Get Red Pepper's email newsletter. Enter your email address to receive our latest articles, updates and news.
It’s hard not to feel a little cheered. The stock market has seen record falls, Keynes is back in fashion and Alan Greenspan is having an existential crisis. Does this mean we’ve won? The answer depends on which ‘we’ is asking. For ‘centre-left’ advocates of financial regulation, a long period at the margins of mainstream policy and academic economic orthodoxy may well be at an end. However, for those who would like to see a substantial revival of the social democratic project with which Keynesianism has been traditionally associated, or even a radical attempt to build up new democratic institutions for the 20th century, there is little to be cheerful about.
The key difference between the situation today and the aftermath of the great crisis of 1929 is the absence of any identifiable constituency or agency capable of acting as a countervailing force to finance capital. The willingness of governments to throw 30 years of neoliberal economic doctrine out of the window in the past couple of months attests to their absolute terror at the thought that finance might lose its hegemonic position. It seems clear that no other force is currently capable of exercising that role: of organising, ordering and stabilising a sufficient range of social spaces, actors and institutions to preserve some semblance of civilised order.
At local, national, and global levels, institutions that could even potentially act as democratic counterweights to the power of speculative capital are hard to discern. Contrast this with the middle decades of the last century, when communism, organised labour, and the strength and autonomy of municipal governments all posed serious challenges to capital and made it possible for governments to implement the very high levels of regulation and socialisation typical of ‘Fordist’ capitalism.
The weakness of the state
The importance of this observation is that it draws our attention to one always-salient fact: the relative weakness of all governments when faced with the dynamic and relentless force of capitalism. Capital’s capacity to innovate, to reinvent and reorganise itself, to circumvent regulation and to disaggregate opposition has been well understood at least since Marx. Unfortunately, many political actors, commentators and citizens seem even yet to underestimate it.
The experience of the mid-20th century has left a powerful residual memory of a time when great power was in the hands of the state. During that time, a particular configuration of late-industrial technologies (electrical grids, advanced railway systems, motorway networks, early broadcast networks, pre-nuclear advanced munitions) required unprecedented levels of centralised co-ordination and gave national governments historically unique capacities to control flows of resources, people and ideas.
There are two main points to observe here. One is that the kinds of control and regulation that could be exercised by national governments during that epoch were specific to an industrial-technological context that has long been superseded in the cybernetic age, when punitive tax regimes or stringent labour laws can be evaded at the click of a mouse. The other is that even under those favourable technological circumstances, governments were only ever able to discipline capital effectively in situations where capitalism itself was still relatively underdeveloped, or where powerful social coalitions could be consolidated and mobilised against it (such as the alliance of unions, government institutions and manufacturers that made Roosevelt’s New Deal possible).
Today, globalisation and the difficulty of effective labour organisation leave left-wing governments in a comparatively much-weakened position. Despite this, the great Fabian fantasy – the dream of benign and omniscient government re-ordering social relationships from the centre of administrative power – maintains a grip on the imagination of both ‘left’ and ‘centre-left’ that is crippling in its consequences.
The weakness of the left
Radical critics have consistently and correctly pointed to New Labour’s enthusiastic embrace of most of the neoliberal programme, and suggested possible alternative directions. But they rarely, if ever, do so with any attention to this fundamental question: what might have to happen first in order to make it politically possible for governments to pursue such progressive agendas?
For example, can anyone really doubt that if New Labour had attempted to resist the international imperative towards privatisation, as many wish they had, then the press and the City would have turned on them savagely? Does anyone believe that New Labour in 1997 had the kind of movement behind them that has enabled Hugo Chávez et al to stand up to the ‘Washington Consensus’? Even with regard to such a controversial policy as the Private Finance Initiative, New Labour is entitled to ask how else its critics would have funded a massive wave of capital investment in the public sector without drawing on non-existent treasury resources – resources which could in turn only be replenished by means of politically intolerable tax rises.
This is not to say that the Labour government first elected in 1997 could not have pursued a progressive agenda as an alternative to its uncritical implementation of neoliberalism. But it is to raise the question of what exactly it is that critics on the left think that ‘progressive’ governments ought to do under conditions that are clearly unfavourable to the pursuit of democratic objectives. Leftist criticism far too often falls into the same trap as centrist Fabianism: imagining, or implying, that governments simply act on the world in a vacuum, making things happen just because they want them to. A more sophisticated approach would be to ask why the government has done so little to act to change the broader political conditions themselves, and to think about what it would have looked like had it tried to do so.
