The pull to the left

Ed Ball's promotion to shadow chancellor gives Labour the Keynesian option, argues James Turley

The first major reshuffle of Ed Miliband's front-bench team has taken place, provoked by Alan Johnson's surprise resignation as shadow chancellor.

As readers will know, his replacement is Ed Balls, who was third in last year's Labour leadership contest. While Johnson ever getting the job at all was widely perceived as a snub to Balls, grudges die pretty easily in the careerist snake-pit of bourgeois politics.

His candidacy attempted - somewhat ineptly - to occupy the same ground as Miliband, trying to be a pole of attraction both for soft lefts and the second preferences of the Labour left proper. His supporters included 'Red' Ken Livingstone and other soft-left pin-ups, but in the end, his lackluster campaign was left in the shade by the two Milibands.

Nonetheless, it came as a surprise to many that he was passed over for the shadow chancellor's job in favour of Johnson. The latter, after all, is a pretty mundane career Labourite - working class roots, a long career in the Communication Workers Union bureaucracy (during which time he was the only union general secretary to support Tony Blair's ditching of clause four). He is not an economist by profession at all. Balls, on the other hand, is a public school, Oxbridge- and Harvard-educated boffin who worked under Gordon Brown in the treasury from 1997 until his election as an MP.

Miliband's choice, then, was widely - and probably correctly - interpreted as a bit of political manoeuvring. It sent a message both to the hard-line Blairites, in a state of shock after the new leader edged the race against his brother, and to the capitalist class as a whole. Even though Johnson could comfortably joke that his first job would be to pick up a primer in basic economics, he was nevertheless, as a committed Blairite, seen as a safe pair of hands politically.

Balls, however, had attempted to reposition himself during the leadership campaign as leaning more towards Keynesian stimulus measures than enormous budget cuts - though not in such a way that he could be pinned down definitively to anything. 'Reposition' has to be stressed; the image widely touted during the Blair era that the treasury was a hotbed of clandestine leftism hostile to Blair was always false. Alastair Campbell claims in his recently published diaries that Balls, in particular, was an enthusiastic proponent of privatisation in his days under Brown (Evening Standard January 25).

Miliband and Balls were quick to issue a statement proclaiming them to be 'united' on the need for cuts. Yet this has not stopped a raft of big-money donors to the Labour Party, led by supermarket tycoon and Blair-era science minister Lord Sainsbury, threatening to withhold cash in the future. Balls' appointment is read as yet another sign that Labour, in opposition, will move to the left - even if only fractionally.

Is this as likely as the capitalists fear? Perhaps not - but it is certainly possible. At the end of the day, Miliband and Balls are straws in the proverbial wind. Labour is in opposition. Its function, according to the norms of bourgeois politics, is to oppose. There is no doubt as to the flagship policy of the coalition government - sustained and brutal attacks on the public sector, ushering in an 'age of austerity'.

This is pretty much an open goal for any party of the opposition. The deleterious effects of capitalist austerity awake the most dystopian parts of the imagination. There are cities in Britain where, in a year or two, one will be able to count the local authority-run secondary schools on the fingers of one hand. There are to be £20 billion of 'efficiency savings' in an NHS already wracked by scandals surrounding the outsourcing of key care roles to barely trained private agencies - it is not too gauche a prediction to suggest that deaths in hospitals will soar under such conditions.

Yet something is currently holding back Miliband and Balls from even feigning a hard line against cuts (one can hardly expect them to formally adopt one, of course). It is expressed in terms of political strategy, in New Labour jargon, as 'triangulation' - political power is won and lost in a small number of marginal constituencies, so the logic goes, and won through the votes of an even smaller proportion of 'swing voters'. In order to attract these people, one must take the 'middle ground' between the left and the right. It is hardly an exact science, but it accounts for the Brown-Darling and now Miliband-Balls line on cuts - (slightly) less of them, (slightly) later.

It is also expressed on the brute economic level. The Labour establishment - Blairite, Brownite or otherwise - fully and sincerely identifies with its role as 'responsible' government (or official opposition) of the British state. Constitutional loyalism is hardwired into Labourism. It certainly is 'irresponsible' to duck out of imposing brutal austerity measures within this framework. The relations between states, the structure of the economy since the fall of the Bretton-Woods system, and the new conditions ushered in by the financial collapse of 2007-09 conspire towards one result. Failure to 'get the deficit under control' will, indeed, prompt financial speculators to hover in the manner of vultures and lead a country, ultimately, to the fate of Greece or Ireland. If Miliband was to oppose all cuts, the Tories would roast him alive on exactly this basis. (His line does at least allow him leeway to attack each individual cut as one that is excessive, that Labour would not have made, etc.)

Whether this will be enough to truly harness the energy of the anti-cuts movement, however, is debatable. It is more likely that we will see official Labour figures - if not from the shadow cabinet proper - more and more willing to engage in anti-cuts struggles, speak from the platforms at rallies and so forth. This is certainly going to be the case with leading Labour-supporting union bureaucrats who are, on the whole, to the left of New Labour orthodoxy (if utterly craven when it comes to challenging it). Indeed, it is already happening - the TUC march against cuts takes place in a little less than two months; and Len McCluskey, the new Unite general secretary, is the highest-profile union figure to publicly sign up to the Coalition of Resistance.

On the economic front, it should not escape notice that the threat of a dreaded 'double dip' recession once again hangs over our collective heads. UK GDP has contracted by 0.5% in the last quarter, to much consternation in the City, giving the pugnacious Balls his first opportunity to go for the jugular of chancellor George Osborne. If we do end up in a downward economic spiral, the pressure will be on governments to produce big-time bailout money - in other words, to exercise yet another wrenching shift into pseudo-Keynesianism (as one neoliberal economist put it at the time of the bank bailouts, "We're all Keynesians in a foxhole"). Balls, the economic boffin par excellence, is well placed to give such a shift serious intellectual cover. That may not translate into a shift to the left, of course - but it will somewhat neutralise the bourgeois cuts consensus and, should resistance to the coalition government continue with any kind of momentum, the Labour Party will be able to sell it to its activists in those terms.

The danger is that the anti-cuts movement - and in particular, the far left, which overall has been in a perpetual state of disarray over the Labour Party more or less since World War II - will miss the real dynamics of this process, or indeed the different possible outcomes of this chaotic situation. When the Labour leadership moves left, it is fundamentally a pose, though one with real effects in the class struggle. Again and again, when Labour is in government and therefore forced into implementing attacks on the working class, sections of the left write it off completely as a simple bourgeois party. Then, when Labour is in opposition and forced into posing left, other sections write off everything else in favour of Labour work.

Communists must not be pulled into either of these blind alleys, recognising the real dynamics of Labour politics both in terms of the cyclical motions of capital and the British political cycle. In the coming period, the internal life of the Labour Party is likely to liven up; it will act as a pole of attraction for opposition to government cuts (and indeed, is already doing so, its poll ratings having pretty much recovered at the expense of the Liberal Democrats). That - combined with its ongoing relationship with the unions - marks out this bourgeois workers' party as a site of struggle.

The challenge is to break the cycle of Labourism for good. That, in the end, means transforming Labour beyond recognition by building a real Marxist pole within it as part of the struggle for a genuine Communist Party.