Ten wasted years

Americanisation and resistance to it was the dominant theme in Blair's decade, argues Mike Macnair

On May 2 1997, the day after Labour's landslide victory in the general election, Tony Blair became prime minister. His 10 years in office have been 10 wasted years: wasted from the point of view of capital, wasted from the point of view of the labour movement, and wasted by both the Labour left and the far left outside Labour.

The background

The underlying political economy of the Blair years has been characterised by an inheritance from Thatcher. The core of British capital was realigned round the central role of financial services and the City of London, abandoning the attempt to compete through 'national' industrial champions which had characterised the 1950s-70s. Alongside this was a decisive shift to political 'Atlanticism': ie, the role of sidekick to the USA in both global and European affairs, and against political 'Europeanism'.

This shift has been accompanied by efforts to make British society more like the ideological image of the US: deregulation, privatisation, contracting out, downsizing and outsourcing, the push for mass house and share ownership, union-busting efforts and the creation of an intensely interventionist regime of legal control of the trade unions, the promotion of the cult of the lawyers and of judicial activism leading to the diversion of political debate into courts, and the promotion of explicit religiosity in politics.

In the aftermath of the 1987 financial market crisis, the wheels nearly came off this project. Liquidity was pumped into the economy to avoid a real crash, causing 'overheating', which in turn led to a sharp rise in interest rates and - in the early 1990s - a mini-crash in the housing market and extensive redundancies affecting the managerial class. The delayed political response was the Tories' landslide defeat in 1997.

But the ejection of the pound from the European exchange rate mechanism in 1992 ('black Wednesday') turned out to be a boon for the British capitalist economy. Together with a soft-money policy in the US, keeping Britain out of the euro hard-money zone has allowed the costs of economic downturns since to be externalised from the US and Britain onto hard-money countries: Japan through the 1990s, Germany and the euro zone more generally, the 'eastern tigers' in the late 1990s, and Latin America in the early 2000s.

British relative prosperity, though real, has not come from the 'truth' of the neoclassical and Austrian economic schemas, which the right and the Blairites claim caused it. It has come from Britain slipstreaming in the wake of the US. And US prosperity - also real - has come not from 'efficiency', but from the multiplier effects of continuing and periodic inflows of money into the US. These inflows have been produced not by 'pure economic' dynamics, but by stealing from other capitalists and from the subordinate classes through criminal fraud (the creation of the current 'third world debt' in the 1970s), theft by bribing fiduciaries (most privatisations) and outright armed robbery (several US military interventions, most recently and on the largest scale in Iraq).

Prosperity has meant that Blair has held office under favourable conditions for pushing forward the Thatcherite project of 'Americanising' Britain (or, putting it another way, rolling back the clock to times before the rise of the mass Labour vote). Social inequality has continued to rise under New Labour, and physical and social infrastructure and public services have continued to decay. But average real wages, even excluding City bonuses, rose between 1998 and 2006. Unemployment has - even taking into account the scams used in constructing the figures - remained substantially lower than in much of continental Europe. Under Blairism, sickness benefits have been allowed to substitute for lost unemployment benefits and declining pensions, and there has been significant redistribution of benefits in favour of the poorest. The result is overall perceived prosperity, which reduces the risks both of explosive mass struggles and of serious political challenges to Blair and Blairism.

Blairites and Eurocommunists

The Blairites are a combination of two political elements with passive support from a third. The two elements are pure careerists (like Blair himself) and ex-leftist, born-again free-marketeers, mainly coming from the old Eurocommunists and their fellow-travellers. The third element is the bulk of the old Labour Party, right and left, and the trade union leaderships.

For the pure careerists and for the passive supporters in the party left and right and the unions, 'New Labour' was a simple matter of rebranding the party in a way which would allow it to regain office after the disasters of the Thatcher years and the failure to defeat Major in 1992. This was essentially a matter of giving clear political guarantees to the City and CBI not to reverse the fundamental changes made by Thatcher, but giving these guarantees in a way which did not simply destroy the party.

The substance of the Blairite ideology was supplied by the ex-Eurocommunists and former fellow-travellers, and is recognisably derived from Eurocommunist and fellow-traveller arguments developed in the 'left intellectual' milieu in the 1970s-80s.

On the one hand, the bureaucratic character of the Soviet and eastern European regimes was blamed on the absence of the rule of law and human rights. The alternative - to blame it on the absence of the subordination of the bureaucracy and managers to the workers - would have amounted to 'Trotskyism' (in the broad sense).