The Fabian fantasy is generally a delusion of the left and the technocratic ‘centre’, while the right normally suffers from it only during periods of desperation. The recurring fantasies that ‘traditional’ values can be re-asserted by government diktat, or that building prisons will somehow reduce crime, regularly grip the Tories when they are presiding over a major recession or mired deep in long-term opposition, but are usually abandoned whenever actual policy programmes have to be implemented.
The Conservative tradition proper has always understood that political success was not just about government making the right decisions, but about the mobilisation and selective empowerment of multiple constituencies. Today, we are living with the consequences of one of the most brilliant strategic realisations of this insight in British history. Central to the consequences of the credit crunch in the UK is the recruitment of a large section of the population into the speculative economy over the past 25 years.
Securing (and deploying) cheap credit against rising asset values is not merely a typical behaviour of contemporary capitalists: it is, as Braudel showed, arguably the constitutive practice of capitalism as such, ever since its beginnings in medieval mercantile Italy. The transfer of vast quantities of social housing stock to the private sector (at below-market prices) in the 1980s, the attendant policy of restricting its replenishment by denying local councils the right to build, and the deregulation of the financial services industry, all had the long-term effect of both restricting the supply of housing in this decade and enabling large numbers of new homeowners to benefit in cash terms by borrowing against the rising market values of their homes.
The decade 1997-2007 saw an orgy of consumer spending and rising household debts fuelled by mass participation in the consequent bubble. The result is that a falling property market has potentially devastating political implications. But the long-term socio-political consequences are even more dramatic. In effect, a large section of the British public has, for the first time, seen its spending-power derived from assets exceed (if only for a short time) that derived from wages. The result is that for the first time, a large section of the public has had very good economic and emotional reasons to think of themselves as, in effect, capitalists: concerned more with interest rates than wage levels and benefiting from rising asset prices.
Whatever the outcomes of the current crisis, the point to take from this situation is that the Thatcher government knew very well what it was doing in the early 1980s. Despite the obvious potential dangers, it was creating a new constituency of speculative asset-owners drawn predominantly from the social group who had previously been the mainstay of the labour movement: skilled manual workers. In doing this, it was creating a new locus of power, which could be expected to pressure any government to pursue particular policy objectives – low interest rates, easy credit, low inflation, low levels of financial regulation – irrespective of that government’s nominal political identity. We are still living with the consequences.
An alternative strategy
The question is: what might a progressive government’s equivalent strategy be? What would be our equivalent of council house sales: a policy that would be relatively easy to effect, but whose long-term consequences would permanently alter the power dynamics of British political culture? It is to this question, and not to a shopping list of fantasy policies, that the left should turn its attention in the coming years.
From this point of view, there are several key areas in which no effective action has been taken by New Labour and which could have provided the basis for a sustained and strategic route out of the current crisis if they had been attended to earlier.
First, for example, it is only in the past three years that the government has made even insignificant moves towards encouraging a revival of organised labour, and its record on pushing for flexible working across Europe more than offsets this gesture. Yet there cannot be any meaningful democracy in a society in which the entire field of work is depoliticised. It may be that the trade union movement as it currently exists needs to be reinvented beyond all recognition, but this is the kind of process in which governments can take a co-ordinating role, and politically it would have been quite possible for government to promote the idea that trade union membership is a social good (encouraging social solidarity, a meaningful engagement between employers and employees, and so on), and to facilitate the full-scale modernisation of British trade unionism. This has not happened to any significant degree: if it had, then a revived labour movement could now be proving an invaluable ally to a government faced with financial crisis and Tory revival.
Second, the distorting effect of media monopolies on our political culture is very well known. The rise of blogging, social networking and alternative web-journalism offers unprecedented opportunities for the growth of a new media culture that is far more democratic in its structures and organising ideologies than the one that has prevailed for the past few decades.
Yet government has not even begun to think about the possibilities of strategically encouraging such a development. Instead it cowers before Murdoch on a regular basis and even makes threatening gestures at the BBC (that great relic of the late industrial age, and of its hierarchical but collectivist values) when it thinks that is what he requires of them.
