30.07.2008
After New Labour
Following Glasgow East and against the background of likely economic recession, Mike Macnair weighs up the possibility of a Labour wipe-out, Scottish independence, and a revival of the organised left
On July 25 the result of the Glasgow East by-election came out. Labour had narrowly lost one of its ‘safest’ seats to the Scottish National Party, on a swing of well over 20%. Since the announcement, the media has been filled with reports speculating on Labour MPs - and even senior ones, though none of them were willing to be attributed - looking for ways to dump Gordon Brown as leader. On the small-time end, Owen Jones has even made an attempt to revive the campaign for John McDonnell for leader, evidently calculating that a leadership campaign is coming in the autumn and the left may as well try to intervene in it.1
The speculation has been dampened down slightly by two factors. The first is some strong statements backing Brown by senior figures, including John Prescott. The second is the ‘who next?’ problem. At the time he took up office, Brown attempted to reposition himself slightly toward traditional Labourite ground - for example, on house building. But he abandoned this shift with the 10% tax band fiasco, an attempt to trump Tory tax offers to the middle classes to win an autumn general election. He then ‘bottled’ the autumn election idea (like Jim Callaghan in autumn 1978) and any thought of a 2008 election was soon ruled out by the ‘credit crunch’ and its consequences.
The capitalist media are now clearly spinning against Brown and for an early Cameron government. An example was provided by The Times: remember that the Murdoch press backed Tony Blair. Some utterly trivial concessions at the Labour national policy forum (at Warwick University over the weekend) were headlined “Weakened Brown gives in to union demands” (July 28). Another trivial example was the media treatment of the theft of David Cameron’s bicycle. They could have treated this as a ‘what a prat’ story; instead, it was reported sympathetically.
There seems no reason to believe that any of the possible ultra-Blairite candidates could win back the lost support, let alone any of the figures close to Brown: the latest poll forThe Times (July 29) suggests that changing the leader would make no difference to voter support. The Labour left is simply not in the frame. The ‘left’ union leaders trumpeted their demands for the NPF, but accepted - as they have done at this annual ritual for the last five years - peanuts. So even if Labour MPs are beginning to panic, the possible alternative leaders are probably not terribly keen on leading Labour into a defeat, now probably inevitable, in 2010.
So far, so silly season. The government scheduled the Glasgow East by-election precisely to place it at the beginning of the parliamentary recess when MPs are going away for their holidays, and clearly hopes that by September things will have calmed down. Governments have, before now, got hammered in mid-term by-elections on their ‘home territory’, and yet recovered at a general election. Perhaps, as the approach of a general election begins to pose a ‘real choice of government’, Labour’s poll position will begin to recover. That is what Brown and his ministers are telling us.
But behind the evidence of silly season speculation and Labour MPs panicking about their jobs, the current political situation poses more serious issues. First is the economy. The poll reported in The Times indicates that the major reason for voters deserting the Labour Party is - unsurprisingly - the perception that the Labour government has made them worse off. Will that still be a dominant perception in 2010?
Second, it is clear that we are now coming to the end of the ‘New Labour project’ as an idea that had mass support. Indeed, ‘New Labour’ looks pretty stale and short of ideas. Do the by-elections at Crewe and Nantwich (May 23, 17.6% swing to the Tories) and Glasgow East (22% swing to the SNP) mean that an ‘anyone but Labour’ mood has taken hold among electors, including many traditional Labour voters? If so, can the Labour Party as the second party of the two-party system survive the end of ‘New Labour’?
Third, is the Scottish question. The British context of Glasgow East is the voters giving the incumbent government a kicking. But the Tory revival did not extend to Glasgow East - the Conservative vote fell slightly both in absolute and percentage terms - and the Liberal Democrat vote fell quite sharply. The Scottish context of the by-election is a Scottish National Party victory under a minority SNP administration in Edinburgh. It thus suggeststhat the Labour vote might specifically collapse towards the SNP in Scotland.
The Labour Party currently holds 39 Scots Westminster constituencies. It has an overall working majority in parliament of 62. If at a general election Scots voters abandoned Labour for the SNP on the scale of Glasgow East, but the Labour vote held up in England and Wales, Labour could not obtain a majority. More probably, let us suppose Scots voters abandoned Labour on a large scale, and a Tory landslide took place in England, but not in Scotland. The issue of independence would plainly be posed. And if Scotland became independent, the English electoral arithmetic would make majority Labour governments severely problematic without a major upheaval in the voting patterns of rural, small-town and suburban constituencies.
