in business with a recognisable brand, and Mr Farage has set up a breakaway: the Brexit Party. The latter is brand new, and has only just completed its registration. Many politicos had assumed that its lack of brand recognition in an apathetic electorate would be a fatal weakness, and it and Ukip would badly split the Brexitvote. But recent polls show that the Brexit Party is doing very well – even leading in some – which goes to show just how powerful the “populist” parties and their social media connections are. Just because voters are apathetic over the various mainstream parties doesn’t mean the are apathetic about Mr Farage’s doings. The new party is likely to be tripped up by the now highly treacherous regulatory regime, given the happy-go-lucky culture such parties live by, but that is not likely to emerge until long after the election is over, provided they manage to get candidates nominated. Ukip, whose affairs have descended into farce, are likely to be buried among the shrapnel. The Brexit Party, on the other hand, could be one of the beneficiaries of the splintered vote.

The three main Remain parties, the Lib Dems, the Greens and the new Change UK (formerly known as The Independent Group or TIG) on the other hand are courting disaster exactly because they are splintering the vote. Combined they could take as much as 25% of the vote – enough to do very decently. Split three ways they could end up with just one or two seats apiece. Under the country’s increasingly bureaucratic electoral regulations running a joint list in the time available to organise it was always going to be impossible, and it would have left the joint parties hobbled by expense limits. The Greens and Change UK claim that the proportional system makes a joint ticket unnecessary, and the Lib Dems claim that their attempts to organise a joint campaign were rebuffed. All three are surely being disingenuous. In any case, if they elect MEPs they will stand for different things – which might count if they succeed in stopping Brexit and serving their full terms. The election isn’t actually about Brexit after all – it’s about playing a role in the EU’s governance.

Meanwhile the three parties will be locked in a fierce battle with each other, and for attention within an apathetic electorate. The Greens have a strong brand, and may draw some votes from disillusioned Labour supporters from the left. The high profile climate change protests in London could help it too – though they are annoying a lot of people, these aren’t the ones who were ever likely to vote for them. But the strong brand is also a limiting factor which puts people off as well as attracting them – it is hard to see the party making it into the big time. It is hard to know what to make of Change UK. They have managed to get their new party registered in time, but their proposed logo was rejected. Their appeal is vague – but they may have some generous donors behind them, and they have a strong profile in mainstream media. They might be able to do something with this and it would be very foolish to write them off.

And the Lib Dems? Their (I should say our) brand is battered. But it has far more administrative strength and depth than the other two, and it could do well in local elections in early May, where its rivals have very little presence. It hopes to become the standard bearer for angry Remain voters. But it needs to push well beyond its usually polling range of 6-10% not to get caught in the shrapnel zone. This will be a big test for the party and its strategy of pitching itself as the hard Remain party.

For now it looks as if the election is the Brexit Party’s to lose, with maybe some consolation prizes for Labour. Whether this tells anything useful about the UK body politic is another matter, but it will provide a lot of entertainment for politicos.

We don’t know who is winning the Brexit trench warfare

Britain’s struggle over Brexit resembles the popular image of trench warfare on the Western Front in the First World War. Huge amounts of effort are expended, after which nothing much seems to have changed. Last night’s further postponement of the leaving date left me with that feeling. None of the possible endings seems any closer: Brexit with a deal, Brexit without a deal, or revocation with or without a further referendum. It doesn’t even look as if Theresa May, the Prime Minister, will resign to give somebody else a chance.

As with trench warfare, however, the important changes are less visible, and have to do with the stamina of the combatants. Optimists urge their side to keep going as the enemy is about to crack; pessimists see the strains on their own side, and assume that the other side is in a better state. But nobody really knows who will crack first.

And the strains are clearly showing on all sides. Within the Remain camp there were some Liberal Democrats, reportedly including the MP Norman Lamb, who were angry that a number of Lib Dem MPs voted (decisively) to oppose the customs union proposal in parliament’s recent indicative votes. Now, they say, is the time to reach out for a compromise and end the stalemate that is stopping progress on so many other parts of public life, as well as blighting businesses. Reportedly Norman said that the Lib Dems were no better that the Tory Brexit extremists of the European Research Group.