Third, it is widely acknowledged that government has made no serious moves – outside of the special case of national devolution – to reverse the Thatcherite trend towards the evisceration of local government. Even the Greater London Authority has no serious power, and that of the London mayor is strictly limited. However, the prevailing critiques of this situation only reflect the persistence and ubiquity of the Fabian fantasy.
Almost invariably, the ‘new localism’ speaks the language of decentralisation, of Whitehall ‘giving up power’. What this discourse fails to grasp is the extent to which local government has not simply been weakened by centralisation to Whitehall, but by the same global processes that have weakened Whitehall itself. Local government is not weak simply because Thatcher and Blair took some of its powers away, but because the mobility and fragility of local communities makes it increasingly impossible to mobilise constituencies against the actions or wishes of international corporations, which work tirelessly to acquire the rights to develop land, take over public services and speculate on property in their localities.
The point is that Whitehall does not actually have the power the ‘new localists’ imagine it to have accrued at the expense of localities. Rather, the UK government has largely acted as a conduit through which the international neoliberal programme to dismantle layers of potential opposition to capital has been implemented.
This is not to say that government could play no role in enabling new, localised democratic communities to come into being. It could do a great deal to encourage and facilitate the development of new and more participatory forms of local politics from which new centres of democratic power might emerge.
But, as in the case of the labour movement and the media, it would be a mistake to imagine such developments in terms of central government ‘handing down’ power from a position of prior omnipotence. It would be much more useful to conceptualise the process in terms of government actively facilitating the growth of alternative centres of power which might (or might not: this is always a danger) prove useful allies in the struggle to contain, direct and re-organise the creative/destructive force of capital.
Could any of this happen? Maybe, maybe not. What is clear is that the left will be wasting its time, and will never recover any credibility, if it merely harps on about all that the government has done wrong without proposing a viable alternative strategy. This is a moment when the crisis of neoliberalism may well prove terminal, but we will achieve very little by crowing or by proposing unworkable returns to the policy strategies of the 20th century.
The question that will soon emerge is whether the route out of the crisis will involve some revival and reinvention of democratic forces, which might help to stabilise the world economy without concentrating still more power in the hands of unaccountable institutions like the WTO or the great investment banks; or whether a new phase of capital accumulation will simply see state institutions take on an increasingly authoritarian role in securing conditions for profitability and social stability, with Singapore – or even China – replacing the US as the world’s hegemonic model. Those who hope for the former outcome would do well to think carefully about exactly what to demand of beleaguered governments, at a time when still-powerful voices will be calling loudly for the latter course to be followed.
The police spend little of their time making arrests, and most crimes are not solved, writes Alex Vitale – their real purpose is social control
Many important things happened on conference floor, reports Alex Nunns – but you wouldn’t know it from reading the newspapers
Radhika Desai says Capital by Karl Marx is still an essential read on the 150th anniversary of its publication
The Spanish state is seizing ballot papers and raiding meetings, write Ignasi Bernat and David Whyte – but it is being met with united resistance
The crunch executive meeting ahead of Labour conference agreed some welcome changes, writes Michael Calderbank, but there is still much further to go
Dipesh Pandya speaks to documentary film-maker Sanjay Kak, who for 30 years has been working outside the mainstream to tell a story rooted in the struggles of those excluded by India’s militarism and its narrative of neoliberal growth
Jeremy Gilbert on how radical Labour politics can be inspired by the utopianism of the counterculture
Disasters have unequal impacts – it's the poor and marginalised who suffer most. David Harvey writes on Hurricane Harvey
#MeToo is necessary – but I’m sick of having to prove my humanity
Women are expected to reveal personal trauma to be taken seriously, writes Eleanor Penny
Universal credit isn’t about saving money – it’s about disciplining unemployed people
The scheme has cost a fortune and done nothing but cause suffering. So why does it exist at all? Tom Walker digs into universal credit’s origins in Tory ideology
Meet the digital feminists