The final issue is: what should the approach of the far left be, now that we are now clearly in the end-game of the Labour governments that have held office since 1997?
The economy, stupid
Brown’s hope is fairly clearly that the optimistic view of the economic situation will turn out to be true. That is, the ‘credit crunch’ phenomenon will be held to losses in financial markets and the financial services sector; the house price slide and its other implications have now bottomed out in the US; and the UK will see a period of slow growth, but not an outright recession (nor negative growth). This view is held by a number of bourgeois media economic commentators (like Anatole Kaletsky in The Times), by the National Institute of Economic and Social Research and by some Marxist economists (not onlyPermanent Revolution, but also some of those interviewed in the AWL’s Solidarity, and others).2
If this is correct, it is possible that by 2010 the economy will have recovered enough for Labour to claim that they have steered the country successfully through the ‘credit crunch’. The immediate basis of this view is that the various bits of economic data published over the last few months have been wildly contradictory - at one moment suggesting a real recession is imminent, at another that the bottom of the cycle has been reached.
At slightly greater depth, economic ‘optimism’ is supported, in outline, by three general circumstances. First, global average reported profits remain high in historic terms, reflecting the major underlying reduction in the share of social surplus received by workers and small producers since the late 1970s. Second, the openings for capitalist investment created by market liberalisation in China and (on a smaller scale) India continue to produce robust growth in east and south Asia. Third, the last two financial crises (the ‘East Asian crisis’ of 1998 and ‘dot.com crash’ of 2001) were weathered without actual recessions resulting from them, thanks to the use of Keynesian and military-Keynesian stimulus mechanisms in the US.
The alternative ‘pessimistic’ view is that the world economy (and hence the British economy) is now sliding into a very serious crisis. The slide is gradual and uneven - hence the contradictory short-term data - but we are nowhere near the bottom. This view is held both by a number of conventional economists and by the majority of Marxist economic writers.
‘Pessimism’ draws strength from the negative aspects of the immediate data. Most strikingly, UK second-quarter GDP growth was reportedly 0.2% - within the margin of error for economic output to have actually declined. The IMF on July 28 predicted a higher probability of actual global recession and at best a more prolonged slowdown extending into 2009. Oil prices, though highly volatile, are (as of July 29) 17% down on the July 11 peak price of $147, reportedly because of sharply weakening demand.3
At slightly greater depth (and again in outline) the foundation for the ‘pessimistic’ view is the argument that in the ‘credit crunch’ the structural contradictions of neoliberal financial globalisation have finally come home to roost. Or, put another way, the means by which outright recession in the core imperialist countries was avoided after 1998 and 2001 - ie, the extension of consumer borrowing and military-Keynesian economic stimulus based on US government borrowing - are now exhausted. In this view, since the east Asian growth has been primarily directed to exports of consumer goods to the US, recession in the US will inevitably go global.4
Another symptom in the same direction is the collapse - after seven years - of the Doha round of international trade negotiations. Put bluntly, the cause of the collapse is that the major participants have become increasingly committed to some degree of protectionism and state subsidy. Although the US and EU are ostensibly blaming China and India, they are also blaming each other for refusal to cut agricultural subsidies.5
If the ‘pessimistic’ view is right, 2009-10 will see very serious problems indeed, and the current choice between Labour and Tories and the question whether Gordon Brown keeps his job will look like small beer.
It is clear enough that there will come a point in the fairly near future where the structural contradictions of neoliberal financial globalisation will come to the surface, leading to severe crisis and sharp political and economic turns. To that extent the ‘optimists’ are simply wrong.
What is not yet clear is whether this financial crisis is that point. Though the differences between Marxist economists of various schools involve serious issues of method and theory, tackling such issues will not resolve this question. The answer depends on the concrete evolution of the financial crisis, the measures of governments to combat its effects and the underlying extent to which the contradictions of the neoliberal globalisation regime have matured, or the leeway in the system to allow another escape à la 2001.
These are empirical issues, and the data that would be needed to address them is systematically obfuscated both by governments and capitalist corporations. The obfuscation by corporations is precisely part of the ‘credit crunch’: banks are reluctant to lend to other banks because they are not clear what losses the other banks are hiding.
The obfuscation by government is simply illustrated in a recent news story - concerning plans to ‘reform’ the benefits system.6 The underlying narrative of the ‘reforms’ is that people are on sick benefit who should not be. But, in reality, governments over the last 20 years have created incentives for people to go on the sick in order to fiddle the unemployment figures. The result of this and other fiddles is that we now have no idea of the real level of unemployment and under-employment in the UK. This fakery significantly affects how fragile the ‘real economy’ is.