On the Brexit side there is the public recantation of influential journalist Peter Oborne. He now says that Brexit is much harder than he thought and really not such a good idea after all. Just before last night’s summit Mrs May talked of moving on to Britain’s brighter future outside the EU. There was no more conviction to this that her mantra that “no deal is better than a bad deal”. Her actions speak otherwise, unless she also thinks that staying in is better than no deal. Only a tiny band of die-hards can actually think that life would be better outside the EU. Most Brexiteers either feel strongly that the 2016 referendum result, with its high turnout from previously apathetic voters, should be respected, or else they simply want to move on. And, of course, accepting Brexit with a deal (which would have to be close to the one Mrs May has already agreed) is by far the easiest way to move on.

The people that look most defeated by this latest episode are the no-deal Brexiteers. They have a lot of poll support, but only about 100 MPs. Most people who look into the idea quickly drop it. Clearly the scare stories are not all the usual hype. The plan of the no-dealers was to get their way by default – but neither the government nor the EU are playing along with this. All intensely dislike the prospect of a no-deal. But the no-dealers aren’t defeated. Their best chance lies in changing the Conservative Party leadership to a hard Brexiteer like Boris Johnson, and hoping that he or she doesn’t wobble. Their other big hope is that the EU will throw Britain out, as is now in their power. This is close to the French president Emmanuel Macron’s public position, doubtless following French public opinion. Britain’s ambiguous status will do progressively more damage to EU institutions as it persists – and some EU leaders are starting to realise that a badly divided United Kingdom would not be an asset to the Union. So the no-dealers won’t give up yet.

The Remainers, who are ultimately looking for a revocation of Brexit, continue to hope too. They have suffered reverse after reverse, but they sense that the public mood is relentlessly creeping their way. Their biggest problem is that the Conservatives have firmly shut them out, and the Labour leadership is opposed too. Of the two, Labour’s resistance is clearly the weaker, since most Labour members and voters are Remainers. And yet the longish delay could force both parties to concede a referendum to break the deadlock, and that is all the opening Remainers are asking for.

Meanwhile those advocating the current deal on offer, or at least the legally binding Withdrawal Agreement part of it, are tantalisingly close to victory, like the Germans in April 1918 in World War One. All it now requires is for the talks between the Labour and Tory leaders to reach a compromise wording around the idea of a customs union and then to recommend that to their respective MPs. That should be enough. Or something similar might be achieved by a move led by backbench MPs. But the political rewards for such public spiritedness look meagre in Britain’s toxic politics.

What will happen? I find it impossible to predict and I don’t even know what I want. Each of the three possible outcomes looks pretty bad. Staunch Remainer as I am – and I would vote to revoke if given an opportunity – I do not relish the prospect of living in a country haunted by a stab-in-the-back myth, which can be trotted out to explain anything bad. Even if Revoke wins in a new referendum, it is hardly likely to amass the 17.4 million votes that Leave did in 2016, as turnout is likely to be low. I am tempted by the idea that we need to take one step back before taking two or even three steps forward.

Meanwhile it is hard not to be depressed.

The Brexit chaos offers Labour an opportunity

Most people who follow British politics are in despair, as neither government nor parliament are able to plot a way forward with sufficient backing to succeed. But perhaps the small band of advisers to Jeremy Corbyn, Labour’s leader, who famously think that Brexit is a subsidiary issue, are sensing opportunity.

When Mr Corbyn was elected as Labour leader in 2015, Conservatives were gleeful, foreseeing a generation of permanent Tory rule. But Brexit and a blinkered leader have undone them. In 2017 they threw away a massive poll lead and lost their parliamentary majority. In recent months they have retained a consistent poll lead over Labour. This is not enough to break the deadlock, but enough to keep Labour out. But that could change.

Consider the possible outcomes of the current impasse over Brexit. A strong possibility is that the country will crash out of the EU on 11 April without a deal. Neither government nor parliament wants this, but neither can they agree on a deal, nor do they have the courage to revoke the Article 50 withdrawal process altogether. So what are the likely consequences?

