Thursday , October 29 2020

What centre?

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chris
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Summary:
The election of Keir Starmer as Labour leader has caused some leftists to fear that the party will move to the centre. Such fears, though, miss the point – that there is no centre. By this I don’t just mean that there are no votes there, as the LibDems and CUK (or whatever they called themselves) discovered in December. I also mean that there are no ideas there either. One feature of CUK was its utter lack of economic thinking and obliviousness to the fact that the economy has changed a lot since the 90s and so requires new policies. Almost the only substantive thought in its launch document was the notion that government has a “responsibility to ensure the sound stewardship of taxpayer’s money” – an idea that has aged as well as Rachel Reeves desire to be tough on the unemployed. But

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The election of Keir Starmer as Labour leader has caused some leftists to fear that the party will move to the centre. Such fears, though, miss the point – that there is no centre.

By this I don’t just mean that there are no votes there, as the LibDems and CUK (or whatever they called themselves) discovered in December. I also mean that there are no ideas there either. One feature of CUK was its utter lack of economic thinking and obliviousness to the fact that the economy has changed a lot since the 90s and so requires new policies. Almost the only substantive thought in its launch document was the notion that government has a “responsibility to ensure the sound stewardship of taxpayer’s money” – an idea that has aged as well as Rachel Reeves desire to be tough on the unemployed.

But this poses a question. Is this vacuity due merely to the inadequacy of centrist politicians? Or does it instead reflect capitalist reality?

To see what I mean, think about two contrasting ideal types of capitalism. Type one relies for its profits on a mass market in consumer goods produced by skilled workers. It has significant profit opportunities but faces a consistent risk of unforeseeable recessions. And it also faces the danger of a socialist uprising.

This type of capitalism would welcome a centrist agenda of Moderate Progress Within the Bounds of Capitalism. Policies to underpin wages would help sustain demand and profits. A decent welfare state acts as an automatic stabilizer, thus reducing capitalists’ risk of recession. The need for skilled workers means capitalists welcome public spending on education and science. High profits mean some redistribution is tolerable – and, indeed, necessary given the need to buy off discontent and so prevent socialism.

In such an environment, there’s plenty centrists can do to ameliorate the worst effects of capitalism whilst respecting the power structures of the system. Centrism should then be healthy. Eclipse-of-the-Sun-rectangular-crop-e1565622440143

Imagine instead a very different type of capitalism. Here, capitalists believe they need not a mass market but policies to increase profit margins, and so need profit-led rather than wage-led growth. It also has low profits and few profit opportunities and so resists more fiercely higher taxes, and is less supportive of expansionary macroeconomic policies that might empower workers. Facing no threat of revolution, it has less need to buy off discontent. Being more dependent on unskilled workers it needs guard labour and surveillance methods more than skills. And having a large finance and rentier sector it needs to protect its methods of extracting surplus more than means of expanding real capital. And that same financialization means it wants not a large welfare state and automatic stabilizers but simply looser monetary policy.

In this world, there’s much less room for centrist reforms. Capitalists will protect their own power and extractive institutions whilst socialists will want more radical change than centrists can stomach.

Of course, I’m talking ideal types here. Actually-existing capitalism is an admixture of the two – although post-war Fordism was close to type one. But there can be little doubt that British capitalism has shifted from type one towards type two. Hence the decline of centrism; there’s just no space for it.

This is not to say that there are no centrist ideas at all. I commend Sam Bowman and Stian Westlake and the Radix thinktank. Several of their ideas, however, would face strong opposition from vested interests – for example, the proposals to cap CEO pay, regulate finance more strongly, or introduce a land value tax.

We can imagine a world in which such opposition would be offset by support from a client base within capitalism. Type one capitalists would welcome a shift in taxes from profits onto landlords and curbs upon financial extraction: if you want to hear extreme hostility to bankers, don’t speak to me or Grace Blakeley, just ask anyone running a manufacturing business. The influence of this client base is, however, weak: the vote for Brexit told us that.

A better base for challenging this type of capitalism, therefore, is to have a large clientele opposed to the interests of rentiers and with an interest in radical reform. Corbynism activated just such a base, and it shouldn’t go away.

I’m not, therefore, very worried that Starmer can shift Labour to the centre on economics, even if he wanted to. There is no meaningful, viable centre.

Instead, I have a different concern. The media – including the BBC – is creating a climate which rules out questioning of the Dear Leader and which regards measures to support economic activity as a cost rather than benefit. I fear that Labour will become infected by this poison.  Which is why we desperately need a counterweight in the form of leftist critiques of the media – to remind Starmer that he need not be swayed by it.

There might be no intellectual pressure on Labour to shift to the centre. But it could drift there simply under media influence. Corbynistas, then, should not keep quiet.

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