Tighter money as class conflict: why the UK’s working classes lost out

August 14, 2023Long Reads, Politics BlogBank of England, British politics, Class conflict, Inflation, Monetary policy, Working Classadmin

In previous posts I argued that: (1) the UK’s working classes have lost out as a result of our rulers’ responses to covid, the war in Ukraine, and inflation; and (2) this outcome wasn’t necessary. The next step is to explain why elites responded in the way that they did, why they chose policies detrimental to the working class. In this essay, the focus will be on the decision to tighten monetary policy in the face of rising prices. Subsequent posts will examine the choices of proxy war with Russia and lockdowns.

Explanations of the policy response to inflation have come in three types: those emphasising a monetarist bias; those concentrating on central bank credibility; and those focusing on distributional conflict. The first two can be readily dismissed, as we’ll see, but the third puts us on the right track: the response to inflation has been detrimental to the working class because policymakers have prioritised the interests of productive capital; this reflects not only a structural advantage enjoyed by capital but also the weakness of Britain’s labour movement.

As I’ve detailed elsewhere, current price rises have been driven primarily by supply-side shocks (lockdowns, the war in Ukraine) and secondarily by corporate profiteering. The policy response, however, has been to hike interest rates, giving the impression that our rulers are treating inflation as a problem of excess aggregate demand. According to this approach, tighter money should remove demand from the economy and so bring prices down. This may well happen. But the point here is that, from the standpoint of the working class, a better approach would be for policymakers to promote supply-enhancing measures and to rein in price gouging. So why haven’t they done these things?

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Today’s sleepwalkers

February 12, 2023Politics BlogNuclear weapons, Russia, Ukraine War, Western policyadmin

Christopher Clark’s The Sleepwalkers provides a compelling account of the origins of the First World War.[i] This war, as we know, was cataclysmic: 20 million military and civilian deaths, and 21 million wounded. As Clark shows, Europe’s decision-makers were aware of these risks: “British Prime Minister Herbert Asquith wrote of the approach of “Armageddon” … [and] French and Russian generals spoke of a “war of extermination” and the “extinction of civilisation””. But while those in power were conscious of the coming horror, they did not grasp it “in a visceral way”. In this sense, the “protagonists of 1914 were sleepwalkers”; the dangers remained abstract, dream-like even.

Discussion of Clark’s ideas in relation to the war in Ukraine overlooks the disjuncture he draws between head and heart. That’s a mistake, as it’s precisely this kind of disconnect that characterises western policy and puts us on a dangerous path.

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Britain’s working classes didn’t have to lose out

February 8, 2023Politics BlogBritain's working classes, Inflation, Lockdowns, Ukraine Waradmin

In my previous post, I showed that working class Britons have borne the brunt of our rulers’ responses to covid, the war in Ukraine, and inflation. I also suggested that this result is puzzling, given that as of early 2020, the working class seemed to be in the political ascendancy. At this time, the government, parliament, and the opposition had a material interest in, and appeared committed to, improving the working class lot. One possible explanation is that, while our rulers really wanted to promote “the interests of ordinary working people”, circumstances overtook them, making it necessary to impose lockdowns, engage in a proxy war against Russia, and raise interest rates. My aim here is to demonstrate that this explanation doesn’t stand up. Alternatives were available and Britain’s working classes didn’t have to lose out.

The ruling elite has to a large extent framed its policy choices as unavoidable. During the pandemic, then prime minister Boris Johnson stated that “there is no alternative” to lockdowns – or rather, the only alternative is “medical … disaster”. The government’s opponents within parliament and the media vigorously assented to this view. Their only complaint was that the Johnson administration didn’t impose lockdowns quickly enough, that it was “too slow and behind the curve”.

Elite rhetoric on Ukraine has followed the same broad pattern. Johnson stated that there is “no alternative” to conducting a proxy war against Russia and that its impact on our living standards is the necessary “price of freedom”. Both of his successors – the short-lived Liz Truss and the current prime minister Rishi Sunak – have reiterated this position. Again, ostensible opponents of the government have largely fallen in line, with criticism limited to matters of degree rather than kind. The Guardian’s Simon Tisdall writes that we have to suffer – the “less wealthy” in particular – to prevent the “disaster” of Russia’s “lawless butchery” prevailing. His only objection is that current policy isn’t “enough to bring Putin to heel” and so Britain and other NATO members should “use their overwhelming power … to force Putin’s marauding troops back inside Russia’s recognised borders”. Not proxy war but direct war.