It is hard to know just how bad things will be in the event of a no-deal Brexit, as most commentators are either pumping up the dangers or dismissing them. But some of the more thoughtful Brexiteers, like Michael Gove, the Environment Secretary, are clearly rattled. Agricultural tariffs seem to be what is spooking him. Agriculture is not a major part of the economy by monetary value, but politicians the world over know that it packs a big political punch. There will be other problems, not all entirely attributable to Brexit, that will add to the misery. The British car industry is flat on its back. This is partly to do with Brexit, and the effect of planning blight on an industry that has to investment for years ahead. But also it is almost entirely foreign-owned and the underlying economics has changed to make repatriation of manufacturing to home countries more advantageous. A no-deal will accelerate its decline and the massive loss of prestige that will go with it. And there will be a hundred other smaller humiliations, that will be felt keenly by the better-educated and more worldly third of the population who never wanted it in the first place.

It gets worse. Britain will still have to deal with the EU and work out new agreements to allow a thousand things that we take for granted to keep going. This will not be easy as Brexiteers promise, and further humiliating climb-downs are in store. The only place where the hard Brexiteers may be proved right is Ireland. The Irish Republic is only now facing up to the consequences of its hard line on the Withdrawal Agreement and finds itself in a very sticky spot, just as the DUP and the Tory supporters predicted.

In the chaos Labour should be able to force a General Election, even if the government tries to struggle on. The Conservatives don’t have a majority, and have been struggling with a stream of defections. The DUP may well decide that the fun of propping it up is over and withdraw its support. The Tory position will be desperate. If Labour are able to launch their strike quickly, they may not even be able to change leader. In that event they stand no chance of presenting a coherent and convincing case to electors. More likely they will manage to find somebody new, but though he (or much less likely, she) might experience a honeymoon, there will not be enough time for them to get a strong grip on the organisation. Meanwhile Labour, and everybody else, will throw back at the Brexiteers that will then be in charge of the party, all their false prospectuses about Brexit and the no-deal.

What happens if Britain manages to avoid a no-deal? One scenario only gives the Tories a chance: if they are able to get Theresa May’s deal through parliament at the fourth attempt, and then leave in a relatively orderly fashion on 23 May. But to do that they will need a substantial block of Labour MPs, and if the Labour leadership resists, that surely will not happen. Ruling that out, what could happen is some sort of long stay of execution to renegotiate the deal and organise a General Election.

What does Labour do then? It needs to promise a new exit deal to be confirmed by a further referendum. To win, Labour must rally the Remain voters who will no longer be able to support the Tories: that means promising a referendum. But they also need to rally at least some Leave supporters. The importance of these to Labour has been exaggerated, but the party will still need all the votes it can get. But the leadership can still say that it is in favour of Brexit, and will campaign in favour of its new deal when that referendum comes. If that looks a little weak, the Tories will be struggling to come up with a coherent alternative. With decent execution (never a given in British politics after Tony Blair) this could be a winner for Labour.

But are still problems for them. The first is Scotland. Labour has always struggled to win without a substantial bank of Scottish seats. But they have been outflanked on Brexit there by the SNP, who remain organisationally strong. It is hard to see what killer arguments they can use against them.

A second problem for Labour is that it still lacks traction in rural and suburban England. Mr Blair conquered these areas by promising neoliberalism. Labour can’t do that this time. Also they are broadly pro Brexit, so any referendum promise will get in the way. Some form of “progressive” alliance with the Lib Dems, the Greens and even with TIG might help to unlock these seats. But Labour’s strategy for dealing with these parties is to crush them, not lend them a hand.

Which is related to the third problem: the Tories will try to change the subject, as Labour so successfully did in the last election. They will not talk about Brexit any more than they really have to. Instead they will paint Labour as loopy lefties, who can’t be trusted to run the nation’s finances, the forces of law and order, or to control the borders. Labour might think that the country is fed up with “austerity”, but the voters they need to win over think that being careful with public spending is a good thing.

That makes it hard for Labour, but not impossible. Their shadow chancellor, John McDonnell, understands the need for a disciplined message on economic management, and the party’s campaign managers surely realise that abstract ideas like austerity cut little ice compared to concrete messages on impacts of cuts to education and police funding, for example.