Presidents Carter and Reagan made rule-of-law theory and human rights into a new ideology of US foreign policy and military action, which persists to this day. In the 1990s, both the former Eurocommunists and the surviving 'official' communists have bought into this ideology of the 'international rule of law', though the 'official' communists have attempted to spin it against US interests. In Blairism this takes the form of 'human rights' interventionism.

On the other hand, Eurocommunists and their fellow-travellers created a new form of popular front policy in the rejection of 'class reductionism' and the promotion of the claims of the 'specially oppressed' - women, black people, lesbians and gay men, and so on - to an autonomous strategic role. In practice, this policy meant that the right wing of the feminist, anti-racist and lesbian/gay movements, based among the petty proprietors and small capitalists, had authority to 'speak for' the oppressed. In Blairism this takes the form of the 'equalities agenda'.

Meanwhile, Eurocommunists rejected Marxist economic theory in the name of Sraffa's and other critiques; this approach would support what was in substance Keynesian economic policy: the 'official' communists' Alternative Economic Strategy, which the Euros adopted. After the collapse of the USSR, given the economic 'success' of the USA and British Thatcherism, this turned to an open embrace of neo-classical and marginalist economic theories. The idea of collective provision and collective action was replaced with the idea of the free market coupled with a state-provided, means-tested 'safety net' for the poorest, and this is the form of Blairite economic ideology.

The Thatcherite counterreformation involved the vigorous exploitation of the (formal) ability of a parliamentary majority to steamroller opposition, the prerogative powers of the crown, and the patronage powers of the prime minister's office. The response of a section of the intelligentsia was Charter 88, a campaign for a written constitution, fundamental rights and extended powers of judicial review, proportional representation and freedom of information. A dilute form of these ideas became a component of Blairism.

To mobilise political support, Thatcher relied on 'traditional values' of nationalism, racism, sexism and homophobia against the so-called 'loony left'. But Tory sex and sleaze scandals undermined claims to the moral high ground here. Meanwhile, generational replacement made these ideas in their traditional form (temporarily) increasingly unattractive, especially among the growing proportion of the middle classes who have some tertiary education. The Euros' and fellow-travellers' 'rejection of class reductionism' provided an ideology which could appeal to this constituency.

These general themes have shaped Blair's 10 years in office. But the ideas have been reshaped, blunted and pushed in tangential directions by a variety of forms of passive resistance. The most important elements here have been the resistance of the state core to constitutional change; and a much wider sentiment against 'Americanisation'.

The constitution and the state

A state is at the end of the day an armed gang, whether grounded on an ideology ('rebels' and 'terrorists') or a simple protection racket. This is how states begin, and it is how they end. But to be effective a state needs more political and organisational coherence than a simple armed gang. This coherence is provided by its constitutional ideology and modes of decision-making.

The British state's constitutional ideology centres on 'constitutional monarchy' and 'parliamentary sovereignty'. The state prides itself on a false claim to continuity across both 1688 and 1641-60: it ritualises this claim in ceremonies like the state opening of parliamentary sessions and so on. There is a great deal more of this stuff: what Walter Bagehot called the 'dignified part' of the constitution.

Its decision-making practices - what Bagehot called the 'efficient part' of the constitution - work by way of the election of a government. That is, the absence of proportional representation forces a two-party system (in which each party is, in fact, a coalition). Once elected, the government has in its hands all the mechanisms of parliamentary management and other patronage which were once - in the 18th century - in the hands of the king or queen and the ministers the king or queen chose to appoint.

Meanwhile, the judiciary, the civil service and the armed forces are run by professional elites which are linked together through a series of social institutions (the universities of Oxford and Cambridge), London clubs (more in the past than now) and a range of ceremonial dinners and so on, at which elite members meet, talk and identify other participants as 'one of us'. All these aspects involve interpenetration of the state elite with the business elite, capital's top managers. The government is a mechanism by which the parliamentary representatives are controlled by those parliamentarians who are willing to work on the terms prescribed by the state and business elites.

It is genuinely essential to the functioning of this system that (a) there should not be proportional representation in parliamentary elections, (b) there should not be a written constitution and (c) that most real decisions should be taken behind closed doors. Without these characteristics, the government system would not work properly, and the resulting political dynamics would undermine the self-image of the state in terms of 'constitutional monarchy/stability', and hence the functioning of the state as such.