We're building new online tools to create a new feminist community and tackle sexism wherever we find it, writes Franziska Grobke
The Marikana women’s fight for justice, five years on
Marienna Pope-Weidemann meets Sikhala Sonke, a grassroots social justice group led by the women of Marikana
Forget ‘Columbus Day’ – this is the Day of Indigenous Resistance
By Leyli Horna, Marcela Terán and Sebastián Ordonez for Wretched of the Earth
Uber and the corporate capture of e-petitions
Steve Andrews looks at a profit-making petition platform's questionable relationship with the cab company
You might be a centrist if…
What does 'centrist' mean? Tom Walker identifies the key markers to help you spot centrism in the wild
Black Journalism Fund Open Editorial Meeting in Leeds
Friday 13th October, 5pm to 7pm, meeting inside the Laidlaw Library, Leeds University
This leadership contest can transform Scottish Labour
Martyn Cook argues that with a new left-wing leader the Scottish Labour Party can make a comeback
Review: No Is Not Enough
Samir Dathi reviews No Is Not Enough: Defeating the New Shock Politics, by Naomi Klein
Building Corbyn’s Labour from the ground up: How ‘the left’ won in Hackney South
Heather Mendick has gone from phone-banker at Corbyn for Leader to Hackney Momentum organiser to secretary of her local party. Here, she shares her top tips on transforming Labour from the bottom up
Five things to know about the independence movement in Catalonia
James O'Nions looks at the underlying dynamics of the Catalan independence movement
‘This building will be a library!’ From referendum to general strike in Catalonia
Ignasi Bernat and David Whyte report from the Catalan general strike, as the movements prepare to build a new republic
Chlorine chickens are just the start: Liam Fox’s Brexit trade free-for-all
A hard-right free marketer is now in charge of our trade policy. We urgently need to develop an alternative vision, writes Nick Dearden
There is no ‘cult of Corbyn’ – this is a movement preparing for power
The pundits still don’t understand that Labour’s new energy is about ‘we’ not ‘me’, writes Hilary Wainwright
Debt relief for the hurricane-hit islands is the least we should do
As the devastation from recent hurricanes in the Caribbean becomes clearer, the calls for debt relief for affected countries grow stronger, writes Tim Jones
‘Your credit score is not sufficient to enter this location’: the risks of the ‘smart city’
Jathan Sadowski explains techno-political trends of exclusion and enforcement in our cities, and how to overcome this new type of digital oppression
Why I’m standing with pregnant women and resisting NHS passport checks
Dr Joanna Dobbin says the government is making migrant women afraid to seek healthcare, increasing their chances of complications or even death
‘Committees in Defence of the Referendum’: update from Catalonia
Ignasi Bernat and David Whyte on developments as the Catalan people resist the Spanish state's crackdown on their independence referendum
The rights and safety of LGBTQ+ people are not guaranteed – we must continue to fight for them
Kennedy Walker looks at the growth in hate attacks at a time when the Tory government is being propped up by homophobes
Naomi Klein: the Corbyn movement is part of a global phenomenon
What radical writer Naomi Klein said in her guest speech to Labour Party conference
Waiting for the future to begin: refugees’ everyday lives in Greece
Solidarity volunteer Karolina Partyga on what she has learned from refugees in Thessaloniki
Don’t let Uber take you for a ride
Uber is no friend of passengers or workers, writes Lewis Norton – the firm has put riders at risk and exploited its drivers
Acid Corbynism’s next steps: building a socialist dance culture
Matt Phull and Will Stronge share more thoughts about the postcapitalist potential of the Acid Corbynist project
Flooding the cradle of civilisation: A 12,000 year old town in Kurdistan battles for survival
It’s one of the oldest continually inhabited places on earth, but a new dam has put Hasankeyf under threat, write Eliza Egret and Tom Anderson
New model activism: Putting Labour in office and the people in power
Hilary Wainwright examines how the ‘new politics’ needs to be about both winning electoral power and building transformative power
What is ‘free movement plus’?
A new report proposes an approach that can push back against the tide of anti-immigrant sentiment. Luke Cooper explains
The World Transformed: Red Pepper’s pick of the festival
Red Pepper is proud to be part of organising The World Transformed, in Brighton from 23-26 September. Here are our highlights from the programme
Working class theatre: Save Our Steel takes the stage
A new play inspired by Port Talbot’s ‘Save Our Steel’ campaign asks questions about the working class leaders of today. Adam Johannes talks to co-director Rhiannon White about the project, the people and the politics behind it
The dawn of commons politics
As supporters of the new 'commons politics' win office in a variety of European cities, Stacco Troncoso and Ann Marie Utratel chart where this movement came from – and where it may be going