The Labour leadership is reaching its moment of truth. Their strategy of sticking to a narrow, leftist agenda (unlike Mr Blair’s broad centrist one) is inherently risky. But the Tories may be gifting them their chance. Will they be up to the task?

Brexit stretches Britain’s democracy to breaking point

Nothing word is more stretched to people’s convenience that “democracy”. Everybody claims to be democratic, and yet few are interested in understanding what people actually want and then implementing it. They just want to convince themselves that their own points of view are “democratic”. But democracy matters all the same – and it is at the heart of Britain’s Brexit crisis.

Liberals are as bad as anybody in trying to bend the idea of democracy to suit them. After all genuine liberals are only a minority of the population at large, and the idea of “liberal democracy” contains a tension at its heart. Tory MP Bernard Jenkin was quite right when he said that marchers last weekend in favour of a further “people’s vote” on Brexit (of whom I was one) weren’t really interested in democracy, but in finding a way for Britain to stay in the EU.

But Mr Jenkin and his ilk are no better. They often claim that people and parliament are pulling in opposite directions. Parliament has a Remain majority, they say, but there is a Leave majority in the country at large. The first part of that statement is probably true, though most MPs seem to want to implement the 2016 referendum result in one way or another. The second statement is flat untrue, according to polling evidence, as demographic shifts and scepticism over Brexit mount. More people would prefer the UK to stay in than leave (though whether there is a majority for either view is doubtful – a lot of people just want it settled one way or another so that the political class can move on to other business). These Brexiteers stretch things even further when they claim that the majority of the British public support their particular version of Brexit, which means departure from both a customs union and the Single Market. For all that humbug, their claim rests on a series of ideas about democracy that have widespread support.

The first idea is that referendum results trump all other forms of democratic decision making. Thus the 2016 referendum result is an instruction to parliament that it must honour, or else there is a betrayal of democracy. This is widely accepted: most Remainers think that the 2016 result can only be superseded by a further referendum result. But there are some curiosities. Turnout in the 2016 referendum was high by British standards, but the result was close, so that the winning side got well under 40% of the registered electorate. Unlike the referendum on Scottish independence in 2014, 16- and 17- year olds were excluded; it is thought that these would mostly have voted Remain. So were EU residents registered for local and European elections (English people resident in Scotland were not excluded the independence referendum). But legally the result was not actually binding – it was advisory. That means that any challenges to its legality, particularly on the conduct the Leave campaign, would actually be pointless. For all that most people think the referendum result is valid and binding – and what most people think, in a democracy, matters a lot.

A second principle is that the manifestos on which political parties stand in a general election are binding on those MPs. The manifesto is the instrument by which the people delegate responsibility for governing to their MPs. This idea is popular with party managers and activists of all political parties. It suggests that if they can win a parliamentary majority for their party, then they have a democratic mandate to implement the entire manifesto, regardless of whether circumstances or opinions change. The seems to be the main justification that the Prime Minister Theresa May uses for her “scorched earth” policy of ensuring that any alternative to the deal she negotiated with the EU gets no oxygen in parliament. Indeed Mrs May seems to think that the manifesto gives her government absolute executive authority to implement it until a no-confidence vote stops it. The Labour leader, Jeremy Corbyn, would probably think the same way if he were Prime Minister. The manifesto argument does have some power. If MPs and parties could do what they liked regardless of what they said at election time, they would be hard to hold to account. And a manifesto is an attempt to promote a coherent programme rather than focus on a single issue. Still most politicians do not go about winning votes based on their manifestos, and few voters other than party activists read them. Instead they say that they are the best candidate to stop the one you most dislike, or that they would be an excellent representative for local issues that never make it to the party manifesto. If a Labour candidate came to my door, and I said that, sorry, I preferred the Lib Dem or Green manifestos, she would tell me not to waste may vote on them because they would never get in here: vote Labour and I can stop the Conservatives winning and implementing a hard Brexit. If I succumbed to this argument, Labour activists would say that I was supporting widespread nationalisation and abolishing student tuition fees. Tories would say that I had voted to implement Brexit. And, of course, it is very rare for the winner of a British general election to actually win an overall majority of votes cast, still less a majority of the electorate as a whole.