Actually to bring in large-scale constitutional reform would thus be a political revolution and the overthrow of the British state. It need not be a social revolution: the British state could be replaced by a US-style state, or, for that matter, a French-style state. But the process would open a can of worms.

For this reason, Blairism has involved the introduction of a series of semblances of constitutional reform, which do not actually change the fundamentals: the Human Rights Act (which the judiciary continue to interpret within the frame of the 'needs of government'); devolution to Scotland and Wales (but of limited powers, and no return of real powers to English local government); the Freedom of Information Act (but so drafted as to allow most government decision-making to continue in private); 'reform' of the House of Lords (but in a way which increases prime ministerial patronage); and so on.

Illegitimate Americanism

The constitution of the United States is no more what it appears to be than the constitution of the UK is a 'thousand-year-old' constitutional monarchy. Behind the 'dignified part' of the constitution, Congress, supreme court and so on, there is an 'efficient part' which includes: (a) the great bureaucratic fiefdoms of the US armed forces, FBI and federal bureaucracy, interpenetrated with their business suppliers; (b) endemic, and more or less open, corruption at all levels of the judicial and political process, and systematic gerrymandering of the electoral system and electoral fraud; and (c) the right of rich enclaves to opt out of local government by creating their own 'localities'. This character of the US state produces as its negation the cult of the lone avenger (whether cowboy, private investigator, maverick cop or Rambo-type) and the accompanying high rates of homicide, and street gangs in the poor areas.

The Thatcherite-Blairite attempt to shift Britain towards a more Americanised society imagines the US without these negative features. But it nonetheless tends to produce them. And the corruption and electoral fraud, in particular, has nothing like the legitimacy in British society that it has in the US (in the sense that it is believed to be normal and unavoidable). The effect has been a series of corruption scandals which have undermined the political authority of the Blair government.

Nor is there anything like majority support for privatising education and health services, and completing the privatisation of housing provision, which are the next steps in the Thatcherite agenda, and ones which Blair has continued to push. Indeed, there was probably no majority support for privatising the infrastructure (railways, etc) under Thatcher and Major; but the Tories used their parliamentary majority to force privatisations through.

The explanation of this lack of legitimacy is simple. Open corruption, gerrymandering and electoral fraud belong to Britain's past: they are ways in which the US constitution reflects the 18th century British constitution. Privatisation and 'public sector reform' has not improved the provision of services to end-users, but merely increased inequality, reduced accountability and political democracy, and put money into the pockets of a minority. This was entirely predictable: state provision was not introduced by Labour because of some Marxist ideology (never powerful in the Labour Party). In fact, the decisive steps were taken by the Tory-led national government in 1939-45 because the inefficiencies of the previous privatised systems impeded the war effort.

So far, the US can tolerate these inefficiencies because it is the world top-dog state, just as the UK did before 1914. How much longer this will go on is not clear: it is clear that the US regime of corruption and so on has assisted the coming US defeat in Iraq. But the UK, even slipstreaming in the wake of US financial globalisation, is not a world top-dog state.

The result has not been mass struggles. The conditions are not right for mass struggles. But the problem is that the Blairites were elected as much as anything else on a promise to defend public services against the Tory privatisation projects. So their continuation of these projects has even less political legitimacy than the original. The projects have had to be disguised, and have been delayed by local public opposition, and by 'guerrilla' opposition within the existing institutions. They have also had to be 'sweetened' by - since 2000 - putting substantial additional money into the public services.

International posturing

The Blair years have been characterised by Blair's Palmerstonian posturing on the world stage. British participation in the Kosova war (1999) was succeeded by a much smaller-scale British military intervention in Sierra Leone (2000), which was in turn succeeded by the immediate British offer of support in the 'war on terror' after 9/11, British participation in the US intervention in Afghanistan from October 2001 and, from 2002 to now, British political and support for the US war drive, invasion and occupation of Iraq.

Meanwhile, 'New Labour' has drifted towards a 'Euro scepticism' in practice which considerably outweighs the 'Euro sceptic' rhetoric of the Thatcher and Major years. Brown held the line against the Euro; Blair conceded to the Murdoch media empire a referendum on the proposed 'constitution'. Within the EU, the British have pushed for enlargement (which dilutes practical unity and brings in more pro-US regimes from the eastern Europe). They have also actively worked to block initiatives of sorts which the Thatcher and Major governments would have grumbled about but in the end agreed to.