The sheer level of false accounting in the current system thus adds enormously to the difficulty of economic forecasting.
We can, however, make much simpler forecasts which are entirely relevant to Brown’s and Labour’s future prospects and the tasks of the left. In the first place, financial capitals have lost a great deal of money in the last year, and a whole investment sector - mortgage-backed securities - has gone down the tube. The corporations and their managers and all the other City types will want to lay off as much as possible of these losses onto other people, and will be looking for other investments. The first sign of this was the move into primary commodities, which has led to inflation in oil, metals and food prices.
There will also be increasing pressure both for state bail-outs (which began with Northern Rock) and for more privatisations, which provide tax-backed streams of income to the investors.
Hence, whether we are facing a slide into severe crisis or merely a temporary slowdown, working class people are going to be made worse off to pay for capitalism’s failings. We can already see this in food price inflation and the continuing squeeze on wages.
Labour will be blamed for this. They are already being blamed for it by voters; and the capitalist media is hammering the message home by pointing to Brown’s ‘poor economic stewardship’ between 2001 and 2007 in the form of increases in public spending and borrowing.
In the slightly similar circumstances of 1992, voters were beginning to blame the Tories for economic mismanagement; but the US and the capitalist class were not yet ready to give up on the Tory government, and Major managed to win a narrow election victory. Today it is clear from the media that the capitalist class now wants to be rid of the Labour government. An election like 1979 or 1997 is in prospect, not one like 1992. If we are sliding into a severe economic crisis, then what is in prospect might be one like 1931.
Will Labour survive?
Labour is headed for a disastrous result at the next general election. If the current polls and recent by-elections are any indication of the loss of support in Labour’s working class ‘core vote’, the party would not only be heavily defeated, but also cease to be the official opposition, the second party of the two-party system. The result would not be an immediate shift to Tories versus Lib Dems, but a period of jockeying and recomposition among several opposition parties, none of which could immediately pose as ‘the’ alternative to the Tories.
Actually, this outcome is not very likely. Of course, if we are sliding into a severe crisis which will become manifest between now and 2010, all bets are off. Both the international and the domestic political situations would change in highly unpredictable ways. But there are structuralgrounds for Labour’s role as the second party of the two-party system, which would not be destroyed by the end of the ‘New Labour project’, nor by a slowdown, nor even by Labour being blamed for making people worse off in a fairly serious recession short of an acute crisis.
Labour is, and has always been, the party of the relationship between the labour bureaucracy (trade union and party officials, Labour councillors, etc) and the British state. It broke through to contention for government after the British state was forced by World War I to incorporate the labour bureaucracy in order to manage war production. It was cast aside in 1931, but still remained the largest among a series of small opposition parties. In World War II the labour bureaucracy was re-incorporated into the working of the state on a larger scale, and since then Labour has remained the main opposition party.
The underlying ground of the Labour Party’s position is thus, on the one hand, the absolute rise of the working class relative to the petty family producers who formed a substantial part of the base of the old Liberal Party; and, on the other hand, and related, capital’s need for at least a partially collaborative relationship with the labour bureaucracy in order to manage the working class.
Now it is true that economic shifts since 1979 have massively weakened the trade unions and strengthened the role of the self-employed, especially in the service sector. But it is by no means the case that British capital can dispense with a relationship with the labour bureaucracy. Cameron’s putting out feelers in the hope of an opportunity to speak at the TUC illustrate this at the political level.7 At the economic level, the Grangemouth strike illustrated the fact that in spite of the ‘knowledge economy’ and so on, the infrastructure on which the whole thing depends remains dominated by wage workers who remain to a considerable extent organised. Indeed, the effects of an economic slowdown or recession are likely to weaken the financial and service sectors and ‘small businesses’ first, proportionately increasing the role of core productive activities dominated by wage workers.
It is true that in the past, as in the later 19th century and in some other countries like the US, this need has been managed through the attachment of the labour bureaucracy to a ‘left’ bourgeois party (the Liberals in the later 19th century, the Democrats in the US today). But these parties were already half of a two-party system. If Labour’s decline meant a Lib Dem rise and a Lib Dem left turn, a shift in this direction might happen. But neither is the case. Since the replacement of Charles Kennedy, the Lib Dems have been moving right. And the results in both Crewe and Nantwich, and in Glasgow East, show Lib Dem electoral support weakening.
