How a decade of crisis shaped Labour and the Conservatives #2
Analysis of how crisis and ideology intertwined to produce political change 2016-24
Catch up on the previous part in this series here
Larry Summers, (IMF Lecture, November 2013)
“My Lesson from this [2008] crisis, and my overarching lesson, which I have to say I think the world has under-initialised, is that it is not over until it is over, and that time is surely not right now”
“The defining characteristic of polycrisis is the convergence and coincidence of a multiplicity of distinct and unconnected shocks – war, pandemic, geopolitical tension, debt crisis, for instance – such that the whole is worse than the sum. Since 2020 this seems to have become a chronic condition”
These two quotes may be a decade apart but they are of the same era, born of the same argument: polycrisis. Larry Summers’ (ex US Treasury Secretary) demonstrated significant foresight to predict in 2013 that the Great Financial Crash, Eurozone crisis and weak economic recoveries of the 2010s were not isolated periods of pain but a demonstration of the sustained crisis to come. Adam Tooze’s analytical argument, first seen in Crashed and then Shutdown, has established him as the historian of crisis and change since 2008 – popularising the term ‘polycrisis’ which became the Financial Times’ word of the year in 2021. What both figures realised is that crises create further crises by continually weakening states, which hurts their responses and opens holes in the global system where cooperation or integration once were.
From a UK perspective, these crises have violently diffused into the political system, which, as described in detail in part one, is no longer shielded by geography, empire or limited technology. For this reason, Labour and the Conservatives, unable to deal with severe polycrisis, have shifted ideological tendency numerous times in just a decade – either out of political desire or necessity. Crisis and ideological change are intimately intertwined in modern British politics – a politics which is now highly susceptible to global shocks. In this part I pick up from the EU referendum, following the crises of COVID, Ukraine, Inflation, and ending with a look at the current ideological positions of each party.
The EU Referendum and Austerity’s Aftermath
There are several catalysts and conditions that created the 2016 leave vote. To keep this piece short it is best to skip the political battle behind Brexit (see PE#3 for an elongated explanation or Dominic Cummings’ view), but synthesised through crisis: the Eurozone and refugee crisis, declining wages / productivity since 2008, along with some canny campaigning. Crisis, yet again, generated further crisis: this time the democratic shock of Brexit. David Cameron’s demise over Europe was a continuation of the radicalism of the 21st Century Conservative party – ideologically undefined before government and shaken by global crisis when in government. Brexit precipitated a swift ideological transformation, with Theresa May, fuelled by her Chief of Staff Nick Timothy, promising to tackle the ‘Burning injustices’ of society. What May proposed was a radically different vision of modern conservatism with a larger role for the state through industrial strategy – in stark difference to the austerity years since 2008. However, what May achieved in reality was negligible – unable to enact post-austerity Conservatism due to a parliament gridlocked by the Brexit crisis. While it was the powerful ERG faction, and DUP, which created the ideological Brexit division, it was 2017 which ultimately sank May.
For Labour, Ed Miliband’s ‘unimaginable’ defeat to Cameron in 2015 opened the ideological floodgates. The bubbling anger of five years of Tory austerity and the pain of global crisis pushed the Labour party to an extreme it had not visited for over 30 years. The party, created by a desire to govern with ideology, was to revisit the Marxist idea that, eventually, the tide of popular feeling would turn in favour of socialist policies, especially that working class people would flock to socialist ideas. The party could thus afford to ignore polling and what, to the Corbynite left, was the Blairite betrayal of socialism in return for power. This was the ultimate rebuke of New Labour – a government which, in the new leader Jeremy Corbyn’s eyes, had won at the expense of ideology. They were, for Corbyn, the defining architects of the global crisis, either through ‘unjust’ wars in the Middle East, or capitalist boom-and-bust expansion in the 2000s leading to the financial crash.
Corbyn’s most divisive ideological shift against New Labour was the refusal to accept the largely market-facilitating role of the EU – specifically its single market and indirect power of the ECB / Bundestag which had a degree of ‘technocratic austerity’ built into it. The Brexit crisis, in this respect, enabled Corbyn to espouse his anti-EU politics through anti-austerity / anti-establishment ideas. Crisis after crisis, and failed policy response, allowed Corbyn to radicalise the party over four years, pushing beyond Miliband’s ‘soft left’ towards a truly socialist modern Labour party. The membership, and a section of the electorate, revelled in Corbyn’s imagination of a socialist Britain. The 2017 Labour surge proved a momentary success – a potent combination of anti-austerity reaction to 2008-17 and Corbyn’s cakeist position of a ‘soft Brexit’ which held the divided Labour voter coalition together. May, attempting to sketch out a new complex version of modern conservatism, underestimated the passionate reaction to the crisis and its recent troubled management. After losing her majority, she was effectively finished.
But the heights of 2017’s ideological summer were not repeated. The crisis of Brexit continually plagued British politics. For Labour, Brexit had catastrophically divided its voter coalition between those crude categories of the ‘red wall left behind’ and those of the university, remainer, metropolitan elite. 2017 had been more about the idea rather than the implementation of Brexit. The ‘soft’ Brexit option was never acceptable to parts of Labour’s electorate – particularly requiring to keep free movement through the single market. By 2019, Corbyn could not control this division either in the country or parliamentary party – nor could he control his spending pledges or high levels of anti-semitism inside the party. Defeat for Corbynism was predestined, but Labour’s ideological shift was representative of a rebellious desire for change from failed domestic responses to global crises.
Boris Johnson’s leadership victory, and ideological change he enforced on the party, was also enabled by a Brexit crisis which offered the Conservatives an opportunity to realign British politics. Johnson’s new ideology was an anti-austerity national populism, pledging to deliver Brexit and change without regard for cost or constitution (see Johnson at 10 or SOP#7). While May’s shift was more gentle, Johnson’s was fast and chaotic – displacing any promotion of the last two Tory governments. But as soon as the party was set to complete a crisis-dependent shift, this time towards interventionism, another crisis hit.
Pandemic, Ukraine, Inflation and the Trussite Bang
Covid-19 partly ended Johnson’s premiership, and thus the third ideological shift in just one period of government. The pandemic had demonstrated the futility of small state and austere budgeting in the face of vast, globalised polycrisis. But Tory ideological transformation was not complete. As Covid subsided, further crises hit – an inflation increase fuelled by the Ukraine-Russian war, made all the worse by a macro shift away from globalised supply chains towards domestic / regionalised manufacturing. Nowhere is this more evident than Biden’s landmark IRA and Chips act. The resultant effect was a sustained increase in inflation – both in volatile areas of food and energy from the war as well as core inflation metrics due to increased manufacturing and supply chain costs.
Covid-19 was arguably the most difficult crisis for the Conservatives to ideologically digest. With the party thoroughly bled of ‘One Nation’ Tories through Johnson’s 2019 ideological Brexit purge, the battle was left between the Osbornite sensibilist wing Vs the insurgent libertarian right – with the national populists (lead by Suella Braverman) slotting in to whoever promised them a job. Enter our final two ideological champions – Liz Truss and Rishi Sunak. The Trussites were enraged by a period of interventionist Tory government from Johnson, partly necessitated by Covid. The inflation crisis created, in their view, a perfect argument to revive Thatcherism (in reality UK-Reaganism). The party thoroughly agreed – displaying a level of disconnection between economic reality and Conservative ideological desire never seen in the party’s political history.