The background is both economic 'slipstreaming' and the domestic politics of Americanisation. 'Slipstreaming' depends on US consent to the City of London continuing to operate as an 'offshore' financial centre. The 'financialisation' turn begun under Thatcher has thus considerably increased the vulnerability of the British economy to hostile moves from the US: if the City was hit hard, much of the economy and the state budget will go down the tubes. It is thus simply not in the power of a British government to act as the French and German governments did in the run-up to the invasion of Iraq.

The domestic politics of 'Americanisation' mean that British governments need to posture on the world stage in order to distract attention from what they are doing at home. This was, of course, also true of Thatcher. But it is particularly true of Blair because of the contradiction between the 1997 platform on which 'New Labour' was elected, and what the government has actually done.

Wasted years for capital

From the point of view of capital, Thatcherism was a decisive step forward, but not enough. The dominant fractions of capital, the business organisations and the pro-capitalist media have all through the Blair period continued to promote pure free-marketism and to urge further privatisation of public services. The Tories and sections of the media closest to them and to business, like The Economist, have continued to argue for 'deregulation' - in particular the reduction of employees' rights at work - and for tax cuts and perhaps 'flat taxes'.

It is in the nature of things that the capitalists and pro-capitalist economists can never be satisfied on this front. Even if wages (including the 'social wage'), the tax bill and working conditions came down to the global average - ie, a little above the current state of affairs in China - they would still urge that 'national competitiveness' required further degradation of wages and conditions. Of course, they would then whine about the weakness of demand (as they occasionally whine about there being insufficient domestic demand in China) and the poor state of the infrastructure.

Nonetheless, it is quite true that the Blairites have not accomplished the next step forward for capital. They have not succeeded in obtaining public consent to the privatisation of health and education or in completing the privatisation of housing. Moreover, what they have done has been achieved on the basis of significant, albeit purely economic and precarious, concessions to workers as individuals: (relatively) low unemployment, rising real wages, increasing numbers in the public sector. The opportunity of prosperity has not been used to make fundamental 'reforms'.

Moreover, the Blairites' actual policies have tended to expose some fragility in the British state. Most of the 'constitutional reforms' have been merely cosmetic. But the Human Rights Act has inflated the political ambition of the lawyers. And devolution to Scotland and Wales has created counter-centres of legitimacy in these countries in spite of the limited powers of the Scottish parliament and Welsh assembly. It will not be easy for a future government to take these concessions back.

Meanwhile, the Palmerstonian posturing has, with Afghanistan and Iraq, perhaps reached a 'tipping point'. The squaddies are disgruntled and so are the generals. The double involvement in Afghanistan and Iraq has exposed the weaknesses of the British armed forces, which increasingly look like a sharp but small spearhead without much of a shaft behind it.

Wasted years for labour

Under Blair, the economic and public services policy has largely been Brown's, run from the treasury. This policy has, as I have already said, delivered rising real wages and unemployment relatively low by European standards.

But these concessions have gone along with a drip-drip of pressure for privatisation. Moreover, the concessions are in fact superficial. They could be wiped out very rapidly by public expenditure cuts under a Cameron government. In fact, they probably will be wiped out very rapidly under the coming Brown government. Real wages have already begun to decline since autumn 2006. Large-scale job cuts in the public services, and further attacks on pension rights and on welfare benefits, are in the pipeline. Interest rates are likely to go up further, and with them increased unemployment.

What has not improved at all is the strategic position of the workers' movement. The point of having an organised workers' movement and a party of labour is not simply to be better off. It is to be able to choose what to fight for, and to be able to fight for it and to defend it when it has been won.

From this point of view there has no advance whatsoever. Thatcher's anti-union laws remain in place and so does Thatcher's system of controls on local government. The Blairites have operated an unequivocally Stalinist dictatorship within the Labour Party: opposition is tolerated only so far as it remains marginal. The system of 'targets' for the public services has been blamed on Brown and characterised as 'Stalinist' as part of the media spin against the chancellor. In fact, Blair was just as much a fan, and the idea was originally introduced under Thatcher. But the 'Stalinist' jibe has some truth. Free-marketisation requires top-down dictatorship. The watchword of 'choice' which has been prominent for the last 10 years has turned out to mean, just as it did under Thatcher, merely private choices and not democratic choices.

As I have already said, Blair's constitutional reforms have in fact been a semblance: power has been even more centralised. Devolution in Scotland and Wales provides a partial exception - but the new system, precisely because it is only for Scotland and Wales, serves mainly to divide the labour movement and reduce the ability of the strong elements of the labour movement in these countries to influence events in England. Instead, Scots and Welsh Westminster MPs serve as voters to support the central power.