The basic reason for supposing there might be a Labour wipe-out is the apparent loss of part of the party’s core support, and the apparent inability of the Labour’s internal life to throw up a left capable of appealing to the core Labour voters by breaking decisively with the party’s current neoliberal commitments. This is partly a matter of the massively increased bureaucratic control of the party’s internal structures under Blair and Brown; partly a matter of the internal sectarianism of the Labour left (for example, its unwillingness to unite behind McDonnell’s leadership campaign).
But at the moment - outside Scotland and Wales, where nationalist challengers pose left and Labour has also shifted left to retain ground - it is really true that core Labour voters will find, when they come to cast their votes in a general election, that there is ‘nowhere else to go’. The far left has managed to comprehensively bungle the 1997-2007 opportunity to develop an electoral alternative to Labour. The plausibility of a BNP vote remains low, and it is likely that a substantial part of even its present support will be stolen by a revival of working class Toryism.
We should therefore expect that the next general election will deliver a very serious Labour defeat - but that Labour will probably remain the official opposition. On the face of things and on the basis of past experience, this should be followed by a serious offensive by the party and trade union left and efforts to rebuild Labour’s base as an oppositional party. Whether this will happenis less clear. On the one hand, the level of bureaucratic control in the party is now very severe and the trend in the unions is also towards tightened bureaucratic control of debate. On the other, the Labour left is at present very weak.
The Scottish question
A Labour wipe-out in Scotland is a little more likely. The Glasgow East result is not analogous to previous protest votes for the SNP, for the obvious reason that - as I have already said - the SNP currently forms a (minority) administration in Scotland. It already has the political wind in its sails.
Moreover, unless the Tories begin to gain ground in Scotland, the clearer it becomes that Labour is going to lose in Britain overall, the stronger the apparent case for Scottish independence and hence giving a clear mandate to the SNP.
The caveat is significant. So far, the Tory revival under Cameron has had limited purchase in Scotland.8 But this could change as the economic situation worsens and a general election approaches. That is, the centre-left character of the SNP administration could come under pressure from economic problems and budget cuts, and spurious Tory promises of prosperity through tax cuts begin to look attractive. A Tory revival in Scotland, if it happened, would probably squeeze the SNP and shift politics back towards ‘British’ terms.
If anything, however, at the moment the trend is in the opposite direction. The Tories have been talking in terms of revising the ‘Barnett formula’ for public expenditure, which favours Scotland (on the assumption that North Sea oil revenue is at the disposal of the British state and government), and limiting the right of Scots MPs to vote on ‘English’ issues. Both ideas point towards the Tories identifying themselves as an English party attacking ‘Scots scroungers’, which makes them less electable in Scotland.
Both the Scottish Socialist Party and Solidarity hailed the SNP’s victory in Glasgow East. SSPer Richie Venton, under the headline “What a result!” comments that the vote “positions the Scottish Socialist Party well over the next couple of years, with our pro-independence but unashamedly socialist vision for Scotland, in contrast to the pro-big business agenda of the SNP”.9 Solidarity headlines Tommy Sheridan, who congratulates the successful SNP candidate and says: “Let us be clear, it is a victory for a party to the left of Labour.”10 Other parts of the left have regarded the result as a Labour defeat, but not as an SNP victory. The comments are mostly simply about Labour attacking its base: ie, economistic.11
For the Scots left to go down the road of independence under SNP leadership would be - as we in the CPGB have said repeatedly - a disastrous error. In the first place the idea would split and, as a result, massively weaken the workers’ movement. The founders of the SSP took the line of least resistance by separating from the British far left, on the basis of an opportunist adaptation to Scots nationalism, rather than tackling head-on the sectarianism of the Socialist Workers Party and Socialist Party leaderships. This already weakened the British far left - and prepared the ground for the disastrous split in the SSP itself. Actual Scottish independence would extend the same dynamics not just to the Labour Party, but also to the trade union movement.
Secondly, the SSP and Solidarity have been engaged in promoting a ‘socialist Scotland’: that is, socialism in a single country, the disastrous illusion of the 20th century. The reality of an independent Scotland - leave aside whatever concessions the British state wrung out of the SNP in independence negotiations about North Sea oil and gas and about military bases - would at best be an Irish-style deregulated ‘Celtic tiger’. More probably, since the conditions of neoliberal globalisation are coming to an end, splitting the British workers’ movement would be the basis for new attacks on working and living conditions and on political democracy on both sides of the border.