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Lockdowns, sanctions, inflation: how Britain’s working classes lost out

August 24, 2022Comment and Analysis, Politics BlogBritain's working classes, Inflation, Lockdowns, Sanctions against Russia, UK politicsadmin

It was only a short while ago that Britain’s working classes were on the rise. Brexit was to a large extent a working class revolt against the status quo, and our ruling elite seemed to get the message: “we will … [shift] the balance of Britain decisively in favour of ordinary working class people”, declared prime minister Theresa May at the 2016 Conservative party conference. May’s calling of a snap election in 2017 led to her party losing its majority in the House of Commons, paving the way for a parliamentary impasse over Brexit. When this impasse was finally broken, working class votes were once again crucial. The December 2019 election saw many traditional Labour constituencies – the so-call ‘red wall’ – turn blue, giving May’s successor, Boris Johnson, an emphatic victory.

Following this victory, many commentators forecast that the Conservatives would become a blue collar party. The academic Philip Cunliffe wrote that “the Tories will now lead a working class revolt to overturn the neoliberal order”. There were solid grounds for thinking this. The Conservatives not only pledged a number of pro-worker policies – such as using post-Brexit state aid and procurement freedoms to revive industry – they also had a material interest in delivering: without the red wall, Labour would have practically no chance of forming a majority government, at least for the time being.

It was for this reason that Keir Starmer, upon becoming Labour leader in April 2020, quickly set about reaching out to the working classes, as shown by the emphasis he placed on patriotism. Though some took umbrage with this approach, arguing that Labour’s “old heartlands [were] gone for good” and that the party should focus on consolidating its support in big cities among young graduates and professionals, these critics ignore basic electoral realities: parties with geographically concentrated vote-shares struggle to win under first-past-the-post.[i] (You could also say that Labour has a historic obligation to rebuild the red wall since the party was founded to protect working class interests.)

By spring 2020, then, both the Tories and Labour had a political interest in, and seemed to be committed to, making life better for the working class. Yet over the last two or so years the policy choices of our rulers have made the working classes worse off.

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Why conservatism isn’t doomed

October 21, 2021Comment and AnalysisBritish politics and society, Conservatism, Conservative values, Progressive valuesadmin

Conservatism is a worldview that values tradition, belonging and place. Drawing on the writer David Goodhart, we may define it as a “somewhere” ideology. According to commentators from across the political spectrum, this ideology has a bleak future. The conservative journalist Ed West goes so far as to say that “conservatism is doomed”. I think West is wrong.

It may seem odd to talk about conservatism’s demise in today’s Britain. Arguably the most significant development our country has faced since the Second World War – Brexit – has been shaped in no small measure by conservative values. The Conservative party currently commands a large majority in parliament after more than a decade in power. And despite the challenges, errors and costs of the covid-19 pandemic, public support for the Tories has remained relatively stable, suggesting a solid social base. Meanwhile, the political left continues in its sorry state.

Yet West isn’t basing his argument on current electoral trends. He’s well aware that the Conservatives are on track for another decade in government. Rather, he thinks that conservatism will disappear because he agrees with Janan Ganesh, that politics is “downstream of culture”. Extant cultural trends, driven primarily by the universities, are leading us inexorably to a left-liberal, progressive destination, West maintains. That is why conservatism is doomed.

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Why the UK should revive its constitutional tradition

September 10, 2021Long ReadsBrexit, British democracy, Labour party, UK Constitutionadmin

The UK should revive its constitutional tradition, argues the philosopher John Gray. We should scrap legislation such as the Human Rights Act (HRA), he says, and revert to an “ancien regime” where the only constraints on parliament were political. Gray’s isn’t a solitary voice; the current Conservative government was elected largely to push back against constitutional changes of the last half century. Yet for many, Gray’s call for the removal of substantive legal restraints on parliament is anathema, a recipe for diluting our basic rights and freedoms. I think there’s much to be said for Britain’s constitutional tradition, not least its capacity to secure legitimacy for political decisions and its potential to help rehabilitate the left.

When it comes to constitutions, political scientists typically speak of two ideal types. These are legislative supremacy constitutions and higher law constitutions.

Under a legislative supremacy constitution, a country’s parliament has supreme law-making authority. This means that, in theory, legislators can pass any law they like, they “can do no legal wrong”, as the academic William Roberts Clark puts it.[1] The only constraints they face are political in nature, whether there’s a majority for the law they wish to enact. Another term for this type of authority is parliamentary sovereignty.

Legislative supremacy constitutions are based on two principles. One is that only elections can legitimise law-making authority, and the other is that a country’s laws must represent the will of the people (as expressed through parliamentary majorities). For these principles to stand, there can’t be any rules limiting what a parliament can pass. If such rules were in place, then authoritative law would exist above elections and the public’s shifting preferences. Hence, under this type of constitution, no body or institution can legally bind a parliament.