When Brown, or Cameron, takes back the last 10 years' material concessions, the trade union and labour movement will discover that it needs to fight. And in order to fight it will need to address what Blairism has never addressed: class unity; and in order to achieve it, the overthrow of the Thatcherite restrictions on the unions and on local government, and the struggle for real political democracy. It will become apparent that the Blair years have been wasted.

Social policy

In social policy the waste of 10 years is even more apparent. We have seen one small, significant step forward: an end to the use of government platforms to promote homophobia and the creation of 'civil partnerships'. But on the far more central questions of gender and race, we have if anything moved backwards.

The general increase in social inequality has produced an increase in inequality of pay between the sexes. 'Americanisation' has carried with it a growing culture of sexual sleaze. Communists oppose policies of state repression of prostitution and pornography, in favour of the self-organization of sex workers. But that does not mean that we are obliged to ignore the fact that cultural norms around sex have shifted to the disadvantage of women: a fact visible in the increasing difficulty of obtaining convictions for rape. Domestic service, an atomised form of employment affecting mainly women, has made a comeback. For the majority of women, who cannot afford domestic servants, the decay of public services has exacerbated the 'double shift'.

In the matter of race, the underlying state basis of racism - immigration controls - and the underlying Tory anti-immigrant campaigns of the Tory press have been untouched by New Labour. If anything Blair's ministers have bought into this agenda. Instead, the 'equalities agenda' and the 'autonomy of oppressed groups' have produced atomisation of migrants into religious groupings, headed by 'elders' and small businessmen, who have become the preferred allies both of New Labour "¦ and of the Socialist Workers Party.

More generally, the Blairites' promotion of religion and religious schools inherently tends to promote the subordination of women and communalism.

Crime: hardly anything needs to be said. Blair came into office claiming to be "tough on crime, tough on the causes of crime". Ten years later, we are back where we were when Michael Howard was home secretary: endless Criminal Justice Acts, criminalisation of increasing sections of the population and a prisons overcrowding crisis.

Wasted years for the far left

Much of the far left bizarrely believed when Labour came to power that there would be a "crisis of expectations" leading to mass class struggles like those in France in 1936 or Chile under Allende. This provided a sort of ground for calling for a Labour vote.

Nothing of the sort happened - unsurprisingly. But by the turn of the century the large bulk of the formerly 'auto-Labourite' far left had persuaded itself into the opposite position: 'auto-anti-Labourism'. In the new theory, Labour had ceased to be a 'bourgeois workers' party' or 'reformist party' and become a simple capitalist party like the US Democrats. Hence, it was argued, there was political space for a new 'old' or 'real' Labour Party. Arthur Scargill's Socialist Labour Party was the first such project; it was to be followed by the Scottish Socialist Alliance/Scottish Socialist Party, by the red-green Network of Socialist Alliances, backed by the Socialist Party in England and Wales, the Socialist Alliance (mark 2) and most recently the SWP's Respect and SPEW's Campaign for a New Workers' Party.

All, without exception, have focussed mainly on economic demands (and pretty limited ones at that). They have offered voters a 'return to the 70s'. But this was to attack Blairism at its strong point: that is, that Brown was delivering economic concessions. It was to fail to attack the weak point: that New Labour's proclamations of service to democracy were flatly untrue.

The problem is, of course, that the far left groups have the same problem with democracy that Blair and his ex-Eurocommunists have. They, too, stand for bureaucratic centralism. This commitment to bureaucratic centralism is reflected in the inability of the groups to unite among themselves.

But unity of the far left can produce strong results even on the basis of weak politics, as was shown in Scotland in the Scottish Socialist Party period. Disunity of the far left, even when accompanied by pretend unity with phantom 'old Labour' types, achieves nothing - as was shown by the dismal showing of the SSP and Solidarity on May 3.

New Labour is still Labour. A Labour government provides the best conditions for building an alternative to Labourism, whether inside or outside the Labour Party. It does so because it makes visible what Labour in government actually means: that is, service to the existing state regime and the capitalist class. That is true even when, as under Blair, Labour government is accompanied by relative prosperity and the absence of large-scale mass struggles.

But the condition of building an alternative is actually to offer an alternative. And this the far left has signally failed to do. It has been characterised by bureaucratic centralism (like the Blairites') leading to disunity, by economism (like the Blairites' economic concessions) and by nationalism (like the Blairites' ...). The far left, too, has wasted the 10 years of Tony Blair.