Truss’ vision exploded on contact with planet earth, her premiership causing a British crisis in itself, and blowing at least £30bn in the nation’s finances. As such, the party turned to the only other powerful ideology left in the party – Sunak’s Osborne/ Cameronite-lite ideology, albeit moulded by a crisis of Brexit, which Sunak himself had supported, and the nightmare of inflation. Sunak is dealing with the repercussions of a failed economic policy reaction to the global crisis – whether the GFC, Brexit or inflation. He is doing this while battling ideological wings of the party who are opposed to him personally (Johnsonites) or radicalised (Braverman national populists). The party is confused and divided, questioning the very basis of their own foundations after years of ideological shift with no clear throughline of governing. The very soul of the UK Conservative movement, and its ideology, is up for debate. Who would have guessed in 2010 that in 2023 Robert Shrimsley would be asking: “Do Conservatives still believe in capitalism? Or to put it less starkly, do they still have faith in their economic model?” Ideological confusion pre-2010 and a series of governments rocked by global polycrisis explains how the party has entertained their sometimes meteoric shifts in ideology.
The Labour party, and Keir Starmer, this time, did have history momentarily on their side. Not only did the crisis of Climate offer room for larger spending pledges, but the British population had genuinely moved economically left over the decade – hardly irrespective of post-2008 wage / condition decline and the political effects of austerity. Not just this but Starmer had struck gold with polycrisis, specifically Covid, enabling Labour’s big state approach. As Tooze notes:
“it seems we have witnessed a dramatic shift in the logic of economic policy: from the orthodoxy of restraint and minimal intervention, to a common sense that now endorses large-scale interventions in the pursuit of technological and industrial breakthroughs. [...] the balance and initiative has shifted to the public side” (Shutdown, 2023, p.xvii)
However, when the inflation crisis hit, compounded by a Trussite explosion, the British state and economy looked so weak as to be unable to complete any previously hoped for large interventionism. These two crises have ensured intervention will be expensive, even more so without QE. The media and public debate around tax-and-spend has, as a result, switched back to the incorrect national credit-card metaphors of the 2010s. These economic arguments have triggered a final shift in Labour’s ideology, back towards a fiscally strategic position – more out of fear of the media who are now using false crisis economics as a weapon against Labour’s spending pledges. However, Starmer’s Labour will likely maintain the ideological wish to intervene and spend more – rather than New Labour’s ideological / political position of less intervention and more market-led answers. After thirteen years Labour have completed their ideological wilderness – combining the interventionism of Miliband / Corbyn and the strategic fiscal politics of New Labour. In this time they have avoided an SDP style split and the vitriol of entrenched powers seen with Militant / unions of the 1980s. This, however, was only possible due to the constant feedback loop of the crisis mixed with controversial or failed Conservative economic policy. Each failure and crisis allowed for the denouncing of a previous Labour ideology and the formation of a new one based on Tory mistakes against global crisis. Labour’s transformation should be in no way interpreted as a planned or efficient ideological debate – it was a lucky mess.
So Starmer sharing a platform with Blair may seem strange, but really it's perfectly possible through the analysis of polycrisis – on which the two party system of ‘broadchurch’ British politics aptly fails to hold steady. This time, however, Labour have much more to do on their return to government in comparison to 1997, as Blair even admits. For now, though, Philip Gould’s revolution may be finished. The question remains whether it can be carried out in a 2024 Labour government.
Ideology and Crisis or Consensus?
2008-2024 will be remembered as a period of global polycrisis. In the UK, it enabled a period of rapid ideological change in both major parties – whether out of national necessity or political opportunity. If you subscribe to the political theory of ‘cycle / consensus’ (see Phil Tinline Death of Consensus 2022, or my take here) then this decade can easily be classed as the period of ‘deconstruction’, where what was previously the political consensus (neoliberalism) has broken down – unable to deal with crisis and thus creating large shocks within internal politics. It is yet to be seen if this period of crisis will end now, or if it will continue throughout the 2020s. What is clear is that if this period of polycrisis continues, as it likely will due to the climate crisis, so will the ideological flux of the British political system, regardless of who is in power.
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Britain certainly is in a period of ‘deconstruction’ with the most devastating consequences. I am keen to learn what follows. CP