A third idea is that you can’t keep going back to people with the same proposition. If it fails at a referendum or parliamentary vote, then you must move on. It is one of the bigger complaints of Brexiteers that for countries where EU treaty changes are put to national referendums and fail, they are put back to them again, substantially unchanged. There are good reasons for this within the EU, but it does make the point that membership of the union restricts the options for any national electorate, and that they have to rely on the their elected representatives to negotiate on their behalf. This idea certainly has something going for it. It stops a bullying executive (or political class) trying to gets its way regardless. And it means that people and MPs are fully accountable for how they vote – rather than just shrugging and saying that they can always change their vote later. The irony of Mrs May repeatedly coming back to Parliament with the same deal, while saying that a further referendum would be undemocratic is lost on few. Still circumstances do move on and minds can change.

What is being lost in all this is the idea of representative democracy, which suggests we elect MPs to consider the issues of the day on our behalf based on the circumstances of the time. We want them to use their own judgement on our behalf, rather than mandating them to adopt particular positions. That idea clearly has its weaknesses, but it is the founding principle of Britain’s democratic institutions. It is the reason that we have single member constituencies, where we vote for people first and parties second. If we believed that parties and manifestos were more important, then a proportional voting system would be more appropriate – which is indeed used in Scottish and Welsh parliamentary elections.

Democracy and its institutions are a messy compromise. There is no right answer, and the best answer will only be the best answer for quite a short period of time. The test is whether the public at large think the whole process is fair, and recognise the legitimacy of the laws that result. By and large British democracy has passed this test, for all the complaints of liberals like myself. But Brexit is now stretching that. Remain voters were shocked at the strength and depth of feeling that emerged from those that voted Leave in 2016. That created a moment for democratic compromise. But the reason why the anti-Brexit protest marches have been drawing increasing support, and the petition to revoke article 50 has gone viral, is that a very large part of the electorate now feels trampled on and ignored in its turn. That is why I have joined them. We have gone through all the stages of grief for the Brexit result, emerged from depression, and instead of reconciliation we are getting angry again. We are told that Britain’s membership of the EU is plot by an unaccountable liberal elite, but that is not how it feels to us and our social circles. It feels more like a group of unscrupulous chancers capitalising on the (legitimate) resentments of the public to push through changes that will make our lives worse.

Who knows how this will work out? Should, against the odds, the Remainers actually succeed in stopping Brexit there will be huge scars on Britain’s body politic – but a least their political leaders seem to recognise that we can’t go back to where we were before. But if Brexit goes through, there will be deep scars too, especially Brexit-supporting leaders seem to care little about it. The people being trampled on may not be a majority, but they are, by and large, the people that keep the country and the economy running smoothly, and participate in public institutions, including voting. How their anger will be channelled is the great unknown that will overhang British politics.

Following the referendum, the government should have gone for a compromise Brexit, involving membership of the EEA (Norway-plus), and then let British democratic institutions take over from that, either back into full membership, or full exit. Mrs May’s plan was a reasonable interpretation of what Leavers voted for, but failed to reach out to Remainers while they were still on the ropes. We will pay a bitter price now whatever happens.

Modern Monetary Theory: a silver bullet for the left?

I have been reading the Economist regularly since 1974. I would find it hard to live without it. But I’m generally disappointed with the modern paper: its analysis lacks penetration, and its default setting is a mediocre version of neoliberalism with a few softened edges. But one of its regular columns stands out: Free Exchange. This discusses new thinking in economics in an open way that does not dismiss challenges to the conventional thinking that dominates the rest of the paper’s coverage. Last week it took on an idea that is increasingly fashionable on the left in America: Modern Monetary Theory (or MMT – its advocates love their TLAs).

This new strand of thinking on macroeconomics winds conventional economists up quite a bit, including those like Paul Krugman who are usually considered to be on the left. This is mostly because MMT’s advocates are deliberately provocative, disregarding a whole series of economic conventions, such as the use of mathematical models, and a complete lack of interest in finding common ground.

So what is MMT? I have discussed it here before, but in essence it suggests that the purpose of taxes is not to raise funds for public spending, which can be done by “printing” currency, but to stop the economy from overheating and the currency suffering from unacceptable levels of inflation. This is a reversal of the modern “neo-Keynesian” consensus (which I will call NKC since TLAs are clearly the thing), developed in the 1990s and still maintaining its grip, which suggests that the job of taxes is to fund government spending, while the job of monetary policy is to police inflation.

MMT has been seized on by the left (for example by Congresswoman Alexandria Ocasio-Cortez) because it suggests that the conventional arguments for austerity economics are bogus. Governments (or at any rate those that have their own currencies) don’t need to worry about budget deficits as long as inflation remains dormant. The magic money tree exists and is ready to nourish an expanded role for the state. Interestingly here in Britain the Labour leadership, represented by shadow chancellor John McDonnell, has resisted taking up MMT, in spite of entertaining other innovative economic thinking. I’m not entirely sure why that is, but Mr McDonnell is acutely aware of the dangers of his party being painted as wacky with the nation’s finances.

In fact the gap between MMT and the NKC is not as big as either its advocates or its critics suggest – much of it is linguistics. This is something that the Free Exchange columnist grasps, instead of falling for the wind-ups on both sides:

Speaking with MMT’s adherents is sometimes like watching a football match with friends who insist the ball remains stationary while every other element in the game, including the pitch and goalposts, moves around it.

The Economist Free Exchange 14 May 2019

Behind the kerfuffle the MMTers are onto four truths that conventional economists should be perfectly able to understand.

First: conventional monetary policy, which primarily operates through manipulating interest rates, is at best a blunt instrument for managing the economy, and at worst positively destabilising. It depends on managing levels of private debt, and often allows it to build up to excessive levels by promoting asset bubbles.

Second: public debt is much less destabilising than private debt, provided that it is denominated in the country’s own currency. Indeed many countries are able to sustain levels of public debt that used to be thought of as impossible – Japan being a prime example.

Third: fiscal policy (i.e. managing levels of public spending and taxation) is a much sharper instrument for managing the economy than monetary policy. It is much easier to direct extra demand to the weaker parts of the economy where is is less likely to cause problems. It may also be easier to direct extra spending towards productive investment (for example in clean energy or social housing) rather than inflate bubbles and the pay of unscrupulous intermediaries like bankers.

Fourth: across the developed world there is much greater headroom for additional government spending than is commonly supposed. This is because of a phenomenon referred to as “secular stagnation”, described by such conventional economists as Larry Summers, who describes MMT as “voodoo economics”. When the Financial Times’s veteran economics writer Martin Wolf thinks that the British government should borrow more to spend on clean energy projects because of secular stagnation, you should know something is up.

So MMT certainly has something going for it, once you look past the wind-ups. What are the problems? It is being embraced as an answer to austerity policies, with the suggestion that spending more on public services and benefits does not mean putting taxes up. But MMT doesn’t say there is unlimited scope for extra public spending – it says this is limited by the resources that the economy has access to. But there is little discussion about how you tell that an economy was is living beyond its resources – simply that this would lead to inflation. Supporters of the NKC suffered a similar complacency because of low inflation levels before the great financial crisis of 2008. Doubtless eventually excess would lead to inflation, but in a globalised economy there is likely to be financial instability first, perhaps driven by foreign currency borrowing. With record levels of employment and a large trade deficit it is not self-evident that the British economy isn’t at the limit already – though if extra public spending was carefully targeted it would stimulate production rather than cause prices to go up or imports to increase.

Which leads to a political issue. Under any economic theory it is clearly the case that governments can borrow too much, and that eventually printing money causes more problems than it solves. At worst this leads to cases where ruling elites and their supporters continue to live well and entrench their power, while the rest of the country becomes impoverished (think of Zimbabwe and Venezuela at the extreme, or the lesser cases of Turkey now and Argentina under the Kirchners). That is why developed world governments operate within political constraints to stop them spending too much. MMT is being used as an argument to remove those constraints, and that would end badly unless they were replaced by robust alternatives. This does not seem to be a conversation that the supporters of MMT are taking on.

There is a middle way. If, as Mr Wolf suggests, government borrowing is directed to support investments that will help economic wellbeing in the long run, then the risks of the economy going out of control are much lower. And if these investments can be biased towards areas where local economies are weak, that is even better. That means institutional controls are needed to ensure that current spending and taxation remains within limits, and to ensure that investment projects are worthwhile. But such institutional constraints are anathema to the left.

If something sounds too good to be true, it usually is. MMT is a useful challenge to stale conventional thinking on managing the economy. But even if its supporters are right that the economic arguments for austerity are flawed, we should not be blind to the political problems of giving governments too free a hand to spend as they please.

Theresa May is stuck in a hole. She has decided to keep digging

There is something unspeakably depressing about Theresa May, the British Prime Minister, seeking a short delay to Britain’s departure date from the European Union, currently 29 March. According to the news reports this morning, this extension should be a short one, of no more than three months.

She has decided on this, apparently, because a longer delay would cause a revolt in her own Conservative Party, including Cabinet resignations. I am no Brexit sympathiser, but such a rebellion would be perfectly understandable. A long delay would mean that Mrs May had failed completely to achieve the goals she set out both when she became Prime Minister in 2016, and went to the country in 2017. How on earth she could contemplate doing so without immediately resigning is completely beyond me. And yet the thought of resigning doesn’t seem to have crossed her mind. She seems stuck in the narrowest of tunnel visions.

But I cannot discern any plan to break the political deadlock that has caused the her to go back to the EU with her request. She is still hoping that a parliamentary majority can be cobbled together to pass the deal she has negotiated, which last time lost by 149 votes. She has been trying to do so by bullying and bribing the MPs who give here a bare governing majority, from her own Conservatives and Northern Ireland’s DUP. She may be able to round up the DUP, but there is a blocking minority of at least 20 Tory MPs who would prefer not to have a deal at all to accepting Mrs May’s deal. Her threat to these MPs is that they might not get Brexit at all. But her bluff has been called. To make that threat credible she needed to ask the EU for a long delay. She has no prospect of succeeding in getting her deal through based on her governing coalition.

To pass the deal she needs to get a lot of opposition MPs on side. Could a large enough block of Labour MPs be frightened enough of no-deal chaos to back her deal? There is no sign of the Labour leadership helping her, and neither any sign of a substantial block of Labour MPs defying their whip to give Mrs May a triumphant victory, which could hurt the party in any subsequent General Election. The political gulf between the party leaderships is so huge that it is hard to see what kind of compromise could be forged. There seems to be only one idea that might break the deadlock: making the passing of her deal subject to a referendum which also gave the public the option of opting to abandon Brexit altogether. That might get SNP and Liberal democrat support, as well as Labour’s. There is just about enough time in the three months to hold such a referendum. But the political ground has not been prepared sufficiently. It is likely that a majority of Conservative MPs would oppose such a U-turn by the government, and that would make Mrs May’s position untenable, which would in practice make the referendum impossible.

Would EU leaders grant the British government’s request for a short extension? They sound reluctant, but they have one good reason to do so. A no-deal crash now is likely to be more damaging than one in June, because there is more time on both sides to prepare for it. Because that is where things are now heading.

Theresa May is stuck in a hole of her own digging. Each shovel of earth had seemed logical at the time. Her red lines were a very reasonable interpretation of the referendum mandate; the Article 50 notice was timed so as not to interfere with elections to the European Parliament, which would have been a major complicating factor – and still are. She o hoped that where she led enough people would follow. But the politics is deadlocked. She has done only one brave thing to try and break that deadlock: which was going to the country in June 2017. And that only made her problems worse. Since then she has simply dug herself in deeper.

What can she do? One alternative is to abandon all pretence of trying to secure a deal, and say that a no-deal is government policy. And then see what happens next. Presumably Labour would then table a confidence motion, which would put Remainer Tories on the spot. That in turn might lead to a General Election, in which she would defend her no-deal proposition. A second thing she could do is to resign as Tory leader and Prime Minister – passing over the premiership to a more politically skilled insider like David Lidington as caretaker, if she can engineer it. That would set off a leadership contest in the Conservatives, while the caretaker might try to either manage a crash out or negotiate a longer delay to exit.

But my guess is that she will do neither of these things. She will plough on with a strategy that has no chance of success, and the country will crash out of the EU on some date in June. That prospect is unbearably depressing.