Back to the Statist Quo

The British state has been starved since 2010: methodically and deliberately. We were told that this was because the crash of 2008 devastated public finances. By now, it is clear this was merely an excuse to justify the ideologically-driven austerity agenda of George Osborne, who hacked away at the state with almost pathological zeal.

The damage his actions have done to our society will take decades to undo. His economic prescriptions didn’t work, turned the comfortable into the vulnerable, and the vulnerable into the destitute. The basis of all of this, the big lie that underpinned everything, was simple: “there is no money”. Public finances were so stretched that everything – from welfare to schools to councils – needed to be cut, and we would have to make do with less. It is, was, and forever will be total bullshit – but bullshit that was uncritically regurgitated by so many for so long that it became accepted as fact. Many warned at the time that responding to a recession by cutting spending, lowering corporation and income taxes and raising consumption taxes was a profoundly stupid approach. If any doubted the argument then, who can doubt it now after our own lost decade?

In the wake of 2008, a competent government would have borrowed to invest. It would have thrown money – borrowed at then-historically low interest rates – at infrastructure, education, home building and other public spending projects as if there were no tomorrow. It would have engaged, in other words, in Keynesian stimulus. The economy had just had a hole blown in the side of it and the state needed to fill that hole.

This would, naturally, have meant an increase in debt: but it would also have improved peoples’ lives, and our economy would now be in a stronger state to pay it down. Not only would jobs have been created in the implementation of these projects, but the new infrastructure – railways opening up areas for new housing and easier commutes – would be generating its own returns for the economy too. The money spent could have paid for world-class education and for the development of new industries, allowing us to better compete on the world stage and generate greater future prosperity.

That is what the government should have done. Instead, it did the exact opposite, cutting services to the bone and defunding what it could not destroy outright. We are all the poorer for it.

It is difficult to envision a solution to our country’s current issues that does not involve spending vast sums of borrowed money. Run through our litany of problems: our broken housing market, the near-abandonment of the most vulnerable, rising homelessness, increasing reliance on food banks, all underpinned by a stagnant economy reliant on consumer debt, and arguably even Brexit, Which of these have not been at least in some way caused by the withdrawal of state provision? Which, after nearly 40 years of them, would be solved by more market-based solutions?

Sadly, many on the (notional) centre and centre-left seem to have internalised Osborne’s contention that “there is no money” at least to some degree. Few would go so far as to say that austerity has been a good thing, but many are decidedly cool on reversing it to the extent that is necessary.

This attitude is not merely a reaction to 2008 and the subsequent promotion of austerity as an article of faith; it is the culmination of the acceptance by the centre and centre-left of core tenets of the Thatcherite/neoliberal settlement, as implemented by Thatcher herself, softened by Blair and then sharpened again by Cameron and Osborne. The most important of these, the core belief that informs all others, is an overwhelming deference to business and to the wisdom of markets; to the notion that higher GDP is an unequivocal good and that rapid economic growth is the ultimate, overarching goal for society. The right wing, and avowed neoliberals, would see this as a good in and of itself, promoting it for ideological reasons. Many centrists instead view economic growth as a means to a different end – as the best way of providing jobs, as well as taxes that can be used to fund public services. A rising tide, as they say, lifts all boats; as such, to attract business, we must not offend them by taxing or regulating them too much, lest corporations take their activities elsewhere and we receive nothing at all.

The problem with all of this is that attempting to achieve left-wing ends in an environment where most major societal problems are rooted in the collapse – indeed, the deliberate destruction – of state provision, while also holding to the right-wing tenets of not spending money, not upsetting business and not returning to the “bad old days” of state intervention in the economy, is incredibly difficult, if not impossible. Much is said about Jeremy Corbyn’s centre-left opposition within Labour, as well as the Conservative Party, having no new policy ideas. I would posit that the core reason for this is that they have reached the limits of what problems they can feasibly solve without the state taking action and without spending any money, and thus have no policy options left without moving onto what is seen as the terrain of the statist left.

After all, how, exactly, do you solve the issue of the undersupply of housing by the private sector, and the resulting ridiculous cost of housing, without the state investing heavily in building houses for social rent? You can incentivise the private sector to do so, granted, but that’s still throwing government money at encouraging private enterprise; why shouldn’t the state be more directly involved? How do you solve the issue of local authorities having no money to provide crucial services without returning the money taken from their grants over the last eight years? What is the point of tip-toeing around companies like Uber and Deliveroo that are nakedly trying to circumvent employment rights; is it beyond the wit of man to legislate against them? Our rail system is dysfunctional and fragmented largely because of the Byzantine structure imposed with privatisation; do we have to keep it that way?

The likes of Chris Leslie and Chuka Umunna, along with the Liberal Democrats, have made a great virtue out of a lack of “extremism”, and a contention to being guided by evidence of what works and rationality. Leslie in particular wrote a long manifesto on this style of politics, which is so awful I intend to take it apart piece by piece in a later article, but to summarise, his contention is that things are basically fine as they are, or rather they were in 2015, and thus we must act to preserve everything that there is now with little amendment or else we’ve fallen to the force of simple-answers populism.

Why would anyone want to vote for this? This rather small, petty-minded politics of keeping things basically as they are now; “public finances” being an abstract end to themselves rather than a means of people living better lives? Centrists like Leslie have put themselves into an ideological corner where the state of things as they are is the best anyone can hope for, because the only real means of making things better lie with the state, which they have arbitrarily convinced themselves is forbidden. If the Chris Leslies of this world – let alone the myriad “new centrist parties” that seem to come and go like the tides – cannot be seen to break out of the neoliberal dogma they simply do not seem to recognise within themselves, or at the very least be seen to accept that the “public finance” argument can no longer hold sway in the face of the clear consequences of austerity, they thoroughly deserve their place on the political fringes. Meanwhile, a left wing that is not quite so squeamish about proposing workable solutions to the problems normal people face every day will continue to run rings around them.