That said, it is hopeless merely to focus on economic issues and hope that Scottish politics will come back to ‘normal’ British, as much of the left does. The evidence of Glasgow East - and of the history of national questions around the world - is that it ain’t going to happen. We need apositive alternative which addresses the national question, on the basis of urging unity - but not on terms that the Scots (and Welsh) just have to put up with government from London. That means the proposal of replacing the UK with a federal republic.
Left behind
Glasgow East showed, like the London assembly elections, rival electoral ‘left unity’ projects with negligible political differences between them. The Scottish Socialist Party won 2.12% of the vote, Tommy Sheridan’s Solidarity Scotland 1.96%. The total ex-SSP share of the vote (4.08%) was thus slightly up on the 2005 general election (3.54%), though entirely because total turnout was lower than 2005: the total SSP vote in 2005 was 1,096; the SSP plus Solidarity in 2008 was 1,067. Disunity is weakness.
The same picture appeared in different forms in other by-elections. Nobody expects or should expect the far left at its present size to stand a candidate in Henley. But Crewe - a historical centre of the Labour movement - was left uncontested. And Haltemprice and Howden, though a safe Tory seat, offered the left the opportunity to oppose both the Labour government’s attack on civil liberties and David Davis’s fake libertarianism: it was left to the small Socialist Equality Party to pick up the gauntlet.
The underlying problem at the moment is the combination of political ‘realist’ tailism with organisational sectarianism. In Scotland this takes the form of the left tailing the SNP. In the non-Labour left in England, it takes the form of plaintive calls on the trade union leaders to make a break with Labour and set up a new Labour Party (SPEW/Campaign for a New Workers’ Party, Alliance for Workers’ Liberty) or attempts to set up electoral ‘broad fronts’ on minimalist programmes which are supposed to attract disillusioned Labour voters (Respect Renewal, the SWP’s Left List/Left Alternative, the Communist party of Britain’s ‘Unity for Peace and Socialism’). In the Labour left in England, it takes the form of ‘waiting for Livingstone’ or trying to unite with the Labour centrist group Compass.
The organisational sectarianism in the left outside Labour, in England and Scotland alike, takes the form of a ‘third period’ belief that Labour is dead or dying as a party based on the working class because of the New Labour project (which is itself dead or dying). In the Labour left it takes the form of clinging to the belief that nothing is possible without working wholly and exclusively within the Labour Party.
On both sides of the Labour/non-Labour divide, the organised left clings to the dictatorship of the labour bureaucracy. This is still the dictatorship of the labour bureaucracy if it takes the form of bureaucratic centralism (the Morning Star’s CPB and the Trotskyist groups both inside and outside Labour). And it is still the dictatorship of the labour bureaucracy if it takes the form of consultative conferences, showpiece rallies without votes or real discussion, or ‘labour movement practice’ which does not make leaders, elected representatives and officials accountable to the membership (the Labour left and a good deal of the non-Labour left).
The result of the dictatorship of the bureaucracy is inability to unite - because there is no way of dealing with serious differences without a split. Both the splits in the SSP and in Respect display the phenomenon at its most virulent. But so does the inability of the Labour left to unite round the McDonnell campaign in 2007.
In the endgame of the Labour government, far-left electoral initiatives are likely to have limited impact. But they still need to be done. Perhaps if Brown falls, more likely once Labour loses office, the struggle within the Labour Party will be increasingly prominent in the life of the left; but it is most unlikely to be the whole story. The problem is one which already faces us. We need to break with the method of political tailism and opportunism combined with organisational sectarianism, and pursue a common struggle both within and outside the Labour Party for apolitical alternative.
Notes
1. See Letters, p2.
2. Permanent Revolution: www.permanentrevolution.net/category/46. AWL:www.workersliberty.org/story/2008/05/02/marxists-capitalist-crisis. Others: e.g. Wadi’h Halabi,www.politicalaffairs.net/article/articleview/6309/1/303 (December 2007).
3. BBC, July 29: news.bbc.co.uk/1/hi/business/7532205.stm
4. A lucid version of a strongly pessimistic view with a serious attempt to work out predictions is by Vasily Koltashov at links.org.au/node/517
5. Financial Times July 29.
6. The Times July 21.
7. The Independent March 23.
8. The Times May 24; also the Glasgow East result.
9. www.scottishsocialistparty.org/new_stories/glasgoweast/result.html
10. www.solidarityscotland.org
11. For example, Jimmy Ross in Socialist Worker August 2; the AWL’s Tubeworker:www.workersliberty.org/blogs/tubeworker/2008/07/29/death-new-labour. The Socialist Party in England and Wales has at the time of writing not yet commented on the result.
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