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Will Trump be re-elected?

April 14, 2020Comment and Analysis, Politics BlogAmerican politics, Donald Trump, Joe Biden, US electionadmin

Donald Trump has two clear structural advantages going into this year’s election. History shows that incumbent presidents have a distinct edge over their challengers, and the electoral college currently over-represents Republican-leaning states. But beyond these built-in factors the picture is unclear. Certain trends point to a Democrat triumph in November, while others point to a victory for Trump. How the president deals with current challenges will also influence the outcome.

The president’s approval rating suggests that the Democrats will win this autumn. Unlike every other post-war president – including one-termers such as Jimmy Carter and George H.W. Bush – Trump’s net approval rating has been negative throughout his presidency. This strongly implies that a majority of American voters are beyond his reach.

Of course, you could retort that Trump’s social base has held up remarkably well and he doesn’t need to win the popular vote to be elected, as 2016 showed. But alongside Trump’s negative net approval rating, two developments signal that pivotal swing voters will break for the Democrats this time round.

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Can Labour reconnect with the working class?

March 20, 2020Comment and Analysis, Politics BlogBritish politics, Labour party, Patriotism, Working Classadmin

Labour is no longer the party of the working class. This was confirmed by last year’s general election, which saw Labour slump to its lowest seat-share in over eighty years and lose a significant number of its ‘heartland’ constituencies to the Conservatives. The Tories’ breach of the so-called ‘red wall’ portends a bleak future for Labour. Without reconnecting with working class voters, the party will likely be out of power for at least another decade. Yet there is little sign that Labour is capable of winning these voters back. In fact, the political thought that prevails in the party works against this outcome, a point that is most clearly illustrated by the issue of culture.

Culture now sits alongside economics as a major political faultline. In Britain, this was revealed most starkly by the EU referendum. Though the classic left/right divide mattered to this vote, its result was primarily shaped by a value cleavage. Broadly speaking, the culturally conservative backed leave and the culturally liberal backed remain. Working class voters on the whole were in favour of Brexit, a position that reflected their desire for more economic and cultural security. This demand for cultural security may be thought of as patriotism, defined by George Orwell as “devotion to a particular place and a particular way of life”.

Under Boris Johnson, the Conservatives have grasped what many blue collar Britons are after, as shown by their policy platform of moving left on economics while delivering Brexit and a tighter immigration regime. The best that can be said about Labour is that its Corbynite policies have spoken to the working class’ economic concerns. But that is all.

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The myth of pragmatism: how too much ideology broke British politics

December 19, 2019Long Reads, Politics BlogAusterity, Brexit, David Cameron, Immigration, Iraq War, Tony Blairadmin

We’re often told that Brexit has transformed Britain from a pragmatic country to one where ideologues rule the roost. At first glance, this narrative seems to have substance. The governments of both Tony Blair and David Cameron prided themselves on being guided by “what works” rather than “ideological zeal”. In contrast, the current prime minister, Boris Johnson, has spoken of delivering Brexit “come what may”. Yet a closer look suggests this narrative is flawed. Key policies of the Blair-Cameron era – the Iraq War, austerity, and changes to immigration – were based less on practical considerations and more on abstract ideals. This excess of ideology helped drive a wedge between political elites and the British public, contributing to the populist revolt and paralysis we’ve seen in Britain over the last few years.

The Iraq War

Britain invaded Iraq in March 2003 as part of a US-led international coalition. The government’s decision to go to war was shaped by geostrategic factors such as oil and maintaining a ‘special relationship’ with America, but prime minister Blair’s Manichean worldview also played a role.

Blair expressed this Manichean worldview in his 1999 ‘Chicago Speech’. In it, the prime minister paraphrased Francis Fukuyama’s ‘End of History’ thesis, arguing that communism’s defeat in the Cold War showed that the “massive ideological battleground” of the past was “over” and that spreading liberal democracy was in humanity’s best interest. Blair further commented that, in the post-Cold War environment, this universal ideal was being blocked by “dangerous and ruthless men”, by the likes of “Saddam Hussein”, the Iraqi leader. In Blair’s logic, then, if these ‘bad guys’ were removed, good would inevitably follow.

A meeting Blair held with a group of Middle East experts in November 2002 shows that this logic informed Britain’s invasion of Iraq. These academics had come to Downing Street to discuss the consequences of removing Saddam from power. They issued a stark warning: Iraqi society was fraught with national and religious divisions and toppling Saddam risked precipitating violence. The essence of Blair’s response was that “Saddam is evil”, indicating that in his mind, eliminating the Iraqi leader could only have beneficial results.

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