The unbearable lightness of British politics

The economic crisis in the developed world drags on, posing fundamental political and economic questions. And yet politicians here in Britain argue about not very much. The Labour leader, Ed Miliband, is currently attracting a lot of criticism for his lack of progress. But the real problem is that the political left has run out of ideas, while the Right complacently defends the status quo. This state of affairs will continue until we learn to look at our problems in a radically different way.

Nobody should doubt that capitalism is still in crisis. We have been cheered in Britain by some better economic statistics. But average wages remain stagnant, and are not keeping up with inflation. Some people are successfully adjusting to a reduced standard of living; others are running down savings or borrowing money. Private and public investment remains weak, and any benefits of a slightly stronger economy mainly accrue to a small minority of the better off, or to anybody that owns land and buildings, along with a trickle of unemployed people who are now finding rather poor quality work. Other developed economies, from the US to Europe to Japan seem locked into variations of the same dilemma: either the economy is stagnant, or it grows to the benefit of only a few people.

It is not difficult to see what the underlying problem is. Globalisation and the advance of technology are killing off industries that used to be the backbone of developed world employment, destroying lots of middle income jobs. We hear a lot about manufacturing industry, but the same dynamic applies to office jobs. There is not the same need for secretaries and administrators, with jobs tending to be either highly skilled (managers, technicians and so on) or else in soulless call centres; and some of those call centre jobs are being automated out of existence. There is a desperate hunt for the better paid careers, and many people have to settle for poorer quality jobs. In Marxist terms, the balance of power has shifted decisively towards capital and against labour. The process started as far back as the 1980s, with only temporary relief provided by the generosity of the Chinese who sold the developed world lots goods for less than they were really worth. Changing demographics adds to the difficulties of managing this problem.

Meanwhile a growing elite of capitalists and professionals are doing very well, but are under spending their incomes. More is being saved than invested, creating downward pressure on the economy as a whole. This is more or less how Marx predicted the end of capitalism. So if the traditional left-wing critique of capitalism is proving better grounded than many thought, why isn’t the Left benefiting?

The answer is that the Left have no convincing alternative to the capitalist model which does not destroy living standards. Marx could believe that common ownership of the means of production would do the trick, but we now understand that this is killing the goose that lays the golden egg. The turning point for China economically was its recognition that it needed a rampant capitalist economy to drive it forward, even if they also see the virtues of a massive state sector coexisting with it. Modern people love the benefits of capitalism, and in particular its constantly advancing technology, and constantly changing fashion – even as they struggle with capitalism’s consequences.

So what to do? There are still many on the Left, especially trade unionists, who think that the answer lies in a big public sector. This can be constructed to provide lots of well paid middle ranking jobs and, it is hoped, put market pressure on the private sector to treat their workers better. This strategy may be called “Sweden in the 1960s”, since that was when and where it worked best. But most appreciate that it is unviable. Sweden’s economy collapsed into a nasty mess after the 1960s. The state sector has no incentive to be efficient, and drags everybody’s standard of living down with it. It creates unbearable pressure on the private sector as they try to compete in world markets.  Constant devaluation of the currency might provide some relief, but in the end this leads to hyperinflation and total seizure (think of various South American economies over the years). In Britain the state sector is too large for the current tax burden, so to sustain it requires putting up taxes. This does not look a realistic political prospect.

So what’s left for the Left? Mr Miliband shows a good grasp of the basic problem but has found only lightweight solutions, such as putting moral pressure on big business to behave a bit better. And without any big ideas we end up arguing about not very much. Is the government’s austerity policy slightly too severe? Should we add a little bit of regulation to this or that industry? Or else do we just moan about various symptoms of the malaise, from immigration to the misery inflected on many who rely on state benefits, without offering any constructive alternative?

It’s much easier for the Right at one level. Their sponsors are doing quite well, so they can try to create smokescreens to pretend the problem doesn’t really exist. Some go further to try and suggest that we should place even less restrictions on the capitalist economy – though that line of argument is as discredited as Sweden in the 1960s. But ultimately they will have to confront the same problem: the economy doesn’t work well enough for most of the people most of the time.

And what is the answer to the problems of capitalism? Clearly this isn’t easy. I think we have start looking at our situation in a completely different way. We are stuck on grand policies that can be implemented by governments in London, accruing lots of prestige to national politicians. But this is just sucking power into an elite based in the country’s southeast. Is it an accident that Scotland is now doing relatively better as real power was devolved to Edinburgh? We cannot continue to destroy local networks and hope that people will be better off as a result. This is completely beyond the grasp of our political elite, left or right. But until politicians start to understand that they are part of the problem, not its solution, we are condemned to an unbearable lightness in our political debate.

5 thoughts on “The unbearable lightness of British politics”

  1. Thank you for this. Why should thinking like this which is so level-headed be so off-limits for the political animals?

    1. Thank you Richard. It might seem level headed to you, but to most in the London political establishment, including the journalists that comment on it, it is all rather soft headed. To them policy formation is just about finding the wisest policies to implement from the centre. No doubt they will point to a number of disappointing experiments in devolving power (and there are plenty of disappointing experiences – of which Welsh devolution is the biggest). The trouble is that local networks have become so weak, and we have become so dependent on the centre of power in London, that it is very difficult for any solution not based on the centre to flourish.

      What I want to do is develop a new language to describe the problems, to make it clear that this dependence on the centre is part of the problem, not the solution. As you may have guessed I think this language will be based on network theory, which I am now trying to read up about!

  2. Very interesting post that points out certain fundamentals that don’t get air time in political discussions. They are too short term, for one thing. Institutional thinking within political and public spheres will tend to come up with more of the same. More of the same is not going to work. The economic system must evolve and change, but how?
    I see decline in living standards as inevitable on current trends. You mentioned demographics. GDP is just about static, so per head it is declining as the population grows. There is no way out of decline in living standards unless either GDP rockets up, which is not going to happen, or population growth stops – and this applies both at national and global level. I think political debate needs to discuss this, make people aware of this.
    For the cake-sharing questions. bureaucracies have tended to come up with big public sector ideas, but I don’t think populations will tolerate big public sectors any more. Big business is the new unaccountable power. The corporations are artificial persons which are not just huge accumulations of wealth and power but also effectively immortal. At least rich human beings die after a few decades and their assets are divided among their heirs. From rags to riches and rags again in three generations… So my idea is to look at time limiting the existence of corporations. We could begin by examining historical precedents such as the dissolution of the monasteries. and the abolition of mortmain.

    1. Thank you Jo. I think it must be my mission to try to help develop thinking on how to move public policy and economics forward in a more constructive direction. I don’t think that living standards, broadly defined, have to fall – but I do agree that GDP growth is destined to be near static over the longer term, and that people should start to wake up to this – though a bit of short-term growth in the UK is probably feasible. Distribution issues will become central.
      Very interesting point on corporations. They are definitely part of the problem. While we focus on big, privately owned businesses like Amazon or BP, it is interesting to note that China has a very similar problem with its state owned enterprises. These corporations are accumulating wealth without spending it, and dragging down the economy as a whole as a result.

  3. I am coming to the conclusion in my own life that what I do comes out of what I think. If my thinking is wrong, my doing is doomed!

    So, I hope people will listen to you and others, who are working on developing the thinking end. We are surrounded with misleading ideas – for instance, “Standard of Living”, which is often confused with “Quality of Life”. Yet they are so different – for me over the last ten years, the first has been going down steadily as the second has climbed!

    I know you have written on this subject elsewhere. Hasrat Inyat Khan (a spiritual writer) likens the human condition as that of a man who begs in the street while unbeknownst to him he as a bank account containing millions. Maybe, the money is ‘spiritual’, but it’s still ours to